The Pipeline Is Full of Expensive, Innovative Therapies

The pipeline is full of expensive, but innovative therapies, and finding room in the budget to cover them continues to be a challenge, explained Jon Mahrt, MBA, president of the pharmacy benefit manager, and chief operating officer of OptumRX.

The trend over the last 7 years has been encouraging for orphan drug approvals, and another 20 are expected this year.

“…if you’re a rare disease patient, these are incredibly exciting times,” Mahrt said.

However, the high cost of these treatments remains a challenge, with some drugs costing over $2 million. These prices don’t are only the wholesale acquisition cost and don’t take into account other costs of treatment, such as supply chain logistics and procedural challenges for physicians and pharmacists, which can drive up the cost even more.

Since these drugs are potentially curative, the prices of other drugs in the portfolio need to be reduced to create room for the curative therapies to come to market, he said.

“If you look at the cost to manufacture these drugs, they're a fraction” of the wholesale acquisition cost, Mahrt said. He added that the Institute for Clinical and Economic Review analyzed unsupported price increases of drugs in 2022, and 8 of 10 drugs evaluated had unsupported pricing, meaning there was no new evidence and yet the price increased above inflation.

The report had found these increases accounted for $1.27 billion in additional costs over 1 year.¹

“So, there's plenty of money there when these drugs come to market at market prices to fund future innovation,” Mahrt said. “I think it’s…focusing on the right drug for the right patient, and that will ensure we get forward-looking innovation in the market.”

Mahrt sat down with Drug Topics at AXS24, the Asembia Specialty Pharmacy Summit, held April 28 to May 2 in Las Vegas, Nevada. Click here for more of our coverage from AXS24.

References

1. Rind DM, Agboola F, Nikitin D, et al. Unsupported price increase report: unsupported price increases occurring in 2022. December 11, 2023. Accessed April 30, 2024. https://icer.org/wp-content/uploads/2023/12/UPI_2023_Report_121123.pdf