Lipitor led the way, and other blockbusters are following

For years everyone has been anticipating the big patent cliff, when a crop of blockbuster drugs loses patent protection and goes generic and prices fall to a fraction of what they had been. Well, the reaping season has arrived. The industry newsletter FiercePharma recently examined the top 10 pharmaceuticals facing generic competition through next year and found that products worth more than $30 billion a year in revenue will be genericized.

The Biggest Losers

The big three — Plavix, Lipitor, and Actos — account for almost half of that amount. Singulair, Seroquel, Zyprexa, and Diovan bring in more than $11 billion, with Lexapro, Provigil, and TriCor each accounting for more than $1 billion in revenue apiece.

Pharmacies have already begun to advertise the arrival of Lipitor copies and every big generic drug maker on the planet has been gearing up for these new markets. Patients are in for some big savings as well, as payers shift these new drugs to the most attractive formulary tiers.

A recent report from IMS Health, commissioned by the Generic Pharmaceutical Association, notes that last year the average copayment for a generic was $6.06, compared to $23.65 and $34.77 for preferred and nonpreferred brand drugs. Together, generic drugs saved payers and consumers about $157 billion in 2010. And with these new blockbusters about to go naked on the intellectual property front, that figure will keep rising.

Pharma companies, of course, haven’t been idle as the patent cliff loomed. They’ve been developing new drugs. This year has already seen a spike in new drug approvals at the FDA compared to previous years, and many of these new therapeutics fall into the biologics sphere, where they will retain marketing exclusivity for 12 years.

Source: Generic Pharmaceutical Association. An economic analysis of generic drug usage in the U.S. September 2011 and FiercePharma. 10 largest U.S. patent losses, October 24, 2011.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.