Subscribe

Realized and Projected Cost-Savings from the Introduction of Generic Imatinib Through Formulary Management in Patients with Chronic Myelogenous Leukemia

November 2019 Vol 12, No 7 - Business, Original Research
David Campbell, PharmD, MS
Marlo Blazer, PharmD, BCOP
Lisa Bloudek, PharmD, MS
John Brokars, MS
Dinara Makenbaeva, MD, MBA
Download PDF
Abstract

BACKGROUND: Imatinib, a first-generation tyrosine kinase inhibitor (TKI), and the newer second-generation TKIs have dramatically improved outcomes for patients with chronic myelogenous leukemia (CML). A previous model estimated the potential cost-savings over the next 2 years after the loss of patent exclusivity for imatinib in the United States in 2016 and its availability in a generic form. Payers have indeed realized meaningful savings, but it took 2 years for the prices of generic imatinib to decline substantially.

OBJECTIVE: To quantify the cost-savings for a US health plan from the passive substitution of generic imatinib and the impact of step-edit therapy with the use of generic imatinib before coverage of a second-generation TKI.

METHODS: We updated the previously published model utilizing hypothetical 1-million-member commercial and Medicare plans to include current TKI use and pricing combined with recent epidemiologic data. Regression models were used to project utilization to 5 years after the loss of imatinib’s patent exclusivity. We compared generic imatinib costs with a scenario in which generic imatinib was not available. The impact of a step-edit therapy restriction was explored for patients with incident CML. The analyses were repeated for the entire US population based on national census data.

RESULTS: The 1-million-member commercial plan saved $0.5 million (3%) from pharmacy spending on TKIs in year 1 and $3.9 million (19%) in year 2 after the loss of patent exclusivity. The projected savings significantly increased to $7.8 million (37%), $8.3 million (39%), and $8.6 million (40%) in years 3, 4, and 5, respectively. Step-edits strategies were projected to result in small incremental savings of $0.3 million (1.5%) annually in years 3 to 5. The 1-million-member Medicare plan saved $1.7 million (3%) in year 1 and $14.1 million (19%) in year 2. The projected savings were $27.8 million (37%), $29.5 million (39%), and $30.8 million (40%), with step-edit estimated to add only $0.9 million (1.2%) annually in years 3 to 5. Generic imatinib saved US payers $2.5 billion (13% of the total spending on TKIs) in years 1 and 2. In years 3 to 5, the cumulative projected savings totaled $12.2 billion, and the savings were expected to grow to 39% as a result of passive generic imatinib substitution, with only 1.7% additional savings from step-edit restriction.

CONCLUSIONS: As a result of a lower price for generic imatinib relative to the brand-name version of the drug, substantial cost-savings to US payers over the next 3 years are expected without step-edit formulary management restrictions. Cost-saving strategies, including formulary management restrictions, should adhere to evidence-based guidelines to ensure the appropriate use of generic imatinib and all available TKIs, with the objective to maintain positive outcomes and, in turn, increase the value of patient care.

KEY WORDS: chronic myelogenous leukemia (CML), cost-savings, formulary management, generic imatinib, pharmacy spending, prior authorization, step-edits, tyrosine kinase inhibitors (TKIs)

Am Health Drug Benefits
2019;12(7):333-342

Manuscript received May 24, 2019
Accepted in final form August 19, 2019

Disclosures are at end of text

 

Chronic myelogenous leukemia (CML) is a hematologic malignancy occurring primarily in adults, with a median age of 65 years at diagnosis.1 The overall age-adjusted incidence rate of CML was approximately 2.04 per 100,000 individuals in 2016, and it is estimated that 8990 new cases of CML will be diagnosed in 2019 in the United States.1 CML is caused by a translocation of the breakpoint cluster region (BCR) gene on chromosome 22 and the Abelson (ABL) oncogene on chromosome 9, creating a shortened chromosome 22 known as the Philadelphia chromosome (Ph).2 This forms the BCR-ABL fusion gene that produces a tyrosine kinase protein (BCR-ABL oncoprotein), which causes abnormal proliferation of myeloid cells.3

The US Food and Drug Administration (FDA) approval of imatinib, the first-generation tyrosine kinase inhibitor (TKI) targeting the BCR-ABL fusion gene, dramatically changed the treatment landscape for CML and significantly improved survival outcomes for patients with this disease. Patient care has further advanced with the FDA approval of second-generation TKIs, which, along with imatinib, have prolonged survival in patients with chronic-phase CML to approach that of age-matched controls.4

