Washington Editor

NEW YORK - Reimbursement pressures are a reality, and those in the drug development space are becoming increasingly aware of the need to proactively address cost-effectiveness questions surrounding new therapies.

An event held here Wednesday, hosted by the investment firm Robert W. Baird & Co., highlighted the issue of access, especially as it relates to many new cancer drugs. The latest wave of products, targeted therapies that represent advances in extending patient survival, carry hefty price tags, so movements toward evidence-based coverage demand attention.

"This debate on the economics of cancer care has to be embraced by the pharmaceutical and biotech industries," said Christopher Raymond, Baird's senior biotech analyst, "so that it doesn't gravitate toward the easy criticism of drug companies."

Such condemnations, of course, center on drug prices, a backlash against drug companies because "they have a name and a face," he told BioWorld Today. "Rather than fixing a structural problem, let's just criticize high-priced drugs."

Going forward, that kind of criticism could lead to cost controls, a red flag topic in the biotech industry. But generating pharmaco-economic data for payers and physicians could point to the value of new products, such as targeted cancer therapies, that goes beyond their price.

That sentiment was echoed by Peter Bach, a senior adviser at the Centers for Medicare and Medicaid Services, who noted that the agency bases its coverage decisions on FDA-approved indications and off-label uses found in accepted medical compendia. Such information could prove pivotal in ensuring quicker market uptake for such new products, especially concerning off-label use.

Rep. Nancy Johnson (R-Conn.) said that multiple factors must be addressed to secure quality of care and access for patients.

She indicated problems among cancer treatment centers that operate outside hospital settings, many of which are closing their doors due to rising costs, which has a ripple effect for all parties. The so-called satellite sites or community clinics treat a large majority of cancer patients, but their expenses are climbing for several reasons.

Among them, patients are having a more difficult time affording climbing co-payments, so patients often are sent to hospital settings where they are more likely to receive older, less innovative drugs.

In addition, the current Medicare reimbursement system has a six-month lag in adjusting for drug price increases, meaning community clinics essentially subsidize the government until coverage is updated.

Restricted patient access leads to "a consolidation" of drug companies' customer base, Raymond said, shrinking the markets, which could lead to a chilling effect on innovation.

Noting that pharmaco-economic data have been regarded as a "backwater" in the past, he forecast that future clinical trial designs would incorporate pharmaco-economic endpoints into their protocols. Much in the same way that drug companies hold dialogues with the FDA around clinical findings throughout the product development process, developers now are beginning to provide cost-effectiveness information to payers in that same continuum.

In addition, predictors such as biomarkers could help drug companies target certain patient populations with better designed trials, which should help lower development costs and help physicians better match therapies with patients who are most apt to respond. That's the kind of precision to which payers would warm, said Deborah Dunsire, the president and CEO of Millennium Pharmaceuticals Inc., of Cambridge, Mass.

"The more we can demonstrate the benefit of medicine," she told BioWorld Today, "the more able the system is to choose to invest its dollars there."