Manufacturers are continuing to wrestle with the effects of the Inflation Reduction Act (IRA) on their business plans and revenue streams. Although some of the IRA’s impacts are still uncertain, real-world evidence (RWE) is an important tool for manufacturers in navigating the road ahead, as it will help them demonstrate the value and comparative effectiveness of their treatments, and help patients get access to the treatments they need.
One of the IRA’s requirements is the Medicare Drug Price Negotiation Program, which allows Medicare to negotiate the prices of certain high-cost, single source drugs without generic or biosimilar competition. In September, Medicare selected the first batch of 10 drugs for the program from among the top 50 covered drugs with more than a $200 million annual drug spend. The Centers for Medicare and Medicaid Services (CMS) reviews evidence, including RWE and comparative effectiveness research, to conduct its assessments, and this year, once each list of drugs up for negotiation was announced, manufacturers had only one month to submit data to CMS to negotiate a maximum fair price for each drug.
In the U.S., mandatory price negotiation is a new concept. Whereas Europe has more strict price negotiation guidelines, the U.S. previously had an “honor system” in terms of demonstrating treatment value in a quantifiable way. From a business perspective, price negotiation cuts into potential profits for manufacturers. Medicare is focusing on drugs with no generic alternative that have been on market for a long time (more than 9 years for small-molecule treatments, and 13 years for biologics), and manufacturers are using RWE to demonstrate as much value as they can for their treatments versus comparative treatments to secure the most desirable price point.
CMS is hiring pharmacoepidemiologists, health economists and outcomes researchers to help them review the evidence submitted and negotiate prices for these named treatments. CMS has said that it is looking for high-quality RWE relevant to Medicare populations – but skeptics have said that the agency might not yet be in a position to recognize high quality, relevant RWE. Whereas Europe has agencies independent of their governments to assess the safety, effectiveness and patient value of treatments, no such agency exists yet in the U.S. Without the guidance of an independent agency, setting these benchmarks is an uncertain process, with the industry waiting to see how it goes.
Using RWE to demonstrate value
Still, while this is playing out, manufacturers can harness RWE to demonstrate treatment value. Real-world data allow manufacturers to expand their comparisons, look at high cost outcomes such as hospitalization rates, and explore sub-populations and vulnerable populations, to which CMS is giving more weight. In the near term, manufacturers will benefit by conducting comparative studies that demonstrate the incremental effectiveness of their treatment relative to other options on the market. One example – and the number 1 drug on CMS’s 2023 list – is the comparison of Eliquis (apixaban) to Coumadin (warfarin). Because most of the treatments on CMS’s price negotiation list have been around for 10 or more years, any effectiveness outside of clinical trials (and the original comparator) will have to be demonstrated with RWE. Patient experience and patient preferences must be taken into account, but these important pieces of data are not captured in administrative claims or electronic health records. Other mechanisms to assess the patient experience, such as surveys, patient-reported outcomes, and patient-generated biomarker data, are needed.
CMS’s price negotiations may have indirect and unintended effects on patient access in the long term. Earlier this month, Medicare held drug price negotiation listening sessions on CMS’s listed drugs to learn more about the perceived value of treatments from the patient, patient advocate, and prescriber point of view. A primary concern from all perspectives was the potential for increased barriers to access. Lower treatment prices coupled with structural changes to Part D may shift the financial incentives of insurers, resulting in increased utilization management restrictions, the movement of treatments to higher formulary tiers, or even the exclusion of a previously covered treatment to limit financial risk. Similar to demonstrating a treatment’s comparative effectiveness, RWE can help manufacturers demonstrate the impact of access changes, including higher copays and the addition of step-therapy requirements, on patient outcomes such as treatment adherence, discontinuation and overall healthcare utilization. CMS is likely to consider this perspective in their negotiations, particularly given that access limitations were expressed in nearly every public listening session. Generating citable evidence that scientifically validates and supports the concerns of patients will therefore be advantageous.
How Panalgo can help harness RWE to improve patient access
Manufacturers can easily access data and analytics for Medicare’s price negotiation program through Panalgo’s RWE solutions, which include the IHD analytics platform, streamlined access to RWD, formulary data, and expert analytics services. Analyses can be iterated in days rather than months, with documentation running in the background to produce a complete audit trail.
In addition to comparative effectiveness research, the IHD platform can map the patient journey and help manufacturers determine the impact of treatment price on patient adherence and sales. Our analytics platform gives you the insights you need to adjust to the ever-shifting landscape and weather the uncertainties ahead.
For more information on how Panalgo can support your team’s efforts, contact us today.