Pfizer must walk the line on arthritis pill price

Thu May 26, 2011 10:09am EDT

* Tofacitinib price seen critical to new drug's uptake

* May be harder to justify premium than with MS, hep C pills

By Ben Hirschler

LONDON, May 26 (Reuters) - Price may be the biggest factor in deciding whether Pfizer Inc (PFE.N) has a winner on its hands with its new rheumatoid arthritis pill tofacitinib.

That is the view of doctors who like what they see of the experimental drug -- despite some deaths among patients in clinical tests -- but point out the new product appears to be only about as effective as existing injectable treatments.

Novel oral medicines are starting to change the landscape for a number of diseases, offering patients an alternative to often painful injections, and several manufacturers have pushed them through at lofty prices.

Novartis AG's (NOVN.VX) Gilenya for multiple sclerosis and two hepatitis C treatments from Vertex Pharmaceuticals Inc (VRTX.O) and Merck & Co Inc (MRK.N) have all been launched at hefty premiums.

But Pfizer may have less leeway since tofacitinib does not have an obvious superiority in efficacy over injectable drugs, known as anti-TNF inhibitors, and also comes with side effects, including infection risk and raised cholesterol.

Georg Schett, head of rheumatology and immunology at the University of Erlangen-Nuremberg, believes tofacitinib should be priced between biological anti-TNFs, costing up to $20,000 a year, and the around $1,000 older drug methotrexate.

Small molecule pills are, after all, a lot cheaper to make than complex biotech drugs, he noted.

"I would hope they (Pfizer) will price it lower than a biological drug," Schett said. "We live in a world of limited healthcare budgets and price is always an issue."

Paul Emery, president of the European League Against Rheumatism (EULAR) and a rheumatologist from Leeds Teaching Hospital, agrees price is key but is not banking on a bargain.

RISK-BENEFIT RATIO

"The data is very impressive but the biggest thing these days will be the cost and we have no idea what that will be ... I do not think it will be much cheaper -- that is a personal opinion," he said. "The way it is priced will have the biggest influence on its market penetration."

A Pfizer spokeswoman said it was premature to speculate about price as tofacitinib was still in development. The U.S. drugmaker aims to file for regulatory approval of the product -- the most advanced of a group of new arthritis pills being developed by various firms -- by the end of 2011.

Tofacitinib is Pfizer's biggest new drug hope but analyst sales forecasts are subdued, reflecting uncertainty about how it will fit into treatment regimens.

Analysts, on average, have forecast annual tofacitinib sales of $1.1 billion by 2015, according to Thomson Reuters Pharma.

Roch Doliveux, chief executive of UCB SA (UCB.BR), maker of the anti-TNF Cimzia, said it was too early to quantify the threat.

"Our assumption is that they will have a place in the market. It is too soon to say what the risk-benefit ratio is yet and that will determine how big that place is," he said during EULAR's annual congress in London, where fresh tofacitinib data was presented. [ID:nLDE74O1RE]

Tofacitinib's progress so far has echoes of Novartis's Gilenya, which was also linked to safety issues during its development yet was ultimately approved.

Novartis went on to set an average annual U.S. price for Gilenya of $48,000 last October -- around half as much again as for older injectable multiple sclerosis (MS) drugs.

Trevor Mundel, the Swiss drugmaker's head of development, told Reuters that price was justified because head-to-head data showed Gilenya was "dramatically better" than injections. The convenience of an oral pill was a lesser consideration.

"I do not think the oral versus biologic in terms of pricing is as crucial as is the value," Mundel said.

When it comes to choosing between a pill and an injection, many doctors are unsure if convenience will prompt current anti-TNF patients to switch from successful treatments like Abbott Labs' (ABT.N) Humira, Johnson & Johnson's (JNJ.N) Remicade, Amgen Inc's (AMGN.O) Enbrel and Cimzia.

"It is very interesting. I was talking to some of the leading RA (rheumatoid arthritis) specialists," said Mundel. "They think that the hurdle is actually higher in RA for an oral agent than maybe it was in MS." (Additional reporting by Katie Reid in Zurich; Editing by David Holmes)

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