Pharma stands to harness the potential of DTx for tackling healthcare issues such as access.
Last year marked a major commercial inflection point for the digital therapeutics (DTx) market, adding pressure on pharmaceutical companies to help DTx become a standard part of care delivery. DTx and pharma are a natural fit for a joint effort. Together, the digital health evolution turns into a revolution.
From the growing need for real-world evidence (RWE) and to the ongoing shift toward value-based agreements (VBA), multiple trends in healthcare are converging. This is creating tailwinds for digital health. DTx offers the opportunity to address these, as well as the deepening physician shortage and growing healthcare costs. Technology is known to be a silver lining of the COVID-19 pandemic, with expectations for care gravitating toward remote settings and technology permeating everyday lives.
"We are the leaders in the digital health revolution," Pear Therapeutics President and CEO Corey McCann argued during Pear's first earnings call as a public company on March 28. "And we are proud of the role we've played in pioneering software as medicine," McCann added.
Pear achieved strong financial results and commercial progress from its portfolio of marketed products across the key performance metrics of prescriptions, fulfillment rate, covered lives, and revenue.
"We think Pear's rapid acquisition of covered lives in 2021 driven by real-world outcomes data is a great reason to believe PDTs are here to stay," McCann added. Pear's products include reSET for substance use disorder and reSET-O for opioid use disorder (collectively reSET-O), as well as Somryst for insomnia.
There are only four prescription digital therapeutics (PDT) companies that have gone public so far. These include the two that went public in 2021—Better Therapeutics and Pear Therapeutics—and one more this year—Akili Interactive. The fourth—Dthera Sciences—was the first to become public in 2016 but has since then become inactive.
Yet the consensus is that it is not a matter of whether DTx will be widely used but when.
HealthLeaders obtained insights from Pear, Cognito Therapeutics, and Big Health, among other DTx companies, into how they view pharma as a natural fit, particularly when it comes to scaling growth.
"There's a tremendous opportunity at what I would think of as the drug-software interface," McCann told HealthLeaders. "For many conditions, we believe that a combination of a drug and a prescription digital therapeutic will be clinically superior to either product alone," he added.
Background
Digital health encompasses all products that engage lay people in wellness and health-related endeavors. These products generally have no regulatory oversight and are not evidence-based.
But within the umbrella term "digital health" lies "digital medicine," a term referring to evidence-based digital software or hardware that measures a person's health. From digital diagnostics to biomarker tests to remote patient-monitoring devices, digital medicine includes wide-ranging technologies.
Digital therapeutics fall into the digital medicine category and refer to products that deliver evidence-based therapeutic interventions to prevent, manage, or treat a condition. DTx, particularly PDTs, typically undergo review and have regulatory oversight. Approvals require clinical evidence and data on real-world outcomes to be reviewed by regulators for efficacy and safety.
"Digital therapeutics basically came out of the wild, wild west of mobile health, probably since the first iPhone came out," Digital Therapeutics Alliance (DTA) CEO Andy Molnar told HealthLeaders. Molnar started in the DTx space at Pear Therapeutics four years ago and served as the director of market access and payer data strategy, following twelve years in market access in pharma.
DTA has doubled in membership growth over the past year, underlining the momentum around the market. The industry trade association now has a total of 92 members. It has had some larger pharma companies join in the last few months. Member companies in pharma include Astellas Pharma Inc., Bayer, Boehringer Ingelheim, Bristol Myers Squibb, Novartis, Roche, Sage Therapeutics, and Takeda.
The lay of the land
There were more than 318,000 health apps and 340 consumer wearables available worldwide as of July 2017, with over 200 health apps being added each day, IQVIA reported. Yet most of these apps were being downloaded less than 10 times, which wouldn't be on the FDA's radar, according to Molnar.
This gave rise to creating digital solutions that could meet the FDA's standards.
"Early-stage companies started taking these products through randomized clinical trials and going through the rigor that you would see more like with medical equipment, medtech, and pharmaceuticals, and out of that activity sprung digital therapeutics, or DTx," Molnar added.
At least 25 DTx products have been granted market authorization through regulatory processes and another 23 are commercially available. Their use indications are predominantly in the mental health and behavior modification areas. An additional 89 products were in the earlier stages of development and evidence generation in 2021. Many rely on cognitive behavioral therapy as part of their therapy.
The mandate on these companies is a big one: to make software mainstream medical treatment.
With that, comes a necessity to build out a whole new space and a whole new degree of structure that did not exist before. When it comes to business models, the PDT model resembles pharma's model in several ways. These include how a clinician writes a prescription that then puts a patient on a product.
For PDT companies, it happens to be a piece of software instead of a pill.
The PDT and pharma models also resemble each other in that either product has its own set of reimbursement codes, and insurance companies provide payment based on those respective codes.
These digital therapies cater to the same constituents as pharma, also.
Shared constituents
DTx and pharma aim to make the same three constituents—patients, physicians, and payers—happy.
On the patient side, DTx companies are working to make their products simpler, demonstrate long-term rates of engagement, and quantify that they work in the real world.
For example, publications around Pear's reSET-O demonstrate that the product helps in keeping patients with opioid use disorder out of the emergency department and in preventing inpatient hospitalizations.
DTx companies are doing everything they can to simplify the process on the clinician side, also. A few milestones have already been achieved on this front, including the Current Procedural Terminology (CPT) codes released by the American Medical Association (AMA) last year targeting remote patient monitoring. These provide an opportunity for clinicians to be reimbursed when setting up a patient with a product and monitoring the clinician dashboard, including subsequent monitoring.
"As digital medicine continues to expand and takes a more prominent role in patient care, the CPT code set has kept pace with this innovation," Mark Synovec, chair of the AMA's CPT Editorial Panel, told HealthLeaders. The new CPT codes "help break down policy barriers for payment and open doors for greater clinical integration of these emerging digital technologies," Synovec added.
