Patients suffering from multiple sclerosis (MS) will be payingfrom $8,500 to $10,000 annually for treatments of Betaseron,the drug approved by FDA on July 26 to treat theunpredictable flare-ups associated with the relapsing-remittingform of this progressive neurodegenerative disease.
Chiron Corp. of Emeryville, Calif., which is manufacturingBetaseron, a recombinant form of beta-interferon, will receive30 percent of product sales. Chiron's partner, BerlexLaboratories of Wayne, N.J., a U.S. subsidiary of the Germancompany Schering AG, is handling sales.
Income from Betaseron will make the drug Chiron's mostprofitable product, according to analyst Eric Hecht, who followsChiron for Morgan Stanley & Co. He said that by 1995Betaseron will bring in more profits than even Chiron'shepatitis C test, which currently generates profits of $80million annually.
Estimating that about 30,000 people in the U.S. will be treatedwith Betaseron in 1994 at a cost of $8,000 each, Hecht said thatBerlex will garner $240 million in revenues, and Chiron will get$72 million of that, which translates into roughly $40 million inpretax profits.
Looking into 1995, Hecht foresees Chiron (NASDAQ:CHIR)receiving $120 million in revenues, with $75 million of that inpretax revenues. And Chiron's royalties on European sales,which Hecht estimated as 8 percent to 9 percent, will be "pureprofit," bringing the company about $25 million by 1997.
But even those figures might not be expansive enough. Hechttold BioWorld that "there's an up side, depending on howenthusiastically patients adapt to a regimen of injectingthemselves three times a week."
But the drug's price to patients -- and the returns that bothChiron and Berlex will be getting -- have raised a red flag forSenators David Pryor, D-Ark., and William Cohen, R-Maine.Pryor, who heads the Senate Committee on Aging, and hiscolleague sent letters to both companies outlining theirconcerns, which center around questions of patient supportservices, deferred billings and provisions for indigent patients.
"We have a very comprehensive support program forBetaseron patients," explained Jeffrey Latts, Berlex's vicepresident of clinical research and development for Betaseron."We have been in contact with the Aging Committee and itsstaff on this issue, and we are in the process of providing allthe details to them," Latts said.
Berlex's patient program, which consists of four parts, boilsdown to this: "No one goes without Betaseron for financialreasons," Latts told BioWorld.
-- The first provision covers indigent patients. Low-incomepatients without insurance will get the drug free of charge.
-- Second comes an access program that applies to somewhathigher-level income patients without insurance. For this group,Berlex is developing a sliding scale of price reductions, with amaximum of two-thirds off the price of the drug.
-- The company is also working out the details of a complianceassistance program, which is meant to encourage patients tomaintain the therapy long-term. "Patients who use the therapyfor 10 months will get the next two free," Latts said.
-- The final program, which will be distributed to physiciansnext week, according to Latts, concerns the financial aspects ofa distribution program and patient access program.
-- Jennifer Van Brunt Senior Editor
(c) 1997 American Health Consultants. All rights reserved.