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Emerging Trends in the Specialty Drug Market

Specialty drugs continue to make up a large portion of drug development and many specialty medications could soon see generic competition as the patents on 30 specialty products expire before 2020. These are a few of the emerging trends in the specialty drug market that were discussed during a session at the AMCP Specialty Pharmacy Conference.

The session, led by Aimee Tharaldson, PharmD, senior clinical consultant, emerging therapeutics, Express Scripts, highlighted key specialty pharmaceuti- cal trends, reviewed recently approved specialty medications, and looked ahead at new medications on the horizon. Drugs are considered specialty medications if they require frequent dosing adjustments or intensive clinical monitoring, if they require patient training, if they have a limited distribution, or if they require specialized handling. The prevalence of these type of drugs in the marketplace only continues to grow. According to data presented by Dr. Tharaldson, there was a greater number of FDA approvals in 2014 for specialty drugs than traditional medications, a trend that has consistently occurred since 2010.

While specialty medications are used to treat <1% of patients, they represent 32% of drug spend. “Due to the high cost of specialty medications, use of clinically appropriate management tools are necessary to ensure that patients have access to medications that improve health outcomes,” she said.

Within the specialty market, experts are seeing increased competition, more development of orphan drugs, and a number of drugs receiving designation as a breakthrough therapy. One indication of the increasing competition within the industry is the growing number of medications within therapy classes. For instance, in 2005, there were just 4 specialty medications for hepatitis C but that number has now grown to 13 in 2015. Just 10 years ago, no specialty drugs were approved to treat melanoma but now 6 drugs have reached the market.

Trends in the Specialty Market

A large number of patents on specialty and biologic products are also set to expire in the years ahead, creating new opportunity for generics. Dr. Tharaldson shared that 30 specialty products will face patent expirations before 2020, creating a $14.1 billion specialty generic opportunity. By the end of 2020, patents on 54 biologic products are set to expire creating an even larger $39.1 billion opportunity for biosimilars. The first biosimilar to hit the market received FDA approval earlier this spring and an additional 4 biosimilars are anticipated to earn approval this year.

“Initially, filgrastim-sndz and other early biosimilars are expected to act more like competing brands in the market,” Dr. Tharaldson said. It is expected, according to Dr. Tharaldson, that as interchangeability increases the poten- tial for cost savings with biosimilars will also increase. Another trend in the specialty market is the extensive number of orphan drugs in development; 41% of the drugs in the specialty pipeline are considered orphan drugs. Cancer drugs, the next highest category, make up 21% of the pipeline.

Since 2013, 15 drugs have been approved as breakthrough therapies. This designation is given to a drug or drug combination that treats a serious or life-threatening disease and has early evidence that it might provide a substantial improvement over existing therapies. In the current specialty market, the leading specialty drug therapy classes based on per member per year (PMPY) costs for 2014 are inflammatory conditions ($80/PMPY), multiple sclerosis ($52/ PMPY), and cancer ($42/PMPY). In 2014, specialty drug approvals were approved for indications ranging from ovarian cancer, to Gaucher disease and melanoma.

Proprotein convertase subtilisin/kexin type 9 (PCSK9) inhibitors, which are very effective in lowering low-density lipoprotein cholesterol, will enter the market this summer and could significantly impact pharmacy drug spend due to their potential to treat a large population of people. “PCSK9 inhibitors may cost $4000 to $12,000 per year,” said Dr. Tharaldson.

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Tyrone Squires, MBA, CPBS

I am the proud founder and managing director of TransparentRx, a fiduciary-model PBM based in Las Vegas, Nevada. We help health plan sponsors reduce pharmacy spend, by as much as 50%, without cutting benefits or shifting costs to employees.

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