Another milestone was achieved when the Centers for Medicare & Medicaid Services established a new Level II HCPCS code to describe FDA-cleared prescription digital behavioral therapy per course of treatment, including PDTs, earlier this year.
The HCPCS set of codes is on par with CMS' remote patient monitoring codes and formed part of the agency's 2022 Physician Fee Schedule. They came into effect on April 1.
By granting the set of HCPCS codes, DTx products can now be coded and reimbursed as both medical and pharmacy benefits. Previously, they were primarily reimbursed as pharmacy benefits.
One example of simplifying the process for clinicians is meeting the clinicians where they are through the integration of digital therapeutics with electronic health record systems.
Payers represent the third constituent for DTx and pharma companies alike. DTx companies are attracting the business of more and more payers as they continue to publish promising health economic data. These companies are, in effect, selling products that save more money than they cost to make.
Pear continues to bring on large payers in various states, particularly those that have been most heavily affected by the opioid crisis, including Kentucky, Ohio, and Massachusetts, among other states.
Payers are increasingly reaching out to DTA, also.
DTx companies are also touting a bipartisan, bicameral piece of legislation aimed at ensuring access to PDTs that was introduced recently. Introducing this legislation to establish new Medicare and Medicaid benefit categories for PDTs is "a critical step toward ensuring that these evidence-based treatments get into the hands of those who need them most," DTA's Molnar said.
The legislation is a "Hail Mary for the space" when it comes to where its headed, McCann said.
A match made in heaven
Some experts expect DTx products to displace certain medications. But DTx products and pharmaceuticals are a match made in "healthcare heaven," if you will, for a variety of reasons.
DTx products sometimes aim to complement traditional drug therapies, boosting health outcomes.
These products are expected to be used for monitoring therapies in some cases and as combination therapies in other cases. Pear's reSET-O product, for example, is indicated for use in combination with pharmaceutical medication buprenorphine for opioid use disorder to make both products work better.
DTx innovators are increasingly seen as ideal partners for pharma manufacturers.
Next to in-person care and medications, DTx as the third modality in care delivery would allow for gaining insights into health outcomes with RWE that can, in turn, aid in delivering VBAs.
"The way I see it is, it's really about increasing patient choice and patient access to evidence-based options in a way that is equitable," Big Health CEO Peter Hames told HealthLeaders.
Pharma companies would also benefit from giving their products a commercial edge, adding value to new and existing medicines. In 2019, digital health investor Rock Health argued that pharma leaders must decide if they are going to be "first movers" or "fast followers" when it comes to DTx solutions. It claimed that the two naturally fit where DTx innovators have the drive to push an innovative idea forward while major pharma players are well-positioned to help with robust R&D expertise and the ability to complete clinical trials that will differentiate a true DTx product from health and fitness apps.
Another problem area DTx products can help address is medication adherence. Hundreds of thousands of deaths in the U.S. and in Europe have been directly linked to poor adherence.
"Success in healthcare hinges on data," Cognito Therapeutics CEO Brent Vaughan told HealthLeaders. "That's as true for pharma as it is for digital therapeutics, yet digital products inherently create data that can be used for clinical development, health economic evidence, as well as to advance uptake and utilization."
The DTA recently announced new task groups to tackle existing roadblocks. These include task groups for the Asia-Pacific policy landscape, clinical evidence, DTx value assessment and integration guide, European policy, public relations and communications, U.S. commercialization and reimbursement, and U.S. policy.
Editor's note: This story was updated on April 29, 2022.
Johnson & Johnson and Gilead became the 15th and 16th companies to cut back on discount drug pricing.
The number of pharma companies that have announced restrictions on their 340B discounts has been growing, creating financial problems for U.S. hospitals.
Johnson & Johnson (J&J) and Gilead were the latest to join their peers recently, totaling 16 companies that have rebelled against providing pricing discounts as required by federal law.
Section 340B of the Public Health Service Act imposes a ceiling price that limits the rates that pharmaceutical manufacturers may charge for prescription drugs sold to specified healthcare facilities and entities, known as 340B entities, to manage rising prescription drug costs.
The 340B drug pricing program requires drugmakers participating in Medicaid to sell outpatient drugs at discounted rates to healthcare organizations that serve vulnerable communities, or many uninsured and low-income patients. The program has seen significant growth since it was first signed into law in 1992. The March 15 enactment of the Consolidated Appropriations Act of 2022 permitted certain hospitals to be reinstated into the program if they met specified criteria.
Drugmakers have reworked their 340B operations over the last few years as lawsuits target constraining them from what they see as a ballooning portion of the prescription drug market.
The number of hospitals participating in the 340B drug pricing program increased from 591 in 2005 to 2,479 in October 2017. IQVIA reported that the program grew by $13 billion, or 16%, to $94 billion in 2021. "Contract pharmacy slowed but didn’t stop out-of-control program growth," said Adam Fein, CEO of the Drug Channels Institute, which delivers timely analysis on issues in the pharma industry. "Beware when 340B Health claims 'financial duress.' "
The reportedly unlawful restrictions come as a new report of more than 500 U.S. hospitals participating in the 340B program demonstrated that all the used savings these hospitals received through the federally mandated drug discounts benefited patients in need in 2021.
Gilead announced on March 15 that it will stop offering 340B drug pricing program discounts to safety-net hospitals, health centers, and clinics if the providers do not submit the patient claims data that the company is demanding. Its policy initially targets discounts on its brand-name hepatitis C drugs Epclusa, Harvoni, Sovaldi, and Vosevi, which are some of the most costly and top-selling drugs used to treat the 4.7 million patients in the U.S. who are living with hepatitis C.
J&J then announced its plans to limit 340B discount pricing for safety-net hospitals that partner with community pharmacies. The policy, which will begin on May 2, covers 29 of its best-selling drugs treating conditions ranging from psoriasis to schizophrenia, multiple myeloma, and HIV.
