Cell and Gene Therapies, Biosimilars, Medical Benefit Drugs Are Areas to Watch Moving Forward

Reprinted with AIS Health permission from the February 2024 issue of Radar on Specialty Pharmacy

2024 Outlook

While the FDA approved a large number of specialty drugs in 2023, payers shouldn't let their attention wander in 2024. Multiple potential blockbusters are slated for decisions by the agency this year, as are several biosimilars and generic versions of specialty medications. Gene therapies will continue to garner headlines — and payer dollars. All of these trends and more point to an active year ahead within the specialty pharmacy space. AIS Health, a division of MMIT, spoke with some industry experts about what's on board.

AIS Health: What are some specialty pharmacy issues to keep an eye on in 2024, and why?

Stefani Papazaharias, trade relations executive for Reliance Rx, the specialty drug company affiliated with the not-for-profit health plan Independent Health:

Continued biosimilar adoption for existing available options, as well as strategy on patient conversion when more biosimilars are approved and available in 2024 (potentially including biosimilars to Tysabri, Prolia, Xgeva, Actemra, Xolair and Eylea).
An HHS final rule on copay accumulators being illegal and that copay assistance dollars must count towards a patient's deductible.
Generic drug shortages, potentially leading to higher priced generics. 340B rebate considerations if volume is dispensed at IDNs [integrated delivery networks] or an entity's own pharmacy.
Patients moving from low-cost generic oncology drugs to newer, "better" branded agents that do not typically have rebates.

Andy Szczotka, Pharm.D., chief pharmacy officer at AscellaHealth: One of the key specialty pharmacy issues is the continuing affordability of specialty drug products. While specialty drugs are costly, they can also provide life-changing options to physicians and patients. Current pharmaceutical spending now exceeds $600 billion, with specialty products accounting for over 50% of the prescription drug benefit. The latest IQVIA estimates state that over 55% of all drug spending is on specialty drugs and has continued to increase year-over-year and is up from 28% in 2011.

The FDA has approved over 30 cell and gene therapy products, and the product pipeline has approximately 365 investigational therapies, with more than half of these in Phase II clinical trials. Oncology and rare diseases remain the top areas targeted by gene therapies from preclinical through preregistration. Approximately 1,604 clinical trials are under investigation for various cell and gene therapies in the U.S. The FDA approved more than 50 novel specialty drugs in 2023, and this trend is expected to continue. Newly approved and marketed therapies continue to be expensive, with one source indicating that the median cost of a newly approved therapy in 2022 was over $220,000, a 23% increase over 2021 ($180,000). 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 orphan conditions and cancer. This will increase the emphasis to ensure proper use and monitoring of these new and very expensive therapies, with specialty pharmacies at the forefront.

Due to these ultra-expensive therapies, there will be continued emphasis towards value-based and outcome-based agreements to link the cost of therapies to the real-world performance of the product and gaining the desired patient outcomes. With the increasing availability of cell and gene therapies, there will be increased pressure on pharmaceutical manufacturers to ensure that their therapies are producing the expected results, with pharmaceutical manufacturers bearing risk in the outcome.

Another continuing trend is the expanding role of specialty pharmacy to manage specialty drugs traditionally covered under the medical benefit. Specialty pharmacies are able to provide cost-effective options for payers to see savings with these products while ensuring the quality and care of the patient. Part of this may also include the potential movement of 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. Specialty pharmacies will be able to be on the forefront in assisting and directing patients to the best option for their unique medical condition and benefit coverage.

Mesfin Tegenu, CEO and chairman of RxParadigm, Inc.: The rise of cell and gene therapies is a key specialty pharmacy issue to watch for in 2024. In 2023, the FDA approved seven new cell and gene therapies, with several more expected to receive approval in 2024. Among the treatments approved last year, four were listed at over $2 million per treatment. It is anticipated that a number of therapies currently in the pipeline will be similarly priced. With the growing number of cell and gene therapy approvals, managing the high costs of these therapies while improving patient access will be a top priority for payers. Payers will increasingly adopt innovative payment models such as value-based and outcome-based contracts and explore other financial strategies to help improve the affordability and access of these therapies.

AIS Health: What do you expect we'll see within the biosimilars landscape this year?

Papazaharias: Some of the most significant biosimilar launches for 2024 are Xgeva, Actemra, Eylea, Neulasta Onpro and additional biosimilars for Humira. Looking forward to biosimilars for Stelara and Prolia for 2025.

Nationally, slow-paced adoption as PBM-owned specialty pharmacies are still incentivized to dispense brand (i.e., due to rebates), and 340B entities will prefer brand over biosimilar.

Regional and independent plans will outpace nationals on biosimilar adoption if integrated well enough with a specialty pharmacy partner.

Providers and patients are becoming more comfortable with biosimilars clinically, especially when the path to prescribing is easy and transparent.

