Speciality

Radar On Market Access: 2018 Saw Slowing M&A Activity; Expect More of the Same in ’19

January 29, 2019

The specialty pharmacy and infusion therapy spaces have certainly seen their share of merger and acquisition (M&A) activity over the years. Some challenges within those industries may have helped slow down 2018 activity a bit, observes Reg Blackburn, managing director at The Braff Group. And for 2019, we may see more of the same, AIS Health reported.

The specialty pharmacy and infusion therapy spaces have certainly seen their share of merger and acquisition (M&A) activity over the years. Some challenges within those industries may have helped slow down 2018 activity a bit, observes Reg Blackburn, managing director at The Braff Group. And for 2019, we may see more of the same, AIS Health reported.

As far as specialty pharmacy trends in 2018, Blackburn points out that “the largest specialty pharmacies continue to get even larger. Payer- and chain-owned dominate. Most new entity growth is coming from large academic hospitals starting their own specialty pharmacies.”

Direct and indirect remuneration (DIR) fees in Medicare Part D that include rebates and price concessions occurring after the point of sale have been around since the start of that program more than a decade ago.

But they started really becoming an issue for specialty drugs around 2016, and it doesn’t look like that’s changing any time soon.

Within the specialty pharmacy space, M&A activity “was lower than in past years,” he explains. Through third-quarter 2018, The Braff Group recorded eight specialty pharmacy deals, compared with 18 for full-year 2017, 20 for 2016 and 10 for 2015.

This lower volume, he says, “is driven by fewer acquisition targets of a size large enough to move-the-needle for strategic buyers and/or large enough to be a platform for PE [i.e., private-equity] buyers. In addition, there is caution from both buyer types given the impact of DIR fees on gross margin.”

Moving forward into 2019, Blackburn expects to see “continued consolidation at a measured pace.” In addition, he says, “smaller independents will remain under pressure for gross margin and closed networks. They will want to exit, but buyers will be limited.”

Within the infusion therapy space over the past year, observes Blackburn, intravenous immune globulin and other specialty infusion products continue to drive revenue growth.

The Braff Group recorded four infusion therapy deals through the third quarter of last year, compared with seven in 2017, six in 2016 and 14 in 2015. 2018, says Blackburn, “continued the recent trend of low deal flow. The sector has experienced significant consolidation over the past five to 10 years.”

In the new year, Blackburn expects to see “continued modest deal activity primarily because of low inventory.”

MMIT Reality Check on Hemophilia (Jan 2019)

January 25, 2019

According to our recent payer coverage analysis for hemophilia treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

According to our recent payer coverage analysis for hemophilia treatments, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

To help make sense of this new research, MMIT’s team of experts analyzes the data and summarizes the key findings for you. The following are brief highlights. To read the full piece, including payer coverage, drug competition and prescriber trends, click here.

Payer Coverage: A review of market access for all hemophilia A and B medications shows that 99% of Medicare beneficiaries are not covered for at least one of the drugs.

Trends: Starting Jan. 1, Express Scripts Holding Co. will exclude Factor VIII recombinant products for hemophilia treatment in its 2019 National Preferred Formulary.

Radar On Market Access: Specialty Drug Pipeline Holds Promise Amid High Costs

January 24, 2019

Blockbuster pharmaceuticals scheduled for launch in 2019 are expected to have a significant impact in treating certain cancers, spinal muscular atrophy, inflammatory conditions and some mental illnesses, according to Express Scripts Holding Co. With specialty medications managed through the pharmacy benefit now accounting for 41% of health plans’ total pharmacy spend, the PBM asserts it is crucial for plans to understand the product pipeline and create strategies to manage new, costly drug therapies, AIS Health reported.

Blockbuster pharmaceuticals scheduled for launch in 2019 are expected to have a significant impact in treating certain cancers, spinal muscular atrophy, inflammatory conditions and some mental illnesses, according to Express Scripts Holding Co. With specialty medications managed through the pharmacy benefit now accounting for 41% of health plans’ total pharmacy spend, the PBM asserts it is crucial for plans to understand the product pipeline and create strategies to manage new, costly drug therapies, AIS Health reported.

On the new drug front, Prime Therapeutics, in its December 2018 monthly update on the specialty pipeline, cites an annual wholesale acquisition cost (WAC) of $203,100 for Pfizer’s Daurismo (glasdegib), an oral drug approved by the FDA in combination with intravenous low-dose cytarabine to treat newly diagnosed acute myeloid leukemia in elderly and certain other adult patients. The Blues-affiliated PBM also points out that Loxo Oncology’s Vitrakvi (larotrectinib), approved by the FDA to treat adult and pediatric patients with certain solid tumors, has an average annual WAC for an adult patient of $393,600.

On the plus side for payers, Express Scripts notes some major drugs are coming off patent protection this year. This means, through the end of 2019, there is also opportunity for several blockbuster medications, including Advair Diskus, EpiPen and Lyrica, to face first-time generic competition.

Moreover, Express Scripts spokesperson Jennifer Luddy says, “We believe there is a $54.4 billion saving opportunity between 2017 and 2022 if [a dozen] biosimilars come to market when the originator patents expire.”

In a recent blog post, Express Scripts singled out two specialty drugs to watch in 2019:

(1) AVXS-101, a DNA-based gene therapy that delivers a functional copy of a human survival motor neuron 1 (SMN1) gene to treat children with spinal muscular atrophy (SMA) Type 1. It is expected to cost between $1 million and $3 million for the one-time IV infusion. The FDA action date is June 18, 2019, but early approval is expected, the PBM says.

