Looking Ahead to 2024: Robust Outlook for Specialty Drugs, Cell and Gene Therapies

As we bid farewell to 2023, it's time to reflect on the dynamic landscape of the specialty pharmacy industry and forecast significant trends in the year ahead.

Pharmaceutical spending in the U.S. alone now exceeds $600 billion annually, with 50% or more coming from specialty drugs. This is in part due to the rise of very high-cost cell and gene therapies (CGTs), with newly U.S. Food & Drug Administration (FDA)-approved treatments listing for more than $3 million dollars per treatment, and more such drugs in the FDA pipeline. Affordability remains a key as payers and patients balance cost and access to ensure optimal patient outcomes.

The outlook for escalating costs is clear: venerable analysts anticipate persistent double-digit pharmacy trends driven by specialty drugs. According to a survey conducted with US health plans, covering 100 million employer-sponsored large and small group members and 10 million Affordable Care Act (ACA) marketplace members, plans are experiencing inflationary pressure from rising median prices of new drugs as well as increasing prices of existing drugs. Combined with the accelerated approvals of new CGTs, pharmacy trends will not slow down in 2024 with the inflationary impact predicted to be in the high single or double digits from 2023-2024.

Issues, Trends and Solutions Worth Watching in 2024

Cell & Gene Therapies for Rare Disease

The FDA has approved 20+ CGTs and the new product pipeline has approximately 365 investigational therapies, with more than half of these in Phase 2 clinical trials. Oncology and rare diseases remain the top areas targeted by gene therapies from preclinical through pre-registration. Approximately 1,604 clinical trials are under investigation for various CGTs in the US, an increase attributed to expanded funding of industry-sponsored trials.

By the end of 2022, 13 CGTs were on the US market and in 2023, 12 or more new CGTs will be approved in the US. As this newsletter went to print, a new treatment for sickle-cell disease and transfusion-dependent β-thalassemia was approved in the UK and is expected to be approved by the FDA for patients aged 12 and over after a rigorous assessment of its safety, quality and effectiveness. This is the first medicine to be licensed that uses the innovative gene-editing tool CRISPR, for which its inventors were awarded the Nobel Prize in 2020.

Shift Toward Value-Based (VB) and Outcome-Based Contracts

Value-based contracts, sometimes called risk-sharing agreements, are innovative payment models used by payers and biopharmaceutical innovators that link reimbursement, coverage or payment to a treatment's real-world performance. It is anticipated that these arrangements will promote greater patient access to new treatments. In an outcomes-based contract, payment is wholly or partly dependent on outcomes being achieved. Service providers are, therefore, directly incentivized to deliver outcomes with service users.  

Unique Financial Solutions

There will be increased demand for these solutions, especially with the introduction of new CGTs with multi-million-dollar price tags. For example, approval of the first treatment derived from CRISPR, the revolutionary gene-editing method and treatment intended to cure sickle-cell disease and a related condition, beta thalassemia, is expected to be millions of dollars per patient.

AscellaHealth’s innovative financial solutions, such as Pharma FlexFund™ for payers, will increasingly play a significant role in offsetting the cost of these expensive drugs and potentially curative CGTs. There will also be greater reliance on copay assistance programs, with copay cards reducing the total out-of-pocket expense for the patient who may be under-insured and unable to afford the expense. The benefits payer pays some of the cost and then the manufacturer pays part or all of the cost that the patient is responsible for through copay or coinsurance. 

Foundations, including CancerCare, HealthWell Foundation, Leukemia & Lymphoma Society, National Organization for Rare Disorders (NORD) and others, will also provide resources to help people overcome financial access and treatment barriers by assisting them with co-payments for their prescribed treatments.

Increased Emphasis on Patient-Centric Care

While the call for patient-centric care resonates throughout the healthcare ecosystem, there is no greater need for a patient-first approach than among individuals who are living with a rare disease or complex, chronic conditions. Many of these patients share the experience of a time-consuming and sometimes frustrating journey towards diagnosis, the lack of established standards of care and the search for physicians who understand the challenges of a specific rare condition. AscellaHealth’s novel approach always puts patients at the center of care, exemplifying a value chain that focuses upon:

• Improved access to specialty pharmaceutical therapies
• Information exchange among prescribers, patients and specialty pharmacies that streamlines care delivery
• Personalized, high-level coordinated support from dedicated patient care coordinators vs. automated call centers to help patients manage their conditions
• Continuity of care throughout the patient’s entire treatment journey for optimal health outcomes

This holistic approach guides stakeholders throughout the SP ecosystem in providing disease-specific care that improves quality of life for patients as well as their caregivers.

