Keith Loria

Keith Loria is a contributing writer to Medical Economics.

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Autoimmune diseases are often debilitating and, in some cases, life-threatening. A National Institutes of Health study revealed that as many as 23.5 million Americans experience one of more than 80 autoimmune diseases, and that number continues to rise every year.

Here is a look at some drugs at various stages of development for autoimmune diseases.

In January, the FDA approved Tepezza for thyroid eye disease (TED) in adults. Srini Ramanathan, Ph.D., vice president of developmental sciences at Horizon Therapeutics, which is headquartered in Ireland, says the company is investigating uses for Tepezza beyond TED. The drug blocks insulinlike growth factor type 1 receptor, which is part of the signaling pathway activated by autoantibodies in TED, leading to inflammation and expansion of tissue behind the eye.

“With Tepezza, we are currently conducting a trial in fibrotic TED, in which there is no longer active inflammation, but symptoms such as eye bulging and double vision remain,” Ramanathan says. “Beyond TED, we believe that Tepezza has a role in addressing the underlying mechanisms of fibrosis, which means it may have activity in diseases like systemic sclerosis.”

Horizon Therapeutics will begin an exploratory clinical trial later this year of diffuse cutaneous systemic sclerosis (dcSSc), a subtype of systemic sclerosis that causes fibrosis over large areas of the skin and often involves internal organ damage, especially to the lungs, kidneys and gastrointestinal tract.

“We are excited about the possibilities for Tepezza because it interferes with underlying biology of inflammation and fibrosis at a mechanistic level,” Ramanathan says. “That could make it a promising candidate for systemic sclerosis or other diseases that involve fibrosis, and our development program will explore some of those opportunities in coming months.”

Another drug under investigation at Horizon is HZN-825, which is scheduled to be evaluated in a phase 2b trial in 2021.

“HZN-825 is an inhibitor of the lysophosphatidic acid receptor LPAR1,” Ramanathan says. “Lysophosphatidic acid (LPA) is a bioactive lipid that is normally produced at sites of inflammation or injury to promote healing. But in autoimmune diseases like dcSSc, elevated levels of LPA can bind with LPAR1 and lead to fibrosis.”

Ramanathan says Horizon was encouraged by the results of a phase 2a study in patients with dcSSC published in 2018 that showed an improvement in skin thickness scores. He says HZN-825 is a complementary mechanistic approach to Tepezza.

Yuval Cohen, Ph.D., CEO of Corbus Pharmaceuticals in Norwood, Massachusetts, touts lenabasum (JBT-101), an oral, nonimmunosuppressive small molecule that binds to the cannabinoid receptor type 2 on immune cells, as a new drug in the pipeline. This receptor plays a key part in inflammation and fibrosis. If successful, lenabasum would be the first drug in this class to be approved.

“We have promising preclinical and clinical data on lenabasum in a variety of animal models and in three separate clinical indications where it was tested,” Cohen says. “For each of these indications, lenabasum is currently in its final, large, multinational clinical study seeking to confirm its efficacy and provide the basis for its approval.”

The indications are systemic sclerosis, dermatomyositis and cystic fibrosis. Lenabasum, which was previously called anabasum, also is being tested in an early stage clinical study for lupus.

Top-line data from studies of lenabasum as a treatment for systemic sclerosis and cystic fibrosis are expected this summer, Cohen says. Systemic sclerosis, which causes a buildup of scar tissue, affects the skin and sometimes the joints, gastrointestinal tract and other organs. The autoimmune disease affects up to 75,000 Americans.

A key unmet need in cystic fibrosis is the treatment of inflammation to reduce pulmonary exacerbations, an acute worsening of inflammation in the lungs with an increase in respiratory symptoms, Cohen says. Lenabasum is being tested as a treatment.

Because currently approved medications can’t control rheumatoid arthritis (RA) in about 1 in 4 patients with the disease, there is a need for new therapies.

Anca Askanase, M.D., MPH, a rheumatologist at Columbia University Irving Medical Center in New York City and director of rheumatology clinical trials, shares a long list of candidates: selective JAK inhibitors, Bruton tyrosine kinase inhibitors, phosphoinositide-3- kinase pathway inhibitors, antibodies to the granulocyte-monocyte colony-stimulating factor receptor and bispecific antibodies that target type 2 cytokines. But she singles out two for special mention.

“Olokizumab is an anti-IL6 immune modulator in late phase 3 trials, and ibrutinib (Imbruvica) is an oral BTK inhibitor, an important regulator of B-cell proliferation and myeloid cell activity, which was effective and safe in the treatment of MTX (methotrexate) nonresponders in a phase 2 trial,” she says.

