RA medications require unique cost considerations

December 18, 2015

When it comes to managing rheumatoid arthritis drugs, cost comes in various sizes and shapes.

When it comes to managing rheumatoid arthritis (RA) drugs, cost comes in various sizes and shapes, according to experts. 

Evans

“Traditionally, the easiest understanding of cost is to compare one standard unit of treatment to another, or the cost of acquisition in procurement terms,” says Todd Evans, director, strategy, sales and marketing, pharma/life sciences, health advisory industries at PwC. “However, looking at RA treatment, rheumatologists manage dosing rates as a means of fine tuning treatment, hoping to meet and prolong the clinical impact and the needs of the patient in managing the condition. This means that not all patients are receiving the same overall experienced cost per treatment. Yet, there is continued focus on ‘cost’ per unit in the game of negotiation.”

Even more surprising for cost is that patients rarely present themselves as single condition patients that only require their RA to be treated, Evans says. “The fact is that many RA patients may also have chronic conditions, mental conditions and other immunological diseases. Two, three and four comorbidities in an RA patient converts to a total cost of care explosion by comparison, dwarfing the cost and savings of unit-based cost management,” he says. “Significantly, ‘cost’ in this case is also compounded for the payer since failure to manage RA can become so aggravating to the patient that other conditions worsen and then require costly acute interventions and even institutionalization.”

In addition, injectables, infused and oral RA treatments carry differing levels of cost to administer the drug, Evans says. “However, looking ahead, physician employment mitigates against drug selection based upon how a physician may be inclined to favor treatments that optimize their incomes, all other factors being equal,” he says. “Reducing the impact of method of administration and its reimbursement impact to physicians enables a laser focus on clinical optimization as a primary and even sole focus.”

Finally, Evans says that bundled payments and capitated arrangements with health systems could encourage a total cost of care consideration for the RA patient, which diminishes drug to drug comparison claims since a total view of patient conditions and costs become the comparator with real-world variables not often captured in clinical trials.

Next: Payer implications

 

 

Payer implications

The RA space is mature in terms of treatment options and has a rich pipeline of potential successors to the anti-TNF biologics.

“However, the diagnostic journey is lengthy and the trial and error search for a treatment that achieves the patient’s biological acceptance, while mitigating the manifestations of uncontrolled RA, can be an arduous process of investment by the rheumatologist, the patient and the risk bearing entity, or payer,” says Evans. 

“Achieving this balance between suppressing the RA patient’s condition and suffering, slowing the disease’s progression and minimizing aggravating side effects is difficult,” he says. “It is often the art of the clinician that optimizes science in the product, and switching patients to alternative products without a highly compelling case of superiority is enormously difficult to achieve. Rheumatologists are generally unwilling to switch to other products unless they have strong clinical industry practice to reference or have built their own experience.  This increases the slope of resistance to adoption for any new entrants in RA unless they have achieved true clinical superiority.” 

Next: Future

 

Future

“Managed care generally should be looking for a cure, whether from a novel [new molecular entity] or a yet-to-be-conceived cocktail,” Evans says. “Barring that, the industry’s RA pipeline should be judged for clinical superiority and not mere non-inferiority. Increasing efficacy from successors of the first JAK3s will grow in potency as practical and effective alternatives to the current dominance by anti-TNF category leaders. Further on down the line, we can expect the ILs to come to market, offering further diversification of both mechanisms of action, methods of administration and side effect profiles/minimization.”

Fundamentally, managed care will see increasing RA pipeline choice. However, the traditional assumptions that this favors the compression of price by commoditizing a class of drug does not play out so neatly for RA, Evans says.

“One way managed care can control cost is by using its metadata and holistic 360-degree radar of the RA patient, comorbidities, diagnostics and drug history to reveal sub-populations of RA patients and their related rate of health resource consumption,” Evans says. “We can then hope to see predictive divisions of RA patients into discrete camps of biological differentiation for targeted treatments to align against, avoiding trial and error drug therapy and/or step therapies. Currently, we tend to see a step therapy process of escalation from one drug to the next as acuity and difficulty to reach a goal of therapy indexes with access to more costly treatment therapies. This is clearly not the pinnacle of clinical excellence in medicine, as bypassing less-effective treatments and going straight to optimal treatment is best when the data may come to suggest this as the most appropriate pathway. Uncontrolled RA can become a compounder of cost and disease progression with accompanied by other comorbid conditions. This compounding not only worsens patient suffering, but payer costs escalate holistically and rapidly.”

Ginestro

Mark Ginestro, a principal who focuses on life sciences companies at KPMG Strategy, believes that the introduction of oral medications is showing a similar dynamic in this category as the one for multiple sclerosis treatments where oral drugs are challenging established treatments.

“[Xeljanz] so far has shown significant growth,” Ginestro says. “The pipeline of RA treatments is fairly crowded and one that will get interesting as these treatments reach the market.”