For millions of Americans with chronic, debilitating migraines — often replete with head pain along with vomiting, dizziness and light, sound and smell sensitivity — a new, emerging drug class that aims to prevent migraines could be a game-changer.
Drug companies in the space, meanwhile, have a new and lucrative market opening up. And because the new drugs are being approved in the same year and are in the same drug class, targeting a particular neurotransmitter tied to migraine, competition should be fierce.
Yet all three drugs that have been approved so far, the latest being Eli Lilly & Co’s LLY, +0.36% Emgality on Thursday, have an identical price tag: $6,900 a year.
That figure, the so-called “list price,” tells only one part of the story. The new medications are seen as largely interchangeable, so price will still be important, through the rebates and discounts that are widespread in the U.S. pharmaceuticals industry.
Related: New migraine drugs have promise — and a $8,500 price tag
Drugmakers are also using other tools, like programs providing free access for patients.
Eli Lilly, for example, plans to launch a program that will provide up to a year of Emgality to individuals with commercial health insurance, with no out-of-pocket costs. The savings card can then be used while the individual’s physician works to get authorization for the drug from the health insurer, Wei-Li Shao, vice president of the company’s neuroscience business, told MarketWatch.
Teva’s TEVA, -3.28% Ajovy, which was approved by the FDA last week, and Amgen AMGN, +1.00% and Novartis AG’s NVS, -0.35% Aimovig, approved in May, have similar programs as well.
“The whole goal here is to give the system time to determine coverage of Emgality, but at the same time make sure patients don’t have to wait, because they’ve waited long enough,” Shao said.
Read: FDA approves Teva migraine medication and Novartis, Amgen anti-migraine drug approved in U.S.
Migraine affects an estimated 38 million individuals and about three to seven million of those people have chronic migraines, meaning they average 15 or more days of headache a month for at least three months, according to the American Headache Society and American Migraine Foundation. Both migraine and chronic migraine affect women more commonly than men.
Though there are migraine therapies available, few have been developed specifically for the condition. Drugs for high blood pressure and epilepsy, for example, have been found to be effective.
The new drugs, named after the neurotransmitter calcitonin gene-related peptide, are more expensive by contrast, at $6,900 a year. Still, the price is lower than previous projections of $8,500 and higher. Allergan’s AGN, +0.04% Botox, also used as a migraine therapy, is also priced at a similar level.
The Institute for Clinical and Economic Review, an independent nonprofit, expects that net prices for Amgen and Teva’s drugs will be about $5,000 after rebates and discounts, which is “responsible,” and works in line with their benefits for individuals who haven’t found success with other therapies, wrote David Whitrap, vice president of communications and outreach for the institute, in an email to MarketWatch.
But bigger discounts may be called for in order to compete with other companies. Ajovy, for example, will need a net price discount “given Amgen’s first mover advantage,” Leerink Partners analyst Ami Fadia said.
Pricing differentials will be important because doctors “generally believe Amgen, Teva and Lilly’s drugs are all comparable on efficacy, and payers so far have not been particularly inclined to contract with Amgen off the bat given Teva and Lilly approvals,” Fadia said.
Still, their high prices relative to other options, along with questions about how these drugs work in the long-term and potential side effects, support health insurers using “prior authorization,” Whitrap said, referring to a lengthy, paperwork-intensive process of securing coverage for drugs.
One UnitedHealth Group UNH, +0.66% plan, for example, requires that patients be diagnosed with four to 14 migraine days a month, consult with a neurologist or pain specialist and have failed at least two other medications.
Novartis shares have risen 19% over the last three months, while Teva shares have dropped 9%, Amgen shares have climbed 20.7% and Eli Lilly shares have risen 26.2%. The S&P 500 SPX, +0.28% has surged 8.3% over that time period and the Dow Jones Industrial Average DJIA, +0.21% has risen nearly 10%.
