The biopharmaceutical landscape is in a state of continual evolution, driven by scientific advancements, regulatory shifts, and market dynamics. As we venture deeper into 2023, several notable trends are shaping the market access paradigm, warranting attention from stakeholders across the industry spectrum. From policy enactments like the Inflation Reduction Act to the burgeoning realm of cell and gene therapies, the nexus of drug pricing, patient accessibility, and commercial strategy is under a spotlight. Additionally, digital innovations promise to redefine the contours of patient care and drug commercialization. Here we explore five trends in biopharma market access that have caught our attention in 2023.

1. Inflation Reduction Act and Price “Negotiation”

The recent enactment of the Inflation Reduction Act (IRA) has stirred the waters in the biopharmaceutical sector, ushering in a new era of price “negotiations” between drug manufacturers and the federal government. The act, aimed at curbing drug price inflation, has been met with a mixed reaction and multiple lawsuits. Central to the discourse is the provision allowing the government to “negotiate” drug prices directly with manufacturers, in particular that the penalties for not negotiating are so steep that the process has been called “negotiation with a gun to your head.”

The unfolding scenario post-IRA enactment beckons a closer examination of pricing strategies and indication selection by biopharma companies. For example, the IRA exempts orphan drugs from “negotiation” but only when the orphan drug has a single indication. A team from Tufts recently found 23% of drugs and biologics approved for an orphan indication we subsequently approved for a follow-on indication. Because such a follow-on indication would bring a given brand into scope for IRA “negotiation,” it seems likely biopharma companies will pass on such development, and patients who have these indications will ultimately suffer.

The ripple effects of the IRA are likely to be felt across the industry, affecting drug pricing, market access dynamics, and the broader discourse on healthcare affordability. As the legal challenges progress through the judiciary, the industry will be keenly watching the outcomes and preparing to adapt to the evolving pricing and negotiation landscape.

Against this backdrop, the dialogue around Pharmacy Benefit Managers (PBMs) and their role in drug pricing has also gained traction. The extension of scrutiny on pricing strategies as driven by PBMs is becoming more understood, adding another layer of complexity to the market access equation. The interplay between PBMs, payers, and pharmaceutical companies in the post-IRA era warrants a deeper exploration, as it will significantly impact how drugs are priced, reimbursed, and accessed.

2. Expansion of Cell and Gene Therapies (CGTs)

The biopharmaceutical landscape is witnessing a remarkable surge in the development and commercialization of cell and gene therapies (CGTs). These innovative therapies, often deemed as potential cures for myriad diseases, are redefining the frontier of medicine. The allure of CGTs lies in their promise to more precisely target disease, particularly in rare diseases and oncology, where there is unmet need and a relatively high appetite for new medicines.

The growth trajectory of CGTs is steep. A recent report by Lisa Jarvis for Bloomberg highlights the potential of gene therapy to revolutionize the treatment paradigm for conditions like sickle cell disease. However, the prices associated with these therapies have raised eyebrows and ignited debates on affordability and access. With price points often in the millions per patient, the economic ramifications are profound, not just for individual payers but for the healthcare system at large.

The puzzle of pricing CGTs is intertwined with the broader market access challenge. The high cost of risky development, coupled with the small patient populations–be they rare diseases or a subset of cancer patients characterized by a molecular diagnostic–often drives the price skyward. Nonetheless, the high efficacy and the potential curative nature of these therapies present a compelling value proposition that is hard to ignore. Central to this value proposition is the need to communicate with policymakers and the broader public in order to ensure support for future R&D investment in these modalities.

Innovative pricing models, such as value-based agreements, outcomes-based contracts and warranties, aim to align cost with demonstrated value and solve for payers’ concerns about patients switching plans after treatment. Proliferation of such models remains nascent and an area of opportunity for all parties.

The trajectory of CGTs is not just a narrative of scientific innovation but a reflection of the evolving market access landscape. The intertwining of pricing, reimbursement, and regulatory considerations underscores the complexity of bringing CGTs to market. As the CGT pipeline continues to burgeon, the discourse on pricing and access will gain momentum, urging stakeholders to forge new pathways to ensure the sustainability and accessibility of these groundbreaking therapies.

3. Digital Evolution: Beyond Digital Therapeutics to AI Applications

The digital realm has entwined itself with the biopharmaceutical sector, forging a path of innovative solutions and enhanced operational efficiencies. Recently, the spotlight was on digital therapeutics (DTx), designed to treat a broad spectrum of conditions through software-driven interventions. Although the promise of DTx remains, commercialization challenges have somewhat dampened the initial enthusiasm. Standalone commercialization of DTx has proved to be challenging, steering the focus towards the integration of digital solutions within broader treatment paradigms.

