Zeno’s Paradox, Orphan Product Access and the Future of Unmet Need

Zeno’s paradox is a riddle about motion and infinity dating to ancient Greece. It may be a helpful way to think about how payers approach budgetary limits they face with orphan product prices and coverage they need to provide.

In physics, Zeno’s paradox describes velocity that keeps approaching a fixed point without ever arriving. Extending the paradox to orphan conditions, it describes product pricing as increasingly unsustainable and continuously tolerated. For orphan product brand planning, arguably, the key business factor behind this “toleration” is unmet need.

Based on my experience conducting payer market research, where unmet need was once a relatively straightforward concept that brand teams could lean into when developing payer value propositions, there appears to be a trend for unmet need to be managed. By managing unmet need in the orphan space, payers increasingly narrow how a gap in standard of care is defined, to limit coverage. This emerging trend requires new agents to demonstrate not just “some improvement” over existing options, but meaningful improvement, before coverage approval.

Although restrictive policies are not new, what is new is the growing concentration of two factors that give payers greater license to manage unmet need more aggressively. First, priority given to value-based health care strengthens the justification for requiring new benefit. Second, payers feel they can afford to be restrictive because an appeal for a medical or formulary exception is always available.

The suggestion here is that management of unmet need will drive greater prior authorization restrictions on future orphan products. Although these restrictions will draw on well-established practices, their application will be considerably more aggressive.

Future restrictions on unmet need

Greater use of step therapy

There are at least two tracks here; the first involves off-label use. In a payer study evaluating a future orphan product developed to treat a serious cancer comorbidity, the consensus was that, consistent with literature support, the orphan product for that comorbidity will need to step through an existing generic before approval. The key point here, as one medical director put it: “Physicians tend to use products off-label, and literature on off-label use tends to grow over time.”

The second track involves anticipation of multiple brand agents approved for the same orphan condition. For these situations, unless new orphan drugs introduce a cure or significant improvement in slowing progression, step policies will likely be driven by net cost.

Expansion of tighter-than-label coverage

Tighter-than-label policies that restrict coverage to patients matching trial inclusion/exclusion criteria are already widely adopted. What appears to be emerging is a trend to move beyond trial enrollment criteria to patient types where the new benefit in the pivotal trial was considered meaningful. If, for example, only early-stage, biomarker-confirmed, or age range-specific patients in the trial saw meaningful new benefit, the future trend is for coverage to recognize unmet need only for patients that match trial subpopulations where the benefit was demonstrated.

More rigorous application of reauthorization

With more restrictive determination of unmet need driving prior authorization at the front end of value-based priorities, the decision to reauthorize coverage is the back end. Two examples highlight how payers can be expected to apply reauthorization more rigorously to determine whether a patient’s unmet need has been adequately treated.

One involves time: If the pivotal trial had two end points achieved within three months, but the patient’s response does not match the trial’s three-month mark, reauthorization is increasingly likely to be denied. A second involves magnitude of response: If a threshold defined trial success — say, 30% reduction in a biomarker — but a patient falls short (e.g., 15%-20%), reauthorization is similarly at a growing risk of denial. A pharmacy director put it this way, and it applies to both examples: “We’re going to be more restrictive in terms of the requirement, or the physician will need to justify continued treatment with some kind of evidence.”

Brand planning

Managing unmet need is an emerging industry practice for containing the escalating cost impact of orphan products on health plan budgets.

Where there is unmet need, access is required, and premium pricing potential is the greatest. Where payers do not see unmet need, access will be subject to restrictions, and net cost pressure should be expected.

Strategically, this suggests that pivotal trial planning should include developing clinical detail on unmet need, given the likely treatment options at the time of launch. The more orphan product brand teams have mastery over details around unmet need at launch, the more likely access and pricing will be optimal.

Ira Studin, Ph.D., is president of Stellar Managed Care Consulting. He can be reached at istudin@stellarmc.com.