Filling the Drug Shortfall Gap, Predicting Demand, and Saving On Medications

In this week’s Innovation Partners BioBlog, we look at several top stories from the pharmaceutical industry. Merck is testing machine learning to predict demand, a move that is expected to prevent wasteful stockpiling and expired drugs. Pfizer fills the gap left by Teva’s discontinuation of an important cancer-fighting drug often used for children’s cancers. Several reports examine the impact of the House Speaker Pelosi’s proposal to lower the cost of drugs and its potential impact on the pharmaceutical industry. Read more for the top stories in this week’s Innovation Partners BioBlog.

Merck and the machine: German pharma tests real-time platform to forestall drug shortages

To counteract periodic drug shortages, German pharmaceutical company Merck is testing machine learning for global forecasting. Machine learning uses data to help computers “learn” and make reasonable, logical predictions based on massive amounts of data. Drugmakers typically stockpile medications in anticipation of peak demand but this is inefficient and often leads to expired medications. Merck’s forecasting to date has been 85% accurate using the new system. TraceLink is developing the pilot platform specifically for Merck KGaA’s immuno-oncology business.
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Industry Voices—Trump’s ‘shoppable’ prices order could bring significant overhaul

The administration hopes that the new executive order signed by President Trump ushers in an era of consumer choice and price comparison in medicine. The new executive order mandates that healthcare providers publish the cost of medical procedures before consumers receive them. Traditionally, consumers have received bills only after procedures are complete, leading to surprise bills and ‘sticker shock’ at the costs of services. The new order, if enforced, will ensure that consumers know the price charged, what their insurance pays, and what, if any, out of pocket costs they will incur.
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CBO: Pelosi drug plan saves $345B but could reduce flow of new drugs

An analysis by the Congressional Budget Office found that House Speaker Nancy Pelosi’s drug prices plan would reduce Medicare spending by $345 billion over a seven-year period but could impact the number of new drugs potentially entering the market. The bill would give Medicare the power to negotiate lower drug prices, which would save money on Medicare Part D. Negotiated Medicare drug prices would also be required to be offered to commercial plans. The plan came about to force companies to offer drugs in the United States at the same prices paid by other nations. The fear is that companies might pull out of the U.S. market if prices drop.
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Part D catastrophic threshold to spike in 2020, hiking out-of-pocket costs: KFF report

Medicare Part D beneficiaries may see an increase in their out of pocket costs next year before they hit the catastrophic threshold. The Kaiser Family Foundation looked at how policy changes might impact Medicare Part D and found that the catastrophic threshold for 2020 will rise from $5,100 to $6,350. This represents a 25% increase. Beneficiaries who take only brand-name drugs will pay for a quarter of that increase out of their pockets, while the rest will be covered by drugmaker discounts. Beneficiaries who take only generic drugs will pay the entire increase out of pocket.
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Pfizer scrambles to fill void after Teva stops making chemo drug often given to children

Pfizer is trying to fill the gap created when Teva Pharmaceuticals discontinued the manufacturing of vincristine, a drug often used to treat children with brain tumors, leukemia, and lymphoma. Vincristine is so widely used that the shortage is affecting both patients and clinical trials. Teva claims that its decision to leave the market was not the cause of the shortage. It said that based on data from 2017, the company found its share of the market was never more than 15% and was a little as 3% per month on average this year.
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Expanding biosimilars market holds potential for significant savings to state Medicaid programs

A recent study from the Pacific Research Institute found that every state would receive significant savings in its Medicare programs if it expanded the use of biosimilars instead of the more expensive biologics. Biologics have no meaningful difference in terms of safety or effectiveness compared to its originator biologic medication. Generic medications, on the other hand, are chemically identical versions of a branded medication. Biosimilars currently save the healthcare system $240.4 million. Of these savings, 19.8% is realized by state Medicaid programs and 56.9% by the commercial market.
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