November 25, 2004
Monoclonal Antibody Therapy Approved For Multiple Sclerosis

Here is a story of a significant advance for treating a chronic debilitating disease. While this latest treatment is a good thing that will benefit many sufferers of Multiple Sclerosis a comparison of the financial figures for drug costs, treatment costs, and other costs of MS versus the amount of money spent on MS research illustrates a larger problem in medicine today: too little money is spend on research into diseases that are costly to treat and costly to live with.

We start out first with the happy news. The US Food and Drug Administration has approved Tysabri for sale as a treament for MS.

Cambridge, MA; San Diego, CA; Dublin, Ireland – November 23, 2004 – Biogen Idec (NASDAQ: BIIB) and Elan Corporation, plc (NYSE: ELN) announced today that the U.S. Food and Drug Administration (FDA) has approved TYSABRI (natalizumab), formerly referred to as ANTEGREN®, as treatment for relapsing forms of multiple sclerosis (MS) to reduce the frequency of clinical relapses. FDA granted Accelerated Approval for TYSABRI following Priority Review based on one-year data from two Phase III studies, the AFFIRM monotherapy trial and the SENTINEL add-on trial with AVONEX®(Interferon beta-1a).

TYSABRI, the first humanized monoclonal antibody approved for the treatment of MS, inhibits adhesion molecules on the surface of immune cells. Research suggests TYSABRI works by preventing immune cells from migrating from the bloodstream into the brain where they can cause inflammation and potentially damage nerve fibers and their insulation.

Tysabri by itself greatly reduced the MS relapse rate.

AFFIRM is a two-year, randomized, multi-center, placebo-controlled, double-blind study of 942 patients conducted in 99 sites worldwide, in which patients were randomized to receive either a fixed 300 mg IV infusion dose of TYSABRI (n=627) or placebo (n=315) every four weeks. TYSABRI reduced the rate of clinical relapses by 66 percent relative to placebo (p<0.001), the primary endpoint at one-year. The annualized relapse rate was 0.25 for TYSABRI-treated patients versus 0.74 for placebo-treated patients.

AFFIRM also met all one-year secondary endpoints, including MRI measures. In the TYSABRI-treated group, 60 percent of patients developed no new or newly enlarging T2 hyperintense lesions compared to 22 percent of placebo-treated patients (p<0.001). On the one-year MRI scan, 96 percent of TYSABRI-treated patients had no gadolinium enhancing lesions compared to 68 percent of placebo-treated patients (p<0.001). The proportion of patients who remained relapse free was 76 percent in the TYSABRI-treated group compared to 53 percent in the placebo-treated group (p<0.001).

When combined with the existing Avonex drug (which is the protein hormone Interferon beta-1a) the result was a lower relapse rate than when used with Avonex alone.

Approval was also based on the results of another Phase III clinical trial, SENTINEL. SENTINEL is a two-year, randomized, multi-center, placebo-controlled, double-blind study of 1,171 AVONEX-treated patients in 123 clinical trial sites worldwide.

In the SENTINEL trial, AVONEX-treated patients who continued to experience disease activity were randomized to add TYSABRI (n=589) or placebo (n=582) to their standard regimen.

SENTINEL achieved its one-year primary endpoint. The addition of TYSABRI to AVONEX resulted in a 54 percent reduction in the rate of clinical relapses over the effect of AVONEX alone (p<0.001). The annualized relapse rate was 0.36 for patients receiving TYSABRI when added to AVONEX versus 0.78 with AVONEX plus placebo.

Note that the annualized relapse rate from the first trial that used only Tysabri was lower than the annualized relapse rate from the second trial of Tysabri and Avonex in combination. Though it is not clear that the sample sizes and the characteristics of the two sets of experimental subjects were comparable. Still, Tysabri looks like it is a more effective treatment of MS.

Some people can't handle existing anti-MS drugs due to the severity of side effects. Expect many of those patients to shift to Tysabri. Also, some may add Tysabri to existing treatments to reduce the odds of relapse.

Tysabri will not be cheap.

Guesstimates have ranged from $20,000/year to as much as $30,000/year. By comparison, Avonex, Betaseron and Copaxone cost about $13,000 per year, Rebif $16,500 per year.

My guess is that Tysabri will put some downward pricing pressure on the other competiting drug treatments for MS. Also, its high price serves as an incentive for other pharmaceutical companies to develop better MS drugs. Estimates for Tysabri yearly peak sales range from $1 to $2 billion to $3 billion.. Estimates of the number of patients who can no longer use existing MS drugs in the US range from 40,000 to 50,000 all the way up to 175,000. Estimates for the number of MS sufferers in the US range from 350,000 to 400,000. Well, at a price of $30,000 year it would take 100,000 patients using Tysabri to reach $3 billion yearly sales. Currently the total market for MS sales split across all existing products is $4 billion. Total dollar volume of MS drug sales will likely grow as a result of Tysabri's introduction. In the longer run more MS drugs will be introduced to try to get a percentage of MS drug sales.

Much more money is spent on MS treatment than is spent on MS research.