“Each new drug, each new MOA (mechanism of action) is a step forward,” Askanase says. “RA pathogenesis is not fully understood. The medications we have used thus far provide limited response rates, (and) combination therapies have higher success rates but are limited by (adverse) effects.”

People with autoimmune diseases are particularly vulnerable to the latest known virus, which is why BetterLife Pharma has been putting efforts into researching drugs that can help.

Ahmad Doroudian, Ph.D., CEO of the Montreal company, says it is investigating the effectiveness of interferon alfa-2b for patients with the virus and plans to launch a randomized, double-blind, placebo-controlled phase 3 study in the coming weeks.

“Interferons are antiviral agents that modulate functions of the immune system,” Doroudian explains. “First identified in 1957, they were named for their ability to interfere with viral replication by protecting cells from infections. Interferon marshals the body’s own defenses against a broad spectrum of infections.” These agents also work in a variety of ways, such as by altering cell membranes to deny viruses entry or exit. Interferons are generally classified into three groups: IFN-1, IFN2 and IFN-3.

“At (BetterLife), my team and I have been working on our own version of interferon alfa-2 (IFNa2b), AP-003,” Doroudian says. “It is our patented, isoform-free inhalation formulation, and its first target indication will be early stage COVID-19 disease. We chose to focus on developing IFNa2b and believe it will be successful because, while all IFNs are important for fighting viral infections and for the regulation of the immune system, IFN-1s are among the first cytokines produced during a viral infection.”

He says he believes that AP-003 will be a significant breakthrough for patients with the latest virus because IFNa2b has already been studied against other coronaviruses, including MERS-CoV, which causes Middle East respiratory syndrome, and SARS-CoV, which causes severe acute respiratory syndrome.

Keith Loria is a freelance writer in the Washington, D.C., area.

Articles

Potential agents to battle inflammation and other processes move through development pipeline.

New Drugs Take Aim at Autoimmune Diseases

Biosimilars are supposed to create competition on price, and that holds some appeal for conservative thinkers who favor free-market economics.

“Expanding the use of biosimilars to treat serious illnesses like cancer or autoimmune diseases could reduce a patient's out-of-pocket costs by 17%,” notes 

, director of the Center for Medical Economics and Innovation at the 

, a conservative free-market think tank in California. “Policymakers should make it a priority to eliminate the inefficiencies standing in the way of more patients saving by using biosimilars.”

In the biologic drug classes in the U.S. and European where biosimilars offer some competition, biosimilar prices are between 20% and 40% lower compared to the prices that existed prior to the introduction of competition,” Winegarden says. “Since biologic medicines are some of the most expensive drugs that are driving the affordability problem in the U.S., biosimilar competition can meaningfully reduce these cost pressures and improve overall affordability.”

The total cost savings will depend, of course, on biosimilars share of market. According to Winegarden’s calculations, based on Medicare’s latest average sales price data and total volumes, the Medicare savings from biosimilars could be between $6.2 billion and $10.5 billion if their share of the prescriptions were between 25% percent and 75%. 

“These savings are compared relative to an ‘originator biologics only’ baseline and uses the prices prior to the introduction of biosimilars to compute the savings to capture the competitive effects on the originator’s pricing,” Winegarden says. “The introduction of competition encourages the originator manufacturers to lower their prices.” Winegarden’s calculations are just for the nine drug classes where biosimilars have been approved already. Greater savings can be had if biosimilars reach a higher share and biosimilars are introduced in more drug classes.”

To ensure an adequate pipeline of biosimilars, the current biosimilars need to gain a significant market share. But unlike generic copies ofbrand-name small-molecule drugs, biosimilars of brand-name biologics are still expensive to produce. “Manufacturers will be unable­-unwilling to invest the necessary resources into developing more biosimilars if they will lose money doing so,” Winegarden says.

“Fixing the disincentives to demonstrate that biosimilars are viable is the most important change that will help ensure biosimilar research and development will continue.”

The key to that, he notes, are education and the removal of the disincentives for use/create positive incentives to prescribe biosimilars. The education component needs to be driven by the medical evidence that shows that biosimilars have the same clinical impacts as the originator products.

“In terms of creating positive incentives, it is essential to ensure that providers, patients, and insurers all benefit from the savings potential,” Winegarden says. “Too often, formularies list the more expensive originator biologic drug as the preferred drug, meaning patients must first fail on the more expensive originator biologic before they can be prescribed the lower cost biosimilar. This biases the system away from lower-cost drugs, which is clearly an adverse incentive to use biosimilars.”

