A recent article in Biocentury by Roger Longman and Jane Borne of Real Endpoints has some undiluted advice about the challenge drug companies will face getting customers for the record number of new medicines approved in 2014
"HCV has taught payers they can in fact limit access to valuable drugs even when there’s no competition at all. Five years ago, it would
have been unthinkable to deny a relatively healthy but HCV-infected patient a curative drug. Today it’s routine."
Ditto for HIV, MS, psoriasis, various cancers.
"They are willing to challenge head-on, as far as we can see for the first time in a major, potentially fatal disease, the resistance of physicians and patients in order to provide their customers with a mechanism for bending the cost curve in specialty drugs. And that means that we will see similar deals in all significant competitive specialty categories — including in some areas of cancer."
RIght now companies are responding by offering the big pharmacy benefit networks discounts in exchange for being the only drug of it's kind covered. And since the first movers are likely to cut such deals to limit competition, what will happen to other medicines that may have significant benefits for patients or to other medicines that need to be used in combination. When price is the only thing that matters, outcomes take a backseat. And pharmacy plans are doing because, under Obamacare, they can.
Isn't that a restrictive formulary? Won't that kill the other speciality pharmacies and small drug stores that sell on service and not just margin? Isn't that bad for patients?
There's only one right answer: Yes.
There are three things companies must do to get their products to patients. I am not sanguine about the ability or desire of most companies to take these steps.
1. Identify groups of patients that benefit most from a new medicine, especially groups that will benefit and require a combination of treatments to improve health.
2. Demonstrate the benefit of such treatments to patients and their families in terms of a return to or continuation of life free for disease. Estimate the value of this state of wellness and estimate the cost -- in terms of out of pocket spending, lost productivity and even death -- of forcing people to use a drug that's cheaper for a health plan but not best for a patient.
3. Demonstrate the benefit of such treatments to employers, universities, retirement funds, life and disability insurers, Medicare, Social Security. And share this information widely and with Congress. Otherwise valuable Obamacare reforms to eliminate discrimination against chronically ill people through restrictive formularies will fail.
As Longman and Borne note: It’s crucial that biopharma provide (these other stakeholders) the appropriate measurement tools. If they don’t, buyers will settle on the easiest point of comparison: price.