In the United States, the annual cost of MS is approximately $20 billion; this amount pales in comparison with the level of investment in MS research at NIH*. For FY'04 and FY'05, it is estimated NIH will spend $101.3 million and $102.8 million on MS research, respectively. Two NIH institutes primarily conduct or fund research on MS: NINDS that funds 75%, and NIAID that funds about 20%.

My guess (and this is a high confidence guess) is that the US government spends easily 20 or 30 times more money (through Medicare, Medicaid, and other government medical programs) to treat MS patients and to take care of MS patients than it does on research. This strikes me as very foolish. Auto-immune diseases (which MS is suspected of being along with rheumatoid arthritis and type I diabetes) will not be as hard to completely cure as, say, cancer or heart disease. There are many more research grant applicants than money to fund them. There is no shortage of qualified researchers who can be funded to speed up the rate of progress.

Let me put it another way: There are about 400,000 MS sufferers in the United States. The NIH is spending about $200 million per year on research. Well, that is about $500 in research per sufferer. Think about this in terms of lost tax revenue. Many MS sufferers can no longer work and therefore pay thousands of dollars less in taxes per year than they would if they were working. So MS is a net loss to the government even before getting to the cost of government-funded treatments. Throw on top of that the money that the US government pays to treat MS sufferers and the size of the effort to find a cure for MS seems penny wise but pound foolish. Of course the same argument probably holds for many other national governments as well. The Western nations ought to agree to large coordinated increases in research into a variety of diseases as a way to avoid huge future health care costs.

Consider the future pay-off. At some point in the future drugs that permanently halt MS will be introduced and the total dollar volume of MS drug treatments and other medical testing and treatments for MS will plummet. We are still on the uphill slope of MS drug sales though since all the existing treatments try to restrain the behavior of the immune system rather than retrain it to permanently deactivate or kill off immune cells that want to attack nerve cells. But once the knowledge becomes available to allow therapies to be developed that can fix the immune system MS treatment costs and all related medical care costs for MS sufferers (which are multiples of the few billion spent on these drugs) will plummet by orders of magnitude.

Update: Note that the introduction of this new MS drug is expected to cause MS drug sales to go up by $2 billion per year. That increase alone is about ten times more than the US government spends on MS research. The amount spent on research strikes me as far too low when we compare research expenditures with the amount of money spent on treatments that do not even work well. Look at this drug. Imagine you had MS. If the drug works on you like it does on the average patient it means you will get an MS relapse and deteriorate further about once every 4 years. Granted that is much better than what happens if you do not take the drug. But it is far from an optimal solution, either for your health, your ability to go on working and earning income comparable to what you make now, or in terms of costs.

The amount of money spent on medical research is incredibly small when compared to the amount spent on treatments. Worse yet, the gap between the amount spent on research and the amount spent on treatment is widening.

The Fiscal Year 2005 budget spending increase for the US National Institutes of Health is not large enough to keep up with inflation in biomedical research costs.

Under the compromise legislation, NIH will receive about $28.4 billion, a 2% increase of $563 million over last year. This will give most institutes and centers increases of 1.6% to 2.4%, failing to keep pace with the biomedical research and development price index, projected at 3.5%

Costs to employers for health insurance are increasing about 4 times faster than federal medical research funding.

Businesses will pay 7.8 percent more, on average, for employee health plans in 2005, even though many firms have shifted some premium costs to their workers, a new study projects.

Think about it: Medical spending costs are increasing while the total effort going into government funded medical research is decreasing. This seems like a huge mistake to me.

Higher deductibles in medical policies are holding down employer cost increases while underlying medical costs are increasing at about 10% per year.

Health-benefits costs rose 7.5 percent this year, down from a 10.1 percent increase in 2003, according to a survey from Mercer Human Resource Consulting. Consumer-price inflation is running about 3 percent.


For 2005, employers forecast an overall cost increase of 6.6 percent, assuming they change plan designs, drop a plan or change vendors, the survey said. However, companies predicted a 10 percent increase if they were to stay with their current health plan and vendor.

Total medical costs are going up 10% while NIH funding is going up by 2%. Yet as I've previously argued: Scientific Advances Are The Solution To High Medical Costs.

Share |      Randall Parker, 2004 November 25 02:55 PM  Biotech Therapies

SteveSC said at November 26, 2004 7:26 PM:

The numbers actually put a positive spin on things. Although NIH is loath to admit it, most of that $28 billion is far from anything clinically useful. Some estimates are that 90% of NIH spending will never lead to any changes in medical care of patients. NIH reports that 50% of its funded research is 'clinical', but their definition of clinical includes anything related to humans 'or human tissues.' So a study looking at the proteins embedded in the cell wall of a human kidney cell counts, even though it is likely to be decades before that knowledge might be used by practicing doctors.

One estimate I saw was that less than 5% of NIH funding was for studies of 'whole human beings.' If that is true, the $1.4 billion is not much more than is spent in one year on the cost of health services in ONE large teaching hospital.

Nancy Day said at December 21, 2004 9:52 PM:

Very interesting article as I have a son with MS who is still working but very much needs this drug too continue his job. Are there any grants out there for this drug, as I am assuming that his insurance won't pay for it?

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