The 21st Century Cures Act: New Drugs Will Require More Aggressive Management Therapies

By Brian Bullock
Wed, Jul, 12, 2017 @ 13:07 PM

A new law designed to make promising new drug treatments available to U.S. patients sooner will potentially further drive up soaring employer drug costs and undermine patient safety. Employers are advised to prepare for this scenario now by holding proactive discussions with their PBMs regarding effective utilization management strategies.

Critics of the 21st Century Cures Act, signed into law in late 2016, contend that it is largely a pork barrel windfall for pharmaceutical companies, which lobbied heavily on its behalf.

The law contains several troubling provisions that would lower standards of evidence the FDA requires for new drug approvals.

Writing for the influential Health Affairs Blog, health policy analysts noted specifically that the law would establish new FDA review pathways, including the use of biomarkers and patient-reported outcomes, to shorten approval times and reduce drug failure rates. It would also allow for expedited review of a drug product of the manufacturer’s choosing, if that manufacturer has invested in developing new drugs for neglected tropical or orphan diseases.

It is still too early to know exactly how the FDA will interpret and apply the law, and its impact on extending drug patents that would stall market entry of lower priced generics and biosimilars. Nevertheless, the challenge for employers is that they could potentially face a new wave of FDA approvals in the future for drug products that have even less clinical evidence of efficacy over existing therapies – and at a much higher price tag.

We are particularly concerned about cost implications when an orphan drug gets approved faster under the new law for a very limited patient population, but subsequently gets expanded FDA approval for new indications that apply to much broader patient populations.

It is our view that PBMs will need to be more proactive and implement aggressive utilization management (UM) strategies as soon as such new drugs come to market. Employers are advised to discuss these options with their PBMs in advance, so that specific UM tools – such as PA and step therapy -- can be put in place immediately upon a drug’s approval, not 90 days or 6 months after market entry.

Here are three key questions employers should ask their PBMs:

  • Given that new drug products might gain FDA approval with less clinical evidence than previously, how will your P&T committee likely respond?
  • Is your P&T Committee likely to recommend that more frequent restrictions be placed on new drugs until additional real-world evidence is generated?
  • How will your PBM protect and encourage the continued use of lower-cost products already on formulary from share erosion by these new products -- especially from those that have little clinical evidence showing additional benefits?

Employers should also consider implementing more aggressive new-to-market exclusions or blocks as part of their overall formulary strategy. A new-to-market block means claims for a new drug won’t be paid unless it is first approved for medical necessity. The PBM can essentially put a hold on the product until the PBM’s P&T committee reviews it to make coverage determinations – or potentially longer. This not only prevents unnecessary utilization – it also prevents patient disruption if, in fact, the product eventually is excluded from the formulary.