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The new drugs plan sponsors need to watch for

See which trends to consider when assessing the pharmacy benefit, which new drugs may be flying under the radar and what's coming.

Hosted by Scott Draeger | February 12,  2024 | 11-minute read

To kick off the third season of the Pharmacy Insights podcast, Optum Rx senior vice president of clinical consulting Scott Draeger welcomes Michelle Kamprath, vice president, trend insights and analytics for Optum Rx and Bill Dreitlein, senior director drug pipeline & surveillance at Optum Rx for a wide-ranging overview of the pharmacy space. Together, they focus on some of the trends you can expect to make noise in 2024, including the ongoing obesity drug dilemma facing plan sponsors, the impact of the profusion of biosimilars on drug costs and some noteworthy drug candidates currently advancing through the pipeline.

Listen to the full “The Year Ahead in Pharmacy: What to Expect and What’s to Come” podcast episode or read excerpts from this fun and informative discussion

Specialty and traditional drug trends

Scott Draeger: Michelle, why don't we go ahead and get started with you to set a baseline. Can you give us a sense of where we are right now in terms of both specialty and traditional drug trend?

Michelle Kamprath: Yes, of course. So, right now we're at a very interesting time with drug trend. I've been looking at pharmacy trends for over 15 years and we've been talking for this whole time about the growth of specialty medications. We've been telling clients specialty is going to reach over 50% of your pharmacy spend by next year, and for some clients that already happened a while ago.

But when we look across our entire commercial book of business, 2023 was the first year where we actually did see that specialty surpass traditional drugs in spend. However, at the same time that happened, a class in the traditional space that everybody's talking about called GLP-1s really started to take off.

So, shortly after specialty trend surpassed traditional, the GLP-1s caused traditional trend to really start to pick up. Now, not only did traditional drugs flip back to account for more than half of the spend, but for the first time, at least since I've been tracking trend, traditional trend is higher than specialty trend.

Biosimilar drug trends

Scott: Another big development we saw in 2023 was the arrival of a slate of biosimilar drugs in the inflammatory drug class. These are drugs that treat conditions such as rheumatoid arthritis, psoriasis, Crohn's disease. Michelle, what does the data tell us now that we have these new alternatives to branded products like Humira?

Michelle: The first biosimilar for Humira launched at the beginning of last year. So, we're kind of at this one-year mark of the biosimilars for Humira. And as we stand here today, there are 10 approved biosimilars. So, we now have a lot of biosimilars to Humira and there's more in the pipeline too. Humira has been the reigning queen of worldwide pharmaceutical sales for about 9 years, and it took a global pandemic for the COVID-19 vaccines to surpass Humira in worldwide sales in 2021. That was the first drug that had surpassed Humira in 9 years!

Even though Humira today still has the lion share of the market between it and its biosimilars, that doesn't mean the biosimilars aren't doing their job in bringing the cost down. When the biosimilars came out, they created competition in the market, which we all know drives down prices and we've seen the net cost of Humira come down by over 20% since they started coming out. In the end, competition is good.

We're looking forward to more biosimilars entering the market this year. Some of them are going to include more interchangeable options and a high concentration biosimilar, which are two things that just don't exist yet in the market. So, it's still an exciting time for biosimilars and more to come.

GLP-1 drug trends

Scott: The other big trend we saw come to the forefront recently is the increased utilization of the GLP-1 drugs. These are medications that were initially approved to treat type 2 diabetes, but later received approval for the for the treatment of weight loss. As you are well aware, utilization and cost of these medications are a top concern for a significant amount of our plan sponsors. Michelle, based on your analysis of the data, what should plan sponsors consider as they approach this class of drugs?

Michelle: Glad you mentioned diabetes, Scott. When you talk about GLP-1s, you really have to separate the ones that are approved for diabetes, which most of the plans cover today, from the ones used for obesity, which have historically been more of a choice for plan sponsors.

I think the biggest question that some of our plan sponsors are struggling with right now is whether or not to cover GLP-1s for weight loss, period. And for those who already do cover them, it's how can we continue to afford them? While they're driving cost, driving trend up so much, at the same time the plan sponsors are getting pressure from their members to cover them. Some employees are even finding that coverage for GLP-1 drugs for obesity is a benefit that can help retain their workforce. Like the members, the employees see it as a benefit that they have to have.

The problem then becomes at what cost do they cover them? As they stand today, GLP-1s are just priced too high here in the U.S. We pay 10 times more than what they cost in Western Europe for the same drug. And we also know that only about one third of patients who started on the drugs are still taking them after a year. Plan sponsors are smart. They see the data and they're starting to think more creatively. They are thinking “OK, I can pay $1,000 a month for one person to take this drug. Or is there another way I can spend that $1,000 a month to help my members lose weight and get healthy?”

