Market Dynamics and Financial Trajectory for Glatopa (Glatiramer Acetate)
Introduction
Glatiramer acetate, a drug used to treat multiple sclerosis (MS), has seen significant market dynamics and financial shifts with the introduction of generic versions, particularly Glatopa. Here, we delve into the key aspects of these changes.
Background on Glatiramer Acetate
Glatiramer acetate, originally marketed by Teva Pharmaceuticals under the brand name Copaxone, has been a cornerstone in MS treatment since its launch in 1997. The drug's primary patent expired in 2014, paving the way for generic competition[1][2][5].
Approval and Launch of Generic Glatiramer Acetate
In April 2015, the FDA approved the first generic version of glatiramer acetate, Glatopa, manufactured by Sandoz. This marked a significant milestone in reducing healthcare costs for MS patients. Subsequently, Mylan Pharmaceuticals also received approval for its generic versions in October 2017[1][4][5].
Market Impact of Generic Entry
The introduction of generic glatiramer acetate led to a notable shift in market dynamics. Here are some key points:
Decline in Branded Copaxone Utilization
Since the launch of generic glatiramer acetate, the utilization of branded Copaxone has declined substantially. Over 52 months, brand Copaxone utilization decreased by more than half (56%), while generic claim volume grew by 155% over the past 16 months[1].
Generic Market Share Growth
Generic glatiramer acetate has continued to gain market share, reaching approximately 30% of claims. This growth is particularly pronounced in the commercial insurance sector, followed by Medicare and Medicaid[1].
Payer-Specific Trends
- Commercial Insurers: Experienced the greatest category claim volume and the highest generic growth, with a 26% share. Branded Copaxone declined by 44% in this sector.
- Medicare: Saw the greatest brand decline at 70% and the second-highest generic utilization uptake at a 28% share.
- Medicaid: Had the lowest utilization volume but the highest ratio of generic utilization among insurers at 45%[1].
Financial Implications
The financial trajectory of glatiramer acetate has been significantly influenced by the entry of generics.
Cost Savings
Generic medications like Glatopa offer substantial cost savings. In 2016, generics saved the US healthcare system $253 billion. Specifically, Glatopa has been instrumental in reducing costs for MS treatment, with the US healthcare system spending $26.88 billion on MS treatments in 2018[3].
Patient Out-of-Pocket Costs
Patients using generic glatiramer acetate benefit from lower out-of-pocket costs. Across all payment types, generics offer approximately a 20% discount compared to the branded version. Medicaid patients, in particular, have the lowest out-of-pocket costs[1].
Excess Spending Due to Delayed Generic Competition
The introduction of a 3-times-weekly formulation of Copaxone by Teva in 2014, just before the expiration of the primary patent, delayed full generic competition. This delay resulted in estimated excess spending of $4.3 billion to $6.5 billion between 2015 and 2017[4][5].
Pricing Trends
The pricing of glatiramer acetate has been a critical factor in its market dynamics.
Price Increases of Branded Copaxone
Teva raised the price of Copaxone 27 times since its launch, leading to a yearly cost of nearly $70,000 by 2020, up from less than $10,000 in 1997. This pricing strategy significantly contributed to Teva's net U.S. revenue, which peaked at over $3.3 billion in 2016[2].
Generic Pricing
The list price of Glatopa was initially higher than the net price of branded Copaxone but remained stable until Mylan's generic versions were introduced. Mylan's prices were later reduced by 62% to 64%, resulting in prices of less than $2000 per month by 2019[4].
Impact on Healthcare Spending
The transition to generic glatiramer acetate has had a profound impact on healthcare spending.
Reduction in Quarterly Spending
After generic competition began for the 3-times-weekly version in 2017, prices decreased by 47% to 64%, and quarterly spending dropped to $508 million by 2019[5].
Policy Implications
The delayed generic competition highlights the need for policy changes to prevent such delays in the future. Policy makers are considering revisions to patent laws and expanding therapeutic interchange to prevent manufacturers from delaying generic competition through product reformulations[4][5].
Quotes from Industry Experts
"Extended market exclusivity from introducing a new version of an existing brand-name drug can yield manufacturer returns out of proportion to the level of investment or risk involved; more limited incentives could encourage incremental innovations to existing drugs at a lower societal cost," - Benjamin Rome, MD, of Brigham and Women’s Hospital[5].
Illustrative Statistics
- Generic Market Share: Glatopa 20 mg/mL accounts for approximately 32.5% of total glatiramer acetate 20 mg/mL prescriptions[3].
- Cost Savings: Generics saved the US healthcare system $253 billion in 2016[3].
- Excess Spending: Delayed generic competition resulted in estimated excess spending of $4.3 billion to $6.5 billion between 2015 and 2017[4][5].
Highlight: Delayed Generic Competition
"Product hops can be defined by (1) manufacturer reformulation of a branded product to ensure that an imminently available generic is not substitutable and (2) manufacturer encouragement of prescriptions for a reformulated product rather than the original product," - Rome and co-authors[5].
Key Takeaways
- The introduction of generic glatiramer acetate has significantly reduced healthcare costs for MS patients.
- Branded Copaxone utilization has declined substantially since the launch of generics.
- Generic market share continues to grow, with notable savings in patient out-of-pocket costs.
- Delayed generic competition due to product reformulations has resulted in billions of dollars in excess spending.
- Policy changes are being considered to prevent such delays and encourage more cost-effective innovations.
FAQs
What was the impact of the first generic glatiramer acetate approval on the market?
The approval of the first generic glatiramer acetate, Glatopa, in April 2015 marked the beginning of a significant shift in market dynamics, leading to a decline in branded Copaxone utilization and an increase in generic market share.
How did Teva delay generic competition for Copaxone?
Teva introduced a 3-times-weekly formulation of Copaxone in 2014, just before the expiration of the primary patent, effectively delaying full generic competition until 2017.
What were the financial implications of delayed generic competition?
The delay resulted in estimated excess spending of $4.3 billion to $6.5 billion between 2015 and 2017.
How have patient out-of-pocket costs been affected by the introduction of generic glatiramer acetate?
Patients using generic glatiramer acetate benefit from lower out-of-pocket costs, with generics offering approximately a 20% discount compared to the branded version.
What policy changes are being considered to address delayed generic competition?
Policy makers are considering revisions to patent laws and expanding therapeutic interchange to prevent manufacturers from delaying generic competition through product reformulations.
Sources
- Prescription Trends in Branded Versus Generic Glatiramer Acetate - Medica Musc Research Commons
- Drug Pricing Investigation - Oversight Democrats House
- Glatopa® (glatiramer acetate injection) Cost Savings vs Copaxone® - HCP Glatopa
- US Spending Associated With Transition From Daily to 3-Times-Weekly Glatiramer Treatment - PMC
- Delayed Generic Competition for MS Drug Cost Billions - Physicians Weekly
