Budget Impact Forecasts for Novel Drugs informs Utilization Management Strategies

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Pharmaceutical breakthroughs offer the promise of life-changing treatment for many patients. When payers evaluate how to add new drugs to their formularies, they must have clear insight into how many of their members are likely to benefit and at what cost. Commonwealth Medicine clinical pharmacists provide expert curation of pipeline intelligence, clinical trial analysis, and claims-based data analytics to predict the impact of new drug treatments on specific populations.

The pipeline of drugs in clinical development is broad and robust, and for many patients, it brings the promise of delivering life-changing treatments. In the United States, two recent drug approvals bring new hope to patients with sickle cell disease (SCD), a rare blood disorder with significant morbidity and mortality that disproportionally affects Black and Hispanic patients.

For decades, options for treating SCD have been limited and primarily addressed symptoms, but not the underlying disease course. Now, recent scientific breakthroughs are beginning to change the treatment paradigm for patients with SCD.

When considering how to add emerging pharmaceutical therapies to their formularies, payers must answer several key questions: How many of their members are likely to receive these treatments? What will the clinical impact be? Will the drug price accurately reflect the value realized? The challenge then is to provide targeted populations with access to advanced therapies while also implementing effective cost-control measures.

Commonwealth Medicine (CWM) clinical pharmacists have monitored the drug pipeline for more than ten years, curating a comprehensive awareness of breakthrough drugs. In the case of SCD, this includes crizanlizumab-tmca and voxelotor, which were approved to treat SCD in fall of 2019. (Table 1)

Table 1 – Clinical Literature Evaluation: Sickle Cell Disease
Drug Name Mechanism of Action Formulation FDA Approved
Adakveo® (crizanlizumab-tmca) Anti-P-selectin monoclonal antibody Intravenous Yes (≥ 16 years)
Oxbryta® (voxelotor) Hb5 polymerization inhibitor Oral Yes (≥ 12 years)

Based on the surveillance of promising clinical trials, CWM pharmacists recognized these two therapies were likely to be approved by the United States Food and Drug Administration (FDA) and predicted their uptake more than one year prior to their approval for one Medicaid plan. Based on our insight into clinical trial data and claims analysis, we predicted that 6 to 33 members per 1,000,000 would receive these new treatments.

In addition to analyzing the number of members with a medical diagnostic code for SCD, CWM pharmacists used claims data to gain insight into the clinical experience of patients (e.g., how many experience painful crisis episodes) and considered uptake factors such as current utilization of SCD medications and preference for oral vs. injectable therapy.

Using this data and predicted cost information gleaned from public sources and reference therapies, CWM pharmacists produced an annualized budget impact forecast of $0.75 to $4.20 per member per year (Table 2).

Table 2. Annualized Budget Impact
Drug Name Key Considerations for Projected Number of Members

Projected No. of Members

Annual Cost/Member

Estimated PMPY

Adakveo® (crizanilzumab-tmca)
  • Current utilization of hydroxyurea and L-glutamine
  • Members not actively using hydroxyurea either due to a prior treatment failure or because they were not candidates for the treatment (up to 57% based on clinical literature)
  • Potential preference for oral therapy (voxelotor)

6 to 11


$0.75 to $1.51

Oxbryta® (voxelotor)

17 to 33


$2.17 to $4.20

While data suggests these therapies will improve clinical outcomes, their true value is yet to be determined. Payers armed with insights tailored to their population can proactively address the clinical and financial impact through utilization programs and contracting strategies.

Because these drugs are new with uncertain cost-effectiveness, payers should consider implementing a variety of cost-containment strategies, including: (1) a supplemental rebate based on the selection of a preferred agent; and (2) outcomes-based contracts, where payment is contingent upon agreed-upon clinical outcomes.

This forecast for new medications to treat SCD is an example of how the curation of pipeline intelligence, clinical trial analysis, and claims-based data analytics combine to predict the impact of new (and often high-cost) pharmaceutical treatments in a payer’s population.