The Rapture, Tofacitinib Joint Space Narrowing and Pricing

Posted by Jeff Berk, BOLT International;


Of the three great mysteries in the news this week, I sort of expect to have data on two of these in my lifetime.  And as for Mr. California Preacher (no, silly, not Jerry Brown), could you please not blog on things you don’t know and can’t know?  And as for the smart aleck who just muttered that maybe I should take my own advice… This echinopsis bloomed tonight.  All the brown stuff that looks like bite marks are due to jackrabbits.  This species is similar to the passenger pigeon, in that in my garden (at least) they are both extinct.


Let’s cut to the chase.  What do we know about tofacitinib today that we didn’t know before EULAR started?  Not much.  And what don’t we know?  Well, as I taunted in my April 21st blog, we don’t know the bloody (EULAR’s in London.  Get it?  Nasty British language) joint space narrowing effect with tofacitinib.  And we won’t know that at launch.  And that is reason #1 why tofacitinib isn’t going to be used as 1st line biologic therapy (after methotrexate, of course).  I’ll get to reason #2 in a minute, but first, here’s a very nice data summary which I found on Med Page Today (written by Ed Susman):

Tofacitinib, an experimental oral JAK inhibitor, reduced signs and symptoms of rheumatoid arthritis even after traditional disease-modifying medications failed to produce a response, researchers said here.

In a phase III trial, both the 5 mg twice daily dose of tofacitinib and the 10 mg twice daily dose of tofacitinib (formerly tasocitinib) were superior to placebo in the three primary endpoints, reported Joel Kremer, MD, chief of medicine at Albany Medical College in N.Y., at the meeting of the European League Against Rheumatism (EULAR).

The researchers determined that after six months of therapy, 52.7% of the 315 patients on the lower dose of Pfizer’s experimental drug achieved an ACR20, which is the American College of Rheumatology criteria for clinical improvement of symptoms. Also, 58.3% of the 318 patients on the 10 mg dose of tofacitinib achieved an ACR20. The researchers found that 31.2% of the 159 patients who began therapy on placebo achieved an ACR20 (P<0.0001).

Kremer and colleagues also reported that more patients on tofacitinib were able to reach clinical remission of disease as reflected by a score of less than 2.6 on the Disease Activity Score, using the erythrocyte sedimentation rate (DAS28-4 [ESR]). Remission was achieved by 11% of the patients on 5 mg twice a day of tofacitinib (P=0.001) and by 14.8% of patients on the higher dose of the experimental drug (P<0.0001) compared with 2.7% of patients on placebo.

The study’s third primary endpoint was the change at baseline after three months in the HAQ-DI (Health Assessment Questionnaire Disability Index). Patients taking tofacitinib showed a 0.46 decline in scores if they were on low-dose tofacitinib and a 0.56 decline in scores if they had been assigned to the high-dose tofacitinib treatment. Placebo patients showed a 0.21 decline in scores (P<0.0001).

“Tofacitinib appears to reduce the signs and symptoms of rheumatoid arthritis very quickly,” Kremer said in a EULAR news briefing on the late-breaking abstract. “We hope that after carefully considering the benefit/risk equation, this compound will provide an additional valuable treatment option for patients who have experienced in adequate response to prior treatments.”

Paul Emery, MD, from the University of Leeds, in Leeds, England, and president of EULAR, commented that if tofacitinib gains regulatory approval, its use would depend on the treatment environment and how the drug is priced.

“This information is the most important phase III data we have seen. The data are quite impressive,” Emery said. “The biggest factor will be the cost of the drug. However, I have learned never to underestimate the power of marketing.”

Kremer also reported several secondary and safety findings. In April, Pfizer, tofacitinib’s developer, experienced a shake-up in its stock prices when the company announced that four patients had died in this final-phase study of tofacitinib. Safety concerns for tofacitinib were first raised when results of a Ph-II trial were presented at the 2009 EULAR meeting.

In the 12-month safety analysis, Kremer said that four patients died in the trial including one serious cardiovascular event. However, an adjudication committee absolved the drug from any cardiovascular cause of death. The investigators theorized that one of the deaths may have been related to treatment-related infections, but the patient’s family refused an autopsy, making it difficult to determine the true cause of death.

