Background

Across the product development lifecycle, pharmaceutical manufacturers must prioritize products and indications for investment. Significant policy changes, such as those introduced by the Inflation Reduction Act (IRA), are likely to impact key elements of manufacturer and investor strategies and shape product development plans. Specifically, the IRA’s Medicare drug price negotiation provision subjects selected products to a maximum fair price (MFP) after a certain number of years on the market. This policy may shift incentives for manufacturers pursuing new indications of approved drugs.

In August 2023, the Centers for Medicare & Medicaid Services (CMS) announced the list of 10 drugs selected for Medicare negotiations beginning in 2026—the first year of the IRA program. Five of the 10 selected drugs treat cardiovascular disease (CVD), likely because CVD affects a large proportion of Medicare beneficiaries. In 2019, almost half of American adults had been diagnosed with a CVD condition, and more than 8 million Medicare beneficiaries were taking one of the five CVD drugs selected for negotiation in 2026.

Despite CVD’s high prevalence in the US, new drug development has diminished for CVD relative to other therapeutic areas during recent years. The need to continue to encourage innovation and improve outcomes for patients creates an environment in which the development of cardiovascular treatments may be particularly affected by the IRA.

To assess the potential implications of Medicare negotiation on the CVD landscape, the Partnership to Advance Cardiovascular Health commissioned Avalere to analyze the unique dynamics facing CVD drug development and how IRA incentives may affect the timing of core development decisions and timelines. Specifically, Avalere reviewed published literature and phase III clinical trial data to assess the resource requirements for CVD drug development, including statistics on late-stage CVD clinical trial success rates, trial duration, patient enrollment, and study populations.

The findings from this review inform how Medicare negotiation timelines may affect decisions by manufacturers of CVD drugs regarding new indications. To that end, Avalere mapped the development timeline for two FDA-approved products that will be subject to MFP in 2026, each with multiple CVD indications, to the Medicare negotiation timeline to understand emerging product lifecycle pressures.

Select Findings

The study revealed that CVD trials involve distinct challenges, including the following, compared to trials on other chronic conditions analyzed:

• Larger study enrollment: Phase III CVD trials averaged 67% greater enrollment than respiratory disease trials and 107% greater enrollment than metabolic disease trials
• Longer clinical trials: Phase III CVD trials took 28%–32% longer to complete than metabolic and respiratory disease trials
• More trial sites: The average number of sites per trial was more than 40% greater for phase III CVD trials than it was for respiratory or metabolic disease trials
• Lower success rates: The likelihood of success from phase I trial to FDA approval was 150% greater for respiratory disease and 300% greater for metabolic disease than for CVD; CVD trials had the second-lowest likelihood of success among the conditions analyzed

The resource requirements for CVD trials will likely present unique considerations for CVD drug manufacturers’ development strategies in the future. The high prevalence of cardiovascular conditions in the US suggests that most CVD drugs on the market will be at a high risk for IRA negotiations. Moreover, most CVD drugs are small molecules, which, according to IRA statute, renders them eligible for negotiation 4 years earlier in their post-approval lifecycle than biologics. IRA negotiations will also be applicable at the drug level across indications and formulations, which may force manufacturers to make difficult decisions on post-marketing research to achieve secondary indications for drugs, potentially affecting what types of products will be available to patients.

Case Study

Avalere also analyzed select FDA-approved products with multiple CVD indications and mapped the timeline of indication approvals to the Medicare negotiation timeline to understand how future manufacturer decision-making for product development could shift indication prioritization decisions.

The product highlighted below is on the initial list of drugs that were selected for negotiation in August 2023. Following the original approval for a non-CVD indication, the product pursued four additional indications over a 14-year period. Studies used for subsequent indications required even larger clinical trial enrollment than those submitted for the original approval. Additionally, when comparing CVD indications to non-CVD indications for the same product, Avalere observed that those studies with a CVD patient population required more than a 5-fold increase in enrollment.

Avalere estimated that it takes a minimum of 4 years for a CVD product to progress from the beginning of the phase III trial to receiving an approval decision from FDA. When overlayed on the small-molecule-drug Medicare negotiation timeline, this shows how the time available to recoup investments on subsequent indications is diminished and millions of patients could have had less effective treatment options if the manufacturer had decided to de-prioritize a subset of additional indications (Figure 1).

*Placement was informed by an assessment of average timing associated for the case study to move from conducting a Phase III study to the date of FDA approval for that new indication.

Funding for this research was provided by the Partnership to Advance Cardiovascular Health. Avalere retained full editorial control.

To learn more about how the IRA impacts product lifecycle decisions, connect with us.

Download the white paper, “Impact of Medicare Drug Price Negotiation on Cardiovascular Disease Product Development and Patient Access.”