Currently, 4 TKIs are FDA approved for front-line therapy of chronic-phase CML, including imatinib, dasatinib, nilotinib, and bosutinib.4-8 Ponatinib is indicated for patients with refractory disease and for a small subset of patients with T151-positive CML.9 Although imatinib is the most prescribed agent in the front-line setting, several factors must be considered when selecting the proper TKI therapy for patients with CML, including disease risk level, CML mutation type, individual TKI toxicity profile and the potential interaction with the patient’s comorbidities, speed to cytogenetic response targets, and ease of administration.10

The current National Comprehensive Cancer Network (NCCN) CML guidelines recommend that the choice of a TKI for first-line therapy be based on the patient’s disease risk level in concert with these additional factors, with all approved agents as Category 1 recommendations (indicating the highest level of evidence) for patients with low-risk disease and second-generation TKIs (ie, dasatinib, nilotinib, and bosutinib) retaining Category 1 recommendation status for intermediate- and high-risk disease.3 Notably, in the absence of treatment initiation within the chronic phase, the natural course of CML follows a triphasic progression from the indolent chronic phase to an accelerated phase, in which the disease takes on aggressive features, such as cytogenetic abnormalities, and ultimately on to a terminal blast crisis, in which blast cells proliferate uncontrollably.4 Patients in the terminal blast crisis phase of CML may require advanced high-cost care, including stem-cell transplant for eligible patients.4

Since the loss of patent exclusivity and the entry of a generic version of imatinib in the United States in February 2016, US payers have started realizing cost-savings; however, generic prices have taken 2 years to decline substantially. A previous study estimated the projected impact of the entry of generic imatinib in the first 2 years from the perspective of a US payer based on projected prices using an Excel-based model.11 This model, which used market share and pricing projections before imatinib’s loss of exclusivity, estimated that the 2-year cost-savings would be $6.8 million (28.8%) in a commercial plan and $22.9 million (28.8%) in a Medicare plan. The adoption of step-therapy formulary management was expected to lower incremental TKI spending nominally, by 1.1% and 2.2% for the commercial and Medicare plans, respectively.

In the 2 years since imatinib’s loss of patent exclusivity, real-world market share and pricing information have become available, and modeling assumptions should be updated to reflect this reality. In the present analysis, we updated the model to evaluate the realized and projected impact of generic imatinib and the impact of step-edit formulary management on cost-savings over a 5-year period from imatinib’s loss of exclusivity.

Furthermore, we examined and quantified, from a US health plan perspective, the cost-savings from the substitution of brand-name imatinib with generic imatinib relative to the potential savings from requiring step therapy through generic imatinib before a second-generation TKI. We assessed these savings for a hypothetical 1-million-member commercial plan and a 1-million-member Medicare plan and at a US national level for all commercially and Medicare-insured patients.

Methods

We updated the previously published model exploring the impact of brand-name imatinib’s loss of patent exclusivity and the formulary management of TKIs to reflect the current real-world use and pricing of TKIs.11 The Excel-based model represented the pharmacy budget of hypothetical 1-million-member commercial or Medicare plans for the TKIs that are indicated for the treatment of CML (ie, imatinib, dasatinib, and nilotinib).

The cost-savings were calculated over a 5-year period as the realized savings accrued by payers since imatinib’s loss of patent exclusivity to the most recent data available at that time (February 2016-September 2018) and the projected future savings (2018-2021). Using the same methods, we repeated the analyses for the entire commercially and Medicare-covered population in the United States to estimate the overall pharmacy cost-savings for TKIs at a national level.

Market Share

We fitted logarithmic regression models to historical market share data to project the use of brand-name TKIs and generic imatinib up to 5 years after imatinib’s loss of patent exclusivity (Figure 1).10 Similar to the original model, TKIs with < 5% market share were not considered, which included ponatinib and bosutinib. Market share was calculated based on observed trends and did not include the potential changes among second-generation TKIs that might have occurred in the absence of generic imatinib’s entry into the market after the loss of exclusivity of brand-name imatinib.

Table

Costs

We used historical wholesale acquisition cost pricing for the period between January 2016 and September 2018.12 The daily drug costs in September 2018 for brand-name imatinib, generic imatinib, dasatinib, and nilotinib were $337, $12, $430, and $455, respectively.12 The daily drug costs assume standard first-line CML starting doses per the respective drug’s prescribing information.5-7 Future drug prices were assumed to remain constant from September 2018 to the end of the model’s time horizon (ie, February 2021); the lowest price among generic imatinib manufacturers for the 400-mg dose was used.

