A weak pipeline among brand name manufacturers is yielding few new drug approvals for “blockbuster” products (e.g., Lipitor), which have been key cost drivers for plans over the past decade. Furthermore, patent expirations over the past 12 to 18 months have allowed less expensive generic versions of several of the most commonly prescribed products to come to market, including Effexor XR, Altace, Pariet, Actos and Alesse. Most recently, the first generic version of Pantoloc received its Notice of Compliance (NOC) from Health Canada in March. These generics are typically 30% to 50% cheaper than the original product.
Manufacturers of brand name drugs are looking to make up for their diminishing pipeline of novel therapeutic entities with products focused on enhancing convenience for the patient, including repackaged formulations of existing products (e.g., immediaterelease wafers, extended-release tablets, etc.) and combinations of two or more existing products (e.g., PravASA, a combination of the cholesterol-lowering statin Pravachol, and Aspirin for the prevention of heart attack and stroke). Other new products being released are simply reformulated versions of existing products and are rarely more effective in terms of clinical outcomes (e.g., Cipralex, one of the two mirror-image molecules that make up Celexa). As part of a strategy to maintain market share, these products are typically released and marketed just prior to the expiration of the patent on the reference product. Finally, drug manufacturers continue to investigate more uses for existing products—in fact, the increase in indications for existing products may drive cost and utilization more than the emergence of new products.
The lack of new blockbusters and recent availability of generics for many expensive brand name drugs has helped dampen the cost trend for plan sponsors in 2007 and into 2008. This has helped to offset prescription drug utilization increases among the aging population. However, plan sponsors with wide-open plan designs that do not differentiate coverage based on cost-effectiveness will continue to be subjected to the premium pricing of the convenience-based and reformulated products relative to comparable generics.
The impact of extremely expensive specialty therapies such as Remicade and Amevive, which are often “biological” in nature, continues to escalate on both sides of the border. At the recent annual meeting for the Academy of Managed Care Pharmacy in the U.S., the following statistics were presented.
• More than half of the drugs approved last year in the U.S. by the Food and Drug Administration are viewed as specialty drugs.
• Specialty products accounted for 62% of the 169 applications for new indications in the U.S. in 2007.
• Many new specialty drugs are oral products, rather than the injectable type of products dominating this category to date.
• Specialty drugs represent well over 20% of total plan spending in the U.S. and are anticipated to reach 30% by 2010. Compare this to the 13.3% of total plan spending in Canada for 2007, according to ESI Canada. Due to the faster approval of new drug products south of the border, the U.S. experience provides clear insight into the impact of these products in Canada. Plan sponsors that do not have appropriate protocols, coordination of benefits optimization and risk management strategies in place will struggle with the costs of these therapies in the future.
New Drug Releases
Here is a brief look at some of the drugs that have recently become available for key disease states (all prices are based on wholesale prices in Ontario as of April 2008).
Diabetes – Januvia (sitagliptin) is the first agent released in Canada within a new class of antidiabetic agents known as the DPP-4 inhibitors or incretin enhancers. Incretin is a hormone that stimulates insulin release from the pancreas and reduces the release of glucose from the liver. Clinical trials have shown that, in combination with metformin, Januvia reduces blood sugars to a similar level and causes less hypoglycemia (low blood sugar) than agents from the existing sulfonylurea class.
Being a novel agent, Januvia has been priced at a premium: $2.90 per once-daily oral tablet. By comparison, the daily costs of therapies such as metformin and glyburide are usually less than $0.50 and, with the recent release of generic versions of Actos (pioglitazone), the cost of glitazone antidiabetic therapy is now as low as $2.50 per day in Canada. It is still unknown where Januvia will fit into clinical guidelines for managing diabetes since studies show that it is effective in lowering blood sugar, but not any more effective than the other agents currently available. Plan sponsors with unmanaged formularies can expect more expensive claims for Januvia to further drive up costs for a condition already increasing in incidence among aging plan members.
High Blood Pressure – The first drug in a new class of antihypertensive agents called renin inhibitors received its NOC from Health Canada late last year. Rasilez (aliskiren) works by targeting and suppressing renin, a central component in an enzyme cascade that increases blood pressure. This represents the first new approach for treating high blood pressure in more than a decade.
Rasilez is an oral tablet dosed once daily, and it is available in 150 mg and 300 mg strengths. Clinical trials for Rasilez have demonstrated that it provides a significant and sustained reduction in blood pressure over a 24-hour period. Investigators say this sustained effect is notable because blood pressure fluctuates during the day and will often surge in the early morning hours.