When its policy takes effect May 2, Gilead will become the 15th company to date to impose 340B pricing restrictions on drugs dispensed at community pharmacies. And J&J the 16th.
Yet 340B Health, a membership organization of more than 1,400 public and private nonprofit hospitals and health systems participating in the 340B drug pricing program, recently reported that the first 14 drug companies that imposed or announced restrictions on safety-net hospital access to 340B drug pricing program discounts collectively brought in more than a half-trillion dollars in revenues in 2021. "The banner year for the drugmakers occurred as hospitals reported increasing losses of 340B savings from the cuts," the organization said.
Tax-exempt hospitals participating in the 340B drug savings program in 2018 provided $67.9 billion in total benefits to their communities, according to the Federation of American Hospitals.
Other pharma companies that have made restrictions of their own include Boehringer Ingelheim (BI), Eli Lilly, AstraZeneca, Novartis, Novo Nordisk, Sanofi, United Therapeutics, and more. The Health Resources and Services Administration (HRSA), however, has gone after all these companies for making these decisions, notifying them that their case has been referred to the Department of Health and Human Services Office of Inspector General. "HRSA informed BI that continued failure to provide the 340B price to covered entities utilizing contract pharmacies could result in civil monetary penalties," the agency wrote in its March 29 referral notice to BI. The rest of the companies received similar referral notices from HRA last year.
The contract pharmacy restriction policies pharma companies have implemented have "limited the number of contract pharmacies that could be used by covered entities to deliver 340B product to patients and the circumstances under which this occurred," IQVIA said.
The bills aim to speed the discovery of new cures, improve patient representation in clinical trials, and enhance the FDA's ability to ensure safety, efficacy, and quality of the drug supply.
The subcommittee on health of the Energy and Commerce (E&C) recently held a hearing on a string of legislation that brings about sweeping changes throughout the pharmaceutical industry.
The 22 proposed bills tackle different areas in healthcare, particularly in pharma, that need major legislative change. The mostly bipartisan bills aim to speed the discovery of new cures, improve patient representation in clinical trials and enhance the Food and Drug Administration's (FDA) ability to fulfill its mission of ensuring the safety, efficacy, and quality of the drug supply.
Industry trade associations BIO, PhRMA, and the Association for Accessible Medicines (AAM) each provided testimony during the March 17 hearing in support of certain legislative changes.
A new high-stakes research agency focused on biotech was also discussed during the hearing.
"This hearing is an enormous legislative undertaking," said E&C health subcommittee chairwoman Anna Eshoo (D-CA), whose bill was the first discussed. The Advanced Research Projects Agency for Health Act would establish a new independent agency, dubbed ARPA-H, to be housed under the National Institutes of Health (NIH) with a 2022 budget of $6.5 billion.
ARPA-H
President Biden first proposed ARPA-H in 2021 as a biomedical version of the U.S. military's Defense Advanced Research Projects Agency (DARPA), known for backing innovations like the internet. The new agency would have the authority to approve and terminate project funding, establish milestones, as well as coordinate with other health agencies, including the NIH.
It "will embody the nimble spirit of the highly regarded and successful defense advanced research project agency" to "pursue large-scale high-risk projects," Eshoo said. "It'll break the mold for federal research agencies by being uniquely focused on solving the valley of death to delivery transformational cures." The agency will be charged with closing the existing gap between NIH research and the development of the private sector's commercial products.
ARPA-H's mission will drive scientific breakthroughs to improve the country's health and help meet the president's goal of ending cancer, as well. The president signed into law the bipartisan Consolidated Appropriations Act of 2022 recently, providing $1 billion to establish ARPA-H.
"This is a momentous first step in creating an agency that will be a beacon of hope for the American people," Eshoo added. "But our work isn't done yet. Our committee needs to pass the ARPA-H legislation to provide the agency with the full authorities it needs to be successful from day one, including ensuring that it will be a nimble, dynamic, and independent agency."
The goals place emphasis on delivering "high-need cures." The term refers to a drug, biological product, or device that should be prioritized to detect, diagnose, mitigate, prevent, or treat any disease or medical condition for which incentives in the commercial market are unlikely to result in the adequate or timely development of such product. Goals include revolutionizing diagnosis, mitigation, prevention, and treatment of diseases via the development of health technologies and high-need cures; and promoting high-risk, high-reward innovation to develop high-need cures.
PDUFA and BsUFA
There was consensus among the trade groups around the need for the timely reauthorization of both the Prescription Drug User Fee Act (PDUFA) and the Biosimilar User Fee Act (BsUFA).
The latest reauthorization of PDUFA (PDUFA VI) was signed into law in August 2017 as part of the FDA Reauthorization Act of 2017 (FDARA) and took effect in October 2017. The enactment of FDARA also renewed BsUFA for a second time. These authorize FDA to collect user fees to support the review processes of prescription drugs and biosimilar biological products. But the current legislative authority for PDUFA VI and BsUFA II is set to expire September 30, 2022.
"Both the PDUFA VII and BsUFA III agreements were carefully considered by the biopharmaceutical industry and negotiated with FDA to ensure that the agency is equipped with the necessary resources to help us deliver new treatments and cures to meet patients' unmet medical needs," said Lucy Vereshchagina, vice president of science and regulatory advocacy at PhRMA. The agreements also ensure that the agency is "able to keep pace with ever-evolving science and have the necessary resources to ensure a timely review of innovative drugs and biologics, as well as biosimilar and interchangeable biosimilar products."
Cartier Esham, chief scientific officer at BIO, said the group "strongly supports timely enactment of the PDUFA VII and BsUFA III commitment letters." The resources these provide "will serve to maintain FDA's global leadership and enable the agency to keep pace with the medical and scientific advances of today and tomorrow," Esham added.
