Chris Dowd, ConnectiveRx

The drug pricing reforms introduced by the Inflation Reduction Act of 2022 (IRA) are expected to significantly impact pharmaceutical companies’ revenues and profitability. The IRA requires the US Department of Health and Human Services to negotiate drug prices, introduces penalties for drug price increases greater than inflation, and makes manufacturers responsible for 20% of catastrophic care costs for Part D patients whose spending exceeds the $2,000 out-of-pocket (OOP) cap.

The USC Schaeffer Center for Health Policy and Economics reports that “taken together, these provisions have been estimated to lead to an approximately 31% decrease in US pharmaceutical revenues through 2039 and result in 135 fewer new drug approvals.” Similarly, an analysis from 5POINT10 predicts a more than 20% hit to the operating income of global biopharma (even more in the US).

Despite the challenges created by the IRA, brand leaders must keep their focus on the day-to-day work of helping patients access—and pay for—their medications. So, what does the IRA mean for patient access leaders, pharma brand managers, and patient service owners? I recently moderated a panel on the topic with three industry experts whose insights I’m sharing here.

According to Sarah Butler, chief commercial officer at ADVI Health, four key areas will be affected, and manufacturers will need to adjust their strategies going forward.

Pre-IRA, the market incentivized biopharma companies to launch a drug first in a smaller population, such as rare disease, because they could continue to earn revenue on the drug while conducting ongoing R&D to expand to additional indications. Now, companies have to make difficult decisions to choose which indication is launched first because once the molecule is on the market, the clock starts ticking to be selected for IRA negotiation.

Because manufacturers need to consider how to delay getting on the list as much as possible, looking at volume projections is more important than ever. Even with a medium- or lower-priced drug, if the volume is high, the drug can appear on the IRA negotiation list sooner than you might think. Market dynamics and the competitive environment also play a crucial role. For example, GLP-1s launched this year in weight loss and have completely impacted the order of drugs on the IRA negotiation list. Paying attention to those market dynamics while preparing for launch is critical.

Manufacturers are likely to launch new drugs in Europe or Asia first in order to develop the drug, conduct additional studies, and prepare to file for the indication that will have the greatest impact in the US. Restricting drug access in the US to potentially groundbreaking drugs is likely to cause a backlash among patient advocacy groups and other healthcare stakeholders.

In addition to changes in launch strategy that are likely to happen as a result of the IRA, brands are likely to face hard decisions around adjustments to copay assistance programs, hub eligibility criteria, the amount of free product they’re able to offer and where they go overall with the brand in order to continue providing support to patients who need it.

Data points to a potential reduction of as much as 40% in the number of FDA-approved drugs over the next 10 years—up to 139 therapies—as a result of the IRA. Some manufacturers may consolidate resources around fewer products and lower investments, while others could pursue assets they might not otherwise approve, and some may discontinue trials. Alexion, for example, has gone on the record and publicly discussed delaying some investments in R&D.

Manufacturers are also beginning to change their organizational structures and adjust engagement strategies to respond to IRA negotiation and create more alignment with their global pricing colleagues. Teams focused on government are getting larger.

Once the negotiated prices are announced in September before taking effect in 2025, the spillover effect on the commercial market will be significant, particularly with Part D, where pricing designs will likely become even more complex. It is important for manufacturers to know their places on the list and use projections to avoid any surprises in terms of submitting evidence packages to the Centers for Medicare & Medicaid Services.

When new laws directly impact patients, it is critical to educate them about how these regulations will affect their medication journey.

“It’s all about getting the information out to the patient, explaining it to them in ways they can understand it, and meeting them where they are—and not just the patient, but of course, caregivers as well,” said Richard Fahrer, oncology marketing director, patient solutions, at Pfizer.

Copay smoothing is one area Part D patients are likely to need help understanding. Designed to put a $2,000 OOP cap on medications and spread patient costs evenly over the course of the year to make monthly costs more predictable, guidance on this is evolving and still being released.

“For patients to be able to take advantage of the program, they need to understand how it works, how to enroll, and how to smooth out that copay,” noted Fahrer. “They’re also going to need to make sure they make their payments on time, because if they opt-in to copay smoothing and then miss payments, they risk being dropped from the program and expected to pay a lump sum.” Interestingly, in a post-webinar conversation with an attendee, Fahrer learned that at least one independent patient assistance charity is suggesting that patients who expect to gain charitable support should not sign up for smoothing as it could disrupt the charity’s qualification and approval processes.

