Progress and pitfalls
Does the study identify the therapeutic areas most likely to set the agenda on market access over the next three years?
Barnett: Yes. We asked managed care decision-makers to identify the disease areas they would prioritize in managing drug utilization
and expenditures during this period. Oncology came out on top, followed by rheumatology, diabetes, respiratory, orphan diseases,
neurology, and obesity. The common link here is the impact that actions by both manufacturers and payers can have on addressing
unmet medical need. Targeted therapies for cancer that address the etiology of the tumor is a clear example, and their novelty
in raising the likelihood that the medicine will end up in the patients most suited for it suggests access can be secured
at a premium price—a win for manufacturers. In diabetes, the number of new patients with all the co-morbidities of this disease
continues to expand the market. Economically, it's a huge burden for payers and there is strong interest in any medication
that will help lower the overall cost of treatment. We found too that the science of diabetes looks promising, with new classes
of drugs coming on stream that attack the disorder in different ways. There is a big potential innovation premium here for
Obesity scored the greatest increase in interest as a priority therapy over the forecast period. Some of the same co-morbidity
factors driving diabetes are at work here. The pipeline for new products with fewer side effects looks promising. And payers
appear willing to reimburse obesity treatments because of the impact on population wellness, which translates to lower health
The biopharma business is uniquely affected by public policy and legislation. Can we identify from the study the key challenges
coming on the regulatory front?
Barnett: Executives on the managed care side are very focused on the implementation of the Affordable Care Act. Uncertainty is the
prevailing sentiment. It remains to be seen if this complex law is a growth opportunity. Will expansion of the Medicaid-eligible
population as well as the individual insurance exchanges create a windfall of new customers whose healthcare needs can be
met at reasonable cost, through a balance of young and healthy against an older demographic with serious health risks? Another
issue is coverage rules for drugs, including formulary management and related design questions, which are impacted in turn
by rules on whether manufacturers can offer co-pay offset and coupon incentives directly to patients in the exchanges.
The study also looked at the prospects for biosimilars. A bare majority of respondents from the managed care/payer side believe
biosimilars will become widely available to US patients in the next three years; there is a stronger consensus that, if this
happens, we will see downward pricing pressure on drugs that lead to meaningful savings for payers. Realistically, however,
most payers contend that discounts of at least 30 percent against the originator brand will be required to deliver any real
Finally, the managed care group struck a distinctive note on comparative effectiveness rules. Surprisingly, most aren't currently
employing this evidence tool to shape decisions on formulary coverage. Interviewees said they are waiting for relevant government
agencies like CMS to take action; many point to internal resource constraints as the culprit in their failure to making it
Structural transitions ahead
Jim Smeeding, National Association of Specialty Pharmacy: Did the study confirm the trend toward a blurring of the roles played by payers and providers in the healthcare system?
Barnett: Yes. The ACO model with its focus on episode of care as an alternative to traditional fee-for-service is viewed as here to
stay. If payers want to reduce costs, it requires that they embrace the concept of active medical management; it's no longer
financially viable to act as a passive third-party.