This year’s Academy of Managed Care Pharmacy (AMCP) conference in San Antonio, Texas brought together over 4,000 peers across a diverse group of payers, pharmacists, academics, patient advocates, manufacturers, and other key stakeholders. It was an energizing atmosphere that allowed for robust discussions on the current state of managed care in the US, and we were excited to meet with both new and familiar faces. We greatly enjoyed attending AMCP 2023 and have summarized a few key takeaways from the conference below.
Based on multi-year data presented at AMCP 2023, COVID-19-related disruptions are clearly waning in the US. In January 2023, COVID-19 vaccines made up 0.8% of retail prescriptions compared with 2.5% in 2022 and 6.0% in 2021Overall, the downward pressure exerted by COVID-19 on healthcare services appears to have abated, and healthcare decision makers should reflect this when forecasting healthcare resource demand. Sales growth in non-retail pharmacy is also recovering from the effects of COVID-19, although growth in hospital pharmacy sales has contracted, driven almost entirely by the decline of inpatient COVID-19 antivirals. Overall health services utilization has also returned to 99% of pre-COVID-19 baseline levels after plummeting at the outset of the pandemic, with utilization of office, institutional, and telehealth visits and diagnostic and screening tests above baseline levels. Although utilization of both elective procedures and new prescriptions are still below pre-COVID-19 levels, they have rebounded strongly from the troughs seen in 2020.
Given the recovery in health services utilization and normalization of demand, it may be tempting to think of the COVID-19 disruptions as transient, but COVID-19 has permanently altered the settings in which patients receive care. Telehealth visits comprised 7–9% of all office, telehealth, and institutional claims in 2022 which suggests a sustainable long-term market. The food pharmacy sector (e.g., grocery store owned pharmacies) has also shown strong growth in sales as consumers became accustomed to one-stop shopping throughout the COVID-19 pandemic. Finally, healthcare decision makers should be aware of the potential adverse impacts from the reduction in healthcare utilization during the pandemic, particularly preventative and screening measures, and how this may affect patient populations, treatment outcomes, and healthcare resource demand in the coming years.
In 2022, for the first time ever, traditional medications (commonly small-molecule drugs used to treat common acute/chronic conditions) fell below specialty medications (high-cost drugs that may have special handling requirements and are used to treat chronic, complex, and/or rare conditions) in terms of market share and accounted for less than 50% of total market sales, excluding discounts. In terms of net spending, specialty pharmacy has grown from 28% of the market in 2011 to 55% as of 2021, increasing by 305%. This growth in specialty pharmacy has been driven by immunology (459%) and oncology (326%) treatments, while traditional pharmacy has been supported by growth in the diabetes field (217%).
Speakers at AMCP also expounded on key current and future marketplace themes:
Migraine sales increased 40.1% year-over-year (YoY) with absolute growth of $2.3 billion. Sales are forecasted to continue to show strong growth.
Anti-obesity sales increased 72.0% YoY with absolute growth of $1.2 billion. Sales are forecasted to continue to show strong growth.
COVID-19 antiviral prescriptions increased 6,105.5% YoY with absolute growth of 9.5 million prescriptions; however, sales growth was -51.5% YoY with absolute growth of -$1.8 billion. This may reflect a shift in prescribing patterns towards outpatient treatments.
ADHD dispensing has increased since the start of COVID-19, which is in stark contrast to the decline in dispensing leading up to Q4 2019. As of Q3 2022, dispensing was up 11.1% since Q4 2019.
Overall, growth in net US medicine spending is projected to slow to -1–2% compound annual growth rate (CAGR) over the next five years, down from 5.2% net CAGR from 2013–2017 and 4.0% from 2018–2022. Immunology and oncology are projected to continue to be key market drivers, growing on a net basis, while neurology is expected to become a key player through 2026. Conversely, the 5-year CAGR for antidiabetics is forecasted to be negative over 2022–2026.
