News & Events

ComputerTalk for the Pharmacist May/June 2017

PHSI Consultant Dave Schuetz contributed to the May/June 2017 edition of ComputerTalk for the Pharmacist. In his Viewpoints article, Dave discusses the concern that the NDC (National Drug Code) number is going to run out of numbers sometime in the next decade and the need for industry stakeholders to start the discussion and work toward a goal before it’s too late.

Click here to read Dave’s article entitled “What Happens When We Run Out of NDC Numbers?”

PHSI to Attend NACDS Total Store Expo

PHSI President Tim Kosty, Vice President Don Dietz, and many of PHSI’s consultants will be attending the 2017 NACDS Total Store Expo in San Diego, CA on August 19-22. PHSI will have an exhibit set up at booth number 2837. If you would like to schedule a meeting with a PHSI team member, please click here to send us a message.

To learn more about this conference, visit the Total Store Expo website at http://tse.nacds.org

ComputerTalk for the Pharmacist January/February 2017

PHSI President Tim Kosty and Vice President Don Dietz contributed to the January/February 2017 edition of ComputerTalk for the Pharmacist. In their Viewpoints article, Tim and Don provide a forecast of market changes for 2017. The article reviews topics related to industry challenges, preferred pharmacy networks, driving pharmacy efficiency, clinical services, and industry consolidation.

Click here to read their article entitled “The Outlook for 2017”.

Conflicts with Value-Based Medication Pricing

With multiple diverse variables and stakeholders to consider, controlling healthcare expenditures has proven to be a difficult problem to solve. Recently, the American Medical Association has voiced support for Value-Based Medication Pricing. This means that a drug would be priced based on the benefit to the patient’s care. While this may seem like a promising strategy, there are several concerns that arise under value-based pricing. For instance, generic drugs often provide high levels of care but do not fall under high price brackets. Under a value-based system, would the prices increase to reflect the value of a low-cost antibiotic? Also, many nonessential prescription products do not make it onto an insurance formulary, including various topical products that are mostly used for cosmetic purposes. This means that the value is much more personal to the patient. The ambiguity in value makes it extremely difficult to establish a value-based price.  In value-based pricing, the payer is the stakeholder defining value.  Another concern that is often brought up when discussing drug costs is research and development.  Often, profits in pharmaceutical manufacturing are used to fund research and development for new innovative medications. Many fear that drastically changing the way medications are priced could hinder new drugs coming to market. Time will tell if value-based pricing attracts more attention but both arguments highlight the fact that coming up with a strategy to price medications is no easy task.

 

http://insidepatientcare.com/issues/2016/december-2016-vol-4-no-12/449-value-based-medication-pricing

2017 Winter Newsletter- Biosimilar Interchangeability

FDA Draft Guidance on Demonstrating Interchangeability

This January the FDA published draft guidance entitled, “Considerations in Demonstrating Interchangeability with a Reference Product”.  This long-awaited guidance provides biosimilar manufacturers with information on proving and supporting their claims of interchangeability status when submitting a 351(k) application.  The draft guidance indicates that biosimilars will require physician approval before pharmacy substitution, unless they gain interchangeability status.  Interchangeable products may be substituted at the pharmacy without prescriber approval or notification.  Just as small molecules must prove both pharmaceutical equivalence and bioequivalence to be considered therapeutically equivalent and substitutable (i.e.: FDA Orange Book A-rated), 351(k) products must show biosimilarity, clinical equivalence, and switchability to be considered interchangeable.

In order to be considered interchangeable to the reference product, the applicant must show that:

  1. Their biological product is biosimilar to the reference product
  2. Their product can be expected to produce the same clinical result as the reference product in any given patient for all indications
  3. For a biological product that is administered more than once to an individual, the risk in terms of safety or diminished efficacy of alternating or switching between the biological product and reference product is not greater than the risk of using the reference product without an alternation or switch

To prove that the product can produce equivalent clinical results, manufacturers must provide data on critical quality attributes, mechanisms of action (target receptors, receptor binding, dose response, etc.), pharmacokinetics, biodistribution, immunogenicity, toxicities, and many other factors.  With scientific justification, manufacturers can extrapolate clinical data to support interchangeability status for additional drug indications.  Although products may be approved as biosimilars if only applying for approval for one reference product indication, interchangeable products must be clinically equivalent and switchable for all indications of the reference product.

