Real-world results determine value-based price for specialty drugs

July 1, 2016

In an era when adherence to specialty pharmaceuticals is disturbingly low, value-based pricing needs real-world results, not single-arm accelerated trials.

Currently FDA provides an array of expedited programs and designations for drugs and biologics “intended to facilitate and expedite development and review of new drugs to address unmet medical need in the treatment of a serious or life threatening condition: fast-track designation, breakthrough therapy designation, accelerated approval, and priority review designation. While admirable in many regards, the program has generated a situation where exorbitant prices are being paid for therapies well in excess of $100,000 per year when definitive proof of their clinical effectiveness and associated value is questionable at best.           

The Institute for Clinical and Economic Review (ICER) evaluates evidence on the value of medical tests, treatments and delivery system innovations. Most recently, ICER reported its analysis of new drugs for multiple myeloma showed they were severely overpriced compared to their cost-effectiveness.

Related: Three ways to maximize value in cancer treatment.

While it is significantly more difficult to ensure adherence to oral therapies versus infused therapies, efficacy and value derivation to both are critical to ensuring the long term health of the entire continuum regardless of delivery method.

For a small set of new cancer drugs, accelerated approval of breakthrough therapies could mean a $600 million bill for payers and patients for therapies that provide only hope, not an established expectation for extension of life, remission or cure. With access already highly limited to proven curative agents for hepatitis C, and a frightening dearth of new antibiotics in the pipeline, how will we pay for the next breakthrough cure when the healthcare system is already taxed with high-dollar therapies that are still in the process of proving their efficacy?

Beyond the “second-level” clinical trials that follow the single-arm trials in an accelerated development process as required by FDA, the true value associated with specialty therapies only becomes apparent in real-world conditions. Improvements to nascent value-based or “at-risk” contracts between payers and manufacturers can be more fairly developed from both sides of the table given early access to real-world results and medication management protocols that provide meaningful access and adherence support.

One healthcare industry expert recently posited the idea that the 21st Century Cures Act should include a clause that limits the price of new drugs brought to market via FDA expedited path to production costs only until the companies offer definitive proof of efficacy. This is value-based sensibility that the continuum should embrace and Congress should include within the 21st Century Cures Act not only because of the lack of certainty around the economics and outcomes data involved, but more importantly because it aligns all parties.

Patients and providers would benefit from improved access to novel therapies that could be their only hope for extending life.

Payers would benefit from not solely bearing the risk of inefficacy.

Manufacturers would benefit from efficacy measurements through real-world results, effective elimination of barriers to adherence and ways to improve the therapies. Oral oncology agents make up 50% of oncology drugs currently in use and about 25% of drugs in the pipeline. Additionally, there are 3,400 ongoing immunotherapy trials in the United States alone. The sooner manufacturers learn which drugs are most effective in real-world situations, the more they can concentrate on bringing effective therapies to market, recoup their investment and rightfully profit from them.

Related: Four critical components for successful, value-based pharma contracts.

The most common barrier to adherence (or compliance) to any high-cost oral therapy, including the oral oncolytics on the market and oral immunotherapeutics in the pipeline, is access. Enhanced medication therapy management should be mandatory for full-value derivation from many specialty therapies, especially for those with limited real-world outcomes data. For example, Curant Health’s medication therapy management protocols, part of its C The Cure Program for hepatitis C, generated 90% cure rates for patients coinfected with hepatitis C and HIV. These are only the second real-world data set known for this patient profile and treatment regimens.

Related: Five ways to improve medication adherence.

In an era when adherence to specialty pharmaceuticals is disturbingly low, outcomes-based derivation of value from them in real-world conditions is exceedingly difficult. Multiple sources place the wasted healthcare expenditure due to medication nonadherence between $105 billion and $300 billion every year. As health insurers push to tie drug prices to outcomes through value-based or “at-risk” contracts, paying full price for immensely expensive approved therapies that have withstood the relatively paltry rigors of a one-armed clinical trial should be avoided. Instead, manufacturers, payers, patients and clinical pharmacists should focus on substantiating that new therapies work in real world conditions.

Marc O’Connor is chief operating officer for Curant Health. Curant Health treats patients nationwide through its medication management protocols.