U.S. Pharmaceutical Market Trends, Success Insights, and More on 2020 ASAP Meeting Agenda

Tuesday, February 11, 2020

Marsha K. Millonig, MBA, BPharm

Recently, I participated in the annual meeting of one of my favorite organizations: The American Society of Automation in Pharmacy (ASAP).

ASAP's mission is to foster understanding of the role technology plays in assisting pharmacists to promote patient safety and the proper use of medications, comply with laws and regulations, and operate their practices more efficiently. It does so by providing a forum for sharing diverse knowledge and perspectives on the modern practice of pharmacy. The group’s semiannual meetings are great because they offer 30-minute updates on current practice/technology issues over the course of two days, with plenty of time left over for business meetings and networking.

This year’s annual meeting, held January 15-17 in Amelia Island, Florida, included podium presentations across a variety of topics and an update on ASAP’s activities:

  • U.S. Pharmaceutical Market: Trends, Issues, and Outlook
  • Project IMPACT: Immunizations – New Innovations in Population Health
  • USP <800> Hazardous Drugs Status
  • Revisiting Readmissions and Transition of Care: Current and Future Priorities
  • Redefining Medication Access: Focus on Improving Adherence
  • Lessons Learned on the Road: What Pharmacists Need to Succeed
  • The Amazon-Pillpack Venture: The Latest
  • California’s Consumer Privacy Act: Requirements, Challenges and Unintended Consequences
  • How Technology Can Advance Guideline Care Delivery in the Pharmacy

Keynote: Pharmaceutical Market Trends

Bob Wahl, VP, Supplier Services and Strategy for IQVIA, provided the keynote, reviewing current U.S. pharmaceutical market trends. Of great interest was data he provided on market growth in the U.S.:

  • U.S. medicines’ total market growth reached 6.1% for the year to date ending in September 2019, exceeding growth of 5.5% in the retail and mail order segments
  • Specialty drugs are driving market growth at 11.8%, while the traditional market is growing at 1.5%
  • Oncologics, autoimmune and HIV antivirals contributed to $123 billion of the $228 billion specialty market, while oncology, autoimmune and diabetes therapies were responsible for 75% of positive absolute growth in the U.S. and dominated new product launches
  • Anticoagulants saw the greatest growth among traditional therapies, with two of the direct-acting oral anticoagulants representing #2 and #8 of the top 10 branded therapies
  • Gross-to-net reductions for brand-name drugs reached $166 billion (rebates, off-invoice discounts, copay assistance, 340B discounts, and other discounts), resulting in a medicine spending growth rate of 4.5% on a net price basis
  • The $166 billion in reductions is spread as follows:
    • $38 billion passed on to the government in Medicaid rebates
    • $33 billion passed on to the government in Medicare rebates
    • $2-$3 billion retained by PBMs, with $39-$41 billion passed on to payers
    • $2-$5 billion in manufacturer fee payments to PBMs
    • $17-$22 billion in supply chain discounts, with $3-$5 billion retained by distributors and $14-$16 passed on to dispensers
    • $27-$31 billion in manufacturer payments to Government Patient Programs
  • In spite of the news headlines, patient out-of-pocket costs for brand and generic medications fell to $9.05 per Rx, a decline of $1.23 since 2014
  • Adjusted prescription growth rate increased 3.0% for the year-to-date ending in September 2019 (normalized for a 30-day supply), with just over 22,000 prescriptions dispensed per quarter, with chain/mass merchants dispensing 30,756 and 25,360, respectively, and independents at 12,233
  • 87.7% of scripts are dispensed for unbranded generics
  • All growth seen in the retail sector is coming from commercial third-party and Medicare Part D plans
  • The proportion of patient costs paid through deductibles and coinsurance continues to grow

New Drug Launches

Interestingly, U.S. new product launches continue their upward trend with 59 for 2018, which included 28 orphan drugs. Nine of the top 10 launches were specialty drugs. Late-stage pipeline growth is also being driven by specialty and niche therapies across a range of diseases.

Generic drug approvals (ANDAs) have reached record highs, but withdrawals are also increasing. Many withdrawals occur if a manufacturer is not one of the first three to market with a generic. The FDA announced it will be reprioritizing how it reviews generic drug applications. The agency will initiate priority review of an ANDA only if the drug product relates to:

  1. drug shortage
  2. public health emergency
  3. if there are not more than three approved drug products (including the Reference Listed Drug)

Applicants can still request priority review for any of the prioritization factors, according to the FDA’s January 2020 newsletter. Losses of exclusivity are expected to be 46% greater over the next 5 years than what was seen in 2013-2018.

Pain Meds

The pain medication category has also been declining after peaking in 2011 at 246 billion morphine milligram equivalents (MMEs) compared to 141 billion MMEs in 2018, a 43% difference. Use is expected to decline by one-third to one-half over the next 5 years. The current attention on the opioid crisis was reflected in ASAP’s Annual Report. In 2020, ASAP updated its Prescription Drug Monitoring Program (PDMP) standard (last updated in 2016), and the Office of the National Coordinator for Health Information Technology (ONC) offered to map the ASAP standard to HL7’s FHIR. ASAP also sent letters about the PDMP Reporting Standard to two Congressional committees in response to the Comprehensive Addiction and Recovery Act and supporting the NABP PMP InterConnect for Interoperability and Data Sharing. Every state uses the ASAP PDMP Reporting Standard, and it is recommended by Brandeis University in its Best Practice Guidelines for PDMPs.

Changing Pharmacy Landscape

Wahl noted four emerging consumerization themes to consider in this ever-changing pharmacy landscape:

  1. Expanded care in diabetes, medication therapy management (MTM), and expanded clinical reach (e.g., vaccines, point-of-care testing, travel clinics)
  2. Finding the time through pharmacy automation and medication synchronization
  3. Providing convenience through home delivery, telepharmacy, and medication synchronization
  4. Considering cost by providing information on prescription discount programs and cards

Wahl did highlight a number of pharmacy closures and the continued trend toward vertical integration and some of the opportunities and challenges that will present the pharmacy community as it tries to address consumer need and preference.

Other Topics: From Amazon to Immunizations

Such opportunities were addressed by Bruce Kneeland, reflecting on his pharmacy road trip, and Brent Fox in his program on care transitions. I had the good fortune to present on the Amazon-Pillpack Venture, and I addressed some avenues that traditional pharmacies might take to compete, including offering same-day or next-day delivery. I plan to address these topics in future blogs.

Along that line, APhA Foundation SVP Ben Bluml, BPharm, outlined components of the Project IMPACT: Immunizations program and its positive impact on immunization rates and Healthy People 2020 goals. The program is expanding, and given the growing importance of consumers getting vaccinated for flu, especially in light of the emerging novel coronavirus outbreak, this work is insightful. I plan to write about it in my next blog. Stay tuned!

Marsha K. Millonig, MBA, BPharm, is president and CEO of Catalyst Enterprises, LLC, and an Associate Fellow at the University of Minnesota College of Pharmacy’s Center for Leading Healthcare Change.

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