Therefore, creating a separate formulary tier for lower-cost biosimilars that has lower copays and coinsurance rates can eliminate this and help patients benefit.

“Providers can often face disincentives to use biosimilars due to the current buy-and-bill payment model that typically reimburses providers as a percentage of the drugs costs,” Winegarden says. “This means that providers can lose money by prescribing lower-cost medicines—a disincentive that should be removed.”

An efficient drug market has to simultaneously incentivize innovation and affordability. This balance can be difficult, but the branded medicine-generic medicine balance enabled by the Hatch-Waxman Act shows, in Winegarden’s opinion, that the combination of a set period of exclusivity to reward innovation followed by an open and competitive market is achieveable.

“Biosimilars represent the opportunity to repeat this process in the biologics market, and the evidence from the EU, as well as some of the signs here in the U.S., demonstrate that this will work,” Winegarden says. “Removing the disincentives discouraging the development of a healthy biosimilars market is essential for making this happen.”

Pacific Research Institute’s Winegarden Sees Dose of Competition as Way to Lower OOP Costs





Biosimilars Fan Club Includes Free-Market Conservatives

Cardinal Health recently conducted a survey of more than 100 rheumatologists asking their feelings about biosimilars, and the findings revealed that the majority of them were familiar with and comfortable prescribing biosimilars. 

Gordon Lam, M.D., FACR, rheumatologist and medical director of clinical and translational research with Atrium Health in Charlotte, NC, notes rheumatologists want greater access to treatment for their patients and lower costs, which is why 90% of those surveyed were in favor of biosimilars.

“Today, biologic drugs account for 40% of all U.S. drug costs, but only 2% of all prescriptions,” he says. “Rheumatologists believe that wider availability of biosimilars will increase competition and drive down costs across the market, which would ultimately expand access for patients.”

Industry experts have predicted that biosimilars could save up to $54 million in drug spending by 2021. The benefit for patients is key, which is why 64% of the surveyed providers said cost savings for patients was “very important” or “extremely important.”

However, a majority of rheumatologists surveyed still indicated they are reluctant to switch from reference products to biosimilars, at least partly because they don’t believe there is enough of a cost savings. In fact, only 11% of the rheumatologists surveyed said they were likely to prescribe a biosimilar to a patient who is having success on a reference product today — and the lack of a significant cost benefit appears to be a key reason. 

“Most biosimilars on the market today are priced at only a 15%-40% discount of the reference product list price, and 66% of our survey respondents said those economics were not favorable enough to motivate them to switch,” Lam says. “This may be because they fear the majority of the discount will go to pharmacy benefit managers and payers, not to patients and practices.”

Additionally, 66% of rheumatologists said they are unlikely to switch to biosimilars until there is more payer adoption. Today, more than 40%t of payers have no policies for mandatory conversion to biosimilars.

The survey also showed that concerns about biosimilars and whether they are, in fact, similar enough to their reference products.

“More than a third of our survey respondents (38%) said doubts about efficacy was their top concern about biosimilars, and 45% said they had concerns about interchangeability and extrapolation for other indications when it came to the FDA approval process.” 

He notes many rheumatologists also feel some disappointment that biosimilars are not as easy to access or as cost-effective as they would have hoped by 2020.

At this time, the two biosimilars prescribed most often by rheumatologists are Inflectra (infliximab-dyyb) and Renflexis (infliximab-abda), which have Remicade (infliximab) as their reference product. 

In the future, Lam expects to see the growing use of Ruxience (rituximab-pvvr) and Truxima (rituximab-abbs), biosimilars to Rituxan (rituximab) biosimilars, both of which are relatively new to the market.

“Many rheumatologists are eager to access biosimilars that have been approved for two other leading rheumatoid arthritis drugs—Enbrel (etanercept) and Humira (adalimumab),” Lam says. “To date, these products have not come to market yet due to delays resulting from patent litigation with the manufacturers of the reference products. There is also optimism that biosimilars will be developed for the branded biologics that are currently used to treat other rheumatic diseases, like lupus and gout.”

While many rheumatologists are frustrated that the promise of cost savings through biosimilars has not yet been fulfilled, there are signs that the tide is starting to turn. Lam notes education about biosimilars has led to greater understanding and acceptance of the efficacy and safety of these agents among both physicians and patients.

“Legislation has been proposed to increase the transparency of biologic patents, which may curb litigation that delays the entry of biosimilar competitors once they are approved,” he says. “In addition, regulations that target anti-competitive practices of exclusionary contracts may free the forces of supply and demand, thereby increasing access and lowering costs.”