In addition to clinical studies, manufacturers must demonstrate the ability of their biosimilar to be switched back-and-forth with the reference product.  The FDA states that they expect applicants to include information from switching studies that mimic appropriate conditions of use.  The newly published draft guidance provides conditions for manufacturers to consider when designing a switching study, including study endpoints, analysis, population, routes of administration, and conditions of use.  The guidance notes that in general, post-marketing data would be insufficient to prove the impact of product switching and would not be enough to gain interchangeability status.  The FDA did state that post-marketing surveillance may be needed along with switching studies to demonstrate interchangeability if there is “residual uncertainty”.  If this draft guidance is finalized as is, it would mean that some biological products must be initially approved as biosimilars and can only gain interchangeability status after a time period significant enough to allow for post-marketing surveillance (likely several months to years).

Throughout the draft guidance, it is recommended that manufacturers work closely with the FDA to discuss their proposed switching studies and proposed presentation, i.e. product packaging, (vial, pre-filled syringe, auto-injector, etc.).  The FDA recommends that manufacturers only seek interchangeability status for products with the same presentation.  They also suggest that manufacturers discuss any proposed presentation changes with the FDA, as the presentation and its design will be thoroughly analyzed prior to granting interchangeability status.

The clinical data and additional study requirements necessary to prove interchangeability for 351(k) applicants will prove more burdensome and expensive than proving substitutability for traditional generic ANDA approvals.  With the amount of data needed to substantiate interchangeability status, there will be a much larger investment to bring an interchangeable product to market compared to a small molecule.  It is not surprising that biosimilars are expected to only provide 30% savings over their reference product.  As expected, the FDA places emphasis on the importance of post-marketing safety monitoring for biosimilar and interchangeable products.  The full 30-page draft guidance document can be found here.  PHSI recommends that all stakeholders monitor this guidance closely, as finalized guidance will have a tremendous impact on the future of biosimilars.

 

2017 Winter Newsletter- 2016 New Drug Approvals

Retirement Announcement

2017 Winter Newsletter- 2016 New Drug Approvals

2016: The Decline of New Drug Approvals and Increase in Expedited Reviews

According to the FDA, only 22 novel new drugs were approved in 2016.  This is a 50% decrease from 2015.  Novel drugs, or new molecular entities, are defined by the FDA as “products containing active moieties that have not been approved by FDA previously, either as a single ingredient drug or as part of a combination product.”  After two record-breaking years of new drug approvals, 2016 is a bit of a letdown for prescribers and patients hoping for new, innovative therapies.  Last year was the lowest number of novel new drug approvals since 21 drugs were approved in 2010.  The chart below shows the trend in the number of new drug approvals for the last six years.

Novel Drug Approvals

Similar to 2015, the largest number of products approved in 2016 were indicated to treat different types of cancers.  For example, Lartruvo was approved to treat soft tissue sarcoma; Rubraca treats ovarian cancer.  Venclexta is indicated for chronic lymphocytic leukemia, and Tecentriq treats bladder cancer.

All of these oncology agents were breakthrough therapies that received FDA priority reviews and accelerated approvals due to the positive implications for patients.  When reviewing all 2016 approvals, priority review is the new norm vs. the exception, as 68% of all 2016 approvals had a priority review.  This could also indicate that few manufacturers are pursuing follow-on drugs in therapeutic categories that already have multiple available drugs.

Based on 2015 and 2016 approvals, special distinctions and expedited approvals from the FDA appear to be becoming more common.  The FDA defines these distinctions as:

First-in-Class: Drugs having mechanisms of action different from those of existing therapies (36% of 2016 approvals)

Drugs for Rare Diseases: Drugs approved to treat rare or “orphan” diseases affecting 200,000 Americans or less (41% of 2016 approvals)

Fast Track: Drugs having the potential to address unmet medical needs (36% of 2016 approvals)

Breakthrough: Drugs with preliminary clinical evidence demonstrating that the drug may result in substantial improvement on at least one clinically significant endpoint versus other available therapies (32% of 2016 approvals)

Priority Review: Drugs are reviewed within six months instead of the standard ten months if the drug could potentially provide a significant advance in medical care (68% of 2016 approvals)

Accelerated Approval: Approval is based on a “surrogate endpoint”, such as a lab value or clinical measure, that the FDA considers reasonably likely to predict the drug’s clinical benefit and allows for earlier approval for drugs treating serious or life threatening illness that offer a benefit over current treatments (27% of 2016 approvals)

The same drug may fall into multiple categories.  The chart below summarizes the 2016 novel drug approvals with special distinctions and/or expedited approvals, as noted by the FDA.

