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Schaeffer Research Director Testifies at Congressional Hearing on Biomedical Innovation and Patient Access

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USC Schaeffer Center research director testifies at Congressional hearing

Darius Lakdawalla testifies before the U.S. House Ways and Means Subcommittee on Health, discussing biomedical innovation and patient access.

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In a hearing on how to balance incentives for medical innovation with patient access, USC Schaeffer Center Director of Research Darius Lakdawalla shared findings demonstrating that “expanding prescription drug coverage is worth the cost because it simultaneously rewards innovators and makes innovation more accessible.”

In testimony before the U.S. House Ways and Means Subcommittee on Health on May 10, Lakdawalla suggested targeted reforms to the Inflation Reduction Act (IRA) of 2022 as well as Centers for Medicare and Medicaid Services (CMS) programs that would improve the system for patients and innovators. Lakdawalla is noted for his studies on how to cost-effectively stimulate biomedical innovation so that as many patients as possible can benefit from its breakthroughs.

He was part of a panel of experts called upon by the subcommittee for a hearing on “Examining Policies that Inhibit Innovation and Patient Access.” The subcommittee, chaired by Rep. Vern Buchanan (R-Fla.), addresses matters related to payment programs for healthcare, medical delivery systems and related research.

“We all want America to lead the world in medical innovation, and we want Americans to have access to the newest, best groundbreaking treatments as soon as possible,” Rep. Buchanan said. “I hope we can leave this hearing today with a renewed sense of bipartisanship and willingness to work together on policies that protect and enhance innovation.”

Balancing innovation costs with meeting patient needs
“The tradeoff between incentives for innovation and healthcare access for patients is typically framed as an either/or proposition,” Lakdawalla explained. “Either we reward innovators with high prices and deny many patients access to therapies they desperately need, or we make new therapies broadly accessible by limiting their prices, starving innovators of rewards for developing new drugs.”

He then noted how Schaeffer Center research presents potential solutions to this dilemma. “Generous prescription drug coverage can serve as the knife that cuts through this knotty tradeoff,” he said.

“Better lives for patients and their families is the goal,” Lakdawalla emphasized. So instead of paying for all innovations, he said the focus should be on rewarding those companies that “seek out and develop new medicines that help us achieve healthier outcomes.”

Aligning price with value
Such an approach requires measuring the value of new medicines, but Lakdawalla observed that traditional economic analyses, such as quality-adjusted life-years (QALYs), are inaccurate. Instead, he said that Schaeffer Center research has revealed the advantages of value assessment models adhering to the “principle that goods are more valuable to people who have less of them. Analogously, health improvements are more valuable for people with disabilities, terminal illness or other severe disease.”

Such a strategy, he added, “also comports with federal law by avoiding value assessments that discriminate against vulnerable patients with disabilities or terminal illness.”

Yet while the IRA “provides an opportunity to better align price and value for individual drugs,” Lakdawalla said the law needs revision to incorporate “credible, evidence-based and scientifically validated methods for measuring value to patients.”

In response to concerns raised by Kevin Hern (R-Okla.) about the IRA’s policy changes related to rare-disease therapies, Lakdawalla noted that the likely result will be reduced innovation in this category. Therefore, he said, reforms should address the unmet needs of people with rare diseases because, in such cases, “even a relatively modest improvement in health can be quite valuable. And that needs to be accounted for in the way CMS sets maximum fair prices to at least mitigate some of these issues for rare disease where value is at a premium.”

Three-part pricing

To better align a drug’s cost with its value, Schaeffer Center investigators suggest a three-part-pricing model that starts with an evaluation phase. During this initial period, Lakdawalla explained, the drug would be introduced at “a lower price in exchange for early access to Medicare coverage and the possibility of exemption from IRA inflation rebates if the drug meets prespecified effectiveness benchmarks.”

This would be followed by a reward phase. “If the drug achieves its targets, innovators would be rewarded with a high price,” he said. Otherwise, they would not.

In the final phase, robust generic or biosimilar competition would drive down prices upon the drug’s loss of exclusivity, improving patient access in the long term.

