UnitedHealth Group Inc. (UNH) plans to increase the reimbursement status of Acorda Therapeutics Inc.'s (ACOR) multiple sclerosis drug Ampyra, a positive development in an area that has been a concern for Wall Street.

The move, effective at the beginning of next year, will lower the out-of-pocket costs to patients taking the drug, typically used in addition to more mainstream MS therapies, which are among the most expensive drugs on the market. Ampyra, approved in January, is a twice-daily pill that improves walking in MS patients and costs about $18 a pill, or $13,000 a year.

The reimbursement systems at most insurers have three tiers. The top tier, or tier 1, being the cheapest option consisting mostly of generics. The next tier is for preferred brands, while tier 3 is generally non-preferred drugs with higher co-pays that can discourage usage.

UnitedHealth initially placed Ampyra on tier 3 but decided to move it up to tier 2 "because of the uniqueness of the drug, it being a new chemical entity and having new indications that aren't met by any other medications," said Randy Falkenrath, who leads the specialty pharmacy business at UnitedHealth.

The move generally decreases the patient copay to $30 a month from $60. From January to July, 700 UnitedHealth patients have had at least one prescription of Ampyra filled, Falkenrath said.

The company provides pharmaceutical benefits to 14 million people, with about 13,000 members being treated for MS.

"This is a particularly big milestone for us," Acorda Chief Executive Ron Cohen said. "Particularly with Wall Street and everyone being so focused on reimbursement for any new drug these days."

Aside from lowering the co-pay, Cohen notes that the decision sends a message that UnitedHealth believes the drug is important and should be available to patients. He declined to speculate on whether more insurers could make similar moves, but said the decision bolsters its case with other companies.

The reimbursement hurdles for Ampyra, which had about $30 million in second-quarter sales, has been a concern among analysts since its launch.

A recent survey by J.P. Morgan estimated that 56% of health plans covering use of the drug have placed it on tier 3. The firm said that 40% of plans required patients to conduct a timed walk when starting the drug, followed by subsequent walks to prove that the drug is working. Such a strict measurement could make it harder to continue use.

UnitedHealth doesn't have such a requirement at this time, but it does monitor patients to see if the drug is working and continues to be safe by having them check-in after the first six months and then yearly. Before beginning treatment, patients are required to have prior authorization that Ampyra is appropriate for them.

Cohen said a "significant minority" of insurers have a walking requirement, which he believes is unreliable because the effects of MS can vary over even a short period.

"We are spending all of our effort on educating those plans," Cohen said.

Treatments for MS itself aim to slow the disease, which is marked by the body attacking its own central nervous system. Ampyra doesn't actually treat the disease but is believed to help conduct the electric signals that travel through damaged nerves.

The rising cost of drugs has given insurance companies good reason to scrutinize new treatments, especially in MS. Drugs for the disease make up about 10% of United Health's specialty drug spending and the per-patient cost is growing. Over the past three years, prices for MS drugs have grown by about 65%, Falkenrath said.

While the most popular MS drugs are on tier 2, the insurer has been tough on some treatments. It recently decided it wouldn't cover Extavia, sold by Bayer AG (BAYRY, BAY.XE) and Novartis AG (NVS, NOVN.VX) and approved last year, after concluding it is no better than current therapies.

As more MS treatments are expected to hit the market in coming years, they are also expected to bring down prices.

"I do think we will be in a much better position," said Timothy Heady, chief executive of UnitedHealth Pharmaceutical Solutions. "Our experience tells us that we will be able to put some pressure on those price points."

-By Thomas Gryta, Dow Jones Newswires; 212-416-2169; thomas.gryta@dowjones.com
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