The default patient copay values were based on the average patient out-of-pocket costs for dispensed claims for commercial and Medicare members. The default copayments were assumed to be $25 per generic imatinib prescription, $110 per brand-name imatinib prescription, $80 per brand-name dasatinib prescription, and $78 per brand-name nilotinib prescription.13 The maximum patient out-of-pocket costs were limited to $7350 annually for an individual commercial plan member and to $5100 annually for a Medicare plan member.14,15 The model assumed that payers pay the list wholesale acquisition cost for all brand-name TKIs, including brand-name imatinib. All pricing data included in the model were based on published sources using proprietary sources.12

Model Population

Commercial and Medicare plan analyses assumed a hypothetical 1-million-member population each. The population of the US national level analyses included 216,203,000 commercial insurance enrollees and 53,372,000 Medicare enrollees (US census data).16 We analyzed the prevalence based on claims data in the Truven MarketScan database and estimated the size of the patient population who received a TKI by applying these age-stratified (18-64 years; ≥65 years) prevalence rates to the hypothetical plan. Data on the incidence and prevalence of CML were taken from the Surveillance, Epidemiology, and End Results Cancer Statistics Review, and all incident cases of CML were assumed to be managed with a TKI.1

In our hypothetical commercial and Medicare 1-million-member plans, the numbers of patients with CML receiving treatment with TKIs were estimated to be 96 and 289, respectively, with 11 (11.6%) patients in the commercial plan and 74 (25.5%) patients in the Medicare plan estimated to have newly diagnosed CML.

We assumed the prevalence of CML to be constant over time, and the standard TKI dose and frequency were based on the prescribing information for the treatment of newly diagnosed patients with Ph-positive chronic-phase CML. Patients were assumed to continue using therapy and to be fully adherent to the therapy during the entire year. The prevalence of TKI treatment that is indicated for use in patients with CML was consistent with the previously published model (Table).10

table

Formulary Management: Step-Edit Therapy

We assumed that policies requiring step-edit therapy would only affect patients who are treatment-naïve and that health plans would not switch successfully managed patients from a second-generation TKI to generic imatinib. The potential impact of implementing formulary restrictions in the TKI class in the next 3 years was explored by applying a step-edit therapy to require a trial of generic imatinib before the use of second-generation TKIs for patients with incident CML.

The administrative cost for the health plans was set at $20 for prior authorization.17 The time required for completing prior authorizations and the cost burden imposed on prescriber practices and patients to get access to necessary therapies were not included in the analysis. The proportion of prior authorizations approved was set at 60% for commercial plans and 84% for Medicare plans based on the weighted average of dasatinib and nilotinib prior authorization approvals in commercial and Medicare health plans claims analyses from October 2017 to March 2018.18

Results

Commercial Plan of 1 Million Members

In our new analysis, a commercial plan with 1 million members was estimated to save $0.5 million (3%) of the TKI pharmacy budget for CML in the first year and $3.9 million (19%) in the second year after imatinib’s loss of patent exclusivity (Figure 2).

figure

The projected savings from generic imatinib entry alone (ie, without step-edit formulary management) increased significantly to $7.8 million (37%), $8.3 million (39%), and $8.6 million (40%) in the third, fourth, and fifth years, respectively, after the loss of patent exclusivity (Figure 2), and continued to result in significantly greater projected savings than the initiation of step-edit therapy during that same time period (Figure 3). Initiating a step-edit therapy for treatment-naïve patients with CML in the commercial plan was associated with limited projected incremental savings of $0.3 million (1.5%) annually over the next 3 years (years 3, 4, and 5).

figure

Medicare Plan of 1 Million Members

We estimated that a Medicare plan with 1 million members saved $1.7 million (2.5%) of the TKI pharmacy budget for CML in the first year and $14.1 million (19%) in the second year after imatinib’s loss of patent exclusivity (Figure 2). The projected cost-savings from generic imatinib entry alone (without step-edit formulary management) significantly increased to $27.8 million (37%), $29.5 million (39%), and $30.8 million (40%) in the third, fourth, and fifth years, respectively, after the loss of exclusivity (Figure 2).

Initiating a step-edit therapy for newly diagnosed patients with CML in the Medicare plan was again associated with projected small incremental savings of $0.9 million (1.2%) annually over the next 3 years (years 3, 4, and 5).

