Weight-Loss Drugs, Oncology Developments Were Among Notable 2024 Pharma Trends

The continuing rise of weight-loss medications and manufacturers entering the direct-to-consumer (DTC) health care arena were among some of the top pharma industry trends in 2024. Oncology remained a leading area of drug development, as did gene therapies, which in turn spurred the use of nontraditional payment models for payers as they grappled with covering the multimillion-dollar therapies. AIS Health spoke with Julia Scanlan, associate consultant in advisory services for MMIT, about those and other noteworthy occurrences within the pharma industry over the past year. (Editor’s note: These comments have been edited for length and clarity. AIS Health and MMIT are both Norstella companies.) 

AIS Health: What were some of the most notable developments and/or trends within the pharmaceutical industry in 2024, and why? 

Scanlan: In 2024, the pharmaceutical industry experienced several notable market access trends that significantly influenced drug availability, patient care and manufacturer/payer dynamics:

·        Advancements of weight-loss medications: It’s no secret that 2024 has seen an unprecedented demand for GLP-1 [glucagon-like peptide-1] receptor agonists. These high-cost drugs, originally developed for diabetes management, have been repurposed to address weight loss for obesity, which industry experts say is becoming a top five global market driver that will have a profound effect on spending across multiple areas.

The weight loss medication landscape was characterized by key trends such as the development of combination therapies, regulatory actions on compounded medications and a substantial increase in Medicare Part D spending. Even the federal government proposed that Medicare and Medicaid should cover obesity drugs, reflecting a shift in the perception of weight loss in obesity as not just for accomplishing cosmetic purposes but as providing real health benefits. If finalized, these proposed changes could put pressure on commercial and marketplace plans to expand access; however, this remains to be seen with the change in presidential administration.

MMIT data also suggests an evolution in payer perception of obesity/weight loss drugs. With this new class of weight-loss drugs, payers frequently cite their concerns around the high cost of treatment as an impediment to coverage. Both Wegovy [(semaglutide) from Novo Nordisk] and Zepbound [(tirzepatide) from Lilly] have list prices between $12,000 to $16,000 per year. Yet despite these concerns, Wegovy is currently covered at 54% across all channels, according to MMIT’s Analytics policy and restriction data. These trends have prompted plans to reevaluate their policies and approach the widespread use of such products with even greater scrutiny of utilization management techniques.

·        Launch of manufacturer-led DTC health care platforms: The past few years saw the launch of several DTC programs, including Amazon One Medical and Mark Cuban’s Cost Plus Drugs. In 2024, several manufacturer-designed DTC programs, such as LillyDirect and PfizerForAll, have been added to the mix to streamline health care access. MMIT data from a recent Rapid Event Primer noted that these platforms demonstrate pharma’s continuing shift toward an integrated model of patient care; however, their rise poses questions around how manufacturers will navigate complex legal/regulatory frameworks and mitigate the risk of unnecessary or misinformed prescribing.

·        Medicaid unwinding: The ongoing effects of post-pandemic Medicaid disenrollment, which began in April 2023, emerged with greater clarity in 2024. As Medicaid membership has dropped, enrollment in health exchanges plans has sharply increased. Data from MMIT’s Directory of Health Plans indicated that many former Medicaid beneficiaries sought coverage in the public health insurance exchange, which reported a record-breaking open enrollment season in [first-quarter] 2024. From a plan perspective, this trend reveals how some payers were successful in converting disenrolled Medicaid members to other lines of business. For others, it represented how much of a headache the disenrollment process was for forecasts and overall program profitability.

AIS Health: What have been some noteworthy areas of drug development, and who are the manufacturers involved in those areas? What were the most important and/or innovative FDA approvals in 2024, and why?

Scanlan: In 2024, several noteworthy areas of drug development, as well as innovative FDA approvals, emerged:

·        Oncology: This area remained a dominant focus, with advancements in personalized medicine such as CAR-T [chimeric antigen receptor T-cell] therapies and tumor-agnostic treatments. For CAR-T, a lot of therapies moved up to earlier lines (in multiple myeloma, for instance), making those therapies available to more patients. Examples include Carvykti [(ciltacabtagene autoleucel) from Johnson & Johnson Innovative Biotech (formerly Janssen Biotech Inc.) and Legend Biotech Corp.] and Abecma [(idecabtagene vicleucel) from Bristol Myers Squibb and 2seventy bio, Inc.].

·        Obesity and metabolic diseases: As previously mentioned, there was increased interest in therapies for metabolic conditions like obesity and diabetes, with GLP-1 receptor agonists gaining significant attention. This includes GLP-1 drugs like Wegovy and Ozempic [(semaglutide) from Novo Nordisk], which drove significant revenue growth, reflecting a shift toward “big drugs for big diseases.”

·        Gene therapy: Vertex Pharmaceuticals and CRISPR Therapeutics’ Casgevy [(exagamglogene autotemcel)] was the first drug approved using CRISPR gene editing. Time Magazine even listed Casgevy as one of the best inventions of 2024. While the approval of CRISPR-based medicines and the rise in cell and gene therapy products reflect significant progress in this field, the path to profitability for such treatments remains complex.