2016 also saw a number of first-time generic launches.  The biggest generic launch of the year was generic rosuvastatin (Crestor).  Other notable brands losing patent protection and becoming availability generically included Benicar (olmesartan), Tamiflu (oseltamivir), and Zetia (ezetimibe).  There were a few notable generic specialty launches in 2016 including imatinib (Gleevec) and valganciclovir (Valcyte), reducing the cost for patients taking these medications.  Although generics are now more common in the specialty space, brand drugs still dominate specialty pharmacy, and PHSI estimates that only 6 of the 22 new drug approvals are traditional retail pharmacy products.

As 2017 unfolds, look for more of the 2016 approvals to become commercially available and appear on drug formularies.  Due to high costs and limited patient population sizes, we anticipate many of these agents being placed on specialty drug tiers due to the high rate of 2016 approvals for drugs treating rare disease states.  PHSI expects this trend to continue in 2017 and will report on the new approvals and their effects on the industry.

 

2017 Winter Newsletter- Biosimilar Interchangeability

Retirement Announcement

Retirement Announcement

The entire PHSI team would like to congratulate Bonnie Mattiko on her retirement, effective December 29, 2016.  Bonnie provided administrative support to PHSI consultants for ten years.  Many of you know Bonnie from her emails, telephone calls, and persistent follow-up for scheduling meetings for PHSI consultants at industry conferences.  As Bonnie begins her retirement, she will continue to reside in Pittsburgh, but expand her traveling to visit her sons and granddaughters.  We all wish Bonnie well in her retirement.  Terry Johnston will now be handling PHSI meeting scheduling.

Congratulations, Bonnie!

PHSI 005

 

2017 Winter Newsletter- Biosimilar Interchangeability

2017 Winter Newsletter- 2016 New Drug Approvals

Don Dietz Presented on DIR Fees at ASAP Annual Conference

PHSI Vice President Don Dietz presented at the American Society for Automation in Pharmacy (ASAP) 2017 Annual Conference.  Don discussed direct and indirect remuneration (DIR) fees, including the challenges facing pharmacy in calculating net sales and profitability due to DIR and related fees. He also reviewed improved timing and transparency as proposed solutions to improve the current situation. Click here to view Don’s presentation slides. You can access all of the 2017 ASAP Annual Conference presentations at http://www.asapnet.org.

2016 Fall Newsletter- 2017 Medicare Part D Prescription Drug Plan Trends

Starting in 2017, there will be 41 million beneficiaries enrolled in Medicare Part D plans.  About 60% of these beneficiaries are enrolled in stand-alone prescription drug plans (PDPs), while the remaining 40% are in Medicare Advantage plans (MA-PDs).  Although the total number of Part D beneficiaries has not substantially changed since 2016, the premiums and deductibles imposed on these beneficiaries is increasing, and plan choices are decreasing.

In the last ten years, PDP premiums have increased over 60%.  The weighted average monthly premiums for PDP plan members are expected to rise by 9% from 2016 to 2017.  This will make the average monthly PDP premium $42.17 (excluding low-income subsidy adjustments), with wide variations from around $17 per month to over $70 per month, based on the plan.  One-third of PDP enrollees do not pay any premiums because of low-income subsidy (LIS) benefits.  The Kaiser Family Foundation projects the 2017 monthly premium distribution to be as follows.

premium-chart

In addition to premium increases, deductibles are expected to rise by 7% in 2017.  Meanwhile, the monthly Social Security benefits will see a 0.3% cost-of-living adjustment.  For senior citizens on a fixed income, these large Medicare premium and deductible increases could severely strain finances for many.