Overall Spending and Savings

We calculated that in the first 2 years of generic imatinib’s entry, US payers saved $2.5 billion—12.6% of the total spending on this drug class. In the next 3 years, the estimated savings with generic imatinib entry and without formulary management strategies are expected to grow to 38.5%, resulting in additional savings of $3.8 billion, $4.1 billion, and $4.2 billion in years 3, 4, and 5, respectively, for a cumulative savings of $12.2 billion (rounded numbers).

Furthermore, over the 5-year period, the estimated savings are expected to total $15 billion in the absence of step-edit formulary management. In fact, nearly all potential savings for this drug class over the next 3 years (years 3, 4, and 5 from imatinib’s loss of exclusivity) come from generic imatinib’s market entry alone, with limited additional savings from step-therapy formulary management estimated to be 1.7% (or $176 million) annually.

Discussion

In 2015, a hypothetical model that estimated the economic impact of the availability of generic imatinib for payers in the United States forecasted that the loss of patent exclusivity would result in >$6 million in savings for a 1-million-member commercial plan during a 2-year period, or 28.8% of the total pharmacy spending on TKIs for the treatment of CML.10 The forecasted savings were even greater in the 1-million-member Medicare plan ($22.9 million, or 28.8%) as a result of higher TKI utilization rates.10 This current update to the original model, using real-world market share and pricing data, reveals that the savings for commercial and Medicare plans were slower to accumulate within the first 2 years after loss of patent exclusivity than was originally forecasted (a total of $4.4 million and $15.8 million, respectively).

The reduction in plan savings during the first 2 years is attributed to higher-than-anticipated pricing for generic imatinib, but its price has steadily decreased and continues to decline. Furthermore, continued price reductions for generic imatinib resulting from competition from additional market entrants have progressed to a 96% price discount from the brand-name drug at the time of this current analysis. This large discount is expected to result in substantial cost-savings to US payers that are expected to materialize over the next 3 years, independent of step-edit formulary management strategies.

Based on the current projections for a 1-million-member commercial plan, savings from generic imatinib’s entry (and without step-edit formulary management) are estimated to significantly increase to $7.8 million (37%), $8.3 million (39%), and $8.6 million (40%) in the third, fourth, and fifth years, respectively, after the loss of patent exclusivity. For a 1-million-member Medicare plan, the projected savings from generic imatinib’s entry (and without step-edit formulary management) are now estimated to significantly increase to $27.8 million (37%), $29.5 million (39%), and $30.8 million (40%), respectively, in the third, fourth, and fifth years after the loss of patent exclusivity. Similar to the initial analysis by Bloudek and colleagues,11 the projected incremental savings through the use of step-therapy formulary management restrictions is associated with a limited incremental savings of $0.3 million (1.2%) for commercial and $0.9 million (1.5%) for Medicare plans annually over the next 3 years (years 3, 4, and 5).

Of note, the limited savings projected from step-therapy formulary management included a conservative $20 administrative cost per prior authorization for health plans. The actual savings may be less when considering that the time and resource burdens for prescriber practices and patients are also substantial. To complete prior authorizations for necessary therapies, it is estimated that prescriber practices average almost 20 hours weekly between physician, nursing, and clerical hours.19 This prior authorization administrative burden equates to $2161 to $3430 annually per physician in a primary care setting.20

Compared with step-therapy formulary management, there may be greater opportunities to manage the treatment costs for CML and to make patient outcomes better through initiatives that aim to improve patient adherence; meet guideline recommendations for molecular monitoring; identify at-risk populations, pediatric patients, and elderly patients who are not eligible for stem-cell transplant; and ultimately, to support optimal treatment selection.

In fact, overly restrictive formularies may be associated with unintended prescribing patterns that do not align with NCCN recommendations, which note that based on individual TKI toxicity profiles, second-generation TKIs dasatinib or bosutinib may be preferred for patients with heart disease, arrhythmias, pancreatitis, and/or hyperglycemia, whereas nilotinib or bosutinib may be preferred for patients with a history of lung disease or those who are at risk for pleural effusion.3,21 Notably, in a recent, large retrospective analysis of 1120 patients with CML utilizing 2 US claims databases, up to 57% of patients had comorbidities relevant to the selection of TKI for the treatment of CML.21