Value-based agreements (VBAs) continue to be a hot topic in the manged care space due to their potential to balance access and price and align financial and/or performance risk across stakeholders. Speakers at AMCP discussed a recent survey of major trends in VBAs conducted using both qualitative and quantitative methods of industry and payer representatives.
Despite the inherent appeal of VBAs, only a minority of respondents stated they had successfully implemented one. This could be explained by the fact that payers and industry view the barriers to successful agreements very differently. Industry is more concerned about administrative burden and lack of internal expertise, while payers are more concerned with the contracting particulars such as outcome definition, timing, duration, and financial terms. However, both payers and industry view easy-to-measure product outcomes as the single most important success factor to implementing a VBA. Organizational commitment and improving patient access are primary reasons both payers and industry pursue VBAs. Industry additionally highlighted the opportunity to generate real-world evidence (RWE) as an incentive toward pursuing a VBA, reflecting the increasingly important role of RWE in managed care pharmacy. Responses also highlighted that educational tools and standardization will be key to accelerate use.
As VBAs have traditionally been considered in the context of cell and gene therapies, the survey interestingly found that both payers and industry view speciality medicines for broader populations as the most suitable product class for VBAs. This was followed by one-time cell and gene therapies and drugs for common chronic conditions. Reflecting these findings, payers and industry indicated that the therapy areas with the highest opportunity in the near-term for VBA implementation were diabetes, cancer, and cardiovascular disease. Both industry and payers stated that innovation in data and measurement tools would help accelerate the use of VBAs in these and other indications.
In the US, there has been a steady call for further healthcare-related regulation and legislation over the past decade to build upon the foundation laid by the Affordable Care Act. Until the COVID-19 pandemic, however, health-related legislation was generally not considered a high priority by political leaders. Following a renewed focus on healthcare and coverage, intense negotiations over 2021 and 2022 set the stage for the passage of major pieces of federal legislation, with two particular bills of emphasis:
The landmark legislative bill of 2022, the Inflation Reduction Act (IRA), has multiple components that will directly impact the managed care and coverage landscape in the US for the next few years. While certain aspects of the bill are clearly stated in the text, the coming year will be crucial for the Department of Health and Human Services (HHS) and Centers for Medicare and Medicaid Services (CMS) to develop proposed rules and listen to feedback from payers, patients, and manufacturers. Among the key aspects of the IRA are two particularly salient points for the pharmaceutical industry:
While the rebates did not appear to broadly impact pricing decisions for Medicaid, it is likely that manufacturers will aim for higher initial prices to combat lower flexibility in pricing for subsequent years. The impact of these changes is still unknown, and it could be years before industry and government fully realize the nuances of the IRA. As HHS develops these rules, however, there will be a legally mandated comment period to provide feedback on proposed approaches. Costello Medical will be reviewing the proposed rules and providing feedback where appropriate to help further access and innovation in the US healthcare space.
Overhauls to the PIE system were a key priority for AMCP over the last few years. PIE allows for manufacturers to submit factual information to payers and health plans before a therapy has been approved by the FDA. Before 2018, payers and health plans could only evaluate clinical trial information following FDA approval. New FDA regulations were introduced in 2018 to allow for PIE, but these new regulations had too many question marks about the type of information that could be shared, preventing effective information exchange from occurring. The PIE Act of 2022 clarifies the intent of PIE by explicitly stating in law that manufacturers of medical devices are also allowed to share information with payers, PBMs, and other pharmacy review committees prior to approval, and states what type of information can be shared.
With the clarified guidance, manufacturers wishing to share information via PIE should keep in mind the following considerations:
When sharing information:
These changes, while seemingly minor, will likely allow manufacturers and payers to quickly begin sharing information now that the law is clear about the type of information that can be shared. For novel, high-priced therapies or where value-based contracts may be applied, these changes allow manufacturers and payers to evaluate information earlier, allowing for more time for negotiation and potentially providing patients with broader access to novel medications.
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