Making that information available to both patients and caregivers, in multiple languages wherever possible, and also educating prescribing physicians, practice managers, reimbursement specialists, and other patient advocates—as well as internally within the pharma manufacturer—is also critical.

In addition, hub services vendors have an opportunity to act as an intermediary to enroll patients in the copay smoothing program “because that’s going to be a little bit tricky in 2025,” explains Butler. Since patients aren’t able to enroll at the pharmacy counter and need to do so via paper, phone, or online application, the process needs to be as easy as possible.

Payers are poised to buckle down and do all they can to shrink their risk around the IRA impact. According to Don Sawyer, senior vice president of market access at Stemline Therapeutics, “The negotiations are going to get much more extreme and they’re going to leverage everything they possibly can do.

In the absence of information, payers “are going to backstop themselves, and who’s going to be there to backstop them is who has always been there to backstop them, the manufacturers,” added Sawyer. Payers are also likely to raise premiums, potentially reduce the number of Part D options, and use a more restrictive benefit design with existing plans.

In anticipation of the IRA and expected reduction in hub, patient assistance programs, and affordability program budgets, manufacturers should be looking to streamline their patient support operations. Leveraging artificial intelligence, electronic benefit verifications, more sophisticated benefits support, and blended staffing models all can help brands do more with less without shortchanging patients. 

Chris Dowd is Senior Vice President, Market Development, at ConnectiveRx.

Articles

What does the legislation mean for patient access leaders, pharma brand       managers, and patient service owners? Industry experts weigh in.


The IRA’s Impact on Patient Hub, Access, and Affordability Programs

As life slowly moves back toward what we think of as normal, Covid-19 continues to test and transform our healthcare system. As a result, the patient support space is evolving in several important ways.

Patients are slowly moving back—back into doctors’ offices, back into hospitals, and, therefore, back into the patient support hub and through their patient journeys again—enough so that we’re now cautiously applying a post-pandemic lens.

It is incredible to consider that nearly one billion diagnosis visits did not happen in 2020, equating to just 19% of expected visits for the year, and some specialties—including dermatology, urology, and neurology—struggled more than others to bounce back.

Simply put, if patients don’t make it to the doctor’s office, they often don’t get diagnosed—and they can’t start on a course of treatment to help them get better. While telehealth doctor visits saw an uptick during the pandemic, the vast majority of patients, 70%, chose a nearby doctor for their virtual appointments, signaling they may at some point want to return to in-person care.

In fact, 50-60% of people who made virtual appointments with specialty providers (podiatrists; OB-GYNs; orthopedic surgeons; and ear, nose and throat specialists) booked a follow-up in-person appointment with the same practice.

 This points to telehealth continuing to be a complement for in-person care rather than an alternative.

As mentioned above, there’s no question that the pandemic has fueled a growing patient acceptance of and comfort with remote care. According to 

, while growth in digital health adoption had stalled pre-pandemic, healthcare consumers have shown an interest in virtual care, with 62% indicating they would choose virtual for health and wellness advisories and 57% open to remote monitoring of ongoing health issues through at-home devices.

In addition, as increasing numbers of healthcare consumers are open to receiving virtual healthcare services from their traditional providers (54%), they are also willing to receive virtual care from technology or social media companies such as Google and Microsoft (27%); retail brands such as Best Buy, Walmart, and Amazon (25%); and medical startups (21%).

Meanwhile, as the Delta variant stresses the country’s healthcare system, an uptick in the use of telehealth as a replacement for in-person care has been reflected not just nationally but in specific regions as they are impacted, with growth data corresponding to the timing of these regional virus flare-ups.

When it comes to paying healthcare provider (HCPs) for their teleheath services, payers are not yet in agreement about how to best go about it and providers are voicing their frustration. Some payers argue that HCPs should be compensated on par with their in-person fees, while others rationalize that because they can see more patients remotely and don’t have a full office staff to support, they should receive lower pay. Despite these growing pains, adoption continues to accelerate because all parties agree that telehealth is a powerful tool that ultimately benefits patients. Realizing its full potential means more than simply enabling remote clinical services. Telehealth has the power to reimagine how patients are understood, engaged and supported in their lifelong health and wellness journeys.