Furthermore, regular molecular monitoring for disease response to treatment (or lack thereof) has been associated with reduced disease progression, presumably by assisting in the timely detection of primary or secondary resistance to first-line TKI therapy in patients with chronic-phase CML.22 The NCCN guidelines recommend that molecular testing (ie, a quantitative reverse transcription polymerase chain reaction) be performed every 3 months in patients who start TKI therapy to evaluate potential resistance to their current TKI therapy, and, if confirmed, a switch in TKI therapy can be initiated to prevent disease progression to an accelerated phase of CML or to blast crisis.3

However, a retrospective review of more than 1200 patients with CML across 2 insurance databases showed that less than 30% of patients had molecular monitoring at least 3 times during the first year after diagnosis.23 Furthermore, in an insurance database review, patients with CML who did not have the recommended monitoring had poor outcomes, increased hospitalizations, and greater total treatment costs than patients who received recommended monitoring.23,24

In addition, in an economic model, the total healthcare costs (including those associated with detected progression and molecular monitoring at 3 tests annually) were $1142 per patient per year (PPPY) for patients with monitoring and $6982 for patients without monitoring.21 This equates to a total cost-savings of $584,005 with full adherence to monitoring versus no monitoring in a 100-patient hypothetical cohort.21 In addition, the ability to detect resistance to a TKI early, before disease progression, facilitates switching to second-line therapy within the chronic phase and potentially avoids the costly sequelae and the poor patient outcomes that occur with more advanced CML disease.

As previously noted, without effective treatment in the chronic phase of CML, the disease will progress to the more aggressive accelerated phase and finally to blast crisis. Poor adherence to TKI therapy in the chronic phase has been noted as one of the main drivers for loss of response to treatment and subsequent progression to the more costly and potentially fatal accelerated phase and blast crisis in CML.25-27

The progression of CML from the chronic phase is associated with a significant cost increase. In a claims analysis of 587 patients with CML that included Medicare beneficiaries, the annual per-patient total healthcare cost was more than 6 times higher in patients with disease progression from chronic-phase CML than in patients without disease progression ($320,635 PPPY vs $49,710 PPPY; P < .001) after adjusting for patient age, sex, geographic region, health plan type, comorbidities, and follow-up duration.22

Limitations

Our updated model was developed for illustrative purposes to explore the impact of generic imatinib and step-edit formulary management on pharmacy spending for the most frequently used TKIs for the treatment of CML in patients with commercial or Medicare plans. The limitations of this study are inherent in any economic modeling analysis in that a variety of assumptions regarding the model population, treatment patterns, and costs (as previously noted) were involved. Furthermore, only TKI treatments for CML with ≥5% market share were included in this model, and market share projections using a logarithmic regression model may differ from the actual future market shares.

It took 2 years for the price of generic imatinib to decline substantially; the lower generic drug prices in year 3 may have a relatively larger impact on the market share than anticipated. However, our model aligned well with the observed trends, and because the realized cost-savings from generic imatinib entry have already materialized, our model projects a stabilizing shift in market share in the future.

All drug pricing data included in the model were based on published sources and did not represent actual pricing to any party; the model did not consider potential price increases among brand-name drugs that might have happened in the absence of generic imatinib entry into the market. Patients were assumed to continue therapy and to be fully adherent to the prescribed therapy during the entire year; actual adherence rates of less than 100% would result in pharmacy savings for the plan.

Finally, guidelines do not imply comparable efficacy, safety, or interchangeability among the TKIs. Comparisons of costs under different scenarios are beyond the scope of this study.

Conclusions

In the United States, payers have realized considerable savings in the first 2 years since brand-name imatinib’s loss of patent exclusivity. Because the price of generic imatinib has steadily declined, it is estimated that the cost-savings to US payers will increase substantially over the next 3 years, independent of formulary management consisting of step-edit therapy with the use of generic imatinib.

Formulary management restricting access to second-generation TKIs may result in minimal additional savings. Initiatives that aim to improve patient adherence, meet guideline recommendations for molecular monitoring, and support optimal treatment selection would afford all stakeholders the opportunity to manage the costs of patient care by also improving patient outcomes.

Acknowledgment

The authors thank Scott Keating, MS, of Bristol-Myers Squibb, for assisting in the preparation of this manuscript.

Funding Source

Funding for this study was provided by Bristol-Myers Squibb.

Author Disclosure Statement

Dr Campbell and Dr Blazer are employees of Xcenda, which received funding for this study; Dr Bloudek is a consultant to Bristol-Myers Squibb; Mr Brokars and Dr Makenbaeva are employees of, and own stock in, Bristol-Myers Squibb.

