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Researchers Investigate the Novelty of Costly Drugs

Posted 08 January 2020 | By Zachary Brennan 

Researchers Investigate the Novelty of Costly Drugs

A new study from Harvard Medical School researchers found that of the 27 active ingredients in 25 brand-name drugs with the highest Medicare spend in 2017, 11 (41%) of the ingredients had previously been approved by the US Food and Drug Administration (FDA) in other formulations or products.

Of these 11, the median time between the first FDA approval and the end of 2017 was more than 19 years, they added.

“Many active ingredients in the 25 brand-name drugs with the highest Medicare spending were discovered decades ago, with a substantial minority having been previously marketed in alternative formulations or products,” Harvard’s Program On Regulation, Therapeutics, And Law’s Emily Jung, Ameet Sarpatwari and Aaron Kesselheim wrote in the Journal of General Internal Medicine.

The researchers also found that in 2016, 84% of Medicare Part D spending came from brand-name drugs, even though they made up just 14% of prescriptions overall.

The list of the drugs that Medicare spent the most on in 2017 features AbbVie’s Humira (adalimumab), which brought in about $20 billion in 2018 sales and was expected to see a similar total for 2019 (the 2017 average Medicare spending per beneficiary was $38,888). And yet, five biosimilars that are FDA-approved will not compete with Humira until 2023.

A recent report from the Institute for Clinical and Economic Review (ICER) similarly found that Humira’s net price change in 2017 and 2018 increased drug spending by $1.86 billion. For 2020, Humira will see another price increase, this time for 7.4%.

Meanwhile, Amgen’s Enbrel (etanercept), which may go 30 years without competition, is also on the Medicare list from 2017, as are several insulin products. This March, FDA will begin allowing biosimilar versions of insulin, insulin analogs and human growth hormone after the products will be converted from new drug applications to biologic license applications.

The researchers noted that etanercept and insulin aspart were originally marketed as solutions sold in vials in 1998 and 2000, respectively.

Meanwhile, the ICER report discusses how drug prices are increasing without new clinical evidence, although presumably some of those new profits will go to the development programs for other treatments.

ICER.jpg

“Repurposing already-approved drugs in new formulations, or with different dosage forms and delivery devices, can be a less costly form of drug innovation, yet Medicare spending on such older products remains high, for example because of intellectual property protections on those delivery devices,” the authors of the research write.

But one could make the argument that costly older drugs are necessary to help fund newer, more innovative treatments, like gene or cell therapies.

Kesselheim told Focus via email: "Gene therapies get a lot of press, and rightfully so, although so far their applicability has been restricted to small populations. Also, this is Medicare, and gene therapies mostly apply to younger patients. But even for cell therapies like CAR-T, even though there are large price tags for them, they thusfar apply to relatively few people, they haven’t accounted for much spending overall. The drugs on our list is where a substantial amount of Medicare spending goes—which is one of the largest public payors covering prescription drugs—and we were surprised at how many of them have active ingredients discovered 2-3 decades ago, or even longer."

They also explain in the report what they think Congress should focus on when it comes to drug pricing: “In addition to insulin, policymakers should examine all of the high-cost drugs in our cohort—17 of 25 which had active ingredients first FDA-approved more than a decade ago and 15 of 25 which do not have therapeutic equivalents—to determine why generic or biosimilar versions are not yet on the market and how to take steps to facilitate entry for the benefit of patients and reduce unnecessary Medicare spending.”

The research was funded by Arnold Ventures, which has spent millions to combat high drug prices.

Research

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