Teva Pharmaceutical Industries jacked up the prices of its two leading brand drugs, Copaxone and Azilect, by a steep 10%, more than the increase in prices of competing drugs. The hike went into effect at the start of the year.
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Copaxone, used to treat multiple sclerosis, is the first brand-name drug manufactured by the company and accounts for the lion's share of the company's profit. According to estimates, the drug's gross profit margin is 90% and it accounts for 50% of Teva's net profit.
Copaxone, which is administered by injection, will apparently be facing new competition from two new orally administered drugs: BG-12 from Biogen Idec and Aubagio from Sanofi Aventis. The price increase should help Teva compensate itself for lost sales volume to these two.
Teva has twice raised Copaxone's price twice before, by 15% in early 2011 and again at the start of 2012. This time, however, the increase was steep compared to price increases for other MS drugs on the market: Rebif went up by 9%, as did Betaseron; while Gilenya (the lone orally administered drug available at the moment) and Tysabri increased by 6%.
During the first nine months of 2012, Copaxone sales amounted to $2.9 billion, an increase of 11% from the same time period last year. Teva has said it expects Copaxone sales to reach between $3.7 billion and $3.9 billion in 2013, down $200 million decrease from 2012 forecasted sales.
The company added that this would be the first drop in sales since Copaxone was introduced in 1996.
Teva also raised the price for Azilect, which is used to treat Parkinson's disease, by 9.9%. Azilect sales amounted to $244 million between January and September 2012, an increase of 18% from the same timeframe in 2011.
Teva estimates Azilect sales of $340 million to $380 million in 2013.
"The price of Copaxone reflects the value of the drug, which includes support and services for patients in addition to its clinical advantages," Teva commented. "Copaxone is competitively priced compared with other treatments for multiple sclerosis, and its cost is covered by most insurance companies. "
As for Azilect, Teva said, "The cost of supplying Azilect to the market continues to increase, but the drug is still competitively priced compared with other medications, and its cost is covered by most insurance companies."