[Among] other gene therapies,…in April 2024, Pfizer gained approval for Beqvez [(fidanacogene elaparvovec-dzkt) from Pfizer Inc.], a novel one-time gene therapy for adults with moderate to severe hemophilia B. The new treatment is priced at close to $4 million per treatment in the U.S. and has raised questions about the rise of warranty-based contracts.

Payers are closely evaluating the availability and terms of VBAs [value-based agreements] for gene therapies, as they would like a safety net in the case that these extremely costly, multimillion dollar therapies do not work or do not have an adequate duration of response. Payers are comparing the terms of VBAs provided by various gene manufacturers — they are evaluating the length of the agreement, the required patient criteria for consideration of the value-based terms, what happens if a patient switches insurance and whether or not third-party organizations are available for tracking success metrics, whether or not contracting is required, among other considerations.

·        Neurological diseases: Eli Lilly progressed with donanemab [approved July 2, 2024, as Kisunla], an investigational antibody therapy aimed at slowing cognitive decline in Alzheimer's patients. Karuna Therapeutics developed KarXT [approved Sept. 26, 2024, as Cobenfy], a novel treatment for schizophrenia, which was among the most anticipated drug launches of 2024.

AIS Health: Could you please comment on pharma merger and acquisition (M&A) activity over the past year?

Scanlan: M&A activity often focuses on enhancing drug pipelines, expanding into high-growth therapeutic areas like obesity, oncology and neuroscience, and acquiring cutting-edge technologies such as gene therapy and AI drug development. These deals allow large pharma companies to diversify revenue streams, reduce competition and accelerate innovation. In 2024, the pharmaceutical industry experienced a notable volume of M&A. This trend was characterized by a focus on strategic acquisitions aimed at enhancing specific therapeutic areas and technological capabilities.

As an example of this strategic focus, companies targeted acquisitions that would strengthen their positions in high-growth sectors such as oncology, immunology and neuroscience. For instance, Johnson & Johnson's acquisition of Shockwave Medical for $13.1 billion exemplifies this trend.

AIS Health: What kind of impact did the Inflation Reduction Act (IRA) have on the pharma industry over the past year? 

Scanlan: The IRA has had a significant impact on the pharmaceutical industry over the past year:

·        Medicare price negotiations: For the first time, the federal government, through CMS, gained the authority to negotiate prices for certain high-expenditure drugs covered under Medicare Part D and Part B. This initiative aims to reduce prescription drug costs for beneficiaries and decrease federal spending. In response to this and other IRA provisions, payers are reevaluating their formularies and being more cautious in the drugs they cover. Likewise, pharma companies are reevaluating their drug portfolios, launch strategies, reimbursement models and patient services.

·        Industry adjustments: In anticipation of the IRA’s full implementation, pharma companies are adjusting their commercial and Medicare strategies. Payer data from MMIT’s most recent December Rapid Event Primer indicates that this means payers plan to prioritize skinnier or biosimilar/generic-centric formularies, as well as increase the use of utilization management tools such as step edits, prior authorizations and not covered products, to mitigate potential revenue losses associated with government price negotiations and a $2,000 maximum out-of-pocket cap under Medicare Part D.

·        Impact on research and development: The IRA’s provisions have also led pharmaceutical companies to reassess their R&D strategies and pricing models due to potential revenue reductions and changes in drug pricing dynamics. Concerns have been raised that the shortened economic lifecycle of drugs, due to earlier price negotiations, may deter innovation and development of new therapies. Some companies have reported reductions in R&D spending and workforce adjustments in response to the anticipated revenue impacts of the IRA. These shifts may lead to increased focus on novel drug development and strategic adjustments in clinical trials.

·        Legal challenges: Several pharma companies have initiated legal actions challenging the constitutionality of the IRA’s drug pricing provisions. The outcome of these challenges, as well as the future of the IRA, will largely depend on what happens with the new presidential administration.

AIS Health: Have you seen any reaction so far spurred by the presidential and congressional elections?

Scanlan: All the below findings come from MMIT’s most recent December Rapid Event Primer, which surveyed 20 payers on how they think the 2024 election will impact the managed care industry:

·       While many payers have a neutral stance on the potential impact the new administration may have on managed care, some voice concern regarding its impact on Medicare, the IRA and drug price transparency.

·        Medicare: Payers believe Medicare will likely be impacted; however, the timing and whether that impact will be positive or negative remains unseen. Many payers also believe the Medicaid LOB [line of business] is very likely to be impacted by the new administration, citing the potential for reduced funding and use of block grants.

·        The IRA: Most payers surveyed reported that the new administration is likely to look into altering or repealing the IRA, but one payer notes too much has been prepared over the last few years to undo. Should the IRA be altered or repealed, many payers foresee Medicare patients being negatively impacted with higher out-of-pocket costs.

Overall, payers overwhelmingly anticipate continuing to develop and execute internal strategic imperatives in preparation of the IRA regardless of the administration change.

·        Drug price transparency: Payers largely anticipate that the new administration will put forth some level of effort toward drug price transparency, while only one payer thinks no effort will be made.

AIS Health: Is there anything I’ve neglected to ask about that you’d like to add?

Scanlan: [Real-world data (RWD) also is top of mind for biopharma companies.] Manufacturers are continuously looking to utilize more patient-level data, claims data and integrated datasets to inform launch.