2024 Drugs to Watch: What Payers Should Know

John Stahl and Matthew Arnold from Clarivate discuss the evolving pharmaceutical landscape in 2024, emphasizing the need for payers to balance supporting innovative breakthrough medicines with containing health care costs.

Highlights

• Significant scientific breakthroughs, such as CRISPR gene editing technologies, emphasize the importance of real-world evidence in decision-making and collaboration between stakeholders.
• Regulatory changes like the Inflation Reduction Act (IRA) impact market dynamics and innovation.
• The value of innovations in improving patient outcomes while addressing affordability concerns through a collaborative approach among industry players.

Read the full transcript:

Please introduce yourselves by stating your names, titles, and professional backgrounds.

John Stahl: It's a pleasure to be here. My name is John Stahl. I'm a partner with Clarivate commercial strategy consulting. Clarivate provides data insights and intelligence to help pharmaceutical and biotech companies make better strategic decisions. In my role here at Clarivate, I lead the US pricing and market access team, providing consulting solutions to market access challenges that our clients are facing.

And I've been with the team now for over 10 years. In the early part of my career, I also have pharmaceutical experience and commercialization experience—having worked both for Johnson & Johnson and Novartis.

Matthew Arnold: My name is Matthew Arnold. I'm a principal analyst at Clarivate. I've been here for 12 years or so. In a past life, I was a journalist in the glamorous world of B2B publications. And I have just wrapped up our Drugs to Watch report. It's an annual report where our experts identify drugs that were approved in the previous year or are likely to be approved in the current year—so in 2024, in this case, based on our data—our data project will be blockbusters within 5 years. So 2029, in this case. And game changers for patient health, whether that means decreasing the burden of treatment for patients or significantly improving health outcomes.

Given the contrasting dynamics in the pharmaceutical industry in 2024, with scientific breakthroughs leading to promising new modalities while external factors pose challenges, what should payers consider when evaluating drugs and drug candidates for potential reimbursement and market access?

Matthew Arnold: Yeah, we are seeing extraordinary scientific breakthroughs. So, this year's drugs to watch include Casgevy and Lyfgenia. These are 2 novel therapies for sickle cell disease and beta-thalassemia. These are inherited blood disorders for which there were previously only limited, symptomatic, or no curative treatments. And they were developed using CRISPR gene editing technologies. So, we project $1.32 billion in revenue for Casgevy alone in 2029.

You have Tarpeyo (budesonide), which delivers greater efficacy and safety than existing corticosteroid treatments for kidney disease. Altuviiio from Sanofi is the first factor VIII replacement therapy for hemophilia. A patient needs to be administered only once weekly. Talvey from Johnson & Johnson. A first-in-class by the specific antibody for relapsed or refractory multiple myeloma patients, which is a very difficult treatment group for whom most, if not all, treatment needs have been exhausted. These breakthrough drugs are being driven by new modalities and technologies that are coming online, such as antibody-drug conjugates and by specific antibodies, gene editing AI, and machine learning. So, there's just incredible advances in medicine happening. And, of course, the question is, how to pay for that.

John Stahl: Yeah, I agree with that, Matt. You know tremendous scientific breakthroughs. But we know payers have limited or finite budgetary resources to pay for all this great innovation that improves patient health and outcomes. It really comes down to those things. Let's look at these new innovations and ensure that payers understand those improvements in patient outcomes for populations that have been previously underserved. Or patient populations that have exhausted all available options, and there's still unmet for new innovations that deliver better efficacy and better safety profiles for these patients so that they can stay on. These drugs have better adherence. We do know that payers are challenged financially to pay for everything. And there are options out there. They can look to and understand what type of patient support services are available, ensuring that their members have or are aware of those options.

But really, it comes down to these medicines, not just in a silo and for the next finite 12 months, which is normally that budget planning period and looking at the longer term and that these products, what we're seeing, is that they are delivering longer-term value, longer-term outcomes. And payers can evaluate those data over the longer term to ensure they get a return.

The importance of real-world evidence in deciding drug coverage is emphasized, particularly from a payer standpoint. However, many people are unaware of this concept. The existing research on these drugs underscores the necessity for payer monitoring due to the substantial real-world evidence available. Would you agree?

John Stahl: The pharmaceutical industry is trying to do a better job. We have grown up on clinical trials being that source of truth. And the evidence for regulatory approvals. But we know that the payer stakeholder needs more data, different data, to make those payer decisions or access decisions. And that's where real-world data and real-world evidence play an increasingly important role. Not just for drug approvals but as these drugs look to expand indications into new populations, generating new evidence, helping to inform protocol and guideline development, really making sure that you know the best evidence can be brought forth, and that will include not just clinical trial evidence, but a wealth of real-world data and real-world evidence to inform those decisions.

How can payers balance supporting innovative breakthrough medicines and addressing the need to contain health care costs in the current landscape?

