Pharmacy Benefits Uncut

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Many employers are now spending close to 30% of their healthcare dollars on prescription drugs, and they’re beginning to realize further increases in drug spend are financially unsustainable.​

However, there seems to be no end in sight. More and more expensive drugs are being approved by the FDA each year. Promises of larger PBM rebates to contain drug spend are proving ineffective and are actually fueling higher drug costs. Point solutions in many cases are also fruitless when it comes to getting ever-increasing prescription drug spending under control.

But there is one thing that every employer who successfully manages their pharmacy spend does: they continually focus on evidence and eliminate noise.

Evidence is the foundation of a sustainable pharmacy benefits plan

Evidence isn't about the latest trends or new technologies in the employer-sponsored pharmacy benefits world. It's about having a system in place to objectively determine whether a drug improves health and, if it does, to ensure you’re paying a fair price for it.

The more you focus on implementing an evidence-based approach to your pharmacy benefits, the more likely you are to achieve value for your drug spend, and value translates into financial sustainability.

We can broadly categorize evidence about a drug as being clinical trial evidence or real-world evidence: clinical trial evidence comes from studies done to demonstrate a drug’s initial effectiveness and safety, and this evidence is often used by regulators to approve a drug; RWE, on the other hand, is evidence gathered from patients who use a drug as part of their routine care, outside of a clinical trial.

Given that many new drugs are receiving fast-tracked approval by the FDA based on uncertain evidence about effectiveness and safety, it’s important for you as an employer to integrate RWE into your decisions about which drugs your plan members get access to.

So today I’m going to share three things about RWE that every employer needs to know to optimize their pharmacy benefits plan.

#1. Clinical Trial Evidence versus RWE

Data from clinical trials is the foundation of evidence-based medicine, but it’s not without limitations. And it’s because of these limitations that you need RWE in combination with clinical trial data to properly evaluate the effectiveness and safety of drugs.

Let’s begin by looking at the purpose of clinical trials. They’re conducted to determine how well a drug works and identify potential safety issues. To ensure reliable, unbiased results they follow strict protocols and by comparing new drugs to current treatments they generate highly standardized evidence to guide healthcare decision making.

But they also have some important limitations. Because of their strict protocols they include only highly selective individuals. In many cases pregnant people, those with multiple medical conditions, or severe disease aren’t eligible for participation. This means many of the patients who eventually receive the drug in everyday clinical practice are not represented in clinical trials and so may not achieve the same results. Also, clinical trials are conducted in very controlled settings with standardized interventions and scheduled visits, conditions which are next to impossible to replicate in everyday medical practice. Finally, most clinical trials are of limited duration and can only measure short-term effectiveness based on surrogate outcomes (e.g. a blood biomarker for lung cancer) rather than improvements in long-term survival or quality of life, which are the outcomes we’re interested in.

RWE can complement clinical trials by providing a more comprehensive picture of how drugs work outside the controlled environment of a trial since it relies on data collected from sources such as electronic health records, insurance claims, and patient registries to evaluate how drugs perform in everyday settings.

#2. The Role of RWE in Evaluating Drugs

With the FDA’s growing use of accelerated approval pathways, RWE is playing an increasingly important role in evaluating new drug therapies. RWE has demonstrated that a considerable number of widely available drugs have been associated with serious safety concerns. In fact, 71 of the 222 drugs approved by the FDA from 2001 to 2010 have either been withdrawn from the market, required a “black box” warning about side effects, or necessitated a public safety announcement about newly discovered risks. These safety concerns were detected a median of 4.2 years after the drugs were approved, and drugs brought to market through the FDA’s accelerated approval pathways were associated with higher rates of safety interventions,

And it’s not just safety issues coming to light with RWE. RWE has also demonstrated instances where drugs are less effective than initially thought. For example, Avastin was approved for the treatment of metastatic breast cancer based on improvements in progression-free survival from clinical trials yet a benefit in overall survival was not demonstrated with real-world evidence, leading the FDA to withdraw Avastin’s indication for this condition. Similarly Zetia, drug indicated for reducing risk of cardiovascular events such as heart attacks and strokes, was found in clinical trials to reduce cholesterol, yet RWE demonstrated no reduction in the incidence of these cardiovascular events.

Important clinical signals detected with RWE also affect a drug’s value proposition. When you consider the tenet underpinning a drug’s cost-effectiveness, which is that its price should reflect its improvements in health, data demonstrating safety issues or lack of effectiveness needs to be integrated into value assessments to ensure drug prices are aligned with their clinical benefits.

#3 How Employers Can Implement an RWE Strategy

You can’t rely on a ‘one-and done’ strategy when deciding whether your plan members get access to a particular drug since many newly approved drugs are astronomically expensive and have uncertain clinical benefits and safety profiles at the point of market entry. You need a process in place to consistently and systematically assess emerging evidence on drug therapies.

Here are four things you need to do to integrate RWE into your drug formulary decision-making process:

· Identify newly approved drugs that are associated with uncertain clinical benefits and safety outcomes. Once you’ve made your initial formulary listing decision, earmark them for continued evaluation as RWE becomes available.

· Develop a plan for horizon scanning. Keep an eye out continuously to identify RWE as it becomes available. Be aware there may be a significant lag time between when a drug is approved and when RWE emerges.

· Have a plan to systematically assess RWE. Amend your formulary decisions as needed and consider whether price reductions are necessary if a drug is found to be less effective than initially thought.

· Keep your members in the loop. As the formulary listing status of drugs may change with RWE, it’s important to communicate changes to your members, and when necessary, support them in navigating these changes.

The Bottom Line

You need an RWE strategy to develop a complete picture of a drug’s benefits and risks to your plan members. This evidence provides the signal you want to detect amongst all the noise you hear about ‘innovative’ or ‘breakthrough’ drugs that often don’t live up to their initial promises.

Consider partnering with an independent expert who can provide a comprehensive RWE strategy based on ongoing, objective, unbiased assessments of evidence related to clinical outcomes of drug therapies. Then be sure to integrate this evidence into your drug formulary decisions so that your plan members have access to effective, safe drugs that improve their health at fair prices.

RWE is an important component of the toolkit you need to get value for your pharmacy spend. Make sure you have a plan in place to leverage it.

That's all for today.

See you in two weeks,

Nina

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Pharmacy Benefits Uncut is produced by Healthcare Decision Making, a consultancy that helps small and medium sized employers optimize their pharmacy benefits plan. We offer a comprehensive range of services focused on three areas: PBM procurement, ongoing management of your pharmacy benefits plan, and self-policing and oversight of your pharmacy spend. To learn more about how Healthcare Decision Making can help you, email Nina Lathia at nina.lathia@healthcaredecisionmaking.com

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