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New osteoporosis medication not cost-effective compared with older, cheaper drug

June 13, 2006

STANFORD, Calif.—Anyone who has fractured a hip, wrist or spinal vertebrae due to osteoporosis can attest to the debilitating impact of the disease, and no doubt welcomes a type of drug that prevents fractures by rebuilding lost bone rather than merely halting bone loss as most therapies do.

But researchers at the Stanford University School of Medicine have found that the first such drug now available, called teriparatide (brand name Forteo), is not cost-effective compared with the most commonly prescribed osteoporosis medication, alendronate (brand name Fosamax). While the average wholesale price of alendronate is about $900 per year, teriparatide costs nearly eight times as much at about $6,700 annually. The findings, to be published in the June 12 Archives of Internal Medicine, suggest that teriparatide should be given only to the highest-risk patients and to those who don't tolerate standard treatments.

"We're not saying you shouldn't use this new drug at all, but, given that we have limited health-care resources, we need to consider whether we as a society are prepared to pay the additional cost of the drug, given the effectiveness of existing therapies," said lead study author Hau Liu, MD, MPH, a postdoctoral fellow at Stanford's Center for Health Policy/Center for Primary Care and Outcomes Research.

A disease most prevalent in postmenopausal women, osteoporosis causes bones to become porous and weak, making them vulnerable to fractures even with minor falls. An estimated 10 million Americans have osteoporosis, though studies find that fewer than half of them know it. People with osteoporosis have higher mortality rates and a lower quality of life than the general population due to fractures that can bring on complications and restrict daily activities. Patients with hip fractures, in particular, are often hospitalized and may require subsequent nursing-home care.

Approved by the Food and Drug Administration in 2002, teriparatide is the first available drug in a new class of osteoporosis medications called anabolic agents, which stimulate new bone growth by increasing the function of osteoblasts, the body's bone-forming cells. This is potentially a significant advance over the most commonly used class of osteoporosis drugs, called bisphosphonates (of which alendronate is the market leader), which halt bone loss and increase bone density but don't build new bone. Still, no studies have directly compared teriparatide and alendronate in terms of their effectiveness in preventing fractures.

Teriparatide is given through daily injections, while alendronate is taken as a once-a-week pill. According to drug-industry analysts, an estimated 600,000 prescriptions were written for teriparatide in 2005, generating more than $350 million in revenue, and sales are projected to reach $750 million by 2008.

Liu's research team sought to find out whether teriparatide was worth its hefty price tag when compared with alendronate. Using a computer simulation model, they evaluated the impact of four treatment strategies in a population of 200,000 hypothetical postmenopausal women who were white, had severe osteoporosis as defined by World Health Organization criteria and had not previously been treated.

The four treatment strategies evaluated were "usual care" (taking vitamin D and calcium but no medication); alendronate alone for five years; teriparatide alone for two years; and two years of teriparatide followed by five years of alendronate. The Stanford study is the first to evaluate the cost-effectiveness of this last approach, known as sequential therapy, which is advocated by a growing number of osteoporosis experts to first build new bone and then maintain it.

The researchers looked at six elements for their hypothetical patients: treatment strategy chosen; number and type of pre-existing fractures; death or survival during the simulation period; entrance (or not) to a nursing home; adverse reactions from treatment; and new fractures during the simulation period. Then the researchers calculated the cost-effectiveness of each therapy in terms of the cost per quality-adjusted life-year gained—a common measurement that takes into account quality of life as well as survival. Therapies costing $50,000 or less per quality-adjusted life year are generally considered cost-effective.

Alendronate-alone therapy cost $11,600 per quality-adjusted life-year gained in comparison with usual care, making it solidly cost-effective, according to the researchers. Teriparatide-alone cost $172,300 per quality-adjusted life-year compared with usual care and, despite its high cost, did not produce health benefits as great as those of alendronate, prompting the authors to write that the therapy "is not a rational choice." They noted, however, that teriparatide may be a reasonable option for patients who are unable to use alendronate.

The teriparatide/alendronate combination costs $156,500 per quality-adjusted life-year, relative to alendronate-alone. Though this value is generally too high to be considered cost-effective, researchers found the strategy could become cost-effective under three conditions: if teriparatide's price were reduced by 60 percent; if the drug combination were given only to women with exceptionally low bone density; or if a six-month course of teriparatide were proven as effective in preventing fractures as two years of treatment.

While it's difficult to predict pricing for any drug, Liu noted that other anabolic agents for osteoporosis are being developed, which could be introduced at lower prices than teriparatide. "Our study gives some idea of what a reasonable price for these products might be, assuming they're as effective as teriparatide."

Senior study author Alan Garber, M.D., Ph.D., the Henry J. Kaiser Professor and director of the health policy center, said teriparatide is hardly an isolated case. "In recent years, we've seen several new drugs introduced that yield small benefits at a high price." But he predicted that "this isn't going to be a successful pricing strategy forever, as we're seeing more outcry over high drug prices."

With consumers now paying more of their medical costs out-of-pocket, physicians should be familiar with the cost-effectiveness of different therapies. "It's one more piece of information they'll want to keep in mind when deciding which treatment to prescribe," said Garber, who is also a staff physician at the Veterans Affairs Palo Alto Health Care System.

Stanford University Medical Center