So, plan sponsors are just in a really tough spot right now. They have to manage their plan to a budget. I'm not saying these are bad drugs or saying they don't work. But I can confidently say based on both our internal analysis as well as a very reputable external source, ICER, that these drugs are not cost effective at their current price.

Bill Dreitlein: Scott, I'd like to kind of pick up that thread a little bit. I agree that we're in a really interesting, perhaps uncomfortable, spot with these drugs right now. There's a natural tension between two very important components of the business of health care. One is the clinical aspect of do these drugs work? The GLP-1s clearly have a benefit on lowering A1C very potently for diabetes and then they help weight loss. But at the same time, there's also the cost of the treatment. How do we manage it so that the people who need these medications can get them while also ensuring that they take it long enough to realize the benefits of it?  As Michelle mentioned, adherence and persistence with these drugs can be very difficult.

Scott: Bill those are some interesting points. This is obviously a very dynamic class. When you look where we are today compared to just two years ago, the market is just totally different. Today, Wegovy (semaglutide) and Zepbound (tirzepatide) are the only two GLP-1 products approved for weight loss. How do you see this class evolving over the next several years?

Bill: Yeah, I think we're just at the beginning of this. I think the evolution in the GLP-1 class will come in probably three forms or three waves.

One, is the expansion into new indications. Semaglutide and tirzepatide are each approved for diabetes and weight loss. They're both now looking to increase their footprint a bit into areas that are connected to both of those disease states.

For example, semaglutide is being studied for chronic kidney disease, which is relatively common in patients with diabetes. The question is if you treat the diabetes with the GLP-1 like semaglutide, does that have beneficial effects on chronic kidney disease? It might. We're looking for that data sometime this year and that will give us a little bit more information about the true impact of these drugs beyond just lowering A1C.

Another example is sleep apnea, which is commonly associated with being overweight. We know that there's cardiovascular implications to that condition. There's additional data coming forward this year about tirzepatide to see if that drug can help with sleep apnea. So those are just two examples of how we could see new indications or new areas that are related to how GLP-1 drugs are used today.

The second wave is in new mechanisms of actions. We have multiple drugs in the pipeline that are looking to build on the backbone of semaglutide and tirzepatide and add some additional components to either boost the efficacy or increase safety.

A good example is retatrutide. It's a triple incretin agonist, so it targets the glucose-dependent insulinotropic polypeptide, glucagon-like peptide 1, and glucagon receptors. By adding that extra action of targeting glucagon, there may be more potent weight loss. The early signs are that it does seem to be associated with the pretty impressive weight loss, maybe a little bit more than what we see with the existing dual agonist treatments. But we'll have to wait and see if the side effect profile is any better.

And then there's another drug CagriSema. It’s a combination of cagrilintide, an amylin analog, and semaglutide. That extra mechanism of action could potentially enhance efficacy for diabetes and obesity. It's still early with both of these drugs, but the initial findings from phase two trials are encouraging. We're hoping to get more solid data within the next year and I'm eager to see whether the tolerability is even better with these agents.

And then the third wave or area is how GLP-1 drugs affect such a broader range of organ systems. As we learn more about these drugs for diabetes and obesity and their tangential conditions, we're going to continue to learn more about their use in other diseases.

There's great interest in using these drugs for nonalcoholic steatohepatitis or NASH. It’s a common condition. NASH really means a fatty liver. When there's a build-up of fat in the liver it can lead to fibrosis and damage to the liver down the line. In turn, this could lead to liver transplants. So, the hope is that if you can attack that disease at its source, then maybe you can have the beneficial downstream effects of preventing liver failure or liver transplant.

There's also a lot of interest in using GLP-1 drugs for things like Alzheimer's disease since GLP-1s target receptors in the brain, that activity in the brain. The hope is there may be other actions in the brain that could help with Alzheimer's disease, and it would be a whole new area for these drugs. That said, we are still in early days for this, but the potential impact could be fairly large.

Michelle: Bill, it's absolutely fascinating how much development is going on, but also how easily some of those terms just flow off your tongue. You definitely have it down to a science.

Bill: Thanks, Michelle. Looking at the pipeline, it's really grown. It seems like every manufacturer is trying to get into the game either with molecules that they already have in-house or by acquiring somebody that has a promising drug in development in that particular space.

It's a just really dynamic space right now. We know some of these will ultimately not pan out, but some of them will, and some of them may be surprising. That's just the nature of the pipeline. So, we watch for that and if we see the signals, then we look a little more deeply and try to understand what the potential impact might be. And then we plan accordingly.

3 drugs to watch

Scott: Bill, moving beyond GLP-1s., as you look at 2024, what are the other consequential FDA approval decisions or trends that are you expecting this year?

Bill: One trend that we have seen is that rare disease products have outnumbered non-rare disease products for the past 4 years in a row. Now, the development pipeline has swung in a different direction and many of the ones that I'm watching are not in that rare disease realm at all, but really more for mainstream type of conditions with larger populations. Since I like to think in threes, I’ll give you 3 products in different areas I'm looking at for this year that that I think could be interesting and impactful.