Dr Campbell is Assistant Director, Scientific Consulting, and Dr Blazer is Associate Director, Scientific Consulting, Xcenda, Palm Harbor, FL; Dr Bloudek is President, Curta, Seattle, WA; Mr Brokars is Health Outcomes Research Director, and Dr Makenbaeva is Group Director, Worldwide Health Economics and Outcomes Research Communications Lead, Bristol-Myers Squibb, Princeton, NJ.

Part of this analysis was presented in abstract/poster form at the 2018 American Society of Hematology annual meeting in San Diego, CA.

References

  1. Howlader N, Noone AM, Krapcho M, et al. SEER Cancer Statistics Review 1975-2016. Bethesda, MD: National Cancer Institute; Updated April 2019. https://seer.cancer.gov/csr/1975_2016/results_merged/topic_med_age.pdf. Accessed October 4, 2019.
  2. Era T. Bcr-Abl is a “molecular switch” for the decision for growth and differentiation in hematopoietic stem cells. Int J Hematol. 2002;76:35-43.
  3. National Comprehensive Cancer Network. NCCN Clinical Practice Guidelines in Oncology (NCCN Guidelines): Chronic Myeloid Leukemia. Version 1.2020. August 26, 2019. www.nccn.org/professionals/physician_gls/pdf/cml.pdf. Accessed January 31, 2019.
  4. Kennedy JA, Hobbs G. Tyrosine kinase inhibitors in the treatment of chronic-phase CML: strategies for frontline decision-making. Curr Hematol Malig Rep. 2018;13:202-211.
  5. Gleevec (imatinib mesylate) tablets, for oral use [prescribing information]. East Hanover, NJ: Novartis Pharmaceuticals Corporation; July 2018.
  6. Sprycel (dasatinib) tablets, for oral use [prescribing information]. Princeton, NJ: Bristol-Myers Squibb; December 2018.
  7. Tasigna (nilotinib) capsules, for oral use [prescribing information]. East Hanover, NJ: Novartis Pharmaceuticals Corporation; July 2018.
  8. Bosulif (bosutinib) tablets, for oral use [prescribing information]. New York, NY: Pfizer; August 2019.
  9. Iclusig (ponatinib) tablets, for oral use [prescribing information]. Cambridge, MA: Takeda Pharmaceuticals; October 2018.
  10. IQVIA. Dynamic claims data. April 2018. https://websolutions.imshealth.com. Accessed September 25, 2018. (Requires subscription to access.)
  11. Bloudek LM, Makenbaeva D, Eaddy M. Anticipated impact of generic imatinib market entry on the costs of tyrosine kinase inhibitors. Am Health Drug Benefits. 2015;8(9):472-480.
  12. AnalySource Online. Syracuse, NY: DMD America. www.analysource.com/. Accessed March 27, 2018. (Requires subscription to access.)
  13. Symphony Health Solutions. Dynamic Claims data. November 2013. Unpublished. https://symphonyhealth.prahs.com/client-login/. Accessed November 20, 2018. (Requires subscription to access.)
  14. Q1Medicare.com. 2020-2006 Medicare Part D Standard Benefit Model Plan parameters. https://q1medicare.com/PartD-The-MedicarePartDOutlookAll Years.php. Accessed September 26, 2019.
  15. Federal Register. Patient Protection and Affordable Care Act; HHS Notice of Benefit and Payment Parameters for 2018; Amendments to Special Enrollment Periods and the Consumer Operated and Oriented Plan Program. December 22, 2016. www.federalregister.gov/d/2016-30433/p-846. Accessed October 16, 2019.
  16. Berchick ER, Hood E, Barnett JC. Health Insurance Coverage in the United States: 2017. Current Population Reports P60-264; September 2018. www.census.gov/content/dam/Census/library/publications/2018/demo/p60-264.pdf. Accessed October 7, 2019.
  17. Balkrishnan R, Bhosle MJ, Fleischer AB Jr, Feldman SR. Prior authorization for topical psoriasis treatments: is it cost-beneficial for managed care? J Dermatolog Treat. 2010;21:178-184.
  18. Symphony Health Solutions. Patient transactional data. April 2018 (treatment-naïve patients). https://symphonyhealth.prahs.com/client-login. Accessed November 20, 2018. (Requires subscription to access.)
  19. Casalino LP, Nicholson S, Gans DN, et al. What does it cost physician practices to interact with health insurance plans? Health Aff (Millwood). 2009;28(suppl 1):w533-w543.
  20. Morley CP, Badolato DJ, Hickner J, Epling JW. The impact of prior authorization requirements on primary care physicians’ offices: report of two parallel network studies. J Am Board Fam Med. 2013;26:93-95.
  21. Jabbour EJ, You M, Le TK, et al. Prevalence of comorbidities relevant to the choice of second-generation (2-G) tyrosine kinase inhibitor (TKI) for the treatment of chronic myeloid leukemia (CML) in the United States using real-world claims databases. Blood. 2018;132(suppl 1):4265.
  22. Jabbour EJ, Siegartel LR, Lin J, et al. Economic value of regular monitoring of response to treatment among US patients with chronic myeloid leukemia based on an economic model. J Med Econ. 2018;21:1036-1040.
  23. Guérin A, Chen L, Dea K, et al. Association between regular molecular monitoring and tyrosine kinase inhibitor therapy adherence in chronic myelogenous leukemia in the chronic phase. Curr Med Res Opin. 2014;30:1345-1352.
  24. Guérin A, Chen L, Dea K, et al. Economic benefits of adequate molecular monitoring in patients with chronic myelogenous leukemia. J Med Econ. 2014;17:89-98.
  25. Jabbour EJ, Lin J, Siegartel LR, et al. Evaluation of healthcare resource utilization and incremental economic burden of patients with chronic myeloid leukemia after disease progression to blast phase. J Med Econ. 2017;20:1007-1012.
  26. Marin D, Bazeos A, Mahon FX, et al. Adherence is the critical factor for achieving molecular responses in patients with chronic myeloid leukemia who achieve complete cytogenetic responses on imatinib. J Clin Oncol. 2010;28:2381-2388.
  27. Ibrahim AR, Eliasson L, Apperley JF, et al. Poor adherence is the main reason for loss of CCyR and imatinib failure for chronic myeloid leukemia patients on long-term therapy. Blood. 2011;117:3733-3736. Erratum in: Blood. 2012;120:4903.

