WARNING: We’re getting into heavy stuff this week, like compassionate use, 340B pricing policy and value frameworks, but we promise you don’t need to be an economics Ph.D. to follow along. We often get asked to pull out our crystal balls and forecast risks. Here are three trends on the horizon that you should know about:
Read on for The Week That Was (no slide rule required).
RIGHT TO TRY: REQUIRED READING FOR PHASE 3 DEVELOPERS
Last week, California became the 32nd state to pass a “Right to Try” law, designed to make it easier for terminally ill patients to gain access to investigational medicines. Translate: these medicines have not been approved by the FDA. In the past, the FDA has been required to review patients’ requests for investigational medicines. The agency even streamlined the process as a result of public pressure last year. Yet, state-based laws, such as the one passed in California, minimize the FDA’s oversight of “early” or “expanded access” to investigational medicines. Such efforts are also commonly referred to as “compassionate use.” Manufacturers are not obligated to provide experimental medicines in states with Right to Try laws, but the public pressure when patients believe it is a matter of life and death can be tremendous and heart-wrenching.
Any biopharmaceutical with a medicine in late-stage trials in highly-sensitive diseases such as rare pediatric or terminal conditions, may become the center of a high-profile, compassionate use campaign. Third-party organizations who seek to minimize the role of government agencies strongly support the Right-To-Try movement, and they bring their ingenuity in policy and media strategies to these sensitive decisions. While a federal Right to Try bill stalled in the Senate last week, medicine makers should not take the RTT movement for granted. Start preparing now for increases in early access requests in 2017.
CONGRESS CLOSING ORPHAN DRUG LOOPHOLE?
“Though she be but little, she is fierce!” Shakespeare wasn’t referring to Vermont (because technically it didn’t exist), but the moniker seemingly applies. The Green Mountain State is small, but mighty when it comes to drug pricing and transparency. Vermont was the first state to mandate advance notice of drug price increases, and last week Representatives Peter Welch (D-VT) and Morgan Griffith (R-VA) introduced legislation to limit the ‘orphan drug’ loophole in the Medicare 340B Drug Pricing Program. So what does this mean? Under 340B, drug manufacturers must provide outpatient medicines to eligible health care organizations, like hospitals, at reduced prices. BUT currently, orphan drugs, which tend to be expensive, are excluded from this program. Welch and Griffith want to close this “loophole” so Medicare only pays for costly orphan drugs when they are used for the rare disease for which the drug was designated. In other words, policymakers don’t want to pay for orphan medicines that are being used for off-label, non-rare indications.
While rare disease therapies have historically been “immune” from pricing pressures, this bill represents culminating concerns over purported abuse of the Orphan Drug Act. Politicians want to cut reimbursement for orphan drugs that secure expedited approvals and price protections but that are then marketed for use in other diseases – a process known as “indication creep.” Pushing back on the price of medicines polls well — and legislators know it – so expect more legislative proposals ahead.
IN OTHER DEBATES: VALUE VS. COST
A hotly contested theme being debated this fall (no, it has nothing to do with a wall or TPP), is how society determines the value of medical innovation relative to costs. Our counselors had a front-row seat last week at the National Pharmaceutical Council’s “Assessing Value” conference where leading biopharmas, payers, patient advocates and health economists gathered in Washington, DC, to discuss the “promise and pitfalls” of frameworks to measure the value of drugs. While the conference focused on five major frameworks (ASCO, ACC–AHA, Drug Abacus, NCCN and ICER), most of the comments were directed at the Institute of Clinical & Economic Review’s (ICER) president, Dr. Steve Pearson.
Saying he’s discouraged by the discourse between pharma and payers, Pearson suggested Value Frameworks must strike a “grand bargain.” He argued patients should be the primary audience in defining value; pharmaceuticals should bring costs in alignment with value, and payers should revamp insurance design to eliminate barriers to access for high-value medicines. Pearson hinted that ICER is planning significant changes to its methodology in early 2017, including revising the way it presents “budget impact,” since that figure often gets misconstrued. It promises to improve patient transparency into the ICER methodology.
We agree with NPC’s Bobby DuBois who asserted that value frameworks are not all created equal, nor do they need to be. And they are certainly not going away. For example, NCCN and ASCO’s frameworks focus on helping providers and patients make treatment decisions, whereas ICER reviews are primarily a payer tool. The Chief Medical Officers from Humana and Harvard Pilgrim Health Care have said they rely on value assessments (namely ICER) when setting premiums—and would prefer to have them pre-PDUFA, as they plan the budget impact of new drugs 18 months out. If value frameworks continue as a growing factor in how medicines are valued relative to costs, they need to include more real-world practice data, not just clinical trial endpoints, and patients should be involved in the framework design from the beginning.
That is all for now. Until next week,
– The Issues Management Practice @inVentiv Health PR
If you missed us last week, find The Week That Was by clicking here.