Commercialization

Vision 2020: The Orphan Drug Forecast

Increasingly, commercial and government payers are raising alarms about the high list prices of “orphan” treatments for rare diseases, meaning conditions affecting fewer than 200,000 people. As a result, more and more patients with health insurance are living in a world where precision medicines that might help them are being approved by the U.S. Food & Drug Administration, but could be tragically out of reach.

In an environment that’s actively being reshaped by innovation, policy shifts and payer consolidation, developers of orphan drugs must consider the following questions:

What adaptations to our healthcare system might ensure that we can sustain today’s pace of innovation and also manage the costs?

For drug developers, how will consolidation of payers and pharmacy benefit managers affect market access?

How will payers’ management toolkits evolve and what must orphan developers do to prepare themselves?

As more game-changing therapies arrive, will the political climate change with regard to orphan drug prices?

How can developers best communicate value to diverse groups of stakeholders, each of which defines it differently?

Many recent news stories and analyses warn about emerging barriers to orphan drug access, but few offer guidance on how to navigate these obstacles. Our new report identifies five market trends that will shape the orphan category between now and 2020 and pairs each prediction with actions developers can take to achieve optimal market access.

Here are five trends to watch involving practices by both payers and developers:

THE ANSWER IS “NO”

The days when insurance decision makers say “it’s orphan, so we’ll cover it” are numbered. Denial of coverage may be uncommon, but it’s no longer unprecedented. Increasingly payers are applying other tools that may delay or diminish access.

UNPALATABLE PRICING STRATEGIES

In today’s policy climate, developers should expect tougher scrutiny of therapies that are approved to treat common conditions and then expanded to treat rare indications. Drugs that are perceived to be reformulations of existing active ingredients will also draw criticism.

REGULATORY SUCCESS DOESN’T EQUAL MARKET ACCESS

In cases where regulators accept surrogate endpoints and grant broad labels based on smaller data sets, more payers may question whether the drugs deliver meaningful cost- saving outcomes and if a benefit to patients can be proven. Some payers may deny them to patients who fall outside studied trial parameters.

CLOSED FORMULARIES AND GREATER USE OF VALUE FRAMEWORKS

Many payers are discussing closed formularies as an eventuality, including three state Medicaid programs. If closed formularies become a reality, the findings of value framework assessments from the Institute for Clinical and Economic Review (ICER) and others will have more relevance in competitive rare disease states.

“GUARANTEE ME” VALUE

Payers will demand more robust guarantees of value, including outcomes-based contracts to ensure the drug works in real world conditions. This may be particularly true of orphan drugs granted broad labels with heterogeneous populations.

Some of these trends already are in motion. Patients seeking new drugs for spinal muscular atrophy and ALS, for example, recently were hit with prior authorizations because they didn’t fit inclusion criteria of pivotal trials. Programs called copay accumulators, which override copay cards and expose patients to higher costs if they ignore formulary placement of a prescription drug, may soon be applied in as many as half of self-insured employer plans. And orphan drugs approved with smaller, expedient trial programs may be deemed “experimental” and fail to secure coverage until real world evidence confirms their impact on health outcomes. Use of restrictive practices like these will increase in the next three years. Amidst such shifts in the coverage and reimbursement environment, what should drug developers do?

An excerpt of our recommendations follows here; comprehensive guidance will be available in the full report.

Start Early

Payers don’t like surprises. As early as possible—long before an orphan drug on an accelerated path gets approved based on clinical trials with naturally small populations, as in many rare disease programs—developers should be talking with payers about disease prevalence, the number of plan members likely to be affected, and the cost of treating the condition, based on well-vetted health economics and outcomes research (HEOR). Prior planning enables greater payer preparedness.

Contextualize the Cost

Smart developers should partner with HEOR experts and leading academic centers to capture the direct and indirect costs for patients and caregivers in a rare disease. This may involve hospitalizations, adverse event costs, or productivity impacts. With so little understanding of cost burdens connected with rare diseases, steps like this can arm patients, physicians and payers with data that may help sway coverage decisions.

Support Guidelines

Well-known chronic conditions have clear treatment and guidance protocols. Rare diseases often do not. Developers can galvanize physicians and other key opinion leaders to identify treatment best practices, and the endorsement will raise the odds that payers notice and adopt the protocols.

Communicate Value

It’s important to make an effort to understand how payers, prescribers and patients define value through their own lens. Beyond presenting a strong quantified value proposition, developers must meet with all stakeholder groups early in the process to understand their unmet needs. With patient communities, the goal is a partnership that addresses concerns—not limited to the therapy—and provides programs tailored to patients’ ideas of value. As the healthcare landscape undergoes rapid transformations, some patients with rare diseases may see their access to life-altering medicines contract. Developers can mitigate many obstacles and serve patients better by spending time and money during clinical development to substantiate the value of the new drugs. And they should communicate this information accurately on the runway to commercialization. When conversations about value are grounded in evidence that’s gathered, validated, and communicated with high levels of confidence, solutions will be within our grasp.

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Our full report, to be released in mid-June, identifies five market trends that will shape the orphan category over the next three years and actions drug developers should take.

Visit syneoshealthcommunications.com/BIO2018 to learn more and download the free report.

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Vision 2020: The Orphan Drug Forecast

Here are five trends to watch involving practices by both payers and developers:

An excerpt of our recommendations follows here; comprehensive guidance will be available in the full report.