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Perspectives on Specialty Drug Pipelines

Posted by Matt Breese on Oct 20, 2015

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The U.S. healthcare system’s rapid evolution to meet the needs of new specialty pharmaceuticals increasingly convolutes the existing framework. As a result of the expanding highly managed class pipelines, pharmaceutical manufacturers, payers and providers find themselves bogged down in an overly complex environment.

Biosimilars continue to stand out as a highly publicized group of drugs. Considering their roles as cheaper emulations of existing blockbuster pharmaceuticals, one can understand why they garner attention. However, as the Evaluation of Biosimilars for Formulary Inclusion points out, HCPs and P&T committee members play a massive role in the adoption of these treatments. As the market encourages development of more biosimilars in several key therapeutic classes, their increasing presence in drug pipelines has numerous implications for pharmaceutical manufacturers, regulatory agencies, health plan P&T committees and healthcare professionals to consider. Due to the varying biosimilars pathways, the healthcare system cannot prepare a single, unified adjustment. Therefore, payers and providers must scramble to get ahead of the future coverage and utilization of these treatments.

As an article from BioPharmaDIVE indicates, industry consolidation occurs at a higher pace now than ever previously. In addition to the activity in the payer space payer space, such as the mergers of Aetna and Humana, as well as Anthem and Cigna, mergers and acquisitions also dominate the pharma and biotech markets. In order to diversify drug pipelines, companies perform M&As; fortunately, cheap interest rates and changes in the regulatory environment facilitate this strategy. This trend does not simply represent the U.S. industry, but rather a global development. As Fortune highlights, international powerhouses, such as Teva, develop their pipelines through strategic takeovers, specifically when it comes to specialty pharmaceuticals.

PhRMA's report on medicines in development for cancer reveals the sheer number of treatments, nearly 800, in the oncology pipeline. Late phase pharmaceutical pipelines particularly focus on breast cancer, leukemia, lung cancer, lymphoma and skin cancer. Notably, an estimated 80% of these drugs are potentially first-in-class treatments. The PhRMA report also highlights specific investment in areas, like personalized medicines and targeted therapies, that continue to present new methods for fighting cancer; however, these classes also further complicate the way in which healthcare covers highly managed therapeutic areas. In response, payers must alter medical benefit and utilization management in accommodation.

In order to handle the bulging specialty pipeline, payers develop innovative strategies. A piece from IMS health identifies the key role that specialty pharmacy networks play to accommodate the surge of new entrants in highly managed classes. Payer considerations include anything from reducing inappropriate utilization and drug acquisition costs to coordinating reimbursement, eligibility and compliance. There is an increasing prevalence of narrow pharmacy networks from health plans, which helps payers concentrate purchasing power, as well as improve general care efficiency. Many leading organizations demonstrate clear understanding of the implications of a growing specialty drug pipeline, developing processes and strategies that support the future of healthcare.

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Topics: Specialty, Industry Trends, Market Access