Szczotka: While this year does not have the punch of the initial introduction of adalimumab biosimilars, there will be some products that will further drive use and savings. Less expensive biosimilars will likely play a key role in controlling drug spend, as biologics continue to be a leading driver of increasing health care costs, with a recent survey identifying that 65% of health plans ranked biosimilars coming to market among their top cost deflator options.

The availability of biosimilars is decreasing the average sales prices (ASPs) of both reference products and the corresponding biosimilar products. Certain reference products have experienced dramatic decreases in ASPs, including Herceptin (25%), Neulasta Onpro (66%) and Remicade (60%). These decreases should assist in helping drive continued biosimilar adoption.

It is expected that biosimilar manufacturers will continue to offer various pricing strategies and approaches for their products. Some manufacturers have launched high- and low-WAC [wholesale acquisition cost] versions of their biosimilars while other manufacturers have opted to launch their high- and low-cost products using a branded and unbranded biosimilar approach. Some manufacturers opted to launch high-WAC biosimilar products only while others launched with a low-WAC-only strategy. The numerous strategies taken by various manufacturers will undoubtedly influence the tactics biosimilar manufacturers select in the future as $200 billion of biologic exclusivity is set to expire by 2028. Biosimilars are now regularly included on various payers' medication formularies, with manufacturers jockeying for preferred formulary placement. The various cost scenarios and available discounts will continue to motivate payers to increase use of prior authorization, step therapy requirements and formulary tiering in order to optimize the savings available with the multiple biosimilar options.

Tegenu: The biosimilar landscape is expected to continue growing this year. Last year, the FDA approved five biosimilars, including three of which were the first for their reference products. Moreover, there are several biosimilars currently in the pipeline, with approvals expected within the year. The growing number of biosimilar approvals and launches will increase biosimilar utilization and contribute to savings. Payers will likely increase utilization management strategies, such as prior authorization and step therapy, and employ formulary tiering or switching to maximize savings. Given that biologics are a leading driver of prescription drug spending, biosimilars hold significant potential to reduce health care costs.

AIS Health: Are there any big specialty drugs expected to see patent expiration — and potentially generic or biosimilar competition — in 2024?

Papazaharias:

Some specialty drug generics that could enter the market include Sprycel, Tasigna, Thalomid and Otezla.
Biosimilar potential launches for Tysabri, Actemra (IV/SQ), Prolia, Xgeva, Neulasta Onpro, Eylea, Soliris, Xolair and Simponi.
The "bio-better" launch of subcutaneous infliximab to compete with brand Remicade (and existing biosimilars), which are only IV.
Potential first-quarter 2025 launch of biosimilar Stelara and once-monthly glatiramer depot in late 2024, early 2025.
Sprycel, Tasigna, Emflaza, Risperdal Consta, Invega Sustenna, Gattex and Symtuza should see patent expiration.

Szczotka: Some key biosimilars are anticipated in 2024. There are additional adalimumab interchangeable high-concentration biosimilars likely to be approved. These new additions will directly compete with the market-leading Humira high-concentration product for market share. Along with the continued introduction of low-cost product options, the competitive landscape for adalimumab products will continue to evolve.

The approval of the Udenyca Onbody biosimilar late in 2023 will likely provide an alternative to the market-leading Neulasta Onpro. This will provide a biosimilar on-body injector version of Udenyca, providing a self-administration version of pegfilgrastim for patients post-chemotherapy.

Another anticipated product will be eculizumab, the biosimilar to Soliris. If approved, this would be the first biosimilar available to treat paroxysmal nocturnal hemoglobinuria (PNH). While the introduction and conversion to Ultomiris by Alexion has impacted the utilization of Soliris, this should provide a potential cost-savings opportunity.

Tegenu: Several specialty drugs, including Cimzia, Neulasta Onpro, Simponi, Sprycel and Tasigna are set to lose their patents this year. Among them, Neulasta Onpro is the only biologic anticipating biosimilar competition this year. Udenyca Onbody, the biosimilar to Neulasta Onpro, is scheduled for launch in the first quarter of this year. Additionally, both Sprycel and Tasigna may potentially face generic competition this year, while biosimilars for Cimzia and Simponi are currently in development.

AIS Health: In terms of the specialty drug pipeline, are there particular drugs and/or therapeutic categories that should be on payers' radar, and why?

Papazaharias: Yes, extremely high-cost cell/gene therapies for sickle cell and hemophilia, as well as treatments for NASH [non-alcoholic steatohepatitis] and Alzheimer's.

Ensuring 2023 launches of generic oral oncology drugs have transitioned to generic and are reviewed for preferable formulary placement and/or step edit.

Outlook Therapeutics is seeking approval and will market a competitor to compounded Avastin for retina use. This could offset any savings from the Eylea biosimilar launch. Payers should continue to intensely manage the VEGF [vascular endothelial growth factor inhibitor] ocular category to ensure patients are managed with the lowest cost therapy and to minimize transition to more expensive, newer agents such as Vabysmo and Eylea HD.

