May 21, 2015
The U.S. Food and Drug Administration (FDA) announced on March 6th that it has approved Zarxio, an immune system booster for patients receiving chemotherapy that has the distinction of being the first “biosimilar” to be approved for use in the United States.
What exactly is a “biosimilar,” and why is this development important to employers? Biosimilar drugs mimic biologic drugs, which are derived from living organisms such as humans, animals, microorganisms or yeast – but they do it at a lower cost.
By way of analogy, think of the difference between a name brand drug and a generic. Name brand drugs are invented first and when they lose their patents, generics follow, usually at lower prices. Examples of name brand drugs that now have generics include Lipitor, a cholesterol fighter, and Nexium, used to treat acid reflux. While there may be minor differences in how the name brand and generic are made, the FDA requires that they have the “same active ingredient, strength, dosage form, and route of administration as the brand name product.”
A biologic and a biosimilar have roughly the same relationship, although a generic is basically a copy of a brand name drug whereas, according to the FDA, a biosimilar drug “is highly similar to an FDA-approved biological product… and has no clinically meaningful differences in terms of safety and effectiveness…”
It’s much more difficult to replicate a biologic drug than a traditional name brand medication, however. A recent Kaiser Health News article uses the analogy of trying to recreate a favorite cocktail (the generic drug) versus trying to recreate a favorite glass of wine (the biosimilar). The latter process is much more nuanced and complicated.
That is one reason why the approval of Zarxio, which is a biosimilar for Neupogen, is so significant. Another is that biosimilars, like generics, are likely to be less expensive than their biologic counterparts. Neupogen, for example, can cost more than $3,500 per year.
Pricing for Zarxio will not be announced until the drug comes to market, which hinges on the outcome of a lawsuit filed against its manufacturer, Sandoz, in a federal appeals court by Amgen, the maker of Neupogen. Zarxio is currently sold in 40 countries, but its sale in the United States is blocked at least until oral arguments are heard in the case, which are scheduled for June 3rd. Resolution could take longer.
Regardless of the outcome of this lawsuit, biosimilars are expected to have a huge impact on U.S. employers, the pharmacy benefit managers that advise them on how to manage the increasingly high cost of prescription drugs, and American consumers who now use expensive name brand biologics. Global biosimilar sales are projected to hit $17 billion to $20 billion per year by 2020. A RAND Corporation analysis estimates that introducing competing biosimilar drugs for illnesses such as cancer and rheumatoid arthritis could reduce spending on biologics in the United States by $44 billion over the next decade.
With numerous biosimilars in the pipeline awaiting FDA approval, it’s likely that we’ll soon see a number of these lower-cost drugs on the market – to the benefit of both employers who sponsor prescription drug benefits and the people who use them.
May 21, 2015
Precision medicine made it onto the public’s radar on January 20th of this year when President Obama announced during his State of the Union address that he intended to make it a priority in the coming year. Ten days later, he formally unveiled the “Precision Medicine Initiative,” putting $215 million in federal funding towards a variety of strategies intended to get away from what the Administration calls a “one size fits all” style of medicine.
The National Academy of Sciences defines “precision medicine” as “the use of genomic, epigenomic, exposure, and other data to define individual patterns of disease, potentially leading to better individual treatment.” Also known as personalized medicine, precision medicine now is used primarily for the treatment of cancer.
While cancer treatments have long varied based on the type of cancer a person has – breast, lung, colon and so on – precision medicine enables physicians to take into consideration the molecular and genetic makeup of an individual patient’s tumor. This has spawned new medications such as Herceptin trastuzumab (Herceptin) for breast cancer. Having this information also can make a profound difference in treatment decisions physicians make.
Emily Whitehead, who is featured on the whitehouse.gov website, is a great example of an individual who has benefited from precision medicine. Emily was diagnosed with leukemia at age 6, yet was declared cancer-free just 28 days later. Her treatment included a procedure in which Emily’s own white blood cells, which play a key role in immunity, were collected from her blood and altered to recognize a protein found only on the surface of leukemia cells. The cells were then infused back into Emily’s blood, where they circulated throughout her body finding and destroying her leukemia. Science magazine declared this procedure a 2013 Breakthrough of the Year.
In the future, precision medicine also will be used to treat other types of illnesses, not just cancer. In fact, any condition that has a genetic or hereditary component – including mental illnesses – could benefit from this approach.
Some experts suggest that the buzz around precision medicine is getting ahead of the science, but that remains to be seen.
Precision medicine may be the medicine of the future, but not necessarily the distant future.
Towers Watson Acquires Acclaris, Expanding Benefits Administration and Consumer-Driven, Account-Based Benefits
May 11, 2015
Towers Watson announced today that it has acquired Acclaris, a provider of software-as-a-service (SaaS)-based technology and services for consumer-driven health plan and reimbursement accounts, including health savings accounts (HSAs), health reimbursement arrangements (HRAs) and other consumer-directed accounts.
The acquisition enhances our position as a leading benefits administrator and private benefit exchange provider. By 2017, Towers Watson research shows that approximately 50% of employers could offer account-based health plans (ABHPs) as their only option – with about 20% already doing so in 2015.
Acclaris’s scalable platform offers integrated technology and services to support account-based benefits. As of March 2015, Acclaris supports 1.4 million accounts across all account-based benefit types and works with 6,000 employers, including more than 40 Fortune 500 companies.
Jim Foreman, managing director of Towers Watson’s Exchange Solutions unit had this to say:
Going forward, Towers Watson and Acclaris will enable clients of any size to offer health benefits in new and cost-effective ways. Acclaris stands out from the competition for its operational efficiency, and its scalable and configurable SaaS-based technology and service delivery.
We believe this combination will allow us to offer the end-to-end process for both traditional benefits administration and private benefit exchange solutions, and to deliver a seamless experience for our employer-clients, an exceptional experience for consumers and high-quality customer support for both.”