Specialty Drugs on the Rise

Chronic illness has become a chronic problem in the U.S. It is estimated that 133 million Americans — almost one out of every two adults, or 45 percent of the population — have at least one chronic illness.^1,2 Almost 75 percent of individuals aged 65 and older have at least one chronic illness, and about 50 percent have at least two.³ Chronic diseases are responsible for seven out of every 10 deaths in the U.S., killing more than 1.7 million Americans each year.² But, these diseases are often preventable and, now more than ever, manageable through early detection, improved diet and exercise, and treatment therapy.

In fact, one of the next great frontiers in healthcare for people, especially those who are approaching or are already in retirement, is specialty drugs. According to a recent article, these medicines are often produced biologically to treat specific complex and chronic diseases. “In recent years, scientists have begun to learn how the genes that regulate diseased cells work. And, now, usually by extracting and modifying substances from healthy cells, they are homing in on the molecular processes of these problem genes,” says Peter Keating, the article’s author.⁴

Why So Special?

What are specialty pharmaceuticals? They include biologics and other injectable and high-cost pharmaceuticals that require special preparation, handling and monitoring, such as refrigeration or protection from light. And, while they can be administered either by a physician or patient, comprehensive education, training and compliance programs are needed to ensure proper use. According to the Centers for Medicare & Medicaid Services (CMS), specialty drugs are medications that cost more than $500 for a one-month supply. In actuality, these drugs usually cost annually in the range of $6,000 to $400,000.⁵

Recently, the specialty drug category was expanded to incorporate oral medications that fit the CMS definition, which includes primarily oral oncologics and drugs with alternative and new delivery systems. According to Medco’s 2009 Drug Trend Report, specialty pharmaceuticals accounted for 12.8 percent of all pharmacy spending during 2008, an increase from 11.4 percent in 2007. And, by 2015, specialty drugs could account for 22 percent of all drug costs.^5,6

A Changing Drug Landscape

Yet, while specialty pharmaceuticals have traditionally been used to treat rare diseases, such as immune disease and hemophilia, that is changing. They are now being used for more common conditions, such as cancer, multiple sclerosis and rheumatoid arthritis. According to Medco, about one-third of new molecular entity approvals in recent years have been in the area of specialty drugs. And, the population of specialty drug users is expected to expand with new specialty treatments under development for a host of other diseases, including lupus, Alzheimer’s disease, pain management, hereditary angioedema (HAE), hepatitis C, diabetes, osteoarthritis and osteoporosis.⁵

It is estimated that cancer treatments could soon be the top category for specialty drugs. Medco projected total annual spending increases on cancer drugs between 12 percent and 14 percent in 2009, a similar growth rate for 2010 and another increase of 11 percent to 13 percent in 2011, all fueled by newly diagnosed patients. As a whole, specialty drugs are growing due to expanded indications for existing treatments and more than 800 drugs in the pipeline as of mid-2009.⁵

What’s interesting is that the route of administration for many new specialty drugs is oral versus injectable. According to Kevin O’Brien, RPh, president of Rumson Pharmacy in New Jersey, and cofounder and treasurer of the Community Specialty Pharmacy Network (CSPN), “approximately 30 percent of products in development for cancer are oral.”⁷

Drugs Pending and Approved

While numerous specialty drugs have been approved by the Food and Drug Administration (FDA) in the past few years, there are also hundreds more in the pipeline that are expected to be approved.

Cancer. With the development of better-tolerated medicines, many types of cancer can now be managed more like a chronic disease. According to the American Cancer Society, the five-year survival rate for all cancers between 1996 and 2004 was 66 percent, an increase from the 50 percent rates seen between 1975 and 1977.⁸ Rather than cytotoxic chemotherapy, medication such as rituximab, erlotinib, lenalidomide and pemetrexed are being used. In addition, some oral oncology drugs, such as imatinib, sunitinib, sorafenib, lapatinib and nilotinib provide patients more convenience and tolerability to treatment.⁵

Most recently, the FDA recommended fast-track approval of ipilimumab by Bristol-Myers Squibb. The drug was used in a study involving 676 patients in 125 cancer centers with stage III or IV metastatic melanoma who had been previously treated unsuccessfully with other cancer drugs.⁹ Several other cancer drugs are up for review by the FDA. Phenoxodiol (Marshall Edwards) in oral dosage form for the treatment of late-stage, hormone-refractory prostate cancer has been given fast-track review. Telatinib (ACT Biotech), an oral kinase inhibitor to treat gastric cancer, GVAX CML vaccine (BioSante) to treat chronic myeloid leukemia, sapacitabine or CYC682 (Cyclacel) to treat both acute myeloid leukemia and myelodysplastic syndromes, and biovaxID (Biovest International) to treat mantle cell lymphoma have been given orphan drug designations. In addition, dasatinib (Sprycel, Otsuka) to treat adult patients with newly diagnosed chronic myeloid leukemia has been given priority review.¹⁰

