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    Payers can predict budget implications of high-cost drugs in the pipeline

    Assessing the potential clinical and economic impacts of investigational specialty drugs is key to forecasting their budgetary implications for payers, according to a speaker at the Academy of Managed Care Pharmacy (AMCP) 2017 Nexus in Dallas.

    Innovative—and expensive—investigational gene therapies, for example, could represent real clinical advances against very specific patient subpopulations, said Nicole Trask, PharmD, Clinical Consultant Pharmacist at the University of Massachusetts in Shrewsbury.

    But their high prices can also represent budgeting challenges. “Approval of high-cost gene therapies might highlight the need for innovative payment models,” she said.

    Trask reviewed budget impact assessment and spotlighted potential high-impact drugs in the 2018-2019 pharmaceutical pipeline during the October 18 session.

    Predicting impact

    High-impact drugs are those agents with clinical impact, offering improved efficacy over existing medications, and economic impact, a function of cost and volume, or patient population, she explained. Clinical impact is assessed with clinical trial data and evaluations of the therapeutic alternatives—“‘me-too’ drugs versus first in class,” Trask said. Market competition and consensus treatment guidelines also affect the clinical impact of new approvals, she added.

    Economic impact, in contrast, is a function of cost and volume. High cost, high volume drugs will have the highest impact. Cost includes pricing, supplemental rebates, and increasing evaluations of value, reflected in value-based contracting and value assessments by bodies like the federal Agency for Healthcare Research and Quality or Institute for Clinical and Economic Review. Volume is determined by the incidence or prevalence of the disease, duration of therapy, and dosing schedules.

    A drug’s economic and clinical impact hinge partly on patient characteristics. High cholesterol or hypertension patients might be less motivated to take a medication regularly, because they are not always symptomatic, Trask explained. Value-based contracts affect economic impacts as well, because they allow payment based on prespecified clinical outcomes.

    Forecasting the budget impacts of new drugs requires proactive pipeline monitoring, Trask said. “Focus on the high-cost disease states, specialty drugs like gene therapy, CAR-T therapy, NASH, monoclonal antibodies,” she advised.

    “Proactive pipeline monitoring and a solid understanding of plan membership are key to anticipating the budget impact of new drugs.”

    Budget impact analysis should be prioritized for drugs with potentially high clinical and economic impact, based on pharmacy or medical claims data on disease prevalence for a beneficiary population and estimates of market share, uptake, and cost, she said.

    “It is difficult to predict uptake of new drugs,” she cautioned. Clinician or patient skepticism surrounding safety or efficacy can lead to “clinical inertia” and slow uptake of new agents, she said. “Prescribers may not be keen to be the first to adopt a new drug.”

    She added: “We project net costs to our budget of cost increases, to take into consideration shifting utilization and cannibalization.”

    Trask described several investigational drugs in the 2018-2019 pharmaceutical pipeline to illustrate impact-analysis methodologies, including treatments for non-Hodgkin lymphoma (NHL), multi-drug resistant HIV-1, and non-alcoholic steatohepatitis (NASH).

    Next: Non-Hodgkin lymphoma

     

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