 

Stakeholder Perspective
The Challenges in Budgeting Potential Savings with the Launch of Generic Drugs
James T. Kenney, RPh, MBA

Author Affiliations

The approval of imatinib (Gleevec) in May 2001 was a clinical breakthrough and provided an opportunity for patients with chronic myelogenous leukemia (CML) who responded to the drug to achieve a cure. Managed care plans then looked at this cancer type as a chronic disease that required the long-term management of patients. The $26,000 annual price tag for the branded imatinib was concerning at the time, because it represented a very high-cost oral therapy in the oncology space that had a significant budget impact on health plans.

Despite its high cost, all health plans covered Gleevec, with utilization management targeting the US Food and Drug Administration (FDA)’s approved indication for CML, and additional indications were added per the National Comprehensive Cancer Network guidelines or as approved by the FDA.

DRUGMAKERS: The launch of the generic version of imatinib on February 1, 2016, was also met with great excitement, because the cost of the branded version had risen to approximately $120,000 annually by then. Sun Pharmaceuticals, the manufacturer of generic imatinib, priced the generic agent within 10% of the brand-name drug’s price, and imatinib became the first generic drug to launch with a 6-month exclusivity period per the FDA’s rules. This pricing was consistent with typical generic drug pricing in the market; a first-to-launch company recoups the largest share of its drug development and marketing costs in the first 6 to 12 months after a drug’s launch.

In their article, Campbell and colleagues have highlighted the challenges in budgeting potential savings with the launch of generic drugs to the market.1 Several factors contribute to the speed of decline in the price of generics, including the size of the market, number of generic drug competitors after the initial exclusivity period, brand-name drug company contracting after the generic drug launch, and the willingness of patients and providers to accept the switch to a generic option.

PATIENTS/PHYSICIANS: The use of closed formularies and mandatory generic substitution in many states helps to drive generic drug uptake, as well as lower out-of-pocket costs for patients; however, physicians can overrule the switch by requiring the branded version for a patient. In some benefit designs, the patient pays the cost difference between the brand-name drug and the generic, and in others, the patients may pay the full price for the drug, if the plan no longer covers the brand-name agent. If a patient cannot tolerate the generic version of a drug, an appeal can be filed to gain access to the brand-name version. If the appeal is granted, the brand-name drug is usually covered at the highest copay or coinsurance tier.

