I had the pleasure of attending a truly valuable meeting this past weekend in Miami, called the Access Forum 2024. The conference offered expert perspectives on pharmaceutical market access in today’s rapidly changing environment.
Before the COVID-19 pandemic, the ability of pharmaceutical representatives to visit individual physician practices and speak with the prescribers was already waning. During the pandemic, this interaction became virtual or virtually nonexistent. That was only one of the sea changes to occur in the past few years.
Another is the effect of the Inflation Reduction Act (IRA), which may well put even more pressure on the pharmaceutical industry to maximize market share in the limited time a drug maker may have before Medicare’s Price Negotiation provisions kick in.
At the conference, Sean Sullivan, PhD, Professor, The CHOICE Institute, School of Pharmacy, University of Washington, discussed how the IRA will affect pharmaceutical portfolio decisions, commercialization, and market access strategies. Stressing the complexity of the law and its implications, Dr. Sullivan lamented, “The more you dig in, the less you know.”
The lack of transparency into how the Centers for Medicare and Medicaid Services (CMS) calculates an initial negotiated price offer worried many of the attendees. In a Q&A session, Steven Pearson, PhD, Founder of the Institute for Comparative Effectiveness Research, commented that “one of the considerations for Medicare price negotiation was how far [CMS] can drive down the price before a manufacturer withdraws the drug?” He expects that the experience after the first wave or two of negotiations will inform how far CMS can push the envelope in the future.
“This was a missed opportunity for CMS to think more deeply about value, and what it means,” noted panelist Jason Spangler, MD, MPH, CEO, of the Innovation and Value Initiative. Dr. Spangler thinks the estimate of a therapy’s value should include not only clinical effectiveness but cost effectiveness as well. To some extent, CMS may be considering the cost of comparative medications in their calculations, but this is not a certainty.
Many of the Access Forum attendees were confused over CMS’s decision to include Stelara® in the list of the first 10 negotiated drugs. It should be subject to intensive biosimilar competition next year (a year before negotiated prices take effect). At least five biosimilar competitors may launch in 2025, which may likely drive the net price of ustekinumab far lower than the result of CMS’s negotiations with the reference drug manufacturer.
We’ve argued that one of the greatest unintended, potential consequences for pharma of the IRA is its negative effect on future decisions regarding drug development. Dr. Sullivan pointed to another tangential consequence: The IRA’s Medicare price negotiation timeline begins once the drug is initially marketed. Unlike the patent expiration clock, which begins with the approval of the drug’s latest indication, the price negotiation timeline is fixed in the past. This will have a huge effect on drug lifecycle management, said Dr. Sullivan, in addition to potential innovative uses for the drug. “I don’t think we’ll see a drug like [Keytruda®] again,” he stated, referring to its 35-plus indications. Companies may decide to not risk investigating many additional indications after initial FDA approval, thereby extending its lifecycle for many years after initial patent expiration. Dr. Sullivan thinks manufacturers will try to launch their new drug with several ancillary indications only if surrogate outcomes can be used for evidence of effectiveness in those conditions.
Dr. Sullivan also raised the question of whether the prices of drugs at time of initial launch may rise in reaction to (1) the anticipation of Medicare Price Negotiation down the road and (2) mandated rebates provided to CMS if yearly price increases exceed that of inflation. It is clear, however, that the games between manufacturers and CMS have just begun. Market access professionals will be watching these developments closely.