Multiplesclerosis (MS). The new drugs for MS are oral treatments, a big change from the market that has long been dominated by injectables. In January, the FDA approved dalfampridine, formerly known as fampridine SR (Ampyra, Acorda Therapeutics), the first oral medication shown to enhance some neurological functions in people with the disease.¹¹ Then, in September, the FDA approved fingolimod (Gilenya, Novartis), the first of the long-anticipated oral treatments to reduce relapses and delay disability progression in patients with relapsing forms of MS.¹² Prior to this approval, the first line of treatment was injections of interferon beta-1, an immune modulator.

Several other promising oral therapies are being developed to treat MS. One is cladribine (Movectro; Merck Serono), which the FDA granted priority review for in August 2010. The drug was approved in September by the Australian Therapeutic Goods Administration for the treatment of relapsing-remitting multiple sclerosis (MS) for a maximum period of two years.¹³ BG-12 (dimethyl fumarate, Biogen Idec) is an investigational oral therapy in Phase III clinical development for the treatment of relapsing-remitting MS, which has received fast-track designation in MS from the FDA. PEGylated interferon beta-1a (CinnoVex, Biogen Idec) is under investigation for the treatment of relapsing MS and is currently enrolling a Phase III clinical trial. And, daclizumab (Zenapax, Biogen Idec) is an investigational agent in clinical development for the treatment of MS in collaboration between Abbott and Biogen Idec.¹⁴

Rheumatoid arthritis (RA). Tumor necrosis factor (TNF) inhibitors, which are a category of specialty drugs, have been used for a decade in the treatment of RA. Those currently approved by the FDA include etanercept, adalimumab, infliximab, certolizumab and golimumab. Other types of biologics also have gained FDA approval for patients who are unresponsive to TNF inhibitor therapy, including rituximab and abatacept.⁵ Most recently, the FDA approved tocilizumab (Actemra, Hoffman La-Roche), a treatment that targets interleukin 6, for the treatment of moderately to severely active RA in adults whose disease has inadequately responded to therapy with one or more TNF antagonists.¹⁵ BG-12 (dimethyl fumarate, Biogen Idec), mentioned above, is also an investigational oral therapy in Phase II clinical trials for RA.¹⁴

Diabetes. A number of new drug developments are being investigated to treat diabetes, many of which will hinge upon the new FDA guidelines evaluating cardiovascular risk. Two that are being closely watched are liraglutide (Victoza, Novo Nordisk) and exenatide long-acting (Byetta LAR, Bydureon, Amylin/Lilly/ Alkermes). Victoza, Bydureon and Byetta are all part of a new class of drugs called GLP-1 analogs. Liraglutide is a once-daily injectable GLP-1 analog and is approved for use in foreign markets.⁷ Bydureon is a once-weekly formulation of exenatide, the active ingredientin Byetta,which has been available in the U.S.since June 2005 and is used in approximately 60 countries worldwide to improve glycemic control in adults with type 2 diabetes.¹⁶

Several other drugs also are in the pipeline. Inhaled insulin (Afresa, MannKind)is an ultra-rapid-acting insulin that mimics meal-related early insulin release. Teplizumab (Lilly/Macrogenics) is a humanized anti-CD3 monoclonal antibody to treat type 1 diabetes and is in Phase III clinical trials. Dapagliflozin (Bristol-Myers Squibb/AstraZeneca) is an inhibitor that lowers insulin-dependent glucose by increasing urinary glucose excretion and is also in Phase III clinical trials.⁷ And, Tolera Therapeutics was granted orphan drug status by the FDA for TOL101 (anti-TCR murine monoclonal antibody, type IgM) for the treatment of recent onset immune-mediated type 1 diabetes mellitus in patients 16 years of age and younger with preserved pancreatic B-cell function.¹⁰

