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Trends to watch in 2020

2020 could be a record year for drug approvals

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At OptumRx, our responsibility is to help ensure that our covered members have access to appropriate and cost-effective medications that can result in improved health outcomes and lower overall medical costs for our clients.

Our dedicated Pipeline Drug Surveillance team tracks all drugs in the Food and Drug Administration (FDA) pipeline. The team is responsible for monitoring over 1,000 new drugs and new indications for existing marketed drugs at any given time.

The team has also reviewed all of the potential drug approvals for 2020, and they have highlighted a few critical trends to watch next year.

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Looking ahead to 2020:

  • 150 new drug approvals. Over 150 new drug approvals, including new molecular entities and other approvals, will be evaluated by the FDA.
  • 64 drugs filed with FDA. Currently, 64 total drugs have been filed with the FDA and have anticipated approval dates in 2020.
  • 11 U.S. blockbusters. 11 are potential blockbusters with expected $1B+ in U.S. sales.
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Source: OptumRx Pipeline Surveillance Database.

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Oncology leads the pack

A continuation from past years, oncology is a top therapy class indicating that pharmaceutical manufacturers continue to invest heavily in this space.

Within oncology, roughly 70% of anticipated approvals in 2020 will be high cost orphan drugs; this means that new drug development is primarily focused on very narrow populations with rare subsets of cancer, as defined by a biomarker or genetic mutation. When considered in this light, oncology encompasses an extremely complex set of more than 200 disease variations, each requiring advanced research and different nuances in treatment.1 Although the impact of such drugs has historically been small, the continued growth in the number of orphan indications and products could lead to substantial growth in the overall cost of care.

There are several difficulties that arise when developing new drugs for such small, segmented populations. For example, it can be hard to find enough viable patient candidates, so trial sizes are often small. In addition, the FDA has been working to simplify and speed-up the drug trial process. While this makes it easier to get new drugs to the patients who need them, it can also make it challenging to assess the overall value of the drug. Even though a small numbers of patients are affected, the cost per patient is typically very high. Read more about the faster FDA process here.

As previously noted, oncology is one of the most costly drug classes. Pharmaceutical companies have been successful in setting high prices for new drugs, which we expect to continue for 2020 and beyond. Looking ahead, specialty pharmacy management will play a critical role in ensuring the drug is being used appropriately, reducing waste, improving safety, and improving health outcomes for these patients. Read more about the new age of oncology drugs here.

Treatments for neurology grow in popularity

Treatments for neurological conditions are second on the list of top drug categories and the pipeline of products treat a wide array of conditions within that class. Perhaps the most dramatic example of why this class ranks so high is the recent spinal muscular atrophy drug, Spinraza, with its current list price of $750,000 for the initial year and $375,000 per year thereafter.2

The current development pipeline includes new therapies for more common conditions such as migraine, Parkinson’s disease, and epilepsy, as well as novel therapies that treat rare or ultra-rare conditions such as spinal muscular atrophy and neuromyelitis optica.

New drugs for rare and ultra-rare conditions could have significant financial and clinical impact because of their small target populations and high unmet treatment needs (see below). In some cases, these pipeline agents will be entering a relatively crowded marketplace. This raises the possibility for added competition and potentially lower drug prices for available treatments.

Orphan drugs make up nearly 40% of drugs across disease categories – and will continue to remain a priority

Orphan drugs treat conditions that affect relatively small numbers of people sometimes only a few thousand. These drugs are critical for patients with rare conditions where previous treatments may not exist. Read more about the orphan category here.

In the past ten years, the number of orphan drug indications has risen dramatically. In 2017, the FDA approved 80 new orphan indications, up from 40 in 2016 and just 15 in 20103. In 2018, for the first time ever, the FDA approved more new molecular entities with orphan drug designation than non-orphan drugs.

Given the return on investment, pharmaceutical manufacturers will continue to prioritize development of orphan drugs for conditions where there is no other alternative option. Therefore in 2020, we expect this emphasis on orphan drugs to continue, with orphan drugs representing an average of 44% of all drugs approved.

Looking across all categories, oncology has the largest proportion of drugs with an orphan drug designation. Remaining orphan drugs are diverse across the categories, including hematology, neurology and endocrine/metabolic.

Similar to the oncology space, orphan drugs are expensive, costing $147,000 a year or more on average.4 Due to the cost and oftentimes complex administration, orphan drugs will require utilization and specialty pharmacy management to maximize outcomes and manage costs for patients and clients. Read more about how OptumRx manages orphan drugs.

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OptumRx Insights Report

OptumRx actively monitors the drug development pipeline. We have compiled this list of drugs we expect to make the biggest impact in terms of their clinical quality, effectiveness, and cost.

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Don’t want to read the full report? Download the brief summary.

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References:

1. Morning Consult. Why Are Cancer Medicines Expensive? Published October 6, 2014 Accessed January 15, 2020.

2. The Institute for Clinical and Economic Review (ICER). ICER Issues Final Report on Spinraza and Zolgensma, Provides Policy Recommendations Related to Pricing and Coverage of Treatments for Spinal Muscular Atrophy. Published April 3, 2019. Accessed January 15, 2020.

3. IQVIA Institute Report. Orphan Drugs in the United States (Part one). Published October 17, 2018. Accessed January 15, 2020.

4. OptumRx. Orphan Drug program. Published 2019. Accessed January 15, 2020.

STATEMENT REGARDING FINANCIAL INFLUENCE:
This article is directed solely to its intended audience about important developments affecting the pharmacy benefits business. It is not intended to promote the use of any drug mentioned in the article and neither the author nor OptumRx has accepted any form of compensation for the preparation or distribution of this article.