Welcome to Our Latest Installment of the Payers’ Guide to FDA Updates

The affordability and access to therapies, particularly those such as bispecific antibodies that make up the focus of this issue, remains a substantial obstacle to care for many. With 10 bispecific antibodies currently being globally marketed, 4 of which are in the United States, having a planned path that carefully maps the patient need to physician-prescribed treatment to payer pathway is critical.

According to the National Cancer Institute (NCI), the per-patient annualized average costs of cancer diagnosis and treatment were highest in the last year of life, at $109,727 for medical services and $4372 for oral prescription drugs.¹

A common explanation for the high costs of new treatments points to the increasing costs of preclinical and clinical research, holding that lower prices will hamper investment and lead to fewer innovative treatments reaching the market.

Help with the costs of care is available. Public and private programs offer patients financial assistance, but sorting through the many programs and identifying what new treatments are available, what’s in the pipeline, and what is the most useful support can be daunting for payers, providers, and patients alike. The American Health & Drug Benefits 2024 Payers’ Guide to FDA Updates: Latest Updates, Latest Approvals, Upcoming Decisions includes a cornucopia of sources that payers, providers, and other stakeholders can reference to help address challenges such as these. The key, particularly when it comes to bispecific antibody access, is keeping the lines of communication open between providers and payers to emphasize patient need, using data to help drive informed decisions.

This edition offers a useful overview of novel drugs approved by the FDA from January 2024 through November 1, 2024. This entry represents a listing of all novel FDA approvals in the past year, and it provides the indications, class/route, and approval dates for all agents approved in the United States during that period.

The Guide also includes a table presenting what’s in store in the FDA pipeline, a useful forward-looking resource that allows payers, providers, and other healthcare stakeholders to anticipate what is likely coming in terms of approvals. As the pipeline demonstrates, the trend of accelerating the drug approval process continues.

Underlying Issues

Investigating the underlying systemic issues of how to get these important treatments to patients, however, is a more challenging obstacle. A study by Franzen and colleagues reviewed the literature on possible avenues to address affordability in healthcare, specifically oncology care, and focuses on the pricing environment, such as joint procurement, 2-part tariffs, and transparency; the research and development (R&D) environment, such as orphan drug reform, public research, and public clinical trials; and the intellectual property system, such as delinkage.²

In this review, Franzen and colleagues looked to move from opinion-based approaches to evidence-based policymaking. They state, “We offer a novel perspective and practical recommendations on how empirical evidence could and should be gathered to inform evidence-based policy interventions that lead to sustainable medicine prices.”²

The authors offer the following pathways to a potential solution to the high costs of medications.

Joint Procurement Policies

Joint procurement is the consolidation of multiple payers into a single stronger bargaining group, and it has the potential to increase the contractual power of buyers, leading to lower prices.

Some issues to be determined include:

• The size of the effect and whether incentives to invest in R&D will be altered
• The most beneficial type of joint procurement
  • Grouping of entities with similar purchasing power, or
  • Organizing payers of heterogeneous financial capacity and separately discussing an equitable and fair distribution of R&D costs
• Whether there will be any buyers excluded from purchasing coalitions

Two-Part Tariffs

With a 2-part tariff, payers pay a subscription fee to access treatment. This money is intended to repay the pharmaceutical company for R&D costs and includes an agreed-on profit margin. In addition to the subscription fee, the buyer pays a per-unit price that covers production costs.²

Franzen and colleagues point out that a 2-part tariff can potentially solve issues regarding the negative economic consequences of monopolistic industries, in which companies are incentivized to keep prices high and production levels low. A 2-part tariff is theoretically expected to solve these inefficiencies.

Advantages of Transparency

Although transparency laws are in place in many states in the United States, undisclosed discounts and confidentiality clauses continue to obscure real prices paid by buyers in other countries. The debate centers on supporters of having more transparency, who argue that it will improve access to medicines through lower prices, and opponents of transparency, who argue that it will eliminate targeted discounts to poorer countries and reduce R&D investments.²

To further evaluate these opposing views, Franzen and colleagues point out that behavioral experiments can pre-assess the viability of interventions that have outcomes dependent on human decision-making and that such experiments in economics are predictive of real-world outcomes.^3,4

Within healthcare, such experiments are gaining importance, examples of which include research on payment schemes such as pay for performance, fee for service, and capitation.^5-7

Orphan Drug Reform

Turning to potential solutions from an R&D perspective, Franzen and colleagues focused on orphan drug reform.²

By way of background, the orphan drug designation is a policy that aims to incentivize the development of treatments for patients with rare diseases. Incentives are intended to improve profits by increasing the period of market exclusivity, tax credits, reduced administrative cost, and grants for clinical trials. Franzen and colleagues propose quantifying to what extent the orphan drug designation benefits expand R&D investments. They also propose examining how the orphan drug designation affects drug development and facilitates the rapid introduction of new medicines. Issues surrounding orphan drug development are especially relevant now, where study after study are showing advances in personalized medicine through biomarkers and targeted therapy, which are benefiting patients. This evolving research and treatment environment challenges the disease-driven designation of the orphan drug system.

We hope you find this publication a useful tool for applying up-to-date information on newly approved treatments designed to benefit patient care.

EDITOR’S NOTE: The FDA continues to make changes to the prescribing information of many drugs on an ongoing basis. Every effort has been made to update the information in each drug update and any other sections of this publication based on each drug’s prescribing information up to November 1, 2024. The Publisher is not responsible for any inaccuracies stemming from changes, new approvals, or company updates that became available after that date. Readers are advised to review the prescribing information for any future updates and revisions.

References

1. NCI. Cancer Trends Progress Report. Accessed July 26, 2024. https://progressreport.cancer.gov/after/economic_burden
2. Franzen N, Romagnoli G, Ziegler A, et al. Improving the affordability of anticancer medicines demands evidence-based policy solutions. Cancer Discov. 2022;12:299-302.
3. Falk A, Heckman JJ. Lab experiments are a major source of knowledge in the social sciences. Science. 2009;326:535-538.
4. Camerer C. The promise and success of lab-field generalizability in experimental economics: a critical reply to Levitt and List. https://ssrn.com/abstract=1977749
5. Brosig-Koch J, Hennig-Schmidt H, Kairies-Schwarz N, Wiesen D. The effects of introducing mixed payment systems for physicians: experimental evidence. Health Econ. 2017;26:243-262.
6. Hennig-Schmidt H, Selten R, Wiesen D. How payment systems affect physicians’ provision behaviour—an experimental investigation. J Health Econ. 2011;30:637-646.
7. Huck S, Lünser G, Spitzer F, Tyran JR. Medical insurance and free choice of physician shape patient overtreatment: a laboratory experiment. J Econ Behav Organ. 2016;131:78-105.