For years, we’ve heard about the coming tidal wave of specialty drugs. In 2012, 25 of them crashed ashore as big pharma and small biotechs continued the pursuit of personalized medicine.

Biologics and other specialty therapeutics made up almost two thirds of new molecular entities approved last year, and their record number furthered the upward trend in approvals since the fast-track process was made law in 2007.

Notably, 12 of the 25 were orphan drugs, and at least seven carry six-figure prices for a year’s worth of treatment — increasingly common for drugs that address rare conditions, sometimes in populations of fewer than 1,000.

FDA drug approvals, 2007–2012

Sources: FDA, Express Scripts

Oncology agents: Not your average formulary decisions

Eleven drugs approved in 2012 were for oncology. Most are targeted agents sure to strain pharmacy budgets, but because of coverage mandates or the paucity of treatments available for their indications, they are unlikely to meet stiff payer resistance. For instance, Erivedge ($7,500 a month) is the first drug approved to treat advanced basal-cell carcinoma, giving it all but a free pass to the formulary.

The cost of addressing unmet needs

New approval Xtandi Cometriq Stivarga
Indication mCRPCa Medullary thyroid cancer mCRCb
Cost per monthc $7,450 $9,990 $9,350
Competing productsd Zytiga ($5,495/mo)
Jevtana ($6,400 per 3-week cycle)
Provenge ($93,000/single course)
Caprelsa ($10,000–$12,000/mo) Zaltrap ($11,063/mo)
Erbitux ($4,032 loading dose, $2,880 weekly dose)
Avastin (~$5,000/mo)
amCRC=metastatic colorectal cancer
bmCRPC=metastatic, castrate-resistant prostate cancer
cPublished average wholesale price, before rebates
dCompeting does not imply substitutable.
Pricing sources: American Society of Clinical Oncology, Cancer Letter, DailyRx, Fallon Community Health Plan, New York Times, The Pharma Letter, Reuters, Seeking Alpha

— Michael D. Dalzell

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.