The first one is resmetirom for NASH. We spoke earlier of potentially using GLP-1s for NASH, but resmetirom could be the first drug ever approved for that indication. It's an oral product, so it's very convenient and it seems to have some data that supports it where other drugs have failed. So, I'm looking forward to that one. We could see an approval in March.

The second one that I'm watching is a drug called ensifentrine. It's an-anti-inflammatory, but it's not a steroid and it's used for chronic obstructive pulmonary disease or COPD. COPD is one area we really haven't seen a whole lot of development in recent history. It's given via nebulizer, so it's not like a metered dose inhaler where you take a few puffs. It's probably going be used more in people who have severe disease. So, it's interesting in that it's the first new mechanism of action that we've seen in a long time in this disease space. And if it works there, then certainly they we could eventually see it expand into other areas like asthma. We expect this one could be coming out mid-year, possibly in June.

The third one I'd like to highlight is called KarXT. It’s a combination of two drugs and it's used for schizophrenia. The first drug gets into the brain, and it works on the symptoms of schizophrenia. But the problem with that one chemical is that it causes too much toxicity in the rest of the body. So, what the company did was they paired it with a drug that doesn't get into the brain but counters all of those side effects in the body. This enables KarXT to be used in high enough doses where you can actually get benefit from the product. This is a totally different mechanism than the existing treatments that we have for schizophrenia. Importantly, it's not associated with the same degree of weight gain.

That's been one of the huge problems with the typical antipsychotics used for schizophrenia and bipolar disorder. Those drugs can cause changes in the metabolic patterns of the body and people can put on a tremendous amount of weight. This is an area of mental health where there's been a great unmet need and this new drug could provide an effective therapy that’s more tolerable as well.

So, one drug for a metabolic condition, the second for a pulmonary lung condition and then the third for mental health for 2024. For anybody looking further ahead, there's a drug called VX-548, which is a new pain reliever. But the interesting thing about that drug is that it does not work on the opioid receptor and it's not an anti-inflammatory drug like ibuprofen. And so it seems to be better than placebo. Not quite as good as an opioid, but there has been a great need for new pain relievers that are non-opioids because of the addiction crisis we have here in America. If all goes well, it wouldn't be until 2025 that we might see this drug, but it's an important one. So, you heard it first here on your podcast, Scott.

What plan sponsors should pay attention to

Scott: Thank you, Bill. Michelle, in a similar vein, are there any trends specifically that you think plan sponsors need to pay close attention to as we progress through 2024?

Michelle: So, a couple of things come to mind with that. If Bill thinks in threes, I think in twos. The first one that comes to mind is drug shortages, and the second one is reformulations.

Drug shortages

With drug shortages, there have been shortages in several classes, including GLP-1s, by the way.  One area where it's really affecting plan sponsors from a trend perspective is in ADHD. There are shortages of generic Adderall and more recently generic Vyvanse. This means that patients may not have the choice to even fill a generic when they go to the pharmacy counter, even though there's one that's approved. So, it's really preventing the full effect of the generic savings to be realized by the plan, at least until these shortages are resolved.


The second trend that we've been seeing is drug spend shifting from the medical benefit to the pharmacy benefit. To be fair, we sometimes see a shift from the pharmacy to the medical benefit, but that really hasn't been the overarching trend that we've observed. And this is happening in several different classes.

For example, over the past several years we've seen this general shift in oncology as more and more cancer treatments have been approved as oral formulations. This makes it easier for patients to take them. It also means that the prescription will more likely be processed and paid under the pharmacy benefit. More recently, we've seen this trend in specialty asthma. There's a handful of drugs for asthma that used to be administered in a provider's office, and then they were reformulated as self-injectables. Now people are filling them at the pharmacy counter.

As a result, we've seen the trend in specialty asthma go up. There were also a couple of reformulations that were approved late last year in the inflammatory class. So, we might see some of those shifting over to the pharmacy benefit. It's also happening in the rare disease space. There were two newer oral formulations to treat ALS and this type of shift isn't necessarily a bad thing, but it's something to be aware of because specialty spend is increasing. It might be partly a shift rather than just an increase in utilization or cost.

Bill: I'd like to pick up on that last one, Scott, because reformulation is now a really big area of the pipeline. Manufacturers are looking at products and trying to reformulate them and find new ways to take advantage of the delivery mechanisms we have today and make them better. And so sometimes you see that shift from the medical to the pharmacy. If you're managing the pharmacy benefit but not the medical, all of a sudden you might see this drug appear on your and radar and say “whoa, where did this come from?”

Scott: Thank you Michelle and Bill really appreciate your time and expertise today.

Michelle: Thanks, Scott. It was a pleasure.

Bill: Thank you, Scott.

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