ViewPoints: Analyst focus group points to increasing payer pressure in multiple sclerosis market ahead of potential generic Copaxone entry

Biogen Idec's oral multiple sclerosis treatment Tecfidera may still be delivering impressive sales numbers as it approaches its first-year anniversary on the market, but in an intriguing note to investors written by Sanford C. Bernstein's Geoffrey Porges, the analyst suggests that subtle payer pressure against the drug is emerging.

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The view stems from a focus group discussion with neurologists based in the New York area, some of whom indicated that payers are suggesting that patients are treated with one of the ABCR (Avonex, Betaseron, Copaxone and Rebif) therapies prior to initiation on Tecfidera. Furthermore, feedback suggested that the neurologists are often responsible for arguing in favour of the drug being reimbursed, a process that was described as being "time consuming and sometimes frustrating."

Analysts appear to be lacking some consensus on the medium-term trajectory of Tecfidera, although differences of opinion may be considered subtle when one considers that the drug is set to race to sales of around $2 billion during its second year on the market.

Porges notes, for example, that versus a similar focus group carried out in May of last year – shortly after Tecfidera launched in the US – expected peak share of the drug has declined from around 35 percent to 21 percent, a view that is consistent with recent prescription trends.

The subtleties of Tecfidera's second-year evolution is pertinent, if only given the further potential shift that could occur should the FDA approve one or more generic versions of Teva's Copaxone in two months' time, which will provide an additional opportunity for payers to reduce costs.

The 'wild card' nature of any generic launch has been given a further sense of uncertainty by Teva's better-than-expected switching of patients to a less frequently dosed version – see ViewPoints: Teva's Copaxone switching strategy continues to impress.

Neurologists in the focus group said that they expect insurers to make a concerted effort to steer patients away from both daily and three-times weekly branded Copaxone, by putting both on a non-preferred tier and charging high co-pays. In addition, pharmacies may try to persuade patients to switch from branded three-times weekly to generic once-daily Copaxone at the point of sale.

Porges adds "with the expected arrival of generic Copaxone this year, the payer pressure is only likely to intensify. With increasing payer management, it will be increasingly difficult for manufactures to replicate the c.15 percent annual price increases they have enjoyed in the past."

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