2024 Trends Include PBM Private-Label Subsidiaries, Biosimilar Guidance
Reprinted with AIS Health permission from the December 2024 issue of Radar on Specialty Pharmacy
New specialty drugs and emerging cell and gene therapies continue to garner much of the attention in the pharmaceutical arena, but other pharma occurrences have made headlines over the past year. Three industry experts gave AIS Health, a division of MMIT, their thoughts on the most noteworthy occurrences within the specialty pharmacy industry in 2024, from PBMs’ private-label subsidiaries to proposed FDA biosimilar guidance, as well as some of those approvals. (Editor’s note: These comments have been edited for length and clarity.)
Renee Rayburg, R.Ph., vice president of specialty clinical consulting at Pharmaceutical Strategies Group (PSG), an EPIC company: [Major industry events of 2024 included] continued advances in science, first-time approvals of drugs for previously untreated diseases, expanded indications (especially for use in traditionally nonspecialty conditions where utilization of specialty drugs can significantly increase), and continued approval of high-cost gene therapies resulting in cost and patient experience considerations for members and plan sponsors. There have been at least six new cell and gene therapy approvals, 18 new biosimilars [and] 44 novel new drug approvals all this year so far, with more to come.
Our 2024 research found that most payers anticipate cell and gene therapies specifically will be a challenge for them in the coming years, but most are not confident in their understanding of the financial impact of cell and gene therapies. We also found that payers are facing challenges with maximizing the benefits of biosimilar competition. It is more important now than ever for payers to understand what these approvals mean for the health of their members and for their organizations financially as they are committed to finding ways to continue to provide access to much-needed new drug therapies.
Andy Szczotka, Pharm.D., chief pharmacy officer at AscellaHealth: One of the noteworthy occurrences in 2024 includes continued increases in overall spending on specialty drugs due to increases in utilization, costs and access to newly FDA approved, expensive therapies, including specialty, cell and gene therapy products. Current pharmaceutical spending now exceeds $722 billion, with projections of overall prescription drug spending to rise by 10% to 12% in 2024. The latest IQVIA estimates state that specialty medicines account for 54% of spending, up from 49% in 2018, driven by growth in immunology and oncology therapeutic areas.
Currently, the FDA has approved 44 novel drug therapies in 2024, with the majority being specialty or related drug therapies. Along with these therapies, there are over 40 cell and gene therapies currently approved by the FDA, with an additional 500 in the pipeline and the expectation that 10 to 20 will be approved annually by 2025. Newly approved and marketed therapies continue to be expensive, and this is expected to continue due to the [ongoing] development of orphan and new cancer therapies, with more than 80% of all specialty drug development for rare and orphan conditions and cancer. This will provide increased prominence of the role of specialty pharmacy in ensuring proper use and monitoring of these new and likely very expensive therapies.
Another noteworthy event is a potential shift in regulatory approvals for biosimilar agents. The FDA has proposed a draft guidance in 2024 that biosimilar drugs seeking interchangeable designation will no longer need studies showing the impact of switching between them and the branded drug. The FDA draft guidance is based on updated scientific thinking and experience related to both biosimilars and interchangeable biosimilars. The FDA has stated that experience has shown that for the products approved as biosimilars to date, the risk in terms of safety or diminished efficacy is insignificant following single or multiple switches between a reference product and a biosimilar product. This change, if adopted, could simplify approvals, increase competition and accelerate access to biosimilar therapies and allow biosimilar products to be handled similarly to conventional generic products. There have been no new changes or updates to this proposal and the draft guidance remains the current status quo while awaiting finalization.
Additionally, in 2024, there was an increased availability of biosimilar drug products. Currently, there is a total of 63 FDA approved biosimilars, with 42 biosimilars having been launched and market available. Of these approvals, 14 biosimilars have been given the interchangeable designation. The availability of biosimilars has provided additional options for specialty pharmacies and payers in terms of product choices, benefit design, formulary options and cost-saving opportunities. Another noteworthy occurrence is the expanding role of specialty pharmacy to manage the site of administration of the specialty drug products from a hospital setting, either inpatient or outpatient, to clinically equivalent alternative settings such as infusion centers, provider offices or even home administration. This approach helps to reduce costs and provide saving opportunities for the patient and payer.
Mesfin Tegenu, R.Ph., CEO and chairman of RxParadigm, Inc.: The uptake of Humira [(adalimumab) from AbbVie Inc.] biosimilars has been one of the most noteworthy occurrences in specialty pharmacy in 2024. Initially, adoption was slower than expected, as many payers maintained Humira’s preferred status and added biosimilars at parity. According to IQVIA, Humira retained at least 97% of total adalimumab volume through March 2024.
However, recent shifts in PBM strategies, including exclusions of Humira from formularies, have driven increased biosimilar utilization. Samsung Bioepis’ Fourth Quarter 2024 U.S. Biosimilar Market Report notes that by August 2024, biosimilars for Humira accounted for 22% of the adalimumab market. This growth has been fueled by the adoption of biosimilars through private-label subsidiaries by PBMs. CVS Health introduced Cordavis to coproduce biosimilars with manufacturers. Similarly, Express Scripts launched Quallent to distribute its private-label biosimilars, and Optum Rx plans to roll out its private-label biosimilar subsidiary, Nuvaila, in 2025. These initiatives reflect a broader industry shift toward cost-effective alternatives, demonstrating the growing role of biosimilars in driving industry change, fostering competition and improving accessibility for patients.
Another noteworthy occurrence is the growing number of orphan drug approvals. Of the 43 novel drugs approved by the FDA this year to date, approximately half received orphan drug designations, reflecting the increasing focus on rare disease treatments. This trend highlights the expanding pipeline for these therapies, offering potentially lifesaving treatments for patients with rare diseases and paving the way for innovative treatment options that address previously unmet needs.
By Angela Maas