Genentech Inc.'s launched three major drugs in nine months, two in therapeutic areas new to it and the third in a new drug class. The latter, Avastin, is an oncology drug which stifles growth of tumors by cutting off their blood supply. Sales have exceeded expectations.The very high cost isn't likely deter use--even as payers scrutinize oncology costs more seriously--because of the solid trial data and political sensitivities inherent in rationing drugs for terminally ill patients.
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The New Oncology Marketplace
New Medicare reimbursement, if implemented as is, will disrupt the close-knit oncology marketplace, Expensive new drugs are relatively immune to discounting pressures that form the basis of the reimbursement formula. Nevertheless, infrastructure changes wrought by the squeeze on oncologists' margins will impact the relationship between manufacturers and physicians.
As Specialty Pharmacy Evolves, Biotech Companies Stay Tuned
As biotech products ripen, manufacturers facing the prospect of launching complex, expensive drugs are turning to specialty pharmacy providers for help. A new breed of business, they provide clinical and logistical support. The recent entry of PBMs into the specialty pharmacy arena, along with new Medicare rules, is likely to accelerate pricing pressure on manufacturers and affect their relationships with distributors, payers, and providers.
Managed Care Tackles Biotech Blockbusters
Manufacturers in the past haven't paid much heed to health plans' half-hearted efforts to reign in biotech drug spending. They figure if the drug is good enough, payers have to cover it. But health plans are for the first time serious about managing specialty pharma spending. Manufacturers should take heed because the impact on their revenues and marketing strategies could be significant.