The industry user fee reauthorization process kicked off in Congress earlier this year. Top FDA officials Patrizia Cavazzoni, director of the Center for Drug Evaluation and Research (CDER), and Peter Marks, director of the Center for Biologics Evaluation and Research (CBER) testified to the success of the agency's current user fee programs and on the enhancements the FDA seeks.
Other legislation of interest to BIO included those related to building a new clinical development paradigm that is more inclusive, more patient-centric, and more informative about clinical outcomes; the FDA's accelerated approval process; continuing the momentum with pediatric drug development; and advanced manufacturing technologies to keep pace with product innovation.
AAM, meanwhile, focused its advocacy efforts on other areas. These include ensuring access to affordable medicines; addressing the current backlog of FDA manufacturing facility inspections; enhancing domestic manufacturing; promoting innovation in drug manufacturing; among others.
The space has become increasingly controversial, with varying new recommendations.
Without holding the customary advisory committee hearing, the Food and Drug Administration (FDA) recently authorized the fourth shot of Pfizer-BioNTech and Moderna’s COVID-19 vaccine.
FDA authorized the two mRNA vaccines as a second booster shot for people 50 years old and older and certain immunocompromised groups on March 29, leaving out the Janssen COVID-19 vaccine from the mix. Yet, Pfizer-BioNTech’s request was for people 65 years old and older.
The agency will continue evaluating data and information as these become available to consider the potential of authorizing a second booster dose for other groups.
Pfizer-BioNTech’s vaccine is marketed as Comirnaty, while Moderna’s vaccine is marketed as Spikevax. Both vaccines were FDA OK'ed to provide the second booster dose in a few days, as Pfizer-BioNTech and Moderna applied for this on March 15 and 17, respectively. The companies submitted safety, immune response, and effectiveness information as part of their applications to revise their emergency use authorizations for the additional booster dose. The FDA posted March 28 review memoranda on Pfizer-BioNTech’s and Moderna’s vaccines.
Some have lauded the FDA for reaching a seemingly timely decision to make a second booster available as the U.S. faced a wave of new cases with the more contagious omicron subvariant BA.2. But others have heavily criticized the FDA's decision, questioning whether the agency kept its promise to ensure the safety and effectiveness of its authorizations not just because of the larger age category but also because of the lack of an AdCom meeting.
"Current evidence suggests some waning of protection over time against serious outcomes from COVID-19 in older and immunocompromised individuals," said Peter Marks, director of FDA’s Center for Biologics Evaluation and Research. "Based on an analysis of emerging data, a second booster dose of either the Pfizer-BioNTech or Moderna COVID-19 vaccine could help increase protection levels for these higher-risk individuals. The data show that an initial booster dose is critical in helping to protect all adults from the potentially severe outcomes of COVID-19. So, those who have not received their initial booster dose are strongly encouraged to do so."
The FDA followed up by updating its guidance for industry on March 31, Emergency Use Authorization for Vaccines to Prevent COVID-19, superseding the May 25, 2021, version. This guidance was first issued and revised in October 2020 and February 2021, respectively. In the latest version, the agency added policies on the second booster dose under clinical data. This includes a new table on immune response comparisons and analyses to demonstrate the effectiveness of a modified COVID-19 vaccine administered as a second booster dose.
The document also set forth new guidance regarding alternate study designs for both boosters.
"Alternate study designs can be considered, for example a study in which subjects who have completed primary vaccination with other authorized (or approved) prototype vaccines are randomized to receive a booster dose with either the prototype vaccine or the modified vaccine," the FDA added to the section on the first booster dose. "Alternate study designs can be considered, for example a study in which subjects who have completed primary vaccination and first booster with any combination of authorized or approved (primary vaccination) and authorized (booster vaccination) prototype vaccines are randomized to receive a second booster dose with either the prototype vaccine or the modified vaccine," the agency wrote on the second booster dose.
The Center for Disease Control and Prevention (CDC) issued updated COVID-10 vaccine guidance in conjunction with the FDA to also include new information on the second booster. Yet, the CDC guidance specifies recommending the dose for people ages 12 years and older who are moderately or severely immunocompromised and adults ages 50 years and older who are not moderately or severely immunocompromised. Both groups "may choose to receive a second booster dose using an mRNA COVID-19 vaccine at least 4 months after the first booster dose."
The CDC also differed from the FDA in adding guidance that people between 18 and 49 years old who are not moderately or severely immunocompromised and who received Janssen's COVID-19 vaccine as both their primary series dose and booster dose may receive a second booster using an mRNA COVID-19 vaccine at least four months after the first Janssen booster.
The FDA, meanwhile, specifies that a second booster dose of Moderna’s COVID-19 vaccine to people may be administered to people 18 years of age and older with certain kinds of immunocompromise—people who have undergone solid organ transplantation, or who are living with conditions that are considered to have an equivalent level of immunocompromise—at least four months after the first booster dose of any authorized or approved COVID-19 vaccine.
The timing of the authorization coincides with a 100-day pledge Pfizer made last June at the G7 Summit. "We have built a process to develop, within 100 days, a new vaccine if needed," Pfizer CEO Albert Bourla said at the time. And the FDA's authorization of the second booster dose happened on day 99 since omicron was detected in every state across the country.
The issue came up during the Vaccines and Related Biological Products advisory committee meeting the FDA held on April 6. People who had received a first, second, and third dose brought to the FDA's attention long lists of symptoms and health conditions they had developed because of the vaccines, including tinnitus, neuropathy, hair loss, brain fog, and migraines, among others.
At the center of the issue was the need for releasing Vaccine Adverse Event Reporting System (VAERS) data in the interest of public health. Marks took this into account when discussing how to approach the potential for combatting future variants with additional vaccine authorizations.
