Allison Inserro

A recent opinion piece highlighted the considerations that US stakeholders should include in any discussion about the necessary balance to finance new drug innovation, ensure incentives exist, and create a predictable framework for decision making, all while ensuring patient access, especially for new curative treatments.

Currently, the pharmaceutical system in the United States relies on companies having set periods of marketing exclusivity through intellectual property rights and the ability to command reimbursement to ensure a return on investment while awaiting future competition from biosimilars and generic drugs, explained the authors in the journal 

The provision for the entry of biosimilars, through the Biologics Price Competition and Innovation Act of 2009 (BPCIA) is new, they noted, and its impact is unknown, given the continued lagging introduction and uptake of biosimilars in the United States. With the exception of what they called “incremental provisions addressing specific gaps and priorities,” the current US drug system has been in place since the passage of the Hatch-Waxman act in 1984, the Bayh-Dole act of 1980, and the Stevenson-Wydler act of 1980.

However, there are multiple objectives that should be balanced when thinking about how to address future challenges, they wrote: effective incentives in order to create new therapies, encouraging competition, and making the treatment affordable.

Systems to finance drug innovation must balance multiple objectives, they said. Those objectives include “predictable frameworks” for payers and developers as they make long-range decisions, but these frameworks should also be flexible enough to adapt to new scientific advances.

However, they cautioned, the lack of what they call a “sustainable insurance coverage and payment model” could not only harm patient access but also deter future development.

For instance, they cited one estimate that says that by 2030, it is possible that 50,000 individuals might be treated with cell and gene therapies, mostly in oncology, at a hypothetical cost of $1 million per patient, or $50 billion for that area alone.

The authors cited prior research that says the research and development timeline, from inception to approval, is about a decade. Including the cost of failed candidates, average direct costs per approved new compound were $1.4 billion (in 2013 dollars). Fewer than 1 in 8 candidates entering phase 1 trials makes it to an approval.

Given these challenges, some have advocated other ways to provide for innovation and access, but there are pros and cons to those approaches, the researchers said.

Those methods include alternatives such as direct government purchasing, limits on certain patents and orphan drug designations, or conversely, targeted incentives for certain conditions. Other methods look to stimulate generic competition, such as barring “pay-to-delay” agreements.

Other ideas include outcome-based contracts and government prizes and backing of research and development activities. One example is Louisiana’s subscription-based model for unlimited hepatitis C drug access to its Medicaid and prison population.

Some of the concerns with these approaches include whether future innovation would be constrained, and in the case of more direct government involvement with research and development and purchasing, whether the government currently has the infrastructure to support an increased role.

Uncertainty about potentially curative, 1-time treatments could hinder investment if developers do not know who will pay the bill, but payers might be willing to consider alternative payment models for revolutionary therapies, depending on how they are constructed, the authors said.

A number of logistical and financial obstacles exist: if a treatment has a high-upfront cost and the patient may switch from 1 payer to another over a period of time, which party should bear the cost and which should reap the later benefits, in terms of having a healthier patient in their enrollee mix?

Alternatives to a single payment at the start of therapy could include breaking it up into smaller, multiple payments over time, much like a mortgage.

“However, given uncertainty about the magnitude and duration of the clinical effects of the new therapies, payers likely would require performance guarantees as part of the payment model,” the authors note.

But the idea of patients moving from one insurance plan to the next gives may payers pause, they said. To ensure patient accessibility and continued development of game changing therapies, experimentation and stakeholder input will be needed, the authors concluded.

Cutler D, Kirson N, Long G. Financing drug innovation in the US: Current framework and emerging challenges. 

. Published online May 26, 2020. doi:10.1007/s40273-020-00926-2

Articles

A recent opinion column outlines some principles to consider when thinking about changing the current US system of financing drug innovation, especially potentially curative therapies.

