This month, IQVIA released its annual report on medical spending in the United States, and the trends are staggering. At the top of the list of best-selling drugs, AbbVie’s powerhouse autoimmune treatment Humira reigned supreme with $21.4 billion in nondiscounted spending.
Set aside the fact that U.S. spending on this single drug was greater than the gross domestic product of 85 countries and nearly double the cost of the No. 2 brand on the list. Debates pitting health care cost against innovation are as old as the industry itself and are nitpicked often in articles and (virtual) gatherings.
But there is a factor that experts regularly fail to consider when assessing the true cost of treatments: drug nonresponse. These treatments cost the health care system billions but, in their current form, only provide a fraction of their perceived value.
Take, for example, representatives of the TNF inhibitor drug class Humira, Enbrel and Remicade: Some estimates put the response rate to these drugs at a mere 34 percent of patients. One well-cited Nature article puts the estimate at closer to 25 percent. These three drugs make a combined $23 billion in annual net sales, and yet over $15 billion is essentially waste to the health care system.
Imagine if the automotive industry sold vehicles that only had a 1 in 3 chance of operating. Even if car insurance covered the price tag (after you paid a sizeable deductible), this wouldn’t be considered acceptable by society. There would be congressional hearings, lawsuits and many out-of-business car dealerships.
Yet this is the state of health care today. In many cases, health insurance companies and employers pay for the equivalent of a Ford SUV for each drug that is unlikely to work. This wasted money ultimately gets passed on in the form of rising overall health care (and therefore taxpayer) costs and increased premiums for patients.
The problems for patients don’t end with financial burdens. After trying a formulary-forced drug for several months, many patients have only bad side effects to show for their time and copays. Real harm results from waiting for the correct treatment in the form of adverse events, continued disease progression and pain. Not only are the drugs ineffective in their current one-size-fits-all form, the suffering nonresponse causes ultimately amplifies to costs to the system.
To be fair, these drugs are best-sellers because they yield great results for a minority of patients based on their specific genetic and environmental factors. But in a time where health care costs are poised to skyrocket as we respond to a global pandemic, we cannot let the issue of wasted drug spend go unaddressed.
Precision diagnostics can solve this inefficiency. Using “precision” in front of any health care-related noun generates much criticism as an industry buzzword – some of it deserved – but recent naysaying headlines should not dissuade us from embracing these technologies as very real solutions to health care’s biggest hidden problem.
There are dozens of companies – including the one I run – that have created safe, effective precision diagnostics that can save the health care system billions by predicting response and nonresponse to treatment options.
They are not science fiction or “coming next year”: The products are available today. However, widespread adoption is hindered by a chaotic regulatory environment and longstanding rebate-driven coverage decisions. In fact, a recent report from the World Economic Forum noted that the key barriers to the adoption of personalized medicine are regulatory and policy related — not scientific.
Expedited approval pathways for low-risk, high-impact tests and legislation such as the VALID Act can speed along the adoption of precision diagnostics and improve response rates to the world’s best-selling drugs. New mechanisms for value-based payment should also be introduced to create fair and early reimbursement for the kinds of low-risk, high-impact tests that the molecular diagnostics industry is producing today.
Finally, health care professionals and industry reports should take a closer look at the response rates to top drugs to ensure these figures are presented more regularly to the general public. Let’s make sure prices, rebates and response rates drive the next round of discussion on the world’s top-selling drugs.
Alif Saleh is CEO of Scipher Medicine, a molecular technology platform company based in Waltham, Massachusetts.
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