Hepatitis C. One of the most promising classes of new specialty drugs is protease inhibitors for combating hepatitis C.A number of companies are hoping to be the first to market a hepatitis C drug that outperforms the current standard of care, which is interferon combined with ribavirin. The most promising is Vertex Pharmaceuticals’ telaprevir. To date, more than 2,500 people with hepatitis C have received telaprevir-based regimens as part of Phase II studies and the Phase III Advance, Illuminate and Realize studies. Vertex was expected to submit a new drug application to the FDA in the fourth quarter of 2010.¹⁷

Merck and Bristol-Myers Squibb also are developing protease inhibitors for hepatitis C. Merck recently announced results from its Phase III study of boceprevir, which is used in combination with Pegintron (peginterferon alfa-2b) and Rebetol (ribavirin, USP) (Peg/riba) for the treatment of patients with HCV genotype 1 infection who were previously treated and in patients who are new to treatment. Merck had plans to submit a new drug application to the FDA on a rolling basis, and had expected to complete regulatory submissions in the U.S. and EU in 2010. 18 Bristol-Myers Squibb recently acquired ZymoGenetics’ pegylated-interferon lambda, a novel interferon drug candidate. It also announced interim results from Phase IIa of its Emerge clinical trial of the drug administered with ribavirin in treatment-naive hepatitis C virus patients.¹⁹

Recently, however, development was stopped on another promising hepatitis C drug candidate from Novartis and Human Genome Sciences, Zalbin/Joulferon (albinterferon alfa-2b), in response to a letter from the FDA together with prior feedback from the European Medicines Agency, as well as results from a new Phase II trial.²⁰

Lupus. Patients with lupus may have their first new treatment in 50 years if the FDA approves belimumab (Benlysta, HGS/GlaxoSmithKline) for the treatment of antibody-positive patients with systemic lupus erythematosus (SLE). After two successful Phase III clinical trials, the FDA has granted the drug priority review status.²¹ Clinical trials of another drug to treat lupus, ocrelizumab (RG1594, Roche/Biogen Idec), was halted due to safety concerns.²²

Alzheimer’s. A front-runner for treating Alzheimer’s disease is intravenous immunoglobulin (Gammagard, Baxter), which has shown significant clinical benefits and is now in Phase III clinical trials. Other drugs in Phase III trials include bapineuzumab (Wyeth), solanezumab (Lilly), dimebon (Pfizer) and LY450139 (Lilly).⁷

Osteoarthritis/pain management. After filing a new drug application with Phase III clinical results, NicOx received a complete response letter from the FDA recommending one or more long-term controlled studies to assess the cardiovascular and gastrointestinal safety of naproxcinod for the relief of the signs and symptoms of osteoarthritis.¹⁰ In addition, Phase II studies of the drug tanezumab (Pfizer) that showed it was highly effective in relieving the pain of osteoarthritis and lower back pain were halted last September when some patients experienced worsening of the disease. However, the FDA is reviewing the safety of that drug, and it could still emerge as an effective treatment.²³

Hereditary angioedema (HAE). In late 2008, the FDA approved Cinryze (Viropharma), the first and only FDAapproved C1 inhibitor therapy for routine prophylaxis against HAE attacks in the U.S.²⁴ Then, in December 2009, the FDA approved ecallantide (Kalbitor, Dyax) for the treatment of HAE in patients 16 and older. 25 One other C1 inhibitor that is in development is icatibant (Firazyr; Jerini), a drug that has been approved for treating HAE in Europe.⁵

Osteoporosis. In June, the FDA approved denosumab (Prolia, Amgen), a fully human monoclonal antibody, for treatment of postmenopausal women who have a high risk for osteoporotic fractures, including those with a history of fracture or multiple risk factors for fracture, or those who have failed or are intolerant to other osteoporosis therapy. Denosumab is the first RANK ligand inhibitor to receive FDA approval.²⁶

Understanding the FDA Drug Approval Designations

On average, it takes 12 years and more than $500 million to get a new drug from the laboratory onto the pharmacy shelf in the United States. For more than 90 years, the entity responsible for protecting the public health, by ensuring that these new drugs and all prescription and nonprescription medications are “safe and effective,” is the FDA.

Opinion varies about whether the FDA approval process for new drugs is too hasty, which places the public at risk, or too lengthy, which delays the arrival of superior drugs and raises the costs of bringing new drugs to market, resulting in many new drug developments being halted. In response to these criticisms, the FDA has instituted several designations during the past 20 years to accelerate the availability of new drugs, while still ensuring that manufacturers demonstrate that the drugs’ benefits outweigh their risks for a specific population and a specific use, and that the drugs meet standards for safety and effectiveness. In addition, the FDA has implemented a separate designation to encourage the development of less-profitable drugs to treat rare conditions.

