Biogen Idec/Elan appear poised to market their re-approved multiple sclerosis therapy Tysabri (natalizumab) at a higher price than when it was first introduced.

FDA approved Tysabri June 5 for re-entry under a restrictive risk minimization action plan (see ¹ Also see "Tysabri Out Of Remission; Returns With Updated Indication, Risk Management" - Pink Sheet, 12 June, 2006.).

When asked by analysts about Tysabri's price, Elan CEO Kelly Martin emphasized the availability of additional efficacy data and the expanded indication.

The approval included an expanded indication to "delay the accumulation of physical disability" as well as reduce the frequency of clinical exacerbations.

"Since the first launch, first approval, we've had the two-year data...come out, which confirms that the drug is highly efficacious, and the two-year data, if nothing else, confirms that it's actually stronger," Martin said during a joint Biogen/Elan conference call June 6.

"Included in the two year data is the disability data that we view as very significant from a patient point of view, and provides even further efficacy for patients, as they move forward....We'll put all those things together, and come up with what we think is a realistic price for the therapy as it relates to trying to intersect all those variables," he said.

FDA first approved Tysabri in November 2004 based on one-year data from two Phase III trials (² Also see "Biogen Idec/Elan Tysabri Clears FDA; Promotion Will Focus On Monotherapy" - Pink Sheet, 29 November, 2004., p. 3). Upon launch, natalizumab's wholesale acquisition cost was $1,808 per month, with an average wholesale price of $2,259.61 per month, according to MediSpan's Price Alert (³ Also see "Biogen Idec/Elan Tysabri Guaranteed Coverage Under Medicare Part B" - Pink Sheet, 6 December, 2004., p. 24).

In addition to a potential price increase reflecting enhanced demonstration of efficacy, the new price could also reflect additional costs associated with running the risk management program, Biogen Idec Exec VP-Development Burt Adelman said.

"We don't have an estimate on what this will cost but obviously there is a burden of operating this process, some of which we bear, some of which the patients, physicians and infusion sites will bear. So clearly this is a further complication to the practice of taking care of patients with MS," he said.

"On the one hand, you have the commercial reality that both Biogen and Elan have as far as the investment over the last 12 plus years on Tysabri [and] you have the operational reality of what it takes to run a business this complex and this important," he explained. On the other hand, there are "the reimbursement constituents [and] the public policy political aspect of the overall cost of healthcare," Martin said.

Biogen Senior VP-Neurology Bob Hamm suggested that Tysabri will likely face a relatively favorable reimbursement environment upon relaunch. "The reimbursement situation is such that we've had market research indicating and getting feedback that many health plans recognize the benefits Tysabri can bring to appropriate MS patients and are likely to provide coverage," he said.

Medicare beneficiaries should not face major hurdles in securing reimbursement for Tysabri; as an infusion drug, natalizumab is reimbursed under Medicare Part B.

Hamm acknowledged that it would "take some time" for private plans "to develop and implement a medical policy on Tysabri."

"During the period before this formal policy's established, plans may provide coverage of Tysabri through a manual review process. In all cases, physicians must seek formal approval from a plan prior to drug administration in order to secure reimbursement of Tysabri," Hamm said.

"However, we believe that when the payers see the scope and breadth of the RiskMAP, they will be encouraged by the steps being taken to ensure that only appropriate patients are being treated with Tysabri."

Hamm estimated reimbursement issues could delay a patient's initial infusion by two to ten weeks.

Adelman discussed whether use of Tysabri as a first-line therapy or a second-line therapy would affect plans' willingness to provide reimbursement. Tysabri is "recommended" for second-line use, but the indication does not preclude first-line use.

"We don't anticipate any specific checklist or algorithm in the reimbursement system to qualify a patient for Tysabri. So we don't anticipate that a plan will require a whole list of information, but we'll see as we roll this out," he said.

Tysabri May Launch At Higher Price With Added Efficacy Data, RiskMAP Cost

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