As a result of the pandemic and the associated isolation, patients are also moving to different sites of care. Pharmacists and pharmacies are now doing more than ever because people couldn’t get to the doctor’s office for more than a year. And patients have become used to this new route, seeing their pharmacy and pharmacists almost as surrogate doctors.

 poll of healthcare leaders revealed that nearly half of doctors, 49%, are working more hours, on average, this year than in 2020.

 With doctors busier than ever as we move through Covid recovery, patients continue to rely on pharmacies. Additionally, as more state and federal laws allow for more healthcare services to be delivered by pharmacists, demand and willingness of the patient care can be met at the pharmacy counter.

When looking at the ability of patients to get tested and immunized against the virus, community pharmacists have proven their ability to reach patients who were unable to visit their physician’s office. They have played a critical role in helping to ensure patients understand the importance of therapy and potential side effects they may experience, and to help ensure the best possible outcomes are achieved.

Recent data confirms pharmacists’ increasing role as a crucial link in patient continuation of therapy. In a ConnectiveRx analysis of patient compliance with a medication from Brand X, there was a nearly 24% improvement in compliance among patients under medication therapy management (MTM), based on the proportion of days covered. In addition, MTM generated a 37% increase in refill persistency per patient.

With an increased reliance on our devices, patients have become willing—and increasingly even expect—to access, share and receive personal health information through the internet, apps and bots, and the pandemic has only accelerated this shift. Whereas pre-pandemic, patients may have shown a hesitancy to enroll in services such as a copay cards, patient support (hub) services or patient portals, the combination of this consumerization and the impact of the pandemic has led a record number of patients to abandon their fear of sharing their personal health information online. From simple program enrollment to complex remote monitoring, patients continue to carry their consumer behavior into their healthcare journeys and are willing to share what it takes in order to get the care they need.

This growing willingness among patients to divulge personal information to HCPs, hospitals and apps ultimately can transform the patient experience and healthcare overall because the reports that are generated from this data have the potential to change the game.

Pharma companies are continuing to look for new ways to meet HCPs because rep visits were nearly decimated during Covid and are only slowly creeping back. According to a recent survey of over 1,000 HCPs by the Physicians Desk Reference,

 more than half of respondents, 55%, are not permitting rep visits, either because of institutional policy or personal choice.

In-person detailing is now approximately only 52% of the norm/pre-pandemic levels. Reps were saturated in offices, and some offices did not allow reps to visit. While the pandemic meant no rep visits, offices are now slowly letting them back—but only at 52-60% capacity, higher for some specialists.

Another way to look at it is share of voice: Brands have lost 50% share of voice in offices, so pharma continues to buy into new share-of-voice tools as they seek novel ways to get their brand messaging across to providers and patients. These tools that help brands reach pharmacists and that help pharmacists reach and educate patients have never been more valuable.

One example is in electronic health record (EHR) messaging, which has evolved from simply an advertising channel into a critical touch point between both pharmaceutical companies and prescribers and prescribers and their patients, enabling deeper patient education and support. Pharma brands are increasing their budgets in this area going into 2022, while also increasingly spending on digital and virtual e-detailing and share-of-voice tools, including text and telehealth services. According to a recent ConnectiveRx survey

of pharma manufacturers, respondents are most likely to report budget increases for digital marketing outreach (59%) and patient engagement (57%), followed closely by virtual e-detailing (52%) and prescriber engagement (48%).

Making the enrollment channel faster and easier for patients to access potentially life-saving therapies is just one of many successful strategies for increasing the likelihood that patients receive their first dose and remain on their course of treatment.

With continuing changes in patient and physician behavior, pharmaceutical companies will continue to adjust to these new realities and seek innovative partners to help.

Chris Dowd is Senior Vice President, Market and Product Development at ConnectiveRx.

1. IQVIA, “Monitoring the Impact of COVID-19 on the Pharmaceutical Market, Week Ending May 28,” June 11, 2021

4. “COVID-19 Impact on Prescribing and Rx Affordability” Physician Desk Reference survey of 1,050 healthcare providers, October 2021

5. “Patient Communication & the COVID-19 Pandemic” CBI and Informa Engage online survey for ConnectiveRx, September 8-20, 2021

The biggest areas of adjustment in patient support brought on by changes in consumer and physician behavior