PHARMACY

Harvard Business Review: Pharmacy, health system partnerships needed

BY DSN STAFF

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First biosimilar paves way for future launches

BY Richard Monks

Last month’s launch of the first generic biologic drug in the United States is the first step in a movement that some say could drive down the nation’s healthcare bill and bring new treatment options to thousands of patients across the country.

(To view the full Chain Pharmacy Category Review, click here.)

“The approval of biosimilar and interchangeable biologic products will create the competition to significantly lower costs for patients, providers and the whole healthcare system,” the Generic Pharmaceutical Association’s Biosimilars Council said in “The Next Frontier for Improved Access to Medicines: Biosimilars and Interchangeable Biologic Products,” a recently published handbook that looks at the impact these complex new drugs will have on American health care.

“Just as generic competition has reduced the prices of traditional prescription drugs, biosimilars and interchangeable biologic products will create the market dynamics needed to lower the cost of biologics and provide patients alternatives,” the council said.

Biologics — already widely approved in Europe and other countries — are injectable drugs made from proteins grown in living cells that are nourished in nutrient broths inside sterile bioreactor tanks. They have been show to provide better long-term outcomes with fewer side effects than many traditional medications. For patients, this often results in quicker recovery times and a reduction in the number of additional treatments needed.

The potential these drugs have to revolutionize patient care has led to a flurry of activity by pharmaceutical companies to develop more biologics and spurred generic drug makers to begin developing their own versions of these medications.

According to the Pharmaceutical Research and Manufacturers of America, there currently are more than 900 new biologics in development, targeting more than 100 diseases. Meanwhile, GPhA noted that in the next few years the patents on many of the earliest biologic medicines will expire, opening the door for more generic companies to enter into this area.

With more biosimilars expected to become available in the next few years, federal regulators and generic drug makers continue to grapple with how these medications will be marketed.

In August, the Food and Drug Administration proposed identifying biosimilars with a four-letter suffix to distinguish them from the brand name versions of these same drugs. The agency said the move would prevent the inadvertent substitution of non-interchangeable products and make it easier to monitor and track usage once the products are on the market.

Generic companies, however, said there is no need for a suffix on biosimilars.

“Adding a random collection of letters to the product’s nonproprietary name confers no additional safety benefit, and in fact would require the healthcare professional to be armed at all times with a code-breaking reference,” Biosimilars Council chairman and Pfenex CEO Bertrand Liang said in a statement released the day after the FDA released its proposal.

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Analysts: Savings outweigh costs of specialty meds

BY Richard Monks

No area of pharmacy is growing faster than specialty drugs.

(To view the full Chain Pharmacy Category Review, click here.)

“The specialty drug market has experienced tremendous growth in recent years as new high-cost specialty drugs, once limited to small patient populations, are increasingly indicated for more common chronic conditions that affect millions of Americans,” said Alan Lotvin, EVP of specialty pharmacy for CVS/caremark.

According to IMS Health, specialty medications, which five years ago made up slightly less than a quarter of spending on pharmaceuticals, accounted for a third of all drug spending in 2014 — and growth is unlikely to abate any time soon.

A report released last month by the market forecasting firm Research and Markets predicted that the growth of specialty drugs will not be limited to just the United States. The company said that worldwide the market for specialty pharmaceuticals will continue to grow by about 18% a year through 2020.

Much of that growth of specialty drugs will be driven by the proliferation of new drugs and the rapidly increasing number of patients relying on specialty medications. IMS data showed that over the 12 months through June, spending on new drugs — most of them considered specialty medications — accounted for $19.8 billion of the $45 billion in total pharmaceutical spending. Medications targeting viral hepatitis accounted for $11.3 billion of that total.

Other therapeutic areas are expected to account for much of the future increases.

“Oncology drugs have been filling the pipeline and will be the largest category of specialty drug approvals in the near future,” John Malley, leader of Aon Health’s Innovation Pharmacy Team, said in late August. “Specialty drugs for cholesterol may also have a significant impact, given that the market has not had this type of drug for such a prevalent disease state before.”

While specialty drug prices are a primary factor behind what some have suggested is out- of-control pharmaceutical price inflation, many healthcare analysts and economists contend that these medications can actually drive down the country’s total healthcare bill.

For instance, the $94,500 cost of the course of treatment to cure hepatitis C, with Gilead Sciences’ Harvoni, is far less than the nearly $600,000 average cost of a liver transplant.

Similarly, two separate reports on heart attacks found that using specialty drugs that would most likely prevent heart failure could lead to significant savings.

The first report from the National Bureau of Economic Research found that the average cost to traditional health insurers for the first 90 days following a heart attack is $38,501.

In the second study, the National Business Group on Health estimated that the average total cost of a severe heart attack is about $1 million over a patients’ lifetime. A patient suffering from a less severe heart attack accrues about $760,000 in healthcare costs.

Economists point out that a patient with cardiovascular disease or high cholesterol placed on $1,000-a-month PCSK9 inhibitors would need to live on the medication for more than 80 years before the cost of the drugs approached the cost of a severe heart attack.

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