Madrigal’s payer challenges will really be demand challenges. And Madrigal is not alone

Companies and investors often blame payers for reimbursement problems that really reflect lack of physician and patient commitment to the therapy

On March 14, resmetirom is likely to become the first drug approved for NASH (or MASH, as it’s increasingly called) via an accelerated regulatory path. Revenue expectations are all over the place — but suffice it to say that most analysts forecast peak sales at over a billion dollars, some well over.

Given the size of the market and its potential budget impact, payers will certainly implement all sorts of utilization management hurdles. But the bigger reimbursement question for Madrigal and the companies that come after it — and indeed any company launching into virtually any market — is demand: how well they’ll do in getting physicians and patients excited enough to fight for reimbursement.

Demand in this instance means more than physicians writing scrips; we’re talking about generating enough buy-in about resmetirom’s clinical value that physicians will invest the time needed to fight through the hurdles payers will erect. Those same hurdles were what ultimately discouraged cardiologists from fighting for the PCSK9 inhibitors, a class of drugs that has never fulfilled its true clinical potential.

Key to a strong launch, therefore, will be the effectiveness of Madrigal’s patient support services, particularly those focused on helping physicians’ offices manage the prior authorization and appeals process.

Payers are well aware of resmetirom’s potential financial impact. Even if the therapy is limited to patients with more severe disease — fibrosis stages F2 and F3 — that’s still about 4.5 million potential patients in the U.S., according to The New England Journal of Medicine editorial accompanying the article on resmetirom’s successful (and ongoing) Phase III MAESTRO-NASH trial.

So, rough math: at a $15,000 price, that’s a $6.5 billion market. At the Institute for Clinical and Economic Review’s suggested price of about $40,000, a $17 billion market.

Non-alcoholic steatohepatitis is a brand-new market — and so a brand-new expense category for payers (and given the NASH ambitions of the obesity drugs, and the many NASH-specific drugs following on, that could be one big new expense category). Investors are right to be reassured by the experience of Madrigal’s top management. They led the group at Sanofi (Euronext:SAN; NASDAQ:SNY) that helped engineer the amazing performance of Dupixent dupilumab. But from a payer’s point of view, Dupixent was a different story: a better drug for an existing category of disease spend, launching at a similar (actually lower) price. Moreover, it was approved on a normal, not accelerated, pathway so payers had greater confidence that Dupixent’s real-world performance would match clinical trials.

Payers will justify their utilization management of resmetirom in various ways. The drug’s benefit, while compelling, is still relatively mild — placebo adjusted, a roughly 20% resolution of NASH and 10% improvement in fibrosis. The endpoints are all surrogates and we won’t have true outcomes from the trial for another three or so years. Remember: payers used the lack of outcomes data on the PCSK9s to restrict utilization — and that was with a surrogate endpoint, LDL lowering, that was as definitive a predictor of outcomes as any.

What could payers throw in the way of access? The eligibility criteria will be strict. Worst case, payers could require liver biopsies (all patients in MAESTRO-NASH had liver biopsies before entering the trial and 52 weeks later). Other hurdles: new-to-market blocks, step edits through weight loss programs; specialist prescribing; no alcohol use; a glycated hemoglobin level less than nine; and a 12-month reauthorization based on documented monitoring results to prove the treatment is working.

So doctors will need help from Madrigal. Tactically, among other things, they’ll need an unusually sophisticated physician and patient support program that will help providers manage, for example, payer monitoring requirements from radiology and pathology and, downstream of that, the burden of that dispiriting prior authorization and appeals process.

Payers are routinely blamed for the challenges we’ve seen when new products are released — prescription digital therapies, for example, or hemophilia gene therapies. But equally important is the issue of demand: providers aren’t doing much to push back against payers, at least in part because they don’t feel the efficacy or safety benefits are worth it — that is, they feel they’ve got comparable alternatives, with or without approved indications. And if they don’t get push back from doctors, payers have no reason to relax their restrictions.

Important new therapies will get coverage, although that coverage will come with varying levels of restriction. Drug companies will need to both build the demand itself — that is, the patient and physician commitment to the therapy — and implement the patient and physician support tools that make it less onerous for physicians to get it for their patients.

Madrigal may be the next company that needs to navigate this challenge, but it certainly won’t be the last. As payers increase their power, market access innovation — new forms of contracting, for example — will of course be crucial. But just as important to payer strategy will be innovation around patient and physician demand, and the support tools to make that demand felt by payers.

Jane Barlow is an MD and chief clinical officer of Real Endpoints; Roger Longman is RE’s chairman.

Signed commentaries do not necessarily reflect the views of BioCentury.