Kremer said that four opportunistic infections were considered drug related: Two cases of tuberculosis, one case of pneumonia, and one case of herpes. All of these patients responded to treatment.

In terms of secondary findings, the researchers used the ACR50, a tougher hurdle that requires about a 50% improvement in symptoms, and found that 33.8% of patients on 5 mg twice daily tofacitinib, and 36.6% of those on the 10 mg tofacitinib treatment, reached that level of recovery compared with 12.7% of placebo patients.

In the ACR70, about 13% of patients on the low dose and 16% of patients on the high dose of the drug achieved that improvement, a 70% or greater reduction in signs and symptoms of the disease compared with 3.2% of placebo patients (P<0.0001).

In this 12-month study, rheumatoid arthritis patients who were treated with background, nonbiologic disease-modifying anti-rheumatic agents, such as methotrexate, were randomized to tofacitinib 5 mg twice a day or 10 mg twice a day or placebo for zero to six months. At three months, nonresponding placebo patients were reassigned to either 5 mg tofacitinib or 10 mg tofacitinib. After six months, the remaining placebo patients were put on one of the two doses of tofacitinib.

Kremer said that once all the patients were on tofacitinib, the placebo patients achieved similar treatment responses as the tofacitinib patients, and then all the patients were able to maintain those improvements through 12 months.


So what about reason #2?  Because some MBA at Pfizer took the same Pricing Class that I did.  And what they teach you in that class is that unless Paul Emery is bitching about the price of your drug, you’re not charging enough.  But… if you charge enough, you’re not gonna be used 1st line.  BOLT published its 32nd Rheumatology Thought Leader panel in late March 2011.  Here’s a tidbit of our pricing prediction:



  • We expect Pfizer to price tofacitinib within 80% of the price of Enbrel.  In Germany Enbrel sells for €23,000/yr, so we are forecasting that Pfizer will target tofacitinib at €18,000 – €19,000 per year.   Panelists want to see a price like 10,000€/yr, but the market will likely support a price of 20,000€/yr.  Etanercept biosimilars will not come into the picture until they are being produced by a major player, so they won’t exert pricing pressure until 2014/2015.


“If you are using it in the TNF-inadequate responder population, which I think is where it is initially going to be used, then I really think Pfizer is going to price it 10 percent, 20 percent above the lowest price TNF inhibitor.  That would be my guess.  They should price it 20 percent below the currently lowest price TNF inhibitor, but I don’t think they will.  If they price it low won’t they simply cannibalize their own Enbrel sales? They might.  They may not because of those practitioners who continue to use Enbrel.  It is very hard to know.  I think you have to take a look at the rest of the field.  They have seen Novartis come in with an oral inhibitor, fingolimod, SP1 inhibitor, and they saw them price it at 45,000 dollars or a huge mark up to what is standard of care in multiple sclerosis with beta interferon.  Yeah, plus 12,000 dollars a year for monitoring it. Exactly.  And they saw Novartis get away with it.  But in fairness, they got away with it but uptake in the US has absolutely not included first line patients because of that in multiple sclerosis. But they probably won’t get first line patients with tofacitinib either.  In fact, I don’t think the label will be approved for that.  They may very well follow the Novartis pricing strategy in saying we have got a first line biologic agent.  We have got a second or third line oral drug and it will be years before we get a first line approval, we are going to price this thing to make money on the margin until we are in a position to make money on the volume.  They could easily follow that route if they see the writing on the wall with a very restricted label.  Now should they get a broader label I think they will come in at the price of a biologic and try to make money on both the volume and some that it is on the margin.  Are there other system costs I should be thinking about besides the drug acquisition cost for anti-TNF therapy?  In other words, when you try to make the pharmacoeconomic argument for tofacitinib what other system costs will get saved by prescribing tofacitinib instead of a subcutaneous injection? None. The only real pharmacoeconomic advantage is over the infused drugs.  All of the other post-TNF therapy drugs, Orencia, rituximab and Actemra and there the saving is huge because now you don’t have to deal with any infusions”.