“While there is value in reducing healthcare costs and improving patients’ access to existing drugs in the short term, there is also value in ensuring a continuing stream of innovative therapies for future generations,” Lakdawalla noted. Achieving both aims, however, requires a balanced–and bipartisan approach. The results, however, will be worth the effort, he said.

“By ensuring generous prescription drug insurance, drug prices that reflect the value they deliver and effective competition throughout the pharmaceutical supply chain, we can achieve improved health for Americans today and tomorrow,” Lakdawalla said. “Getting prices right would go a long way toward addressing the different symptoms of our various economic diseases in this market.”

The hearing was webcast live and may be viewed on YouTube. Other panelists were Ted Okon, executive director of the Community Oncology Alliance; Joshua Makower, director of the Stanford Byers Center for Biodesign at Stanford University; Aaron S. Kesselheim, professor of medicine at Harvard Medical School; and Tony Gonzales, national early-stage advisor for the Alzheimer’s Association–who spoke about his battles accessing care after his own Alzheimer’s diagnosis before age 50.

Read Lakdawalla’s testimony in full.

Lakdawalla also serves as Quintiles Chair in Pharmaceutical Development and Regulatory Innovation at the USC Mann School of Pharmacy and Pharmaceutical Sciences and is a professor at the Price School of Public Policy. The Schaeffer Center is a partnership of the Mann School and Price School.

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David Zong
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USC Mann School of Pharmacy and Pharmaceutical Sciences
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Commencement Spotlight: Jack Saville

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New USC Mann and Naval ROTC grad will soon commission in the U.S. Navy
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By David Zong

Since kindergarten, Jack Saville has dreamed of being in the U.S. Navy. He joined the Naval Reserve Officers Training Corps (NROTC) program three weeks after arriving at USC. And on May 12, he will graduate with a degree in pharmacology and drug development from USC Mann School of Pharmacy and Pharmaceutical Sciences.

Saville said he always had the urge to serve the country. He grew up in Manhasset, N.Y., in a family where many others have also joined the military. Saville’s great-uncle served in a tank battalion during the Battle of the Bulge in World War II.

At USC, Saville and his fellow cadets meet three to four times a week for training while “integrating themselves into the military lifestyle.” The ROTC lifestyle is atypical for Trojans: waking up as early as 5 a.m., completing intensive physical and leadership training, and wearing the uniform around campus. “It definitely makes you stick out in a crowd,” Saville said. “It’s a reminder of the commitment that you have made to serve our country.”

Through the Naval ROTC program, Saville received a three-year scholarship that paid for his education at USC. He signed on for a five-year commitment to the U.S. Navy after graduation.

“Being a part of the Naval ROTC Battalion at USC has been a gratifying experience,” Saville said, noting that the program provided him with naval knowledge, leadership skills, and friendships for life. Saville added that he uses the Navy’s core values of honor, courage and commitment when evaluating problems or trying to make ethical decisions. And by doing so, he has the ability to look at issues from different perspectives, setting him apart from peers in other classes.

When he first came to USC in January 2020, Saville was lost and overwhelmed just like other first-year students. He said that once he found his place at USC Mann and in the ROTC program, “everything fell into place.”

Saville originally came to USC as a biochemistry major. Later, his curiosity and passion for science took him to the world of pharmacology and drug development–fields he instantly fell in love with after taking the History and Geography of Drugs class with Terry David Church, assistant professor of regulatory and quality sciences.

“One of the best feelings in the world is walking into class, and not only being close with classmates but also with your professor,” Saville said. “That was an important part of my life here at USC, and it played a huge role in my happiness as a student at USC Mann.”

His coursework included a few unforgettable classes, including “Ethics, Drugs and Society” and “Mysterious Deaths: From Poisons in Literature and History to Forensic Toxicology.” Another memorable learning experience was a May 2022 Maymester trip to the Balkans to study folk medicines, an educational experience that brought him and his classmates even closer. “Being able to learn about pharmacy and pharmacology from a different perspective was extremely eye-opening,” Saville noted.

