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Updated from 9:58 am. EDT

The weakened economy is causing rheumatoid arthritis patients to put off or delay treatment with expensive injectable drugs and pressuring the leading market players




Johnson & Johnson



Abbott Labs



A new survey of 61 U.S. rheumatologists released Wednesday by

J.P. Morgan

revealed that 68% said the economy was having a negative impact on the prescription of drugs known as anti-TNFs for rheumatoid arthritis in the past three months.

Explaining the slowdown, 58% of doctors said patients were finding it more difficult to get their insurance companies to pay for anti-TNF therapy, while 79% of doctors said patients were having a tough time paying out-of-pocket costs for the drugs, according to the survey.

"Given the high cost of therapy ($17,000 to $25,000 per year), this isn't a surprise, but it is the first time that the economic downturn has had an impact on market growth of a broad class like the anti-TNFs with $16 billion in 2008 sales," wrote J.P. Morgan analyst Geoff Meacham, in a Wednesday research note discussing the survey results.

Investors are watching the downtrend in rheumatoid arthritis drug sales with concern. Recent weakness in Amgen's stock price is attributable, in part, to slacking first-quarter prescription data and management's cautious comments about Enbrel, the company's anti-TNF drug, which accounted for $3.6 billion, or 23%, of Amgen's revenue last year.

Analysts expect first-quarter Enbrel sales of $918 million, essentially flat with fourth-quarter sales and down a bit more than 3% year over year.

For the year, Enbrel sales are expected to grow 3%, compared to 11% growth in 2008.

Abbott's Humira and Johnson & Johnson's Remicade are the other two leading anti-TNF therapies for rheumatoid arthritis. Drugs from

Bristol-Myers Squibb




( DNA) (now owned by


) are also probably affected by the economic slowdown.

Earlier this month,



warned of lower first-quarter profits

, which the company blamed, in part, on fewer patients being able to afford its high-priced cancer drugs.

Wednesday's J.P. Morgan survey of rheumatologists is another piece of evidence that the recession, job losses and falling disposable income are forcing Americans to make hard spending choices. In some instances, that means choosing to go without medicines needed to treat even the most serious diseases.

Doctors polled in the survey indicated that more rheumatoid arthritis patients are canceling scheduled appointments or want to space out appointments even further. Patients and insurance companies are asking for less-expensive drugs or requiring more medical proof that higher-priced drugs are needed. And for patients who have lost their jobs or insurance coverage, expensive anti-TNF therapy is no longer an option.

"The end result is a delay in new starts and higher discontinuations rate for the anti-TNFs in rheumatoid arthritis (and probably in psoriases)," said J.P. Morgan's Meacham.

This trend is borne out in recent prescription tracking data. In the first quarter, the growth of new prescriptions for all anti-TNF drugs is down 6.5% year over year, according to health care research firm IMS Health.

Breaking that figure down, new prescriptions for Enbrel and Remicade are down 16% and 30% in the first quarter, respectively. Humira new prescriptions are up by just under 10%, according to IMS Health.

At Tuesday's closing price of $47.38, Amgen trades at a bit over nine times 2009 expected earnings, lower than its big-cap biotech peers and reflective of slower growth in Enbrel as well as the company's anemia drug franchise.

In testing the ramifications of a slowdown in rheumatoid arthritis drug sales, Meacham "stress tested" his Amgen model by assuming no growth in Enbrel sales at all in 2009 (compared to 11.8% growth in 2008). The financial hit to Amgen was a loss of 5 cents in earnings, or 1%, in 2009 and an 11 cent per share, or 2% decrease, in 2010 earnings.

If the economy begins to recover this year, the downward pressure on sales of rheumatoid arthritis drugs may also begin to lift, which would represent upside to most analyst projections.

Anti-TNF drugs work by blocking a chemical called tumor necrosis factor that plays a role in inflammation and tissue damage. These drugs, given by injection, are typically used in rheumatoid arthritis patients who do not respond first to steroids or disease modifying drugs like methotrexate.

The FDA is currently reviewing new rheumatoid arthritis drugs from Roche, Johnson & Johnson and


( MEDX), and



Nektar Therapeutics



At the time of publication, Feuerstein's Biotech Select model portfolio was long Amgen.

Adam Feuerstein writes regularly for In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in He also doesn't invest in hedge funds or other private investment partnerships. Feuerstein appreciates your feedback;

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