Like all health care industry stakeholders, pharmaceutical manufacturers are under pressure to demonstrate the value they bring to care delivery. These ten need-to-know developments shed light on the path forward to better clinical results for patients and better business results for drug manufacturers. Read more.

Drug Supply

Drug manufacturers obtained record number of FDA approvals for novel drugs in 2015

The Food and Drug Administration's Center for Drug Evaluation and Research approved 45 novel drugs in 2015 for use by patients, according to the latest FDA data. Novel drugs are prescription medications that seek to treat “previously unmet medical needs or otherwise significantly help to advance patient care and public health,” the FDA says. The record 45 approvals top the previous record of 41 first set in 2011 and tied in both 2012 and 2014. However, the pace of approvals has slowed so far this year. Through mid-July, the FDA's CDER has blessed just 15 novel drugs for use by patients.

Drug Spend

New national health expenditure data show moderation in prescription drug spend increases

Total spending on prescription drugs rose 8.1 percent in 2015 to $321.9 billion, according to the national health expenditure figures from the Centers for Medicare & Medicaid Services. That's down from a 12.1 percent increase in 2014. The new figures project a moderation in drug spending over the next decade. The CMS said it expects spending hikes on prescription drugs to average 6.7 percent from 2016 through 2025 “as the influence on spending from newly approved drugs is expected to fade after two years of above average impacts.”

Switching to generic equivalent prescription medications could save billions in health care costs

A study in JAMA Internal Medicine concluded that switching to clinically appropriate generic medications could have reduced the nation's drug bill by $73 billion from 2010 to 2012. Another $24.6 billion could have been saved in patients' out-of-pocket costs during that same period from using generic prescriptions. Therapeutic drug substitution “offers a potential mechanism to significantly decrease drug costs if it can be implemented in a way that does not negatively affect quality of care,” the researchers said.

Oncology Drugs

Global oncology pharmaceutical market projected to reach $150 billion by 2020

The average annual growth in the oncology drug market will range between 7.5 percent and 10.5 percent through 2020, said a report from the IMS Institute for Healthcare Informatics. Those annual increases will push the market to $150 billion in four years, the report said. “Wider utilization of new products -- especially immunotherapies -- will drive much of the growth, offset by reduced use of some existing treatments,” the report said. IMS Health also said it expects payers to pursue new reimbursement models in an “effort to drive greater value from their expenditures on these drugs.”

Advancements in oncology drugs saved billions in health care costs in Canada

A research paper published by the Montreal Economic Institute said new cancer drugs that became available to Canadian residents from 1980 through 1997 reduced national health expenditures in the country by $4.7 billion (Canadian dollars) in 2012. The paper attributed the savings to inpatient hospital days avoided because of the therapeutic effects of the new oncology drugs. The number of inpatient hospital days for cancer care dropped 23 percent from 1995 to 2012 despite that fact that the number of new cancer cases diagnosed during that period rose 46 percent, the paper said. The drugs reduced inpatient hospital days for cancer care by more than 1.7 million in 2012, saving the $4.7 billion. Total spending on oncology drugs that year in Canada was $3.8 billion. The MEI said, “Pharmaceutical innovation is responsible for a large part of such long-term improvements in health and longevity.”

Specialty Drugs

Study documents rising demand for specialty pharmaceuticals

Using claims data from employers and health plans, a researcher at the University of North Carolina found growing demand for specialty drugs as well as the willingness of employers and plans to cover specialty drugs. The study, which appeared in Health Affairs, defined specialty drugs as prescription medications that cost $600 or more for a 30-day supply. The study found that the percentage of prescription medications covered by health plans that were specialty drugs rose to 11.8 percent in 2014 from 3 percent in 2003. Also, the percentage of prescriptions filled that were specialty drugs rose to 1.8 percent in 2014 from 0.6 percent in 2003.

More employers adding fourth tier to drug benefits plans to cover specialty pharmaceuticals

Some 44.1 percent of employers used four or more tiers in their prescription drug plans for workers in 2015, according to a new report on prescription drug benefits trends released by United Benefit Advisors, the Indianapolis-based employee benefits consulting firm. That's up from 27.9 percent in 2013, representing a nearly 60 percent jump in just two years. Under a tiered drug benefits plan, prescription medications are separated by type with each tier coming with a different copay level. Typically, a health plan charges higher copays for higher tiers. The first tier often is generic medications followed by formulary brand medications in the second tier, non-formulary brand medications in the third tier and biotech or specialty drugs in the fourth or higher tier. The median copay for drugs in the first tier of a four-tier plan was $10 in 2015, according to the report. It was $35 for second-tier drugs; $60 for third-tier drugs; and $100 for fourth-tier drugs.

Clinical Trials

More patient, provider education needed to increase participation in clinical trials

Only 35 percent of surveyed consumers said they were “likely” to enroll in a clinical trial following a cancer diagnosis. That's according to a poll conducted on behalf of the Memorial Sloan Kettering Cancer Center in New York. The top three barriers to participation cited by the more than 1,500 consumers surveyed were: worry over side effects/safety (55 percent); uncertainty about insurance and out-of-pocket costs (50 percent); and inconvenience of trial locations (48 percent). Nearly 600 physicians also were polled, and 56 percent said they considered clinical trials late in a patient's treatment with 28 percent saying clinical trials were treatments of “last resort.” Sloan Kettering said, “It is critical that the cancer community address common myths and misunderstandings around issues like effectiveness, safety, use of placebo, and at which point in treatment a trial should be considered.”

Manufacturers' research support to teaching hospitals and doctors nears $4 billion

Drug, device and other medical manufacturers reported $7.52 billion in payments and other financial support to teaching hospitals and physicians in 2015, according to data from the Centers for Medicare & Medicaid Services. That's up from $7.49 billion in 2014. Of the total payments, $3.89 billion, or nearly 52 percent, was research support. That's up slightly from $3.79 billion in 2014.

Pharmaceutical Value

Value-based reimbursement models create business opportunities for drug manufacturers

Health plans increasingly are interested in paying for prescription medications based on patient outcomes, and that shift will be good for drug manufacturers. That's according to an analysis released by Avalere Health. A survey of 42 health plans by the consulting firm found that 63 percent had “high” or “very high” interest in entering into outcomes-based reimbursement contracts with pharmaceutical manufacturers for Hepatitis C drugs, 53 percent for oncology drugs and 41 percent for rheumatoid arthritis drugs. Avalere said such contracts can be mutually beneficial for health plans, drug manufacturers and providers: “These types of arrangements encourage collaboration between stakeholders, which may increase the predictability of coverage and reimbursement processes.”

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