THE OUTLOOK FOR HEALTH CARE IN 2023:

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Blog Post

What we got right (and wrong) about life sciences in 2022

By Lauren WoodrowSolomon BanjoBrandi GreenbergKayne RyanPamela Divack

January 13, 2023

    Last year, life sciences market experts from Advisory Board and Optum Life Sciences came together to consider the trends poised to have the greatest impact on the market for real-world data and evidence in 2022.

    Drawing on conversations with 200+ decision-makers across the healthcare ecosystem, these experts identified 11 trends worth watching. Recently, I had the privilege of sitting down with these experts and discussing what they got right and wrong, and what excites and scares them about the future.

    Question: When we joined this call, we were chatting about how many of these predictions held up. Were you surprised by any of your correct predictions?

    Pam Divack: We predicted that the impending launch of numerous "next-gen therapies" would disrupt traditional treatment paradigms and require stakeholders to take a more coordinated, expansive approach to data collection, evidence-generation, outcomes monitoring, and value assessment over time.

    I'm not surprised we got this one right, but I'm surprised that we haven't seen as much progress in terms of how stakeholders think about the value of next-gen therapies and how they're going to generate evidence. We're seeing an increase in the number of approved therapies, but the conversations don't seem to be advancing beyond a more general acceptance of ICER value determinations.

    Brandi Greenberg: I agree. Value assessments are evolving, and we're taking a more holistic view to consider all the things that go into total cost of care. There's a recognition that we need to come up with better reimbursement and risk-sharing models, but we've yet to see much action.

    Solomon Banjo: I'm surprised at how well we anticipated the rise in anxiety over data privacy and security. This trend accelerated a lot faster than I expected. Last year, some massive things pierced the healthcare bubble (like the Dobbs decision), forcing us to think about broader societal questions that none of us could have predicted.

    Greenberg: I was surprised at how right we were about the proliferating sources of real-world data (RWD) and the challenges in integrating data from fragmented care sites. I think we all knew the site-of-care-shift genie wasn't going to go back in the bottle. But its ripple effects on data capture and patient journey mapping are real and significant.

    The shifts to retail and virtual care (both telehealth and apps) also raise important questions about the representativeness of real-world data sets. While retail and virtual sites may increase access for underrepresented or marginalized communities, we need to make sure those encounters are adequately captured in EHRs or other clinical data sets.

    There's an opportunity here to expand access and increase the representativeness of our data sets, but we need to be deliberate in our approach.

    Kayne Ryan: I'm also not necessarily surprised at the proliferation of data sources that clinicians can use to gather evidence and guide treatment decisions. They are, after all, clinical choices. But the impact of social media here was confirmed in a way that I found interesting. We've heard providers say "there's always Twitter. I don't need another place like that to get this information and talk to other people in my field."

    Divack: In the past year, we've repeatedly seen the impact social media can have on life sciences companies. I think instances like that are a wake-up call regarding the importance of medical information on Twitter and other social media sites. We need to figure out the role of healthcare evidence and expertise on social media and online.

    Question: What scares you about what you got right?

    Banjo: Going back to our initial prediction about the numerous next-gen therapies, I'm scared that if we continue trying to fit everything into our old models, rather than creating new solutions, we're going to hit a financial and access breaking point.

    Our previous tools, like pre-authorization and utilization management, aren't sufficient for these kinds of therapies. And we don't have a decade to figure out how these new models should work or who should pay for what.

    Divack: And I don't think most providers have the infrastructure in place to manage, administer, and track the outcomes from these new therapeutics either.

    Question: Where did you expect to see more progress?

    Greenberg: I thought that we would see much more progress on health equity, especially when it came to diversifying clinical trials. We have the data; we've built awareness; we know it's a problem. But inertia is a powerful thing. It's much easier to describe the problem and point fingers. I thought in those areas we would be able to hold up more stories of progress.

    On the flip side, I'm seeing some evidence of progress in addressing health disparities at the local level. These initiatives may not be rolled out on national scale, but in many cases, the work is very data driven. I suspect that more of that kind of local, grassroots work is happening than we realize, and it's just not yet bubbling up enough for us to notice.

    Question: If you could go back in time and change any of these predictions, would you? And why?