“You seem to be holding out hope that Pfizer is going to be reasonable on the pricing. No, no I am wishing.  I think they are going to be greedy and I think they are going to price it somewhere close to a TNF inhibitor.  I think they are stupid though.  I think that is not what they should be doing”.


“Pfizer has a subcutaneous drug, a biologic, namely Enbrel and I am sure they are not as stupid to price tofacitinib let’s say at half the price because they are going to lose their own market of Enbrel.  So you are saying that Pfizer is going to be forced to price tofacitinib closer to Enbrel? Not forced but I think the upper management will say we are not stupid. We don’t take away the market for Enbrel by just pricing tofacitinib too low.  My hunch will be that tofacitinib will be like well let’s say 18,000 or 19,000 Euros a year or something in Germany while Enbrel is like 23,000 Euros a year”.


“Monitoring is always relatively cheap compared to the price of biologicals.  But that brings us to pricing and to the question that you asked where will you position it.  I would say with the current knowledge, let’s say there is no new signal in terms of effectiveness compared to safety.  So it is what is now when it comes to the market and the price would be the same or maybe 90 percent of the price of the biological then I would still position it after biologicals for the time being until we have more experience.  However, the picture may change also in light of the present economic situation worldwide.  The payers are quite keen on us reducing the cost for treatment of RA patients.  And our economy is actually relatively strong, but still we need to clearly reduce already this year in Holland within the RA group we need a cost reduction of 25 million Euro for rheumatology only.  So if Pfizer would decide to go to a price that is substantially lower than the price for the biologicals then the whole story changes, in effect, we may be forced by the payers by the insurance companies to try a JAK inhibitor before we prescribe a TNF blocker or another biological.  This may be the clue that it will be positioned before or after biologicals”.



“I have to admit that I get more and more positive about it because the clinical data in terms of efficacy or effectiveness really look quite good.  It is amazing.  So yes this is an interesting approach.  The clinical effect is quite impressive”


“What sort of benchmark do you use for the annual cost of therapy for a patient on biologic?  I am just trying to get some sense of if Pfizer wanted to get quick penetration into the Netherlands how would they have to price their drug? I think the average biological treatment costs about 25,000 Euro per patient per year.  And what do you think is a percentage drop from that that would really sway the insurance companies? I think that there is one other element that the prices of biologicals may also go down.  So with the event of perhaps biosimilars or in light of the situation that has been created now where the government and the insurance companies force us to come with a cost reduction it is not impossible that a company like UCB will go down with the price for tocilizumab, actually that is what I expect.  So that another element that we need to take into account from the strategic point of view.  But I think it should certainly not be more than 50 or 60 percent of the current pricing of biologicals, which would still be a lot, so let’s say no more than 10,000 Euro per patient per year.  Although the cost to Pfizer to produce this oral therapy is going to be much less than the cost of producing the biologicals? Absolutely.  So they can get lower, but they want to recoup the cost of such a huge investment in the discovery and the development. But I agree that is what the companies that produce biologicals always say is that it is so expensive to produce it”. 


“Probably they will go for the 85 percent.  So given all that, as a prescribing doc I can tell you that unless there was a huge financial incentive, and I don’t mean me personally, but it was going to be much cheaper to society and to the patient, I am still going to cycle through at least two TNFs before I get to this drug.  I don’t see where I would prescribe this ahead of a TNF inhibitor given all the data that currently exist.  I just don’t see how you could do it. If it was 85 percent of the cost I don’t see how you could do it”.


“So that is what they hoped Pfizer would do but most people think that they are going to come in.  Some people said a little bit above but everybody is saying right around.  What is your take? Like the rest, my hope and what I think they are going to do are very different obviously and what they should do.  I think what they probably will do will be exactly what you suggested which is come in I think probably at the price of what a biosimilar will be.  They are not stupid.  No biosimilars are going to be coming out and to be honest they only have a couple of years left on Enbrel anyway.  Biosimilars will be out in two years for Enbrel.  And they lose their US royalty like next year anyway.  All they are going to have is the European royalty on Enbrel”.

Categories: IMMUNOLOGY, Rheumatoid Arthritis
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