The FDA created a new Q&A page on what happens to emergency use authorizations (EUA) when a public health emergency (PHE) ends. This covers whether EUAs continue after a PHE ends, what becomes of the medical products with an EUA, and how EUAs are terminated or revoked.
The past decade has been marked by major drug price hikes. But the spotlight has historically been on drug manufacturers and not so much on the role of health insurers.
A recent report from the Kaiser Family Foundation (KFF) found that prices increased faster than inflation for half of all Medicare-covered drugs in 2020, while PhRMA separately called out payers over increases.
KFF regularly provides updates on drug price increases, which take place at the beginning of each year. Its latest report analyzes the comparison between price changes for drugs Medicare covered between 2019 and 2020 to the 1% inflation rate over the same period. Trade association, PhRMA, echoes KFF's findings that point to health insurance causing higher drug spending.
The reports come at a time when concerns about rising drug prices have emerged due to inflation increasing. They also coincide with stalled enactment of the Build Back Better Act (BBBA), passed 220-213 by the House of Representatives last November. The legislation aims to lower prescription drug costs.
The issue of increasing drug prices hindering patient access is not new. In fact, more than the past decade has been marked by major drug price hikes. But the spotlight has historically been on drug manufacturers and not so much on the role of health insurers, whether public or private.
"Manufacturers raised prices for 72% of the 100 top-selling brand-name drugs in January alone, because drug companies use their monopoly power to keep prices high," Sen. Elizabeth Warren (D-MA) said on Twitter. "It's time to end Big Pharma's rampant price gouging," she added.
GoodRx, an American healthcare company that tracks prescription drug prices and offers coupons for discounts on medications, reported this year that pharmaceutical manufacturers raised the prices of 832 drugs by an average of 4.6% in January 2021. However, GoodRx also reported that prescription drug prices were no longer the fastest-growing commodity or service as of 2021.
Yet payers frequently review the medications they cover and adjust their coverage of these medications.
Elevated inflation has been a shared concern since the reopening of the economy last year, driven by disruptions in the supply chain and bottled-up consumer demand for goods and services resulting from the COVID-19 pandemic. The BBBA was set forth in Congress to serve as an inflation rebate proposal.
The Association for Accessible Medicines (AAM) took issue with the BBBA last November, arguing that the proposal is bad policy for generic drugs. AAM pointed to the application of inflation-based rebate penalties to generics in arguing that the legislative proposal "is misguided and would limit patients' access to low-cost medicines." Drug manufacturers have control over the pricing of brand-name drugs, whereas generics compete based on lower list prices, thus the proposal caters to the brand drug market.
There has been some progress toward increasing competition in the generic drug market in recent years. But "generics are indisputably not the cause of higher patient spending in Medicare," AAM said.
The federal government would be able to negotiate drug prices in Medicare and cap beneficiaries' out-of-pocket spending under Medicare Part D as part of the BBBA. Drug companies would be required to pay rebates to the federal government when annual drug price increases for Medicare Part D and Part B and private insurance outpace the rate of inflation, which has reportedly been the case since 2020. The price of insulin, which is under the spotlight of the pricing issue, would also be capped under the BBBA.
KFF compares for drugs administered by physicians—Part B—and retail prescription drugs—Part D—to the 1% inflation rate using the latest drug spending data from the Centers for Medicare & Medicaid Services through 2020. A recent surge brought the previous annual inflation rate up to the current 7.8%.
KFF arrived at its findings by concluding that 23 of 25 Part D drugs and 16 of 25 top-spending Part B drugs had price increases that exceeded inflation in 2020. The Part D drugs include anticoagulant medications Eliquis (apixaban) and Xarelto (rivaroxaban), as well as multiple myeloma medication Revlimid (lenalidomide). The Part B drugs include two cancer medications, PD-1-blocking antibody Keytruda and Opdivo (nivolumab), as well as the osteoporosis medication Prolia (denosumab).
PhRMA, meanwhile, conducted a survey in collaboration with market research company Ipsos that indicates that Americans would prefer that Congress focus more on reducing the overall costs of healthcare coverage such as premiums and copays (71%) rather than prescription drugs costs (29%).
"It's time to bring the patient perspective to the healthcare reform debate and focus on immediate solutions that Americans value the most,” said Debra DeShong, PhRMA executive vice president for public affairs. "That includes making sure insurers provide more dependable health coverage that helps patients get the care they need and lowers out-of-pocket costs for medicines. We are ready to do our part, and we remain committed to working with policymakers to improve our healthcare system."
Final guidance is available that clarifies the agency's expectations about voluntary product recalls.
The U.S. Food and Drug Administration recently finalized guidance urging companies to be "recall ready" to protect public health and outlined the steps to do so.
The 13-page final guidance document largely resembles the 2019 draft version, apart from several additions that provide further clarity on the agency's expectations when it comes to initiating voluntary product recalls. It speaks to how the agency had to shuffle around priorities because of the COVID-19 pandemic, though the draft was issued beforehand.
"Voluntary recalls continue to be the fastest, most effective way for a company to correct or remove violative and potentially harmful products from the market to help keep consumers safe," said Judith McMeekin, FDA associate commissioner for regulatory affairs, in a press release. "It is critical that all companies in the supply chain are 'recall ready' to ensure appropriate actions are taken swiftly across the distribution channels to best protect public health and the integrity of the supply chain." The outlined policies are intended to be used across all FDA-regulated industries.
Recalls of prescription drugs, however, do not fall under FDA's legal purview like medical devices and other products, placing greater responsibility on drug manufacturers to initiate voluntary recalls. "We will continue to work with companies to improve their recall procedures and minimize Americans' exposure to potentially harmful products," McMeekin added.
The final guidance defines two new terms—correction and market withdrawal. It defines a correction as the repair, modification adjustment, relabeling, destruction, or inspection of a product without physically removing it. A market withdrawal refers to a firm's removal or correction of a product in distribution involving a minor violation of FDA regulations.
