A study of cost trends for tumor necrosis factor (TNF) inhibitors for rheumatoid arthritis (RA) after the entry of new competition showed that the newer drugs did not lower costs, and in fact, the annual treatment costs of the existing medicines rose by $17,390. Taxpayer funds shouldered all of the increases, and the “findings illustrate a market failure contributing to the rising costs of prescription drugs,” according to the researchers.
A study of cost trends for tumor necrosis factor (TNF) inhibitors for rheumatoid arthritis (RA) after the entry of new competition showed that the newer drugs did not lower costs, and in fact, the annual treatment costs of the existing medicines rose by $17,390.
Taxpayer funds shouldered all of the increases, and the “findings illustrate a market failure contributing to the rising costs of prescription drugs,” according to the researchers, all from the University of Pittsburgh. The study was published Monday in a research letter in JAMA Internal Medicine.
The authors studied how prices changed after the FDA approved 3 new RA treatments: subcutaneous golimumab (Simponi, approved in April 2009), certolizumab pegol (Cimzia, approved in May 2009) and intravenous golimumab (July 2013).
Before the approval of golimumab, only etanercept (Enbrel), infliximab (Remicade), and adalimumab (Humira) were on the market.
The study was released a few weeks after the House Committee on Oversight and Reform launched a wide-ranging investigation into prescription drug pricing in the United States, including into AbbVie's Humira and Amgen's Enbrel.
If cost trends had not changed after the newer drugs, costs for etanercept, infliximab, and adalimumab in December 2016 would have been 40% to 45% lower than they actually were. Moreover, the increases were carried only by Medicare; patient out-of-pocket spending remained flat. The increases were not offset by manufacturer discounts in the Medicare Part D coverage gap.
The researchers used 2006-2016 wholesale acquisition costs (WAC) from Analysource and calculated monthly estimates of the annual costs of TNF inhibitor treatment. Using claims data from a 5% random sample of Medicare beneficiaries, they also calculated monthly estimates of annual costs of TNF inhibitor treatment for drugs typically reimbursed under Medicare Part D: etanercept, adalimumab, subcutaneous golimumab, and certolizumab pegol. They also estimated total claim payment amounts for drugs typically reimbursed under Part B: infliximab and intravenous golimumab.
The researchers used an interrupted timeseries analysis with a linear model. The results showed that annual treatment costs with existing TNF drugs increased by 144% from April 2009 to December 2016 after new drug entry (from $15,809 to $38,574), compared with a 34% increase expected without the new competition (from $15,809 to $21,184).
Using Medicare data, annual treatment costs increased by 139% (from $14,901 to $35,613), compared with a 43% increase expected in the absence of new drugs’ entry (from $14,901 to $21,308). When estimates were based on Medicare data, the trend increased significantly after market entry of intravenous golimumab.
The authors said the rising costs of existing drugs “may reflect manufacturers’ opportunism in response to payers’ increased willingness to pay for TNF inhibitors after market entry of new, more expensive agents.”
Intravenous and subcutaneous drugs followed different trends. For instance, observed costs of infliximab fell under the expected range without market entries.
San-Juan-Roodriguez A, Prokopovich MV, Shrank WH,, Good CB, Hernandez I. Assessment of price changes of existing tumor necrosis factor inhibitors after the market entry of competitors [published online February 18, 2018]. JAMA IntlMed. doi:10.1001/jamainternmed.2018.7656.