(2) Tafamidis meglumine, which is expected to be the first drug approved for the treatment of cardiomyopathy caused by transthyretin-mediated amyloidosis. The drug’s approval is expected in mid-2019, and Express Scripts says it “could rapidly become the standard-of-care for these patients.”

Many pharmaceutical launches this year will treat a variety of cancers, with cancer therapies representing about one-third of all specialty drugs in the pipeline.

MMIT Reality Check on PCSK9 (Jan 2019)

January 18, 2019

According to our recent payer coverage analysis for PCSK9 inhibitors, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

According to our recent payer coverage analysis for PCSK9 inhibitors, combined with news from key healthcare influencers, market access is shifting in this drug landscape.

To help make sense of this new research, MMIT’s team of experts analyzes the data and summarizes the key findings for you. The following are brief highlights. To read the full piece, including payer coverage, drug competition and prescriber trends, click here.

Payer Coverage: A review of market access for PCSK9 inhibitors shows that more than 90% of the lives under the pharmacy benefit in commercial and health exchange formularies have utilization management restrictions.

Trends: In October 2018, Amgen said that it would reduce the price of its Repatha SureClick autoinjector to $5,850 per year.

Trends That Matter for FDA Orphan Label Application Reviews

January 17, 2019

The Orphan Drug Act (ODA) offers multiple incentives to manufacturers that bring a drug to market with an orphan designation. A recently released U.S. Government Accountability Office (GAO) report revealed that while the number of applications both received and granted for this designation has grown, FDA reviewers were not consistently recording or evaluating required information that is mandated to consider granting this designation, AIS Health reported.

The Orphan Drug Act (ODA) offers multiple incentives to manufacturers that bring a drug to market with an orphan designation. A recently released U.S. Government Accountability Office (GAO) report revealed that while the number of applications both received and granted for this designation has grown, FDA reviewers were not consistently recording or evaluating required information that is mandated to consider granting this designation, AIS Health reported.

The report, titled Orphan Drugs: FDA Could Improve Designation Review Consistency; Rare Disease Drug Development Challenges Continue (GAO-19-83), shows that from 2008 to 2017, both orphan designation applications received as well as orphan designations granted rose.

Researchers also assessed whether FDA reviewers were using consistent criteria to evaluate applications. On this, however, reviewers’ performance left a bit to be desired.

From October to December 2017, after the implementation of the modernization plan, the agency analyzed 148 review templates. According to the GAO report, “of the five review template sections where reviewers are required to record information, we found that OOPD [i.e., the Office of Orphan Products Development] does not ensure that all required information is consistently recorded in the background information section and evaluated when making designation decisions.”

Of the 148 templates, the FDA granted orphan designation to 26 applications that were missing required information. GAO recommends that the “FDA should ensure that all required information for reviews of orphan designation applications is consistently recorded and evaluated. The agency concurred with our recommendation.”

Radar On Market Access: Vermont Pushes Ahead on Canadian Drug Importation

January 17, 2019

A new report concludes that if Vermont undertakes wholesale importation of prescription drugs from Canada, such a program could achieve cost savings for the state’s commercial payers. But achieving benefits requires an emphasis on program mechanics, and Vermont’s own effort is far from a done deal — with the state’s largest health insurer pointing out that administrative costs and hurdles, which may be significant, are not quantified in this feasibility study, AIS Health reported.

A new report concludes that if Vermont undertakes wholesale importation of prescription drugs from Canada, such a program could achieve cost savings for the state’s commercial payers. But achieving benefits requires an emphasis on program mechanics, and Vermont’s own effort is far from a done deal — with the state’s largest health insurer pointing out that administrative costs and hurdles, which may be significant, are not quantified in this feasibility study, AIS Health reported.

The state’s 14-page report on the preliminary design of the “Canadian Rx Drug Import Supply Program,” written with the National Academy for State Health Policy’s (NASHP) technical assistance, estimates savings of $1 million to $5 million annually, based on just 17 high-spend drugs identified for two of the state’s three major carriers.

Blue Cross and Blue Shield of Vermont was among the three major carriers in the state asked to voluntarily identify top-spend prescription drugs for the second quarter of 2018, excluding drugs such as narcotics, biologics, and IV and infused drugs that are not eligible for importation under federal law. MVP Health Care also provided data, but Cigna Corp. opted not to do so.

While NASHP Executive Director Trish Riley declined to identify by name the 17 high-spend drugs contained in the report, she says they are used for contraception, chronic obstructive pulmonary disease, diabetes, hepatitis C, HIV/AIDS, multiple sclerosis, arthritis and venous thromboembolism prevention, along with one cancer drug.

Payers also were asked to calculate net savings from importation, with NASHP adding a “conservatively-high estimated mark-up” for program administration of 45% on top of the Canadian price. To determine savings, plans were asked to determine their net spend (net of rebates) on the 17 drugs, comparing it to the would-be net spend for the same drugs if they were imported from Canada with a 45% mark-up.

Even with the 45% mark-up, plans reported savings ranging from $2.61 to $2.82 per member per month, or $1 million to $5 million annually, the report says. But it notes these savings for commercial payers, post mark-up, don’t take into consideration the state’s costs in operating the importation program.

Broadly speaking, the Vermont Blues plan supports efforts to reduce prescription drug costs for its members, says its spokesperson Sara Teachout. Yet she notes the complexity of the issue, pointing out that “some of the administrative hurdles [for Canadian drug importation in Vermont] are significant.”