Meanwhile, the net price of some reference products has fallen over the past few years.

The price drop helps with healthcare costs — which is the whole point of biosimilars—although it has the effect of reducing the appeal of biosimilars and may, ultimately, lead to a less competitive market because biosimilars can’t gain a foothold in the market. The sales price of Janssen’s Remicade has fallen by an annual average of 14.4% since the introduction of its biosimilar competitors. 

Survey: Rheumatologists Still Reluctant to Switch Patients to Biosimilars 

, CEO of Canton & Company, a healthcare advisory and consultancy company, has spent a career working with healthcare professionals across the industry.

Prior to founding Canton & Company, McDaniel was the founder, chairman and CEO of Sage Growth Partners; vice chairman and chairman of Continuum Health; CEO of Lighthouse Risk Solutions; SVP and general manager of consulting of Northrop Grumman Health IT' and more.

He also taught health economics for more than 20 years at Carey Business School and the Bloomberg School of Public Health, both at Johns Hopkins University in
Baltimore.

®, recently interviewed McDaniel. This transcript has been edited for clarity and length.

How would you characterize the expected impact of the COVID-19 pandemic on the health economy overall and how the possible economic downturn will affect healthcare broadly?

Like any other sentinel event, there will be short- and loving-term implications. Given the order of magnitude, and the “different-ness” of this event, the response has been dramatic. For example, policymakers de-regulated licensing and communications, allowing providers—regardless of where they were licensed—to treat patients in need. This was a humanitarian response and an economic response. Consumers needed treatment and health services; providers needed revenue.

We have seen a dramatic pivot of services from face-to-face to remote visits. It is hard to envision that we will fully return to the prior regulatory regime. Now that there are signs of return, I suspect hospitals will uncover pent-up demand and, starting with the rescheduling of elective procedures, begin the process of getting consumers back in queue.There will, however, be some permanent impact of services volumes and questions as to whether certain institutional settings, like hospitals, are really required to serve certain needs.

Relative to the health insurance industry, many insurers are the beneficiaries of lower health services utilization and deferred care. This twill likely result in improved financial performance for the balance of 2020 and into 2021. However, given the artificial nature of the impacts, we might expect both utilization backlog and worsening health status to impact loss ratios in the next several years. I suspect that health plans will be under pressure to meet the statutory levels for medical spending and may look to recontract with their networks to offer enhanced payments in return for clinical improvement activities as they are loathe to rebate premium dollars to subscribers.


Finally, the healthcare industry’s return has a larger economic impact than most people suspect; with roughly 1 in 7 jobs tied to the industry, the sooner the “business of healthcare” returns, the better it is for the business of America, and our economic standing. In most communities, hospitals are the largest employers with physician organizations closely following. Healthcare’s return to normalcy will become a key driver of overall economic health.


How will it impact hospital systems. What challenges will it create?

To date, the impact on hospitals and other institutional entities has been significant. Seemingly regardless of proximity to COVID outbreaks, elective hospital and ambulatory health services everywhere have been deemed as nonessential and healthcare services capacity has been re-purposed to prepare for the onslaught of virus cases – in some cases a reality, in others not so much. Some hospitals, those in hot zones for COVID have continued to be busy but have experienced a pivot from their general acute care purpose to mono-focused on the virus. Many other hospitals have been forced to curtail services and implement social distancing, and those have seen dramatic reductions in their volumes. Generally immune to economic downturns, we have seen COVID cause many hospitals to furlough significant staff. As the recovery begins in earnest, many hospitals are ramping up staff to recall patients that have been waiting for elective services, with some executives suggesting they may operate to deliver these services seven days a week for some period of time.
 

Many will likely be laying people off. How soon do you believe regular medical services will spring back to life? And what will make that happen?

A return to scheduling prior cancellations is starting in earnest in many parts of the country. I think this re-ramp will continue through the summer, and many hospital executives I know are targeting 75%-80% of full volume as a goal by year end. The return to some level of normalcy for healthcare organizations is an important economic signal, driving its concentration of employees. While I expect some organizations to affect reductions in force, many have already been triggered with leaders now planning how and when they can get staff back to work. Return to work in healthcare organizations is dependent upon the ability of those organizations to withstand a second wave of cases.



How about payers? What will they be facing with the possible economic downturn to come

So far, I think most payers are in a wait-and-see mode, with this being described as the calm before the storm. Most actuaries that I have talked with are witnessing suppressed 

(MLRs)and are projecting the same through the end of 2020. But the question is when will pent-up demand start to impact MLRs in the future?

