Obesity Meds, Gene Therapies, NASH Drug Make Payers’ Cost Concern List

Reprinted with AIS Health permission from the Jan. 11, 2024 issue of Radar on Specialty Pharmacy

By Tim Casey

For years, payers have been concerned about the rising prices of prescription medications and how to cover newly approved drugs. Pharmaceutical experts tell AIS Health, a division of MMIT, that PBMs and plans will continue to be challenged in 2024 with similar issues, particularly when it comes to gene therapies, obesity medications and other expensive products.

Andy Szczotka, Pharm.D., chief pharmacy officer at AscellaHealth, notes that more than half of pharmacy benefit spending is on specialty medications even though only a small percentage of members use those drugs.

He says dealing with high-cost specialty products "is a focus for most payers" and adds there is a "large target on specialty drugs."

"That expands the role of specialty pharmacies in trying to manage the therapies more proactively with patients to make sure they're being used appropriately and they're getting the right outcomes," Szczotka says. "There's [more of an] active patient care program put in place for specialty drugs than with traditional therapies like statins or high blood pressure meds."

EXPERTS FLAG FDA DECISIONS TO TRACK IN 1Q

Szczotka mentions three medications the FDA could approve by the end of the first quarter that come with high costs: resmetirom, an oral medication for non-alcoholic steatohepatitis (NASH); sotatercept, a subcutaneous injection product for pulmonary arterial hypertension (PAH) and donanemab, a monoclonal antibody for Alzheimer's disease.

In September, the FDA granted resmetirom priority review and set a Prescription Drug User Fee Act (PDUFA) date of March 14. Madrigal Pharmaceuticals, the drug's manufacturer, has not set a price for resmetirom, which is a once-daily, oral medication. However, the Institute for Clinical and Economic Review (ICER) noted that resmetirom would achieve common thresholds for cost-effectiveness if it was priced between $39,600 and $50,100 per year. The ICER report noted that there are currently no FDA-approved medications for NASH, a condition in which the liver builds up excessive fat deposits that affects between 1.5% and 6.5% of U.S. adults.

Szczotka says a resmetirom approval "could change the whole way we approach that disease state." He adds that the clinical trials were limited to patients who had undergone a liver biopsy that proved they had NASH. He wonders "are payers going to require a biopsy….or will they use a surrogate end point?" The authors of the ICER analysis wrote that if payers require a biopsy, "this would create greater barriers to patients who lack equal ability to miss work and have social support at home."

Meanwhile, the FDA last year granted sotatercept breakthrough therapy and orphan drug designations. The agency set a PDUFA date of March 26.

Merck, the manufacturer of sotatercept, noted that about 40,000 people in the U.S. are living with PAH, which is often associated with limited physical activity, heart failure and reduced life expectancy. The company has not announced a price for the drug, but ICER calculated a health-price benchmark of $17,900 to $35,400 per year. ICER's report mentioned that there are currently several treatments available for PAH, although sotatercept's "subcutaneous delivery system is less burdensome than many other PAH treatments." However, the organization wrote that "uncertainty remains about sotatercept's efficacy in sicker populations and in those with connective tissue disease, and about the durability of effect."

NEW ALZHEIMER'S TREATMENT COULD HIT MARKET

As for donanemab, Eli Lilly & Co., the drug's manufacturer, has said it expects the FDA to decide on a full approval by the end of the first quarter. If the agency approves donanemab, the drug would be the third monoclonal antibody for Alzheimer's disease following Aduhelm (aducanumab) and Leqembi (lecanemab), which received accelerated approvals in 2021 and 2023, respectively. The FDA also granted Leqembi a full approval in July.

However, payers have been reluctant to cover the Alzheimer's medications. CMS in April 2022 finalized a Medicare national coverage determination (NCD) limiting access to Aduhelm to people who meet clinical diagnostic criteria and are enrolled in certain clinical trials. The agency granted Leqembi a more favorable coverage decision after its full approval, but the drug is still limited to Medicare beneficiaries with a specific diagnosis who have a physician willing to participate in a qualifying clinical registry.

Commercial payers have been hesitant to cover the Alzheimer's drugs as well. It remains to be seen what they do with donanemab if it's approved since it will likely be covered under the same criteria as the NCD governing Aduhelm and Leqembi.

"We've had some of our commercial payers say, 'Oh, we're not worried about those drugs because Alzheimer's is not a disease in the commercial population,'" Renee Rayburg, R.Ph., vice president of specialty clinical consulting at Pharmaceutical Strategies Group (PSG), tells AIS Health. "Full-on Alzheimer's or advanced Alzheimer's is usually a disease in the elderly, which is the Medicare population. However, these drugs target the early onset [disease]."

OBESITY AND GENE THERAPIES POSE COVERAGE CHALLENGES

This year, payers also must deal with the heightened demand for weight loss medications, primarily Wegovy (semaglutide) from Novo Nordisk, which was approved in March 2021 and holds a majority of the market share. For the first nine months of last year, Novo saw its worldwide obesity drug sales increase by 174% from the previous year even though the company ran into production issues.

Wegovy will face competition this year from Eli Lilly's weight loss drug, Zepbound (tirzepatide), which the FDA approved in November. Wegovy and Zepbound have monthly list prices of $1,000 or more, and while their net prices to payers are likely lower, costs will add up with so many people wanting access to the medications.

"There's a lot of pressure in the market for employers and payers to cover weight loss drugs," Rayburg says. "Many of them are trying to figure out how they could afford them. I think that's the big barrier."

Rayburg says she knows of a small number of employer plan sponsors, including the University of Texas, that have stopped covering weight loss medications due to cost concerns. The University of Texas noted that its monthly costs for weight loss medications increased from $1.5 million to $5 million over 18 months, while it had a 46% adherence rate. Other payers have restricted the medications to people with a particular body mass index range or mandated that people taking the medications participate in lifestyle or behavioral modification or diet and exercise programs.

A recent PSG survey found that 42% of employers covered or planned to cover the weight loss medications, according to Rayburg. However, she says she expects "the number is going to go down a little bit because I think the reality is that the budget impact is far greater than what anyone expected."

Gene therapies are another category that payers are keeping track of this year. The medications in the category often have list prices of more than $2 million, including two treatments for sickle cell disease that the FDA approved last month that will become available this year: Casgevy (exagamglogene autotemcel) and Lyfgenia (lovotibeglogene autotemcel).

Several more gene therapies could hit the market this year, including Casgevy for transfusion-dependent beta thalassemia (PDUFA date of March 30) and fidanacogene elaparvovec for adults with hemophilia B (PDUFA date of the second quarter of this year).

Colin Russi, a principal at ZS Associates, notes that payers are taking steps to address the cost of gene therapies. For instance, The Cigna Group offers the Embarc Benefit Protection program for plan sponsors in which the company's subsidiaries such as eviCore, Accredo Specialty Pharmacy and the Express Scripts PBM provide services and help defray the costs of certain gene therapies. Plans pay 99 cents per member per month for the Embarc program.

"PBMs are continuing to try to figure out what to do with [gene therapies]," Russi tells AIS Health. "They're challenging from a utilization management prospective and challenging from a fulfillment perspective."

Contact Szczotka via Caroline Chambers at cchambers@cpronline.com, Rayburg via Kara Lester at kara@gregoryfca.com and Russi via Kate Donivan at kate.donivan@zs.com.