A total of 17 comments were submitted to the drafted guidance document by various stakeholders.
The FDA made some of the revisions requested. The main message of the guidance, which stresses that "it is critical for firms in a product distribution chain to be 'recall ready,' " remains the same as the draft version. Yet the following statement nixed the language about helping to "minimize public exposure to products that are in violation of the FD&C Act and other laws administrated by the FDA." It points to the list of general preparations that companies should have "as appropriate and applicable to its operations" and newly adds to the finalized version that they should apply the recommended preparations "in advance of when a recall may be needed."
The general preparations the FDA recommends include identifying appropriate personnel, training personnel on their responsibilities, establishing a recall communications plan, identifying reporting requirements for distributed products, using adequate product coding, as well as maintaining distribution records. The finalized version adds examples to the last two recommendations.
The Consumer Healthcare Products Association (CHPA), however, had argued against recommending specific coding or recordkeeping practices. "[I]t is unnecessary to include any additional coding or recordkeeping requirements in the Recall Draft Guidance," John Punzi, senior director of quality assurance and technical affairs at CHPA, wrote in the group's submitted comment. "Current recall processes and procedures have worked well in the past and remain effective today. Recalls of OTC products are rare, and little benefit would be seen with an added burden of additional coding," he added. Yet implementing FDA guidance is not required.
"While this guidance is nonbinding, manufacturers and companies within a product's distribution chain should keep FDA's recommendations (and applicable recall-related regulations) in mind when planning for or initiating a voluntary product recall," noted global law firm Faegre Drinker.
Additional policies set forth via the guidance document relate to procedures for initiating a recall, what to do if there is an indication of a problem with a distributed product, and how the FDA works with a firm recalling a product to ensure the recall is initiated in a timely manner.
As requested by the International Society for Pharmaceutical Engineering and others, the final guidance clarifies that a comprehensive list of contact information for FDA recall coordinators is available on the FDA's website in recommending consulting with agency staff about the problem.
The guidance also coincides with a decrease in the number of FDA-reported product recalls for FY 2021, ending in September 30. The agency's recall data dashboard indicates 5,310 products were recalled in 2021, down from 7,252 in 2020. The drop represents the lowest number of annual recalls since the FDA first started making recall data publicly available in 2012, with 3,208.
Large pharma players are approaching IoT to embrace what is happening in the digital health space.
As Thomas B. Cueni of the IFPMA recently stated, voluntary "technology transfer partnerships have been the cornerstone in the fight against COVID-19" in ways that offer new and exciting opportunities for pharma. The need for the adoption of connected technologies that was exacerbated by the pandemic is expected to complete a shared vision.
The vision is centered on using the Internet of Things (IoT), a concept coined several decades ago, to provide improved and personalized healthcare to patients. IoT describes a system of computing devices interconnected via the internet that enables sending and receiving data. The ongoing push for the IoT hype to become reality as part of the digitization of healthcare got a second wind after the pandemic began in 2020. Major pharma players are working to harness the potential of IoT for time and cost savings that ultimately benefit patients and providers.
IoT encompasses every organization from providers and payers to developers and vendors. But pharma is in an advantageous position to connect the dots across the entire life cycle of a medication. The advantages of IoT are focused not only on medical intervention and medication errors, but also personalized medicine.
What perhaps is the most interesting is the way that large pharma players are approaching IoT to embrace the entirety of what is happening in the digital space and through connected devices. Bayer, for example, has invested into a business unit that is focused on trying to create revenue out of this.
Johnson & Johnson, as another example, made a $2 billion IoT investment in 2016 and was named as the top IoT innovator in the pharma sector at the tail end of 2021. Meanwhile, Verily Life Sciences LLC, the research arm, of Google's parent Alphabet, and Sanofi also launched a $500 million joint venture in 2016 aimed at developing a comprehensive, data-driven connected diabetes management platform.
"The integration of multiple interventions, such as data-driven patient support and devices in addition to treatment, can help improve outcomes, which is important from the perspective of patients, healthcare professionals and the overall healthcare system," Peter Guenter, executive vice president, and head of global diabetes and cardiovascular business at Sanofi, said at the time.
"Our goal is to connect the dots for health care providers on the 'moments of truth' that happen outside of the clinical setting, and to help people manage diabetes on a daily basis," added Jessica Mega, MD, chief medical officer of Verily.
GlobalData Plc, a London-based data analytics and consulting company, tracks data points of IoT in pharma that include IoT deals in the pharma technology sector, the number of IoT patents in the pharma sector, top companies with IoT mentions in filings, and IoT influencer activity in the pharma sector today. It also monitors the top IoT related innovators in the pharma industry and in the clinical operations industry , with J&J toppingboth.
Additionally, GlobalData indicates the top IoT patent holders from 2001 through 2021.
Yet another research area that GlobalData records involves comparing IoT as a theme to the top five themes in pharma today. While IoT is at the bottom end of the spectrum of the top themes, following cybersecurity, data security, ecommerce, marketplace, and Big Data, the theme has been steadily trending upwards since 2019.
"We've seen with all things wireless, or wired, that the foundational technology has improved so much that, if you're not in it today, you're behind," Brian Drozdowicz, senior vice president of integrated care and digital health at Bayer Pharmaceuticals, told HealthLeaders of the IoT market. "So, we're well in it."
Wearables and electronic health records (EHR), among others, are some examples of patient health data providers in the real-world. Yet data can be captured from patients throughout the entire care continuum. Diabetes management has been used as a primary example of the potential for these data.
Greater adoption
In the earlier days of healthcare IT and digital health, where the connectivity, technology, and underlying foundation that make IoT possible was not as reliable, provider and patient adoption was low. The pandemic has accelerated the adoption of digital technologies in healthcare that have been around for a while. The improvement in the use of these technologies over the last two years has been primarily based on a larger sample size using them. Most people, for example, have had remote telehealth visits or remote diagnostic used over the past two years.