Saville contributes to the close-knit culture. “He has a big heart, though he pretends otherwise, and cares deeply for his family, friends and classmates. He looks out for those around him,” said Church, faculty leader of the 2022 Maymester trip. “His smile is goofy and genuine; it is endearing and can lighten tense moments or brighten the gloomiest situations.”

After graduation, Saville will travel to Norfolk, Va., to complete required training and then head to San Diego, Calif., to serve as a surface warfare officer aboard the USS Pearl Harbor.

He said he eventually hopes to earn a law degree and combine his pharmacy knowledge with legal skills. Saville is interested in becoming an attorney in a pharmacy-related field and believes the knowledge and skills he learned at USC Mann will serve as a solid foundation for his future endeavors.

“Being a freshman at a new school can be extremely daunting, but if you put yourself out there and get involved as much as you can, you will find your place here,” Saville said. “The USC Mann staff and professors are some of the nicest human beings in the world, and will help you discover what you want to do in your career and will also help you develop as a student.”

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Jack Saville, who is graduating from @USCMann with a bachelor’s degree in pharmacology and drug development, will soon commission in the U.S. Navy.
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Jack Saville
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Saville and his peers standing in front of a Navy helicopter on July 19, 2022.
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8405 https://healthpolicy.usc.edu/article/biosimilar-drugs-underutilized-due-to-commercial-insurance-restrictions/
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Biosimilar Drugs Underutilized Due to Commercial Insurance Restrictions

First study to examine biosimilar drivers finds commercial insurers limit use in almost 20% of cases; restrictions greatest for pediatric patients.
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Biosimilars provide the same therapeutic benefits at much less cost than biologic medications, yet slow marketplace acceptance has prevented their advantages from being fully realized.

A new study led by USC Schaeffer Center Fellow Jakub Hlavka finds insurers either excluded or imposed restrictions on biosimilars in 19.4% of the cases examined. The study, published in the journal BioDrugs, is the first to address the drivers of biosimilar coverage.

Coverage limitations may take the form of step-therapy requirements that keep biosimilars away from patients until after other treatments have failed. In traditional pharmaceuticals, such exclusions are usually aimed at more expensive treatment options, however, in the case of biosimilars, their list prices tend to be lower than those of their reference products.

Hlavka worked with James Chambers, associate professor at Tufts Medical Center, and students from the USC Alfred E. Mann School of Pharmacy and Pharmaceutical Sciences and USC Dornsife College of Letters, Arts and Sciences Department of Economics to examine 1,181 coverage decisions made by 17 U.S. commercial plans. The research included 19 commercially available biosimilars that provide alternatives to seven biologic reference products used in treating 28 different conditions.

Five of the plans–or 29.4% of the total–restricted biosimilar use in 30% or more of their decisions.

“These restrictions hamper the potential of biosimilars to increase access to care,” says Hlavka. He adds that, “such coverage variations may negatively impact patient access to effective treatments.”

The researchers find the following trends related to coverage decisions:

While plans were more likely to allow biosimilars for cancer patients, they were generally more likely to impose restrictions on biosimilar use for pediatric patients.
Coverage decisions were also found to be influenced by market competition and budget impacts: the first biosimilars to enter the market were less likely to have restrictive coverage and biosimilars offering savings of $15,000 or more per patient annually were much less likely to be restricted. Furthermore, the availability of cost-effectiveness evidence correlated significantly with coverage being less constrained.
Health plan pharmacy benefits managed by the three largest pharmacy benefit managers–CVS Caremark, Express Scripts, and OptumRx–were less likely to impose restrictions on biosimilar coverage relative to plans not managed by the big three.
The researchers note that many competing factors may be driving these trends: plans may be more cautious when it comes to pediatric patients while large PBMs may be leveraging their market power to negotiate higher rebates from biosimilars.

“We know that biosimilars are not being utilized as much as they could be,” says Hlavka. “Our study helps to uncover some of the trends in coverage decisions and offers points in the system where more research is warranted.”