Fast Track. The fast-track process was designed to expedite the review of drugs to treat serious diseases and fill an unmet medical need. Drugs are generally determined to be serious if they will have an impact on patient survival and/or day-to-day functioning or, if not used, will cause the disease to progress to a more serious condition. Obviously, providing a therapy where none exists fills an unmet medical need. However, even if there is an existing therapy, an unmet medical need can still be shown through a variety of factors, such as superior effectiveness, lack of serious side effects, etc.

Drug companies must apply for fast-track designation, which they can do at any time during the drug development process. If granted, early and frequent communication between the FDA and a drug company can occur throughout the drug development review process to ensure questions and issues are resolved quickly, which can often lead to earlier drug approval and access by patients. Drugs with fast-track designation are likely to also be considered appropriate to receive a priority review..

Accelerated Approval. The accelerated approval regulation was instituted in 1992. A drug can be granted accelerated approval to treat serious diseases that fill an unmet medical need based on a surrogate endpoint. A surrogate endpoint is a laboratory measurement or physical sign that is used in clinical trials as a substitute measurement that represents a clinically meaningful outcome, such as survival or symptom improvement. Once accelerated approval has been granted, the drug can be used to treat patients, but it must go through Phase IV confirmatory trials to prove that the clinical benefit was met. If it is, the FDA grants traditional approval for the drug.

Priority Review. Under the Prescription Drug User Fee Act (PDUFA) enacted in 1992, the FDA created a twotiered review system. The first, standard review, applies to new drug applications for drugs that offer only minor improvement over existing marketed therapies. The goal for approving a standard review is 10 months. A priority review designation is given to new drug applications for drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists for both serious and less serious diseases. The goal for reviewing a drug with priority review is six months. The drug company must request a priority review designation when filing the new drug application. Neither review system affects the length of the clinical trial period.

Orphan Drug Status. The Office of Orphan Product Development (OOPD) was established by the FDA to exercise the rights given to them under the Orphan Drug Act of January 1983 to develop cures for rare diseases. Because drugs for rare diseases (which often treat fewer than 200,000 people) are much less profitable than those developed to treat common diseases, companies granted orphan drug status for the development of drugs that treat rare diseases are provided tax reductions, as well as exclusive patent rights for a period of seven years. A company must request an orphan designation by submitting an application to the OOPD. If approved, the designation does not alter the standard regulatory requirements and process for obtaining marketing approval.

For a more detailed explanation of these designations, visit the following FDA websites:

• National Anemia Action Council. 2009. Clinical Trials and FDA Review Safety and Effectiveness of New Drugs. Accessed at www.anemia.org/patients/feature-articles/ content.php?contentid=000429&sectionid=00015.
• U.S. Food and Drug Administration. Designating an Orphan Product: Drugs and Biologics. Accessed at www.fda.gov/ForIndustry/DevelopingProductsforRare DiseasesConditions/HowtoapplyforOrphanProductDesignation/default.htm.
• U.S. Food and Drug Administration. Fast Track, Accelerated Approval and Priority Review. Accessed at www.fda.gov/forconsumers/byaudience/forpatientadvocates/ speedingaccesstoimportantnewtherapies/ucm128291.htm.

A Hefty Price Tag

All of these specialty drugs come at a price, however. Biologics are expensive, as mentioned previously, costing in the range of $6,000 to $400,000 annually. Rather than charge patients a copay, insurers often charge a portion of the cost of the drug, typically 25 percent to 35 percent of the overall cost. According to Avelere Health, a Washington, D.C., consulting firm, “86 percent of Medicare Part D plans and 10 percent of private insurance plans now force patients to share costs rather than make copayments.⁴

Does this mean that patients will opt to forgo treatment with these specialty drugs? Not so, says a 2006 study by Rand Corp., which reports that rising copayments can reduce the use of prescription drugs by 30 percent to 50 percent, but expensive tiers for specialty drugs lower their use by only 1 percent to 21 percent. This is not only because these drugs are effective, but there are few alternatives.⁴

New Therapies, More Treatment Options

Despite the high cost, as the number of chronic illnesses in need of treatment with specialty drugs continues to rise, researchers in the pharmaceutical industry are making great strides. Today, the industry is not only helping Americans who have long suffered from chronic disease to live a quality of health and life they never thought they would, but it is also providing more and improved options to individuals with more common chronic conditions.