There has been greater adoption of these technologies in the past two years than the prior decade, and the preexisting challenges around accessing these technologies has improved in almost every case. The pandemic exacerbated the issues around access and forced people to consider models of care that had never been entertained before. Prior to the pandemic, primary care provider (PCP) visits were not widely expected through Teladoc, Amwell, or other telehealth providers through an iPad, smart phone, or computer. But adapting to this type of PCP visit has outweighed the perceived risk of being out in public with a pandemic that has had many unknown consequences in recent years.
From exploring the future of a decentralized clinical trial to specific post-drug launch digital companions to disease management solutions, Bayer has a variety of examples of what it's working on today when it comes to IoT. "It spans the entirety of our core drug portfolio," Drozdowicz said.
Drozdowicz's work leading the function of integrated care, includes the mandate to build a digital revenue stream through devices and digital solutions. An interesting concept that has gone into the formation of this business unit is looking beyond the things that core assets will benefit from.
"We don't want to limit ourselves," Drozdowicz said. "We see tremendous opportunity to potentially taking a leadership position in the market with some of the bigger things that are happening in digital health, and we have made some investments and relationships that support" these endeavors.
The company is working to strategically build business partners that it both invests into and has commercial and developmental relationships with to bring solutions to market that are transformative for healthcare as a whole and its core pharma business, in addition to building a revenue stream. Bayer sees "a tremendous opportunity in the [IoT] market today … and we see at it as a core part of our business going forward," Drozdowicz said, pointing to the efficiency-creating potential.
Strategizing
The efficiencies to be gained in the long term relate to obtaining results faster and more accurately. IoT can be used for improved recruitment of patients that are a better fit for a clinical trial. The speed, the precision around interoperable devices, the connectivity, and what all this can bring to a business are all efficiencies that give companies advantage over the traditional ways of capturing patient information.
There is a litany of challenges that go with moving toward connected devices, including integration challenges, data security, privacy challenges, and adoption challenges. "But it's here and it's now," and it's a core part of companies' pharma strategy all the way up to the highest-level, Drozdowicz said. Digital aspects of Bayer's strategy get "sharper and sharper each year and it's exciting to be in it."
On the digital therapeutics side, "the evolution in connected virtual reality and other devices that allow software to be the intervention have evolved toward clinically validating products and simplifying the onboarding process in healthcare as opposed to looking at the use of software in more of a 'mobile health' approach," Andy Molnar, CEO of Digital Therapeutics Alliance told HealthLeaders.
Yet IoT innovation has dropped among pharma companies in recent months. Figures compiled by GlobalData show the number of IoT patent applications in the pharma industry standing at 99 in the three months ending November, down from 181 over the same period in 2019. They also show patent grants related to IoT decreasing from 180 in the three months ending November 2021 to 101 as of January.
But the technology is expected to outpace any major policy change.
If the time it takes to conduct a trial and the data collection and evaluation of that trial can be done in a world where everything is electronic and integrated, that could rapidly speed up innovation in producing more timely and cost-effective therapies and be a massive disruption to the traditional path to market.
"I honestly think that the technology is going to move faster than the policy, and organizations like ours will adopt the technology because it's the right thing to do and because the patients live in a generation where it is now accepted," Drozdowicz said.
He said that the biggest advancements that will aid adoption and growth of the technology is going to be long-term consolidation of vendors, like what happened on the provider side with technology. Epic and Cerner own the EHR market today, with the former maintaining a 31% market share and the latter 25%. But a decade or so ago, these companies were small, and hospitals could have up to 30 best of breed systems that they stitched together and were loosely interoperable. The world of trials is expected to go in a similar path where there will be vendor consolidation that makes it easier for pharma companies to be more efficient in their processes.
Provider perspective
Stanford Health Care uses Epic, which "has many capabilities to advance further in its own existence as an EHR," within the EHR ecosystem, Deepak Sisodiya, director of pharmacy services at Stanford Health Care in California told HealthLeaders. "There's much ability for each system to have its own version of IoT," he said.
With many therapy types within pharmacy, there is some general guidance of what a medication order would be. But based on patient-specific nuances, providers may guide or advise for them to be slightly different. Providers, for example, may guide an intended order to be different for patient A than patient B based on the patient's individual health outcomes. This is one potential use case on the provider side.
When it comes to real-world data and personalized treatment, providers want to know how they can tap into information portals that may have already existed and ones that are not quite there yet.
Sisodiya compared a CVS or Walgreens information system to that of the Epic system that Stanford is using to share information. "We still aren't exactly perfect at having accurate medication history."
Sisodiya used cancer as an example of where better visibility can be obtained. Cancer is a slightly different category than diabetes, but the question is, "how do we get better determinations of what is the best treatment for a patient headed toward precision medicine?" Based on historic cancer treatments, a patient would be prescribed the type of dosing that are specific to a genotype and phenotype. A patient may get the same drug but dosed slightly differently, maybe more frequently.
The intent is to tie all healthcare advancements, genetics, and more personalized medication and therapy treatments together. For Sisodiya this means tying Stanford's Epic with the tools it uses such as certain levels of robotics and automation and then tie that to the external parties it partners with to receive medication, which include Stanford's wholesalers McKesson and Cardinal Health. This is intended to enable visibility of the system, of every single medication flowing through the entire life cycle, from its creation at the pharma level all the way to administration at the patient level," Sisodiya said.
Sisodiya also spoke to the long-standing issue in healthcare of medication errors. This is "unfortunately a reality of healthcare and our world today," he said. But IoT is an opportunity for Stanford to tackle medication errors, as well as track expired medications.
Sisodiya said that the hope for tracking medications is the radio-frequency identification (RFID) that can be used as a tool along with the labeling of medications, barcodes, and lot numbers to know where a medication is always. "There are many avenues through which medications are moved and opportunities for systems to continue to evolve in."