 

How to Pay for Future Drug Innovation? Paper Examines a Few Ideas

The next stop in a long-running court battle between Sandoz and Amgen over a biosimilar etanercept could be the Supreme Court of the United States, after a federal court upheld 2 patents held by Amgen for its originator drug Enbrel. In 

 Wednesday, the US Court of Appeals for the Federal Circuit ruled against Sandoz, which won FDA approval for Erelzi in August 2016.

In a statement, Sandoz said it was reviewing all options, including a possible appeal to the high court, and said it “cannot speculate on next steps or timing."

“Sandoz will continue its efforts to make Erelzi available to US patients with autoimmune and inflammatory diseases,” said Carol Lynch, president of Sandoz US and head of North America, 

. "Our company respects valid intellectual property, however Sandoz continues to believe the patents asserted by Amgen are not valid, and that it should not be able to use them to extend the drug’s exclusivity."

The win solidifies Amgen’s biggest moneymaker and best seller; Enbrel generated $1.15 billion in first-quarter sales for this year and is the biotech company’s best-selling drug.

, which covers the fusion protein etanercept, and US Patent 

, which covers a method of manufacturing. The 2 patents expire in 2028 and 2029, respectively. Roche was the first to file applications for these patents, and Amgen and its subsidiary Immunex obtained rights to the patents from Roche.

Prior to a 2-week bench trial in September 2018, Sandoz did not contest infringement of the patents, but asked the court to find the patents invalid because of a lack of written description and enablement, obviousness, and obviousness-type double patenting.

US District Judge Claire C. Cecchi, JD, found that Sandoz failed to show by clear and convincing evidence that the patents are invalid. Two judges Wednesday affirmed her decision, saying it founded the biosimilar manufacturer’s arguments unpersuasive.

Elrezi, like another eteanercept biosimilar, Eticovo from Samsung Bioepis, is sold in the European Union. Eticovo is also FDA-approved but has yet to launch.

 found that 72% of Enbrel's total patent applications were filed after it had already received FDA approval.

Sandoz said it was reviewing all options, including a possible appeal to the Supreme Court. The case concerns Amgen's originator drug Enbrel and the biosimilar Erelzi.

Federal Panel Upholds Decision Against Sandoz 2-1 in Enbrel Battle With Amgen

A series of reports from a subsidiary of drug distributor McKesson says patients are having trouble getting the medications they need—particularly specialty medications&mdash;due to prior authorization requirements and cost, among other things.

, CoverMyMeds said electronic prior authorization (ePA) can help speed up the process to get approval for specialty medications. ePA can cut approval time from 17 days using phone and fax to as little as 1.5 days, the report said.

According to one survey conducted by the company, 60% of patients have reported some difficulty in getting their first dose of a specialty medication. A survey of providers said that 91% of them said that prior authorizations have delayed care, and 75% reported that the prior authorization process caused their patients to abandon treatment.

Providers are using outdated technology such as phone and fax to complete prior authorization requests, and this is part of the problem, the report said. On the approval side, nearly 100% of payers and pharmacies accept ePAs.

Other reasons have to do with physicians not acting soon enough. Only 17% of providers say they initiate the prior authorization request at the time the prescription is written, with the majority of the requests, 60%, happening retrospectively. Another 20% complete the request after a patient tells them authorization it is needed.

At the same time, a majority of providers report a heavy administrative burden completing the authorization request—an average of 2 business days a week. That burden has increased over the past 5 years, 88% of providers said.

The administrative process cuts into time with patients, said 26% of providers; and 16% said they have less time to interpret lab and scan results.

The use of costly specialty meds, often for rare and chronic conditions, is increasing at more than twice the rate of other medications. They account for 45.4% of total pharmacy spending, this week's report said; 

 predicts that specialty drugs will soon account for 55% of US drug spending, as more expensive, although potentially curative, therapies are in the pipeline.

To facilitate access to specialty medications, vendors, or so-called hubs, that provide patient support have sprung up, the report notes. Specialty pharmacies can also provide assistance. But only 40% of providers and 80% of patients are aware of the services, the report said.