Current volume restrictions on Revlimid generic allocations will end in first-quarter 2026, and plans may recognize significant savings at that point.

Szczotka: There are some key pipeline products that payers should be keeping an eye on for 2024. Some of these products would include:

Resmetirom — This would be the first FDA-approved product for NASH. It is estimated that about 1.5% to 6.5% of U.S. adults have NASH. Resmetirom works by increasing liver fat metabolism and reducing liver fat. In the clinical trials, patients taking resmetirom had significantly greater reductions in hepatic fat content as compared to placebo and met surrogate endpoints. The clinical trial used surrogate liver histological endpoints that the FDA proposed as reasonably likely to predict clinical benefit. However, the clinical trial did require a baseline liver biopsy as qualifying criteria for trial inclusion. If approved, liver biopsy requirement versus other noninvasive testing will be a key decision point for payers for therapy initiation.
Sotatercept — This is a new mechanism of action, an activin signaling inhibitor developed by Merck, for pulmonary arterial hypertension (PAH). While there are multiple proven therapies available for PAH, sotatercept would likely be add-on to standard ERA [endothelin receptor antagonist] and PDE-5 [phosphodiesterase 5 inhibitor] dual therapies and may target the underlying disease, not just work via vasodilation. In a clinical study, sotatercept resulted in a greater improvement in exercise capacity, and the first eight secondary endpoints were significantly improved, including an 84% reduction in time to death or fatal clinical worsening event.
Donanemab — Donanemab would be the third amyloid beta inhibitor for the treatment of Alzheimer's disease (AD), joining Aduhelm and Leqembi. This would be a monthly IV injection, similar to Aduhelm but less frequent than Leqembi (every two weeks). The study results showed that it significantly slowed cognitive and functional decline in people with early symptomatic AD, and about half of the patients had no clinical progression at one year. However, the incidence of ARIA [amyloid-related imaging abnormalities] was seen with donanemab and comparable to the other available agents.
Givinostat — Duvyzat is a histone deacetylase (HDAC) inhibitor for the treatment of Duchenne muscular dystrophy (DMD). Givinostat may be able to activate muscle repair mechanisms to increase muscle fiber regeneration and reduce inflammation. This oral product, if approved, would be likely be add-on therapy to corticosteroids and the first oral HDAC inhibitor treatment option for DMD and an additional option to target inflammation in DMD.
Fidanacogene elaparvovec — This is a one-time gene therapy for hemophilia B which would complete with Hemgenix. Fidanacogene contains a bio-engineered adeno-associated virus capsid with a high-activity variant of the human coagulation FIX gene. In the clinical trial, fidanacogene was associated with a 71% reduction in annualized bleeding rate and well tolerated.
Lifileucel — Lifileucel is a one-time cell therapy for the treatment of advanced melanoma in patients who have experienced disease progression after prior therapies. This would be the first cellular therapy to treat a solid tumor cancer that does not respond to first-line therapies. The overall response rate was over 31%, with eight patients having a complete response and 40 partial responses. Median overall survival was nearly 14 months, and progression-free survival was over four months. Additional trials in the treatment of NSCLC [non-small cell lung cancer] and endometrial cancer are also underway.

Tegenu: Oncology, immunology and neurology are quickly growing areas with numerous drugs in the pipeline and thus warrant close attention. Similarly, payers should monitor orphan drugs, as the approvals for orphan drugs have consistently risen in recent years. The introduction of new drugs may lead to changes in treatment guidelines and standards of care, which may have financial implications for payers. Staying well-informed about these therapeutic categories is essential for payers, as they represent significant potential costs, and strategies need to be developed to manage these potential costs effectively.

AIS Health: Is there anything I've neglected to ask about that you'd like to add?

Papazaharias: To control costs of GLP1s [glucagon-like peptide-1s], health plans are implementing utilization management, such as prior authorization, step therapy and quantity limits, to ensure payment only for FDA-approved indications and to address off-label prescribing concerns. Moreover, there is a consideration for the inclusion of wellness or weight-loss programs within GLP1-coverage to promote a comprehensive approach to health.

Given the anticipated growth in the prescription weight-loss category, expanding the definition of specialty drugs may be necessary, and health plans may adopt more aggressive criteria to manage utilization and costs, including longer waiting periods, prescription coaching, wellness requirements and restrictions on prescribing.

According to a 2023 pipeline review, the highest-cost items, each with annual sales exceeding $500 million, include xanomeline-trospium, tirzepatide, sotatercept, donanemab, datopotamab deruxtecan, blarcamesine and aficamten. These pharmaceutical products represent significant contributors to the overall sales landscape based on their substantial revenue.

Contact Papazaharias via Frank Sava at Frank.Sava@independenthealth.com, Szczotka via Caroline Chambers at cchambers@cpronline.com and Tegenu at Mesfin.Tegenu@rxparadigm.com.

By Angela Maas