While some global pharma companies continue to manufacture and sell products in Russia, several large pharma companies said they are scaling back their business there.
As the war between Russia and Ukraine enters its fourth week, major pharmaceutical companies have stepped up to support humanitarian efforts in Ukraine by making multimillion dollar donations. Yet there is mixed response from these companies about continuing their business with Russia.
Hundreds of companies, including airlines, banks, and tech giants, exited Russia during the past few weeks. President Biden has imposed numerous sanctions on Russia over the invasion of Ukraine, but drugmakers, as well as medical device manufacturers and healthcare companies have been exempted from these sanctions so far. Global drug companies have thus been reluctant to cease operations in Russia, so they continue to manufacture and sell their products there. But there are some that have scaled back their business.
American biopharma company AbbVie has suspended its aesthetic products operations in Russia and paused its new clinical trials there. Meanwhile, Pfizer, Bayer, and Sanofi, among others, are holding off on new investments or development. All three companies recently provided updates on their positions.
Drugmakers that continue operating in Russia include Abbott Laboratories and Johnson & Johnson (J&J), which have corporate offices in Moscow, Novosibirsk, St. Petersburg, and Yekaterinburg. The reason is twofold: Russians need access to medicines and medical equipment and international humanitarian law requires such companies to keep their supply chains open.
Abbott manufactures and sells medicine in Russia for oncology services and liver health, among others. Abbott condemned the war and violence in Ukraine and donated $2 million to humanitarian efforts. Yet "as a healthcare company, we have an important purpose, which is why at this time we continue to serve people in all countries in which we operate who depend on us for essential products, some life-sustaining," Scott Stoffel, divisional vice president at Abbott, told Kaiser Health News (KHN).
J&J donated $5 million to help provide humanitarian support for refugees in the border countries. The company also said it remains "committed to providing essential health products to those in need in Ukraine, Russia and the region, in compliance with current sanctions and while adapting to the rapidly changing situation on the ground."
But drugmakers saying that they had to continue manufacturing drugs in Russia for humanitarian reasons were "being misguided at best, cynical in the medium case, and outright deplorably misleading and deceptive," Jeffrey Sonnenfeld, a professor at the Yale School of Management, also told KHN.
Abbott and J&J have more recently joined a growing body of companies that are buying time.
More response from pharma
Additional companies that have issued statements on the crisis in Ukraine include Baxter and Novartis.
The Baxter International Foundation said in a statement that it is also "making financial grants to support activities of Americares, International Medical Corps, Project HOPE and USA for UNHCR [UN Refugee Agency] who are providing critical supplies and health services in the region."
Novartis made an initial donation of $3 million to support the efforts of three humanitarian organizations: the International Red Cross and Red Crescent Movement, Save the Children, and the International Rescue Committee. "Novartis experts are working diligently to ensure continued supply of our medicines in Ukraine, where the health of patients who depend on these medicines is our priority," the company said in a statement.
"We are expanding our humanitarian efforts in Ukraine by donating our inventory of essential medicines directly within the country, including much-needed antibiotics and painkillers from the Sandoz portfolio, for use in Ukrainian medical facilities," Novartis added. The company further noted that it is also "working with the surrounding countries to supply medicines into Ukraine from outside of the country."
Swiss drugmaker Roche also made a donation to the Ukraine of 150,000 packages of its Rocephin, an antibiotic on the World Health Organization's list of essential medicines for treating the symptoms of several kinds of bacterial infections.
"We are ensuring that our critical medicines and diagnostics reach the people who need them both in Ukraine and other countries impacted by the crisis," Roche said in a statement. "We are making every effort to ensure continued supply to Ukraine, Russia and Belarus within the scope of the available possibilities." The company has also been working to prevent disruptions in treatment access for Ukrainian patients enrolled in ongoing clinical trials.
The humanitarian crisis has affected hundreds of clinical trials ongoing for major pharma companies.
American multinational pharmaceutical and biotechnology corporation, Pfizer; German multinational pharmaceutical and life sciences company, Bayer AG; and French multinational healthcare company, Sanofi S.A., among others, have made clear they are scaling back their business in Russia.
Pfizer provided $1 million in humanitarian grants for Ukraine. Sanofi has donated more than $5 million, while Bayer established a disaster relief fund valued at more than $3 million.
Still, Pfizer President Albert Bourla said the company wasn't going to make additional investments in Russia. Bayer also recently said it was suspending all nonessential spending in Russia and Belarus, though it intends to continue supplying essential, lifesaving products. Sanofi made similar decisions.
Pfizer, Bayer, and Sanofi issued new statements and took to Twitter recently with updates.
"We will no longer initiate new clinical trials in Russia and will stop recruiting new patients into our ongoing trials in the country," said Pfizer.
"As the war in Ukraine evolves, we've made the decision to suspend with immediate effect all of our advertising and media activities in Russia, and to suspend any new spending not related to the supply of our essential medicines and vaccines," said Sanofi.
American drugmaker Eli Lilly announced its plans to shift its business focus in Russia, also. This came after Lilly donated $7.5 million of its insulin to Project HOPE on March 3.
"We also have suspended all investments, promotional activities, and new clinical trials in Russia, as well as the exportation of non-essential medicines to that country," Lilly said. "Our Russian operations are now only focused on ensuring people suffering from diseases like cancer and diabetes continue to get the Lilly medicines they need." The company added that if it were to generate profits from its sales in Russia, it intends to "donate them to organizations dedicated to humanitarian relief."
UK-based GlaxoSmithKline is yet another pharma company that has suspended advertising and new clinical trials in Russia, a list compiled by Yale School of Management notes. AstraZeneca, however, is digging in its heels as the only one in pharma defying demands for exiting or reducing activities in Russia.