Some confusion in the market can occur at the pharmacy level, because existing prescriptions may continue to be filled with the brand-name agent until a new prescription is written after a generic drug launch. Again, this is typically covered by state interchange laws regarding the use of generic drugs. Many of these drugs were also dispensed through specialty pharmacies that might have contracted with Novartis, the manufacturer of brand-name imatinib, to provide the brand-name drug in lieu of the generic drug, provided that the cost was comparable with the generic drug on the market, and that health plans were not mandating the conversion of patients to the generic drug option.

PAYERS: As discussed in the article by Campbell and colleagues, the step edit for treatment-naïve patients with CML makes sense for health plans; however, some clinicians will argue that the second-generation tyrosine kinase inhibitors (TKIs) may be better choices for this patient population. I agree with the assumption that plans would not attempt to forcibly switch existing patients with CML who are receiving other TKIs to imatinib.

The administrative cost of the prior authorization process is low and immaterial in comparison to the potential cost-savings with generic imatinib. The bulk of the savings with generics is achieved through the declining cost of the generic drugs, as more competitors launch drugs into the market, which currently stands at 11 drug companies with approved ANDAs (Abbreviated New Drug Applications) for imatinib per the FDA’s website.

The most concerning finding of this research is the very low rate of molecular monitoring of only 30% in a sample of more than 1200 patients.2 As expected, patients who were not monitored had worse outcomes. Cytogenetic testing identifies patients who are resistant to or are simply not responding to the current TKI treatment and affords the provider the opportunity to change the medication. The progression to the accelerated phase or blast crisis of CML can be fatal and is associated with a significant cost burden to the patient and the health plans.

My personal experience in this area consists of a contract with Bristol-Myers Squibb that focused on promoting routine cytogenetic testing of patients every 3 months to detect disease progression in patients with CML. A cooperative effort led to much higher rates (60%-80%) of testing in a commercial patient population.

Generic drugs routinely provide significant savings to health plans if competition is present in the market. Plans need to model the impact of significant generic drug launches, because this may influence their budgets and potential premium rates for subsequent annual insurance filings. Utilization management can be a useful tool in driving the uptake of generic drugs; however, clinical differences among drugs may limit a drug’s success in the market. Plans are encouraged to promote routine molecular testing of patients to promote best-in-class care and improved outcomes in the patient population with CML.

  1. Campbell D, Blazer M, Bloudek L, et al. Realized and projected cost-savings from the introduction of generic imatinib through formulary management in patients with chronic myelogenous leukemia. Am Health Drug Benefits. 2019;12(7):333-342.
  2. Guérin A, Chen L, Dea K, et al. Association between regular molecular monitoring and tyrosine kinase inhibitor therapy adherence in chronic myelogenous leukemia in the chronic phase. Curr Med Res Opin. 2014;30:1345-1352.

James T. Kenney, RPh, MBA, is President, JTKENNEY, LLC, Waltham, MA.

Related Items
Mental Health Conditions and Hospitalizations for Ambulatory Care Sensitive Conditions Among Veterans with Diabetes
May 2020 Vol 13, No 2 published on May 20, 2020 in Clinical, Original Research
Expenditure, Utilization, and Cost of Specialty Drugs for Multiple Sclerosis in the US Medicaid Population, 2008-2018
May 2020 Vol 13, No 2 published on May 20, 2020 in Business, Original Research
Association Between Formulary Coverage and Use of Abuse-Deterrent Prescription Opioids, Risk for Abuse or Overdose, and Associated Healthcare Resource Utilization
Allison Petrilla, MPH, Elizabeth Marrett, MPH, Xian Shen, PhD, MS, BS, Winghan Jacqueline Kwong, PharmD, PhD, Edmund Pezalla, MD, MPH
February 2020 Vol 13, No 1 published on February 18, 2020 in Business, Original Research
Medication Use Before and After Hospitalization for Chronic Obstructive Pulmonary Disease in a Cohort of Elderly Patients with a Medicare Advantage Plan
Qingqing Xu, MS, Sarah S. Laxa, PharmD, Omar Serna, PharmD, BCACP, Sujit S. Sansgiry, MS, PhD
February 2020 Vol 13, No 1 published on February 18, 2020 in Clinical, Original Research
Outcomes-Based Contracting for Disease-Modifying Therapies in Multiple Sclerosis: Necessary Conditions for Paradigm Adoption
Cori Gray, PharmD, James T. Kenney, RPh, MBA
December 2019 Vol 12, No 8 published on December 27, 2019 in Business, Original Article
Last modified: June 1, 2020
Copyright © Engage Healthcare Communications, LLC. All rights reserved.