How Roche Tweaked an Aging Drug to Keep Profits Rolling In

In the remote forests of northern Sweden, Anders Svenningsson’s multiple sclerosis patients have benefited from a drug he’s been prescribing for the past eight years. It doesn’t require weekly injections, doesn’t leave patients feeling achy and feverish; and most important, halts their disease. That drug, Rituxan—originally developed to treat cancer—has become Sweden’s most prescribed medicine for MS, in which the body attacks its own central nervous system. Swedish doctors have great freedom to prescribe treatments they believe are appropriate, but few MS patients elsewhere can get the drug. That’s because its maker, Roche Holding AG, has never tried to sell it for the disease. Instead, Roche this year introduced a nearly identical medication that it markets under a new name and at 10 times the cost.

The tale of the two drugs highlights how pharmaceutical companies tweak aging medications to keep the profits rolling in. With Rituxan facing the expiration of its patent starting in the middle of this decade and another drugmaker due a share of the profit from the medication, Roche didn’t pursue it as a treatment for MS despite studies indicating it probably works. Instead, Roche invested in the offshoot medicine, which would take years to reach the market but enjoy longer protection against generics. That strategy began paying off in July, when the new drug, Ocrevus, wildly outperformed expectations in its first quarter of sales.