Although brand biologics and specialty medicines account for just 3% of all prescriptions, they constitute 55% of all drug spending. Therefore, biosimilars have the potential to greatly increase savings while reaching greater numbers of patients with effective therapies for a wide range of diseases, from cancer to rheumatoid arthritis.

“Insurer coverage policies have a determining role in patients’ access to biosimilars. This study sheds light on the factors that influence insurer decision-making and provides novel insights into when patients have favorable access to biosimilars,” adds Chambers.

While Hlavka and his co-authors acknowledge that more research is needed, this study takes an important step in uncovering the decisions that result in a slower adoption of lower-cost equivalents of expensive biologic treatments.

Funding for this study was provided by a grant from the PhRMA Foundation. Tianzhou Yu and Shihan Jin of the USC Mann School and Chang Li of the USC Dornsife College of Letters, Arts and Sciences coauthored the study.

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https://dworakpeck.usc.edu/news/msn-graduate-seeks-to-change-rural-access-to-health-care
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Nursing graduate seeks to improve rural access to health care

Raelene Zamora, MSN ’23, knows first-hand how daunting access to medical care can be in small, rural communities.
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According to the National Institutes of Health, rural Americans are more likely to die prematurely from heart disease, cancer, lung disease and stroke, and have higher rates of obesity and diabetes. They are also at greater risk for fatal car crashes, suicide and drug overdoses. Raelene Zamora wants to change this for her community of Porterville, California, and receives her Master of Science in Nursing (MSN) from the USC Suzanne Dworak-Peck School of Social Work in May 2023.

For Zamora, who grew up in the small Central Valley town, medical care in her community has always been daunting. It was normal for her to wait all day to be seen at a local clinic, and there was a period of months when she drove 55 miles for her daughter to see a specialist. Many residents of Porterville are living under the poverty line, so having to travel long distances for medical treatment is unrealistic.

“The commute could set some families back in their rent, work, food and day-to-day expenses,” Zamora said. “Especially if they are missing work to make the appointment.”

Zamora’s path to earning her MSN and becoming a family nurse practitioner has been challenging. She dropped out of high school, and unexpectedly became pregnant when she was 19. It was then she decided to go back and get her high school diploma. For the next 13 years, Zamora raised her daughter alone, earned her associate’s degree in nursing, and after passing her boards, began work at the local hospital, first as a preoperative nurse and now in the Intensive Care Unit (ICU).

At the hospital, Zamora cares for seriously ill patients. It was her experience there, coupled with those of her family living in the community, that inspired her to pursue an advanced degree in nursing.

Janett Hildebrand, associate teaching professor in the Department of Nursing at USC Social Work, explains that in rural communities like Zamora’s, social determinants of health play a significant role in health disparities and inequities. Obstacles like lack of transportation, literacy skills, access to a primary care provider during non-working hours and the necessity to travel long distances for care are common.

“These circumstances lead to delay in care, thus, patients may be sicker when they seek medical care,” Hildebrand said.

Zamora watched, helplessly, as a close aunt passed away from an end-stage cancer. “It could have been caught sooner, but the local clinic doctors kept turning her away,” she said. “I want to be able to recognize something like that and maybe take it a little more seriously in terms of thinking outside the box for any patient, no matter if they’re young or old, to look at all the possibilities it could be.”

She followed her heart

Zamora enrolled at USC and was able to take advantage of the flexible hybrid model of the MSN program while continuing to work at the ICU in Porterville. Classes are online, but live, allowing for interaction with professors and classmates in real-time. The small class sizes allowed the students to really get to know each other and Zamora says they still keep in touch. And as a self-proclaimed lover of learning, she appreciated the challenging and fulfilling local clinical placements for her required internships.

Hildebrand explains that these clinical experiences prepared Zamora to integrate the social determinants of health domains into her practice to provide high-quality comprehensive care to people with acute and chronic diseases.

“When she spoke in class, there was an excitement in her voice about her future role as a practitioner,” Hildebrand said. “She was aware of the disparities as an inpatient nurse, but now she was able to see how her role as a nurse practitioner could make a difference in the lives of patients such as the prevention of hospitalization. Her enthusiasm was reflected in her storytelling of the patient cases.”