John Stahl: I think there are a couple of points. One, we've talked about that balance of cost and efficacy or cost and outcomes. If they're really making sure there's a good appreciation for the ability to deliver longer-term value, and we know the world is changing, the payer mindset is changing. The health care world is changing to value-based care with greater appreciation incentives for longer-term outcomes. Yes, there might be higher costs immediately. We see that with some of the self-therapies, eg, one-time high cost but the benefit over the longer term, is more than enough vs current standards of care. Right? So, payers understand that. But I think it's making sure that that all stakeholders are adopting that mindset. That leads to the second point, from a market access perspective.

One of the most important points is the balance of cost and access. Making sure that the right data are provided and that for us, when we're advising our clients on payer access-related topics, it's all about ensuring that the payer input or other stakeholders who are involved in treatment and access decision-making input is considered early in the clinical development lifecycle. So, you're having conversations looking to engage payers on clinical development trial protocols and lifecycle management decisions to really understand who the appropriate patients are. So they can understand what that unmet need is. Having the ability for payers to participate and provide that input early in the lifecycle process and early in the clinical development process is going to be critical. When, down the road, these drugs are being launched, and payers are considering access decisions. So, the earlier that access input can be collected ideally is through a positive partnership or collaboration that life science manufacturers can have with payers and payers can have with HCPs. And patient voices can be included. The more we can get multistakeholder input into clinical development, the more it will ensure that the right outcomes, the right endpoints, and the right data is brought to the board at the end.

Some payers often review drugs and disease states from a bird’s eye view, so involving them upfront early on can help them better understand the disease state the drug is indicated for to determine coverage.

John Stahl: We hear that so often in the advisory boards that we help our clients with. It really helps to define or size the box—it's a common language. I need to understand how many patients are out there. What have they already been on? Why are they an appropriate patient? And then, what is that unmet need? I think through that upfront understanding and collaborative engagement, knowing how big the population is and what those needs are will be critically important to help payers understand. And we know that they rely on physician KOLs and physician communities. So making sure that we can bring that information and say we know the pharmaceutical industry, the biotech companies, medical device companies—there are a lot of new and innovative solutions out there, and it's incumbent upon those companies to bring that education forward for payers so they can truly appreciate the unmet need that exists.

Considering the top drugs highlighted in the report, such as the less-frequent administration of high-dose aflibercept for wet age-related macular degeneration and diabetic macular edema, the delayed-release formulation of budesonide in TARPEYO^®/Kinpeygo^® showing enhanced efficacy, and Ensifentrine's potential as the first-in-class maintenance COPD treatment without systemic side effects—how do you anticipate payers evaluating these innovations?

Matthew Arnold: You mentioned aflibercept, a high dose. Here, you have a safety and efficacy profile similar to the current standard of care with a 12- to 16-week dosing. And the biggest unmet need for patients with these diseases has been clinically superior therapies with more convenient delivery profiles than available treatments. The frequency and time requirement of clinic visits take a real toll on the patient, caregiver, and caregiver's quality of life and can be particularly burdensome for the working-age population and patients who can't drive. This high-dose aflibercept affords extended dosing intervals with favorable safety and efficacy profiles, and that means a huge reduction in the administrative and follow-up burden of treatment on patients, caregivers, and health care providers.

Then, looking at budesonide Tarpeyo, this is a delayed-release formulation of the corticosteroid budesonide. Clinical trial data indicate greater efficacy and a better safety profile. And it's a major breakthrough, particularly for high-risk patients. IgA nephropathy is a rare progressive kidney disease. We're talking about around 500,000 diagnosed in the G7 markets, and it can lead to end-stage renal disease requiring dialysis or kidney transplant. It generally progresses slowly, and treatment is primarily directed at managing symptoms and minimizing kidney failure, improving patient quality of life through multidisciplinary supportive care. So, clinicians are looking for a more holistic approach that takes into account all these aims and, therefore, effective, safe, and well-tolerated drugs that protect kidney function or slow the progressive decline needed because of the greater efficacy and safety. It'll likely provide physicians with an alternative option to conventional corticosteroids.

In addition to being obviously nice to have, decreasing the burden on patients also affects compliance and adherence, which ultimately affects the cost-benefit analysis. We have to calculate that as well.

John Stahl: I think that was going to be my point, Matt, right? It's good that some of these innovations that have been highlighted are novel deliveries of older medications or reformulating existing medications to improve efficacy, decrease the number of administrations, make it easier on the patient, and make it easier on the physician. At the end of the day, we know that payers historically have not paid for convenience or not valued increased convenience. But these drugs are not just delivering increased convenience. They're serving real patients' unmet needs and delivering increased efficacy. And we have to remember that at the end of the day, there is a strong value proposition for each asset that extends beyond increased convenience. And to Matt's point, if that leads to greater adherence, it's safer and easier for the patient to take. This will lead to decreased events down the road because the disease is well-controlled, right? And so, having that mindset of, yes, this isn't just simple reformulations, or going from twice a day to once a day, increases the convenience of the delivery. These are coming with real increases in efficacy. Real benefits from a safety perspective.