As the prevalence of hypertension among plan members continues to increase with the aging population and blood pressure targets within clinical guidelines for patients with cardiovascular risk factors become more aggressive, there is the potential for rapid uptake of this brand name medication, either to replace the generic products currently used or as an add-on to these existing therapies. It is priced at $1.20 per tablet—in line with other brand name antihypertensives such as Avapro, Cozaar and Norvasc, yet still well above the price of generics from other classes of drugs used to lower blood pressure.
Depression – Late in 2007, the second serotonin norepinephrine reuptake inhibitor (SNRI) for the treatment of depression in Canada also received its NOC. Cymbalta (duloxetine) works in the brain to prolong the activity and mood-enhancing effect of two natural neurotransmitters, serotonin and norepinephrine, between nerve cells. The first SNRI, Effexor (venlafaxine), has been on the market since 1994 and now has several generic versions available for the extended-release Effexor XR product.
Similar to Effexor XR, Cymbalta has been indicated for the acute and maintenance treatment of major depressive disorder and for the acute treatment of generalized anxiety disorder. However, Cymbalta has also been indicated for the management of nerve pain associated with diabetic peripheral neuropathy. Cymbalta is available in 30 mg and 60 mg delayed-release capsules, with its daily dosing dependent on the specific indication for which it is being used.
The Cymbalta 60 mg capsules have been priced at $3.76 each, compared to $0.94 for the highest-strength capsule of generic Effexor XR. Given the prevalence of depression among plan members—and the fact that the vast majority of antidepressants in the Canadian market have generic equivalents— the availability of this new brand product is expected to drive costs higher for employers in this common therapeutic area, despite questionable additional clinical benefits for plan members.
Many plans have started to experience a “double-bulge” effect along the demographic spectrum. This involves costs increasing in the 45-plus age group with greater utilization of drugs to treat age-related chronic conditions, as well as a new peak in the younger 25 to 34 age band with the use of fewer—but much more costly—specialty drugs for the aggressive management of conditions such as rheumatoid arthritis and Crohn’s disease. Without a proactive and strategic approach toward preferential coverage for cost-effective therapies, the pressures behind these two peaks will continue to grow unchecked.
Paying a premium for certain drugs that offer little or no incremental clinical benefit over existing therapies—or handling the eligibility of drug products costing tens of thousands of dollars per year in exactly the same manner as those costing pennies a day—does not make sense from a value or sustainability perspective. Plan sponsors must measure and understand exactly what is driving their own unique claims experience and assess the impact of alternative plan designs for which cost-effectiveness and value are the driving principles.
Understanding Specialty and Biological Drugs
Plan sponsors are becoming increasingly aware of the array of specialty products available on the market. Specialty therapies are unique in a number of respects. Most are biological in nature—in fact, the term “biological therapies” is often used synonymously with specialty products. Many have complex administration protocols requiring intravenous, intramuscular or subcutaneous dosing, meaning that many of these agents must be administered in outpatient clinics.
Specialty therapies are also very expensive. Their unique mechanisms of action and specialized delivery systems require extensive research and development, and the resulting cost to patients and their drug plans is significantly greater than for nonspecialty drugs.
The following characteristics are used to determine if a product is biological in nature.
• Native, biological macromolecules produced by living systems (e.g., blood products)
• Recombinant peptides or proteins
• Antibody-based therapy (i.e., monoclonal, polyclonal, antibody fragments)
• Nucleic acid-based therapies
• Cell- and gene-based therapies
• Reliance on defined biological pathways
• Highly specified or targeted mechanisms of action
Here are some of the new drug products to watch for in 2008 and beyond.
• Seventy-one distinct specialty products in the U.S., including 28 cancer-related therapies, two new biologicals for rheumatoid arthritis (tocilizumab and certolizumab pegol), two new oral products for multiple sclerosis (fampridine SR and fingolimod) and the first fully human monoclonal antibody (ustekinumab for psoriasis).
• Two more gliptins for the treatment of diabetes: alogliptin and saxagliptin.
• Prasugrel (currently marketed as Effient in the U.S.), the first major competitor for Plavix for the inhibition of platelets to prevent secondary heart attack and stroke.
Chris von Heymann is senior vice-president of Cubic Health Inc. and a licensed pharmacist. email@example.com
For a PDF version of this article, which includes the entire 2008 Drug Plan Report, click here.