Evolving Role of Specialty Pharmacies (SPs) to Manage Specialty Medications Under the Medical Benefit Depending on the mode of administration, specialty drugs may be covered by a health plan as a medical benefit, pharmacy benefit or both. This approach, however, has made it challenging to see the full effect of a payer’s specialty strategies and where there may be opportunities to improve the patient experience and health outcomes.

The evolving landscape of SPs in managing specialty medications under the medical benefit prompts a critical examination of their multifaceted role. AscellaHealth, at the forefront of this evolution, brings its specialized expertise to navigate the complexities of specialty drugs for a diverse range of stakeholders, including payers, employers and TPAs. With the ability to implement carve-out programs for specialty medications, AscellaHealth not only ensures cost savings but also enhances patient outcomes. The intricate interplay between health plan coverage, both as a medical and pharmacy benefit, necessitates strategic insights. Throughout the dynamic integration of these benefits, the focus remains on optimizing patient experiences and elevating health outcomes.

Nearly half of specialty drugs are covered under the medical benefit.

• Drugs that must be administered by a health care provider, which includes many cancer medications, are typically covered by medical benefits.  
• Drugs covered under pharmacy benefits are most often self-administered, such as oral medications, self-injectables or medicines delivered via other methods that patients can manage at home.

In the year ahead, expect to see SPs manage these benefits seamlessly and assist both the patient and payer in enhancing the quality and cost of the specialty drug therapy regardless of the benefit.

Growing Focus on Site of Care Optimization

Historically, hospitals typically charge more for specialty drugs and their administration than independent administration sites and physician offices, whether treatment occurs in a hospital or a hospital-owned physician practice. Going forward administering drugs in physician offices and patients' homes – instead of hospital outpatient settings – will significantly reduce costs and provide savings opportunities for both the payer and patient. This approach helps to eliminate hospital stays, decreases hospital utilization, hospital resources and subsequent cost.

There can also be key differences in coverage, depending on whether the drugs are paid for under the medical benefit or pharmacy benefit. The member copays, formularies and clinical prior authorization programs can vary significantly across the two benefits, resulting in benefit shopping and sub-optimal sites of care.

Increased Value of SPs

In 2024 and beyond the pivotal role of expert care coordination takes center stage. Look to SPs for expanded support in directing patient care and specialty drug administration sites of care. Optime Care, AscellaHealth’s nationwide SP and patient management organization, provides an industry-leading patient-centric approach. Providing high-touch capabilities for rare and orphan disease patients, the Optime Care team of experienced professionals has a profound understanding of the patient journey for complex, chronic conditions.

Optime Care champions the patient-first approach, delivering innovative end-to-end solutions across the entire specialty pharmaceutical ecosystem. Their adept care coordinators ensure seamless patient experiences, strategically intervening at key points to prevent therapy lapses and enhance the overall quality of life for those with rare diseases. This comprehensive support extends to caregivers, healthcare providers, and biopharma partners. For optimal clinical and non-clinical issue management associated with rare diseases, experienced specialty Rx pharmacists are available 24/7.

Optime Care's unique financial pharmaceutical services, including custom copay assistance programs and innovative loan-based assistance services, introduce a "pay-over-time" model, easing the financial burden of expensive cell/gene therapies and broadening access to these transformative treatments.

Greater Number of Biosimilars

Simply defined as a biological medicine highly similar to another already approved biological medicine, referred to as the 'reference medicine, biosimilars are approved according to the same standards of pharmaceutical quality, safety and efficacy that apply to all biological medicines. The adoption and potential of biosimilars to manage rising drug costs is widely recognized: the prices of biosimilars on average are more than 50% lower than the reference products for which they can substitute, and 65% of health plans surveyed ranked biosimilars coming to market among their top cost deflator. 

AscellaHealth celebrates progress made in 2023, acknowledges challenges and anticipates the promising horizons that await patients with rare diseases or complex conditions, life sciences manufacturers that are introducing novel therapies and other key stakeholders in the specialty pharmaceutical ecosystem.

For further guidance and assistance, contact AscellaHealth.

The conversation doesn’t stop here! Take a look inside the pipeline of specialty pharmaceuticals and groundbreaking cell and gene therapies with essential product updates and exclusive insights in AscellaHealth's Q4 2023 Specialty & Rare Pipeline Digest™ being released on December 18.

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