There is also building concern about the long-term impact of chronically ill patients that have forgone care during the COVID-induced shutdown; others are concerned about poor dietary and sedentary habits exacerbated during the shut-in. In the tale of two cities that is our reimbursement system, provider organizations that rely on predominantly FFS (fee-for-service) payments have been scrambling and struggling, while risk-bearing provider organizations are, in some cases, awash in cash. Among that latter group, albeit a small segment of provider organizations nationwide, the winners will be those that used the “downtime” to invest in operations improvement and new capabilities that will serve them well post-recovery.

Many will be paying COVID-19 related payouts but not other things. Will that affect anything? 

Again, in the short term, COVID has been a good guy for payers— but it remains to be seen what the tail involves.

How about Medicare and Medicaid? What do you expect the impact to be there?

I honestly do not expect much to change with Medicare and Medicaid. I think the writing is on the wall, these programs are on a forced march to defined-contribution. The favorable economics and accountability of Medicare Advantage and Medicaid managed care are increasingly undeniable. If anything, this crisis validated the private market’s ability to manage through a crisis, at least related to private-sector healthcare. Given the collective government response to COVID vis-à-vis industry’s response, Americans will come out of COVID wanting to be aligned with professional organizations that are consumer centric.

What do you feel is important in getting things back to normal and having a sound health economy again?

Testing, testing, testing, and a dramatic, consistent flattening of the curve. The other game changer would be a faster than expected vaccine breakthrough. I do also get sense that Americans are feeling that maybe the economic harm isn’t commensurate with the health impacts moving forward, and people are hankering to get back to business as usual.

Historically, large unemployment numbers meant people would skip going to the doctor. Is that something that we should fear this time around?

Given the nature of this pandemic, no fault of anyone who is unemployed or will be, I suspect that CMS and the states will deploy various strategies to ensure continuation of access and some semblance of benefits. I don’t know if that means ACA and new Medicaid expansion, but I do think it’s advantageous that most of our states are waiver states and have the private health plan commerce infrastructure in place to accommodate scaling for more enrollees.

How does Medicaid expansion and the ACA provide a health insurance safety net of sorts?

It’s unfortunate to think that we’d have to rely on Medicaid expansion in this situation, but given the explosion of newly uninsured, the fact that we have a majority of states that are Medicaid waiver states (

waivers that allow states to move their Medicaid populations into managed care plans), and many of those states expanded eligibility for Medicaid under ACA – to 133% of FPL (federal poverty level) we are better positioned for expansion of Medicaid than we were after the financial crisis. There will likely be additional pressure placed on the feds by the states for enhanced short-term benefits and continued calls for additional state expansion.

What can hospitals do to get back on track?

Getting back on track will require skill, luck, and lots of elbow grease. The elbow grease will entail massive outreach to reestablish connections with patients. I do believe hospitals and their boards will be spending more time trying to prepare for the next black swan event.

I think it’s fair to say that it was almost impossible to plan for Covid, but was it impossible to plan for scenarios where facilities were closed for extended periods of time, where we needed to affect mass layoffs, where we needed to connect with people virtually, etcetera? Given the retail experience over the past 10 years, maybe this is healthcare’s example of Blockbuster vs. Netflix.

What is the impact on specialists versus primary care doctors? What do you see as far as the impact on both segments?

I think its primary care’s time to shine and take the mantle, from gatekeeper to quarterback. We have seen clearly that most of what is needed by patients can be done in their homes and communities, especially when those efforts are spearheaded in partnership with a high-quality primary care physician and an integrated care team.

What can payers do to withstand any long-term effects?

This is a tough question, as all aspects of what we have come to understand as managed care have been eliminated from the playbook. I think the best thing payers can do is continue to encourage smart, provider-based organizations to manage risk-based populations and empower them to develop a truly holistic health ecosystem. I am not sure if hospitals value this opportunity, but we should see a whole new level of plan-provider partnerships develop from this.

The veteran healthcare executive says this may be a Netflix vs. Blockbuster moment for hospitals. And health plans may be under pressure to meet the statutory levels for medical spending and recontract with their networks to offer enhanced payments in return for clinical improvement activities.

Author | Keith Loria

Articles

New Drugs Take Aim at Autoimmune Diseases

Biosimilars Fan Club Includes Free-Market Conservatives

Survey: Rheumatologists Still Reluctant to Switch Patients to Biosimilars

Q&A With Don McDaniel