The use of specialty medications has also created affordability issues for patients, the report notes. Some 29% said they have quit their therapies. With the rise of high-deductible health plans, which force patients to pay more out of pocket (OOP), patient abandonment of treatment has become more common. For each dollar increase in average OOP costs, the report said, prescription therapy abandonment rises 0.6%, the report said.

AARP noted last year that the average annual price for a single specialty drug used for a chronic condition for a Medicare beneficiary is $79,000. The CoverMyMeds report said 69% of patients surveyed have made “personal sacrifices” when the deductible is in effect.

Although the cost of specialty drugs is an increasing concern for patients as well as payers and employers, 

 said that few US health plans select biosimilars as a cost-savings option. Just 14% of US health plans selected a biosimilar as the preferred drug in the time period covered by the report.

Patients have problems getting timely authorizations for specialty meds and physicians face time burdens in getting them approved, a new report from CoverMyMeds says.

Authorization for Specialty Drugs Still a Patient Hurdle, Report Says

What do UK patients think about the process and communication used to switch to adalimumab biosimilars by the National Health Service (NHS) and the local home care trusts?

 at the European Hematology Association (EHA)’s 25th Annual Congress, EHA25 Virtual, not very much.

, even before the results of the tender for adalimumab (reference product Humira) had taken place. The United Kingdom has made no secret of its hopes of significant cost savings on a switch to biosimilar adalimumab, aspiring to save £300 million (approximately US $386 million) of its £400 million (approximately US $514 million) annual spending on adalimumab as a result of using biosimilars.

In the UK setting, self-administered biologics are delivered to patients in their homes by commercial companies that are paid for by pooled funds from the pharmaceutical industry. Once a prescription is initiated by a hospital prescriber, nurses deliver the products and teach patients how to inject their therapy at home.

Nearly 2 years in, researchers sought patient feedback on the switch process with the intent of reporting findings to NHS England. In addition, they sought to give organizations representing rheumatology, dermatology, and gastroenterology patients information to develop any future resources to help improve shared decision making (SDM).

These organizations had worked with National Health Service (NHS) to produce the materials for disseminating information to prescribers and patients, and they now wanted to know how the process was implemented and if SDM was practiced.

A working group of 4 organizations created an online survey asking questions about:

How the individual was communicated with regarding their treatment being switched to a biosimilar

Was there any choice or perceived input into the decision making process

Overall satisfaction on how the individual felt their personal preferences/needs were met

The results demonstrate how challenging the switch process turned out to be.

899 useable responses, with patients identifying as 52% rheumatology, 42% gastroenterology, and 5% dermatology patients; the remaining 1% were “more complex specialties,” the researchers said.

More than half of patients were not asked for their consent before their treatment was switched to a biosimilar adalimumab, while 40% said they gave consent. A minority (7%) couldn’t remember or were unsure if consent was given.

Three-fourths were not at all satisfied or not satisfied with the ability to decline being switched. Just 12% felt that they had been given an option to refuse the switch.

SDM “needs to be put into action not just words,” concluded the authors, who represented the National Rheumatoid Arthritis Society, 1 of the 4 organizations that created the survey. The other organizations were the National Axial Spondyloarthritis Society UK; Crohns’ & Colitis UK; and the Psorarsis Association, UK.

They said they will continue to work with NHS and other stakeholders to make SDM “a reality not just rhetoric.”

The UK results show how challenging switching to a biosimilar can be, according to patient groups.  

Allison Inserro

How to Pay for Future Drug Innovation? Paper Examines a Few Ideas

Federal Panel Upholds Decision Against Sandoz 2-1 in Enbrel Battle With Amgen

Authorization for Specialty Drugs Still a Patient Hurdle, Report Says

Looking Back, UK Patients Unhappy With Adalimumab Biosimilar Switch