Considering the Inflation Reduction Act (IRA) reshaping market entry and portfolio strategies, how do you anticipate payers navigating the evolving landscape of biopharma research and development?

John Stahl: I think it's one of the one of the solutions. We know that under IRA, there are many provisions that have been brought forward. In our discussions with payers and other stakeholders, I think we're also trying to figure out how the provisions will shake out. We know it's good for patients; it's lowering the out-of-pocket caps or putting in place a cap. We know payers are going to be asked to shoulder more of the burden in that Medicare Part D population, and that may cause them to start to act a little bit differently given that their costs are expected to increase. We know that there are different incentives related to biologics vs small molecules in terms of some of the provisions that exist prior to the entry or the availability for there to be price negotiation.

I think people are still trying to figure out how all those factors interplay and go together. But what it does mean, and what we know at the end of the day, is, at its core, ensuring that there is a strong evidence package, ensuring that the evidence package that is brought to market includes clinical trial data and real-world data. Ensuring that it addresses payer needs goes back to our conversation about engaging payers early and ensuring they understand. Making sure that they understand or can articulate what those unmet needs are. And understand what is clinically relevant. Right? I mean, sometimes we see some things from the clinical trials where certain biomarkers or other endpoints were identified. But what does that really mean at the end of the day? We get asked that so often by a payer, “Is that clinically meaningful and relevant?” So, we need to make sure payers understand those endpoints.

Have their voice and their input be included in the development of these new innovations. That's good. That's how we'll be able to move forward and bring great things to patients.

Matthew Arnold: And one of the things we're watching with the IRA is, of course, whether there are going to be unintended consequences from this. And how is it going to impact innovation? We've already seen a couple of companies like Eli Lilly and Alnylam blaming program cancellations and blaming drugs in development being cancelled on this law. In the case of Alnylam, they were developing a treatment for Stargardt disease, which is an eye disorder affecting 700,000 people across the major mature markets, and that was shelved due to a provision in the law that exempts treatments for rare diseases, but 1 alone from possible price negotiations. So, this was AMVUTTRA, which is already indicated for ATTR in the US. The IRA, by some industry figures, is the Innovation Reduction Act has been in effect since spring. But it's going to be years before we really know what effects it will have. The upshot for pharmas is that they'll need to be much more efficient in direct development. And they're going to compensate by moving those go and no-go decision-making decisions up further in the innovation cycle. Fortunately, we have tools like real-world data applications, AI, and machine learning coming along to help make that possible.

John Stahl: We are engaging with a number of clients trying to look into that crystal ball and understand payer behavior. We're at a point where we know, as mentioned earlier, what the main points of the IRA are and what those incentives or disincentives are for different stakeholders. Whether it's payers, pharma companies, or patient providers, it will be interesting to see how that all plays out over the next couple of years. I don't think anyone has the answer today. But coming back to the topics of our discussion, the thing that the IRA doesn't change is how to demonstrate the value of these innovations, the value of these new medicines that are breakthroughs in many different ways, of being able to address and improve patient health, and making sure that as a pharma industry, as payers evaluating these drugs, and solutions for coverage, for doctors evaluating as part of a treatment paradigms, really making sure that we're looking at that evidence, the value proposition that they're bringing and making sure that it's strong vs things that are already out there.

What are the key takeaways you hope the audience gains from this interview?

John Stahl: I think one of the things that I love about our role here is helping our clients—and we work again with a lot of pharma and biotech companies—is answering their access challenges. And for me, it comes down to this balance of access and affordability. That's the central theme at the end of the day. How can we have an appropriate balance between those 2? We know that many of these new innovations are coming at higher and higher price points. That affordability component is really being squeezed in light of a lot of the macroeconomic factors that payers and governments are facing today. But we need to remember again that these new innovations are delivering tremendous breakthroughs for patients that have not had effective solutions for their diseases up until now. They're coming with increasing efficacy that is proving advantageous over the longer term. It's the improved safety profiles that are going to allow patients to remain adherent to medication.

When we think about that affordability equation vs access and making sure that we take that longer-term view, it's hard given some of the incentives in which payers are asked to act or getting some of the incentives that other stakeholders are asked to act in the very short term view up until now. Ensuring we balance that access and affordability equation and thinking longer term allows these innovations to address the total cost of care. This is vitally important.

Matthew Arnold: The only thing I can add is that payers, pharmaceutical companies, and med techs will need to partner more closely to get the fruits of these amazing scientific advances into patients going forward. And real-world data and real-world evidence are going to have a huge role to play there.

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