Shifts in cost-sharing for out-of-pocket expenses are also taking place.  Almost all PDPs have five cost-sharing tiers, with two generic tiers, two brand tiers, and one specialty tier.  Although percentage-based coinsurances have been popular for the specialty tier for many years, many non-preferred brand tiers are now implementing coinsurances vs. flat-dollar copays.  In 2017, the threshold for a specialty drug will also increase to $670 for a one-month drug supply.  This limit designates many injectable, high-touch products as specialty drugs.  However, several oral drugs often thought of as retail products may hit this threshold and fall into the specialty tier, including Absorica, Fycompa, Januvia, Latuda, Nucynta ER, Opana ER, and Saphris.  Manufacturers setting or increasing drug pricing should be conscious of this specialty threshold, as patient pay and pharmacy reimbursement amounts can be greatly impacted.

To promote use of lower cost generics, approximately one-third of PDPs have implemented a $0 copay preferred generic tier.  Compared to the models of the past decade, this formulary change shifts more of the costs for non-preferred brands to the patients.  It incentivize them to curtail the use of high-cost medications, when lower cost, equally efficacious options are available.

The average Medicare Part D enrollee had a choice of 22 PDPs in 2017.  Based on the state in which they reside, this number varied from 18 to 24.  Although this is still an acceptable number of choices, it is the lowest number of options since Part D was implemented in 2006.  This decrease is likely caused by several factors, including industry consolidation.

As 2017 approaches, PHSI recommends that pharmacists prepare to discuss increasing costs with patients who may be surprised when their prescription costs change.  Manufacturers should monitor their products’ tier placement and evaluate if any significant copay/coinsurance changes will affect their business.  2017 promises to be an interesting year for healthcare, so stay tuned for more updates in our coming newsletters.

 

2016 Fall Newsletter – Drug Exclusion Lists 2017 Update Article

2016 Fall Newsletter- Drug Exclusion Lists 2017 Update

PBMs and health plans have finalized their 2017 drug formularies, and payers have announced the products on this year’s highly anticipated formulary exclusion lists.  While many of the drugs remain the same as the previous year, the increased presence of biosimilars and generic specialty drugs has caused some interesting changes for the exclusion lists.  The hyperinflation of drug prices has also prompted payers to evaluate the medical necessity of these drugs.

For CVS, a unique hyperinflation drug category now exists on the exclusion list.  CVS has stated that they will evaluate drug price increases on a quarterly basis and potentially remove these items from the formulary when clinically appropriate alternatives are available.  There are ten items identified as “hyperinflation drugs” on CVS’s 2017 formulary exclusion list, including DexPak and Zegerid.  Valeant, who grabbed headlines earlier this year with many of these drug price hikes, markets both of these products.  Interestingly, Express Scripts (ESI) includes none of these ten hyperinflation items on their 2017 exclusion list.

One of the most meaningful changes to the CVS Health formulary exclusion list is the preference for biosimilars and follow-on biologics over their comparator brands.  The exclusion of Gleevec, Lantus, and Neupogen in favor of generic imatinib, Basaglar, and Zarxio sends a strong statement.  CVS is looking for significant savings by removing these high cost biologic or specialty products in favor of covering newer, generic alternatives.  CVS is also excluding brands Crestor and Nexium now that generic version of the drugs (rosuvastatin and esomeprazole) are available.  These changes could help to control rising premiums and costs if a portion of the realized savings are passed on to the patients.

For Express Scripts, one of the most interesting exclusions is alogliptin and alogliptin/metformin, the generic versions of Nesina and Kazano.  Earlier this year, Takeda entered into an agreement with Perrigo to launch authorized generic versions of their alogliptin and alogliptin combination products, Nesina, Oseni, and Kazano.  Takeda hoped that by launching a generic in an all-brand category, they could capture preferred formulary status.  However, likely due to launch prices, it is clear that this did not happen, as both the brands (Nesina and Kazano) and their respective AGs (alogliptin and alogliptin/metformin) are now listed on Express Scripts’ 2017 exclusion list.  Interestingly, neither Oseni nor its alogliptin/pioglitazone AG are included on the exclusion list, but this could change as Express Scripts evaluates products in the future.

The chart below lists new products on the CVS Health and Express Scripts 2017 drug exclusion lists that were not present on the 2016 lists.

formulary-exclusion-lists

 

 

2016 Fall Newsletter – 2017 Medicare Part D Prescription Drug Plan Trends Article