    Banjo: There are two things I talked a lot about in 2022 that didn't make our predictions at all. One is payviders. Most people know about provider-sponsored health plans, but health plan ownership of risk-bearing delivery organizations came into the limelight in a really meaningful way, as we've seen continued growth in this area, and they've emerged as viable competitors to health systems.

    And the second thing is the workforce crisis and its future implications for life sciences. The workforce crisis has been and will continue to be transformative. It goes further than "providers just need to hire enough people." It affects prescribing decisions and even who those decision makers are as responsibilities shift from physicians to other care team members.

    It's been interesting to observe the elements of autonomy, especially clinical, that physicians in particular are willing to trade for more sustainable care models. If the EMR care pathway is hard-coded, it restrains a clinician's ability to deviate from agreed-upon standards.

    Greenberg: I totally missed that the federal government would find a path to compromise and pass something as significant as the Inflation Reduction Act. It's still going to take a while before we see how the price penalties and negotiations will impact pharma—or how they'll impact plans, PBMs, employers, and patients, for that matter.

    But we're already seeing pharma CEOs talking publicly about how this legislation may affect their product and portfolio strategies. And a lot of folks are watching to see how even the possibility of price negotiations may impact which biosimilars come onto the market – and when.

    When it comes to the IRA's penalties for raising prices faster than inflation—that is something we did get right, but we were still focused too much on the state level, where such penalties had been picking up steam.

    But, yeah, if I could go back in time, I wish I'd realized that being able to say "we did something about drug prices" was sufficiently important to enough congressional leaders on both sides of the aisle to drive the compromises needed to pass that legislation.

    Question: What indicators of change are you looking towards?

    Greenberg: I'm looking for communications and actions from the FDA, the FTC, and other regulatory bodies around guidelines for real-world evidence, trial diversity, and additional health care data privacy protections. Who is going to move first? Are we going to have an innovative example of what it means to bring a real-world evidence study design to the FDA for feedback?

    I think a lot of what people are looking for is related to FDA, but I would also say the FTC is also worth watching, especially given the growing concerns about data privacy and HIPAA violations. How the FTC responds to violations with fines or added restrictions could end up impacting how providers and manufacturers think about using real-world data for trial recruitment or innovative study designs.

    Banjo: To your point, the FTC is an agency that has been very active in healthcare, but primarily we think of them from the mergers and acquisitions lens. We need to shift our thinking and realize there are many other ways in which they could do things relevant to healthcare ecosystem players—changing market dynamics and setting guardrails about what is acceptable and not.

    Divack: Another thing I'm watching is the biosimilars launch for Humira. Optum Rx recently announced that they're going to cover three of them. Other PBMs have followed suit. I'll be watching to see if these actions make a dent in how we as an ecosystem think about cost and competition within therapeutic categories. Will this just play out as more of the same in terms of rebate-based competition and limited specialty pharmacy distribution, or will consumer affordability and access really increase? How will health systems and pharmacies manage the added inventory complexity if they're now expected to stock Humira and three or four of its biosimilars at the same time?

    Despite the many unknowns, what excites me about this is that I think we're at a point now where we can start to gather legitimate real-world evidence about comparative effectiveness in categories where there are multiple biosimilars competing against a branded biologic. Are there certain populations that may benefit from staying on the branded one versus the biosimilar? Are there other populations that do better with one biosimilar vs. another? Unless it becomes easier to deem biosimilars as interchangeable with the reference biologic or each other, all these comparisons could matter. I'm fascinated to see what we can learn. This could actually improve care, not just cost.

    Ryan: One of the things that really interests me about this is interchangeability. Does it become like a label expansion? How does one achieve that status after you're approved for the first one? Will companies continue needing to actually submit evidence to get the interchangeable classification? I heard there may be legislation that would make it easier for biosimilars to get an interchangeable designation, like in Europe. That will be important to watch.

    Parting thoughts

    Clearly, we have many open questions for the future of the life sciences industry, and this reflection allowed us to gain perspective into what the answers to those questions could look like.

    But with a new year comes new questions and new predictions. Join our experts on January 19 for a live discussion of our seven predictions for 2023.

    Webinar: 7 trends shaping life sciences strategies

    imageJoin a panel of experts from Advisory Board and Optum Life Sciences on Thursday, Jan. 19, at 1 p.m. ET, as they offer their predictions on key trends life science leaders need to monitor in 2023.

    Register now

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