As health care in rural areas across the country suffer from a shortage of doctors, particularly specialists, there is limited access to state-of-the-art equipment and an increasing number of health system closures due to lack of funding, Zamora wants to help make access to health care a priority in Porterville. It is where she grew up, her family is there and she sees the greater community as her extended family. She wants them all to have the same access to medical care as those in bigger cities, which would provide better patient outcomes by cutting out delays in patient care.

“I see my MSN providing me with the opportunity to sit down and thoroughly educate my patients,” Zamora said. “This is the main reason I chose to pursue my MSN to become a family nurse practitioner, to be able to have the opportunity to prevent someone from ending up in the ICU. To educate, follow-up and be someone the patient can see as a trusted provider, not just another provider.”

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Commencement Spotlight: Samuel Garza

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Commencement Spotlight: Samuel Garza

The 2023 Mann School Graduate Speaker went from being a first-generation college student to pursuing doctoral and master’s degrees–all while serving as president of USC’s Graduate Student Government.
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Samuel Garza went from being a first-generation college student to earning his PhD in Molecular Pharmacology and Toxicology alongside a master’s in Regulatory Science at the USC Mann School of Pharmacy and Pharmaceutical Sciences. He also worked as a graduate research assistant while still finding time to advocate for more than 28,000 graduate and professional students as president of USC’s Graduate Student Government. Garza was the first-ever Mann School student to serve in the position.

Originally from the Inland Empire, Calif., Garza developed his passion for science at California State University, Los Angeles, where he earned a bachelor’s and a master’s degree in biology. From 2016 to 2018, he worked as graduate research fellow for Minority Opportunities in Research (MORE), a program funded by the National Institutes of Health that identifies highly motivated students and assists them in reaching their goals in obtaining doctoral degrees.

As his academic journey continued, Garza fell in love with biotechnology and pharmaceutical sciences while still an undergraduate. This led him to USC Mann–a school, in his words, that really positions students for success.

“Faculty and staff here are able to help you with whatever path you choose: academics, industry or government. There is always someone somewhere who can help you,” Garza said, referring to the school’s faculty and alumni network. “USC makes a promise and can keep that promise. This is unique to the university.”

At USC Mann, Garza conducted research in the lab of Dean Vassilios Papadopoulos. In this capacity, he co-authored several peer-reviewed academic publications with Papadopoulos and fellow researchers–including two featuring Garza as first author. Meanwhile, his thesis involved investigating the pathophysiology and treatment of conditions related to insufficient steroid hormone biosynthesis. He also worked as a drug discovery and development intern with Eli Lilly and Company.

During his first year at USC, Garza joined the USC Graduate Student Government, which represents master’s and PhD candidates in addressing important issues with university administration and faculty. The organization also offers a range of supportive resources–from interdisciplinary events and professional development resources to emergency funding and child support subsidies.

Garza was elected president for the 2022-23 academic year, serving as lead advocate for more than 28,000 graduate and professional students at USC. During his tenure, he spearheaded a university-wide study that led to an increase in stipend for PhD students. Garza and team members collected data from USC graduates, analyzed living expenses and peer school data, and made recommendations to the administration.

In August 2022, Garza addressed an audience of more than 8,000 at USC’s convocation ceremony. It was an exhilarating experience, he said. “I thought about my academic journey and how my experience might help others–especially how I got past the difficult moments throughout my journey. When I arrived at USC, I felt anxious and overwhelmed by the academic pace and new environment. But one thing kept me grounded: my acceptance letter. So, as I said to my fellow students that day, ‘Whenever you are feeling overwhelmed, think back to that acceptance letter,’ because by gaining admission to USC, we’ve all accomplished something incredible.”

Garza is currently considering roles in pharmaceutical consulting and development. To build on the scientific and regulatory expertise honed at USC Mann, he also plans to explore strategic leadership opportunities, including examining how data can be used to drive what happens next in the fields of pharmacy and pharmaceutical sciences.

Samuel Garza will address the graduates at the 116th USC Mann Commencement on Saturday, May 13, 2023.

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