Teva’s New Version of Copaxone Could Be a Tough Bet for Insurers

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In a moment of desperation, Teva Pharmaceutical Industries Ltd. (NYSE:TEVA) is attempting to persuade multiple sclerosis patients who currently use its drug, Copaxone, to switch to a newer version of the drug, which will have patent protection until 2030, Bloomberg reports.

Copaxone is Teva’s top selling drug, and currently brings in $4.3 billion in annual sales for the company. In addition, the product accounts for more than half of the company’s profit. The drug’s U.S. patents, however, are set to expire in May, and generic copies of the medicine may become available as early as that date.

The newer version of the drug is essentially the same in all respects, but is more convenient in that the injectable drug need only be taken just three times a week, as opposed to a daily injection with the older version.

Bloomberg reports that Teva’s toughest sell is likely to be the insurers who know that cheaper, generic versions of the drug will become available soon, and that the new version offers no new health benefits besides being more convenient than the original.

“Some payers are viewing this as Teva’s strategy to avoid losing patients and they may take an aggressive stance,” said Gary Owens, a former executive at a licensee of the Blue Cross and Blue Shield Association of health insurers, who spoke with Bloomberg. “It’s going to be a wrestling match between two 500-pound gorillas.”

But it’s not just the threat of generics that Teva needs to watch out for; the company is also facing stiff competition from new, branded drugs that come in pill form, such as Biogen Idec Inc.’s (NASDAQ:BIIB) Tecfidera. Analysts are estimating that Teva’s annual sales of Copaxone will plummet 56 percent by 2016, Bloomberg reports.

Despite that, Teva is optimistic regarding insurance coverage. The company says it “expects to convert 30 percent to 50 percent of its patients to long-acting Copaxone.” Jon Congleton, who oversees Teva’s central nervous system drugs, says he believes that while “payers have ‘economic’ incentives they also focus on what’s best for the patients and there’s a clear benefit there.”

How, you may ask, does Teva plan to convince patients to switch to the newer, patented version of the drug when generics and pill-form options are looming just over the horizon? Answer: phone calls, it seems. The company has been in contact with doctors, and has started emailing patients currently registered with its Shared Solutions program, a 24-hour patient-supported hotline staffed by nurses.

“Our records show that you may be a candidate for this new treatment option,” reads one promotional e-mail. “Talk to your healthcare provider.” Thus far, the company has contacted at least 85,000 individuals, according to Congleton, per Bloomberg.

Copaxone’s generic version, which is currently called M356, is being developed through a partnership between Momenta Pharmaceuticals Inc. (NASDAQ:MNTA) and Novartis AG’s (NYSE:NVS) Sandoz unit, and is awaiting regulatory approval. Momenta’s Chief Executive, Craig Wheeler, said in a February conference call that he expects the company will be ready to start selling the drug in May, at the time of Copaxone’s patent expiration.

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