Spotlight on Market Access

As researchers gain growing insight into the mechanics of what makes diseases tick, more and more genetic tests are coming onto the market to help make sure the right patient gets the right drug at the right time. While these diagnostics can help inform diagnosis and treatment for patients, the sheer volume of these tests may be overwhelming payers in their coverage decisions. Stakeholders should work together to help establish the clinical utility that payers need to make coverage decisions on these diagnostics, industry experts say.

Daryl Pritchard, Ph.D., senior vice president of science policy at the Personalized Medicine Coalition (PMC), describes the landscape of coverage for genetic testing as “uneven. Payers are increasingly considering coverage and reimbursement of genetic testing products and services.” However, he tells AIS Health, a division of MMIT, “there remain significant challenges in establishing coverage policies and payment rates for diagnostic tests that reflect the value of their care. As a result, many newer novel diagnostics are under-reimbursed or not covered at all. Such practices ultimately restrict patient access to some needed tests and to optimal care. Coverage and reimbursement policies vary widely among different payers, and decision-making processes are often inconsistent and not transparent.”

The FDA has approved around 100 targeted therapies for different types of cancer, with many more in the pipeline. Current agents for non-small cell lung cancer (NSCLC), for example, target more than 10 different biomarkers, and more than 70% of people with the condition have alterations in their tumors that are tied to available treatments. But a recent study found that due to practice gaps in the precision oncology pathway, just more than one-third of patients with biomarkers that could be treated with an FDA-approved therapy are actually benefiting from those drugs.

Lung cancer is one of the most common types of cancer, and NSCLC makes up the bulk of the cases. Many of the agents approved for NSCLC are targeted therapies that are indicated for specific subsets of the disease, and numerous companion diagnostic tests are available to help providers determine the best treatment for a patient.

In an executive order released Oct. 14, the Biden administration directed the CMS Center for Medicare and Medicaid Innovation (CMMI) to “to consider additional actions to further drive down prescription drug costs,” building on the Medicare drug price negotiation stipulations of the Inflation Reduction Act (IRA). D.C. insiders tell AIS Health, a division of MMIT, that CMMI could pull old policy proposals off the shelf when it works to “test new ways of paying for Medicare services that improve the quality of care while lowering costs,” as the administration puts it.

The executive order isn’t specific about what policies the White House would prefer CMMI look into. However, the administration will know the possibilities fairly soon: CMMI will have 90 days to develop recommendations. Per a White House fact sheet, the final product will be “a formal report outlining any plans to use the Innovation Center’s authorities to lower drug costs and promote access to innovative drug therapies for Medicare beneficiaries.”

The average annual premium for employer-sponsored health insurance in 2022 was $7,911 for single coverage and $22,463 for family coverage, similar to the average premiums last year, according to the Kaiser Family Foundation 2022 Employer Health Benefits Survey. On average, employees contributed 17% toward single coverage premiums and 28% toward family coverage premiums. Among employees at small firms, 33% of them chose a plan where the employer paid the entire premium for single coverage, compared with only 6% at large firms. Meanwhile, 31% of small firm workers were in a plan that required them to contribute more than half of the premium for family coverage.

Since the FDA’s approval of the first biosimilar — Zarxio (filgrastim-sndz) from Sandoz, a division of Novartis Pharmaceuticals Corp. — on March 6, 2015, the agency has approved almost 40 more agents via the 351(k) pathway established under the Biologics Price Competition and Innovation Act (BPCIA), itself part of the Affordable Care Act (ACA). Although not all of those agents have launched yet, and almost all of the ones that have are all professionally administered, industry experts say they expect to see more competition in the space, depending on interchangeability status, provider uptake and the impact of the Inflation Reduction Act.

CVS Health Corp.’s Aetna is the third-largest health insurer in the U.S., serving more than 22 million lives across all market sectors. Nationally, Aetna ranks No. 3 in administrative services only (ASO) non-risk contracting, No. 4 in the group risk commercial market and No. 3 in Medicare Advantage (MA), an area of significant investment for the insurer in recent years. For the 2023 plan year, Aetna will expand its MA offerings to 141 new counties across its 46-state market, compared to 83 counties in 2022. And as the COVID-19 pandemic rattled the employer group markets, Aetna in 2022 returned to the Affordable Care Act (ACA) exchanges after pulling out in 2018. While it enrolls just under 60,000 exchange lives as of October 2022, its footprint will expand to four additional states in 2023.

Highmark Health recently implemented a medical policy stating the insurer will cover digital prescription therapeutics (DPTs) under certain circumstances. The decision is “incredibly significant for our industry,” Akili Interactive Labs chief executive and co-founder Eddie Martucci, Ph.D., writes in an email to AIS, a division of MMIT.

Highmark’s policy pertains to Akili’s EndeavorRx treatment for children with attention-deficit/hyperactivity disorder as well as the eight other FDA-approved DPTs, which are software-based therapies to treat medical and behavioral conditions. DPTs treat conditions such as substance use disorder, opioid use disorder, irritable bowel syndrome and chronic lower back pain.

Total inflation-adjusted spending on prescription drugs grew from $520 billion in 2016 to $603 billion in 2021, before accounting for rebates, according to a report published by HHS’s Assistant Secretary for Planning and Evaluation (ASPE). Retail drug expenditures represented about 70% of prescription drug spending in 2021. For retail prescription drugs, there was a 13% increase in drug spending over the five years studied, yet only a 5.7% increase in the number of prescriptions.

Meanwhile, more and more Americans received their drugs from mail order pharmacies, clinics and home health care organizations between 2016 and 2021.

Amid a global pandemic and inflation challenges, CEOs surveyed for a recent report expressed confidence in the three-year outlook for their companies and the economy. While many respondents from the life sciences sector said they expect a recession will occur within the next year, almost the same amount said their growth prospects are strong, according to the KPMG 2022 CEO Outlook. Those CEOs also expressed a growing interest in environmental, social, and governance (ESG); and diversity, equity and inclusion (DEI) initiatives.

For the eighth edition of the report, KPMG spoke with 1,325 CEOs from 11 markets around the globe and 11 key industry sectors, including life sciences, between July 12 and Aug. 24. The company shared the responses from the life sciences CEOs on their three-year outlook with AIS Health, a division of MMIT.

The FDA recently approved the first novel long-acting granulocyte colony-stimulating factor (G-CSF) in more than 20 years. Payers say they are likely to manage the new agent similar to existing ones, but oncologists have indicated that they are willing to prescribe it in place of other neutropenia agents, according to Zitter Insights.

On Sept. 9, the FDA approved Spectrum Pharmaceuticals, Inc.’s Rolvedon (eflapegrastim-xnst) to decrease the incidence of infection, as manifested by febrile neutropenia, in adults with nonmyeloid malignancies receiving myelosuppressive anti-cancer drugs associated with clinically significant incidence of febrile neutropenia. The company developed the drug with South Korea’s Hanmi Pharmaceutical Co. The recommended dose is 13.2 mg administered subcutaneously once per chemotherapy cycle. The company says it expects the product to be available in fourth-quarter 2022. It has not revealed the agent’s price yet.