Now, the narrative is shifting towards the potential impact of Artificial Intelligence (AI) in biopharma. Hypothesized applications are broad and transformative, spanning drug discovery, clinical trial optimization, and real-world evidence generation. AI’s ability to sift through vast datasets to unearth actionable insights is enticing to marketing teams who are still in the early stages of experimenting with these tools.

Moreover, there is a hope that AI might play a pivotal role in personalizing medicine, enabling a deeper understanding of patient sub-populations and the customization of treatment plans. This move towards precision medicine might not only enhance the efficacy of treatments but also reshape the market access landscape. Payers continue to show interest in personalized treatment approaches as they often promise better outcomes and potentially more efficient resource utilization. Just as clinical trial inclusion and exclusion criteria are a blessing and a curse in market access, professionals must be attentive to how applications of AI might simultaneously enhance and destroy asset value.

4. Anti-Obesity Medications: The Rise of a New Therapeutic Frontier

The therapeutic domain of anti-obesity medications has witnessed a significant upswing, as marked by the commercial success of drugs like Mounjaro, Ozempic, and Wegovy. As the global health community grapples with the burgeoning obesity epidemic, the advent of these novel medications provides a beacon of hope. These pharmacological interventions have showcased a notable efficacy, giving them a sturdy foothold in the market.

The market potential for anti-obesity medications is vast. Forecasts for market size, even if not entirely accurate, indicate a substantial opportunity: a market so expansive that there’s ample room for multiple agents to carve out significant segments. Moreover, the ripple effect of obesity on other health conditions such as diabetes and cardiovascular diseases underscores the critical importance and potential impact of effective anti-obesity treatments.

Furthermore, the acceptance and integration of these medications into treatment protocols reflect a broader shift towards addressing obesity with a medical model. As part of this clinical paradigm shift, there is legislation to include coverage of these agents in Medicare, which could have substantial knock-on effects. Even if this legislation is unsuccessful, market access teams must account for scenarios including status quo and Medicare coverage. This evolving reimbursement landscape, patient access programs, and educational campaigns targeting healthcare professionals and patients are part of a complex tapestry that requires meticulous navigation.

The ascent of anti-obesity medications is emblematic of the broader trend of expanding pharmacological solutions to previously under-addressed or stigmatized health conditions. This unfolding scenario presents both an opportunity and a challenge for market access professionals to foster a conducive environment for the successful introduction and adoption of these vital medications.

5. Shifting Dynamics in Patient Out-of-Pocket Costs

The financial burden borne by patients has been a subject of intense scrutiny and debate, and 2023 has seen some notable shifts in this domain.

• Copay Accumulator and Maximizer Programs: The rise of copay accumulator and maximizer programs is worrisome among patient advocates and manufacturers. These programs don’t allow the monetary assistance provided through copay cards to count towards patients’ deductibles and out-of-pocket maximums. As a result, once the copay assistance is exhausted, patients find themselves facing higher out-of-pocket costs, which can adversely affect medication adherence. Some data indicate that accumulator program growth has slowed.
• Smoothing OOP in Medicare Part D: On a positive note, the IRA also has a provision to allow beneficiaries to smooth their out of pocket (OOP) costs throughout the year. This development is positive in that it begins to solve for the financial stress of patients paying through their deductible and initial coverage phases all at once at the beginning of the year, and thus the smoothing provision ought to increase medication adherence once it comes into effect in 2025.

These evolving dynamics necessitate a thorough understanding and strategic approach from biopharmaceutical companies to ensure market access and commercial success of their products. Transparency, patient assistance programs, and adept pricing strategies are poised to play crucial roles in navigating these changing landscapes successfully.

Conclusion

The landscape of biopharma market access is in a state of continuous evolution, driven by regulatory changes, advancements across modalities, the burgeoning digital transformation, and the shifting dynamics of patient out-of-pocket costs. As we navigate through 2023, these identified trends underscore the imperative for biopharmaceutical companies to remain agile, informed, and strategically adept to ensure both market access and commercial success of their innovations.

Staying ahead of these trends and understanding their implications is crucial. Apex Market Access is at the forefront of navigating these complex landscapes, empowering our clients with the requisite knowledge and strategies to thrive amidst these challenges.

We welcome conversations on these and other market access trends. If there are reflections on the trends discussed or other trends you believe should be on our radar, we invite you to get in touch with us. Your insights and the ensuing discussions enrich the collective understanding and strategies necessary for success in the biopharma market access domain.