Pricing of Ocrevus and What it Means for MS Treatments
There were no big surprises in the March 2017 announcement of the Food and Drug Administration’s (FDA) approval of Ocrevus, the brand name for ocrelizumab, the latest disease modifying therapy (DMT) for multiple sclerosis, Ocrevus is manufactured by Genentech Roche. The FDA review process had been slow and even postponed for an additional 3 months, but very few people who have followed this drug’s development didn’t expect it to eventually get approval for use in relapsing remitting and progressive forms of multiple sclerosis.
What was a surprise in the March 28 announcement is Ocrevus will come on the market at $65,000 a year. As crazy as this might sound, this is good news because this price is about 25% less than what the annual cost is for Rebif, another MS DMT that was used as a comparator for the studies to prove Ocrevus is superior in efficacy to other MS drugs.
Escalating costs of MS drugs
Pricing for newly approved MS drugs has historically been higher than the cost of the existing DMTs. The pattern has been as each new DMT is approved and sets a new high mark for pricing, the drugs already in use have followed suit and increased their prices to be comparable to the new drugs as they have come to market. The National MS Society (NMSS) went on record in September 2016 about the spiraling costs of DMTs and is part of their priority to work with pharmaceutical companies to contain drug costs. In Make MS Medications Accessible, the MS Society shows that DMT prices have increased by 400% since 2004.
For Ocrevus to be priced less than existing DMTs has several ramifications and may be disruptive to the cycle of increasing DMT pricing, according to SeekingAlpha, an online pharmaceutical marketing newsletter. Michael Racke, MD, Department of Neurology at The Ohio State University Werner Medical Center, set aside time to speak with me about the release of Ocrevus and its importance to the MS community. He has a particular interest in B-cell therapy and how it works on the immune system and is one of the original researchers who studied the use of rituximab, the predecessor of ocrelizumab, 17 years ago.
Proving Ocrevus is cost-saving to patients and payers
“We have this discussion all the time with payers (insurance) about why patients should come to our clinic instead of going to a general neurologist. It has been proven to be cost effective to have patients come here – we reduce illness, visits to the ER and other problems that can be handled in the MS clinic. I suspect there is going to be the same thing with ocrelizumab- it is going to have to be demonstrated for sure, but it appears ocrelizumab will be a cost effective treatment and save payers money”
“Over the next couple years I suspect that along with the other B cell therapy drugs that are in development, this is going to be very good for patients with MS because it will help with access to therapy. Because of this reduced price for ocrelizumab, I think it will be fairly easy to get approval to use for patients,” said Dr. Racke. He also talked about how patients will also save money because they will only need to come to the clinic every six months for Ocrevus.
Ocrelizumab vs Rituximab
Ocrelizumab is a humanized therapy based on previous success with rituximab (brand name Rituxan), which is a chimeric drug (derived from part mouse and part human) therapy. There are many people with MS who are using rituximab off-label, which means the FDA has not formally approved its use in multiple sclerosis. The advantage of ocrelizumab over rituximab is the humanized form would have less chance of causing an anti-body reaction, whereas some people may have intolerance and an allergic reaction to the chimeric based rituximab.
“Rituximab and ocrelizumab do the same thing to deplete B cells – the biggest difference is some patients body will recorgnize the antibodies being mouse and not humanized and have a reaction – there are fewer infusion reactions with the humanized form,” said Dr. Racke.
“I have 150 people on rituximab at Ohio State” and Dr. Racke said he expects most of them to change over to Ocrevus. “With ocrelizumab coming in where it is in price, unless there is a specific insurer who has negotiated a price for a lot less (for another disease modifying therapy), that is the only reason I can think they would be told they have to try something else first before they can try ocrelizumab. It will be fairly easy to get approval because of where they (Genentech/Roche) came in at their price for Ocrevus,” said Dr. Racke.
Will other drug prices drop?
Dr. Racke said he thinks this pricing from Genentech, which reverses the trend of increasing drug costs for new therapies, will force the other drug manufacturers to reevaluate what they are charging for their DMTs and possibly adjust their pricing downward. In that scenario, Dr. Racke says everyone wins, including the patients and the payers.
Whether this scenario will hold true needs to be seen over time. EMD Serono, the manufacturer of Rebif, issued a statement about the comparison quoted by Fierce Pharma. Rebif is currently listed at $86,000 per year, but that is before negotiated discounts with payers. Merck KGaA, the parent company of Rebif says the pricing comparison is “misleading and oversimplified.”
From my view, whether it is a fair comparison or not, this lowered pricing is a step in the right direction to slow or even halt the escalation of MS drug prices. It will be interesting to see how other DMT manufacturers react to this pricing and if this will cause them to lower their own MS drug costs.
Wishing you well,