Small Molecules vs. Biologics Patterns of Indication Expansion and the Potential Impact of Medicare Price Negotiation
Author(s)
Cheyi Li, MPH1, Richard Xie, PhD1, Jacqueline Rhuda, BSc2, Peter Kolchinsky, PhD1.
1RA Capital Management, Boston, MA, USA, 2RA Capital, Boston, MA, USA.
1RA Capital Management, Boston, MA, USA, 2RA Capital, Boston, MA, USA.
OBJECTIVES: Under the Inflation Reduction Act, Medicare price negotiations (MPN) begin nine years after initial approval for small-molecule (SM) treatments and 13 years for biologics. This policy may differentially affect incentives for indication expansion for innovative therapies. This study examines the number and timing of indication expansions in the US for SM and biologic treatments approved between 2000 and 2014.
METHODS: Using Citeline’s Biomedtracker database, we constructed an analytic dataset of US approval histories (2000-2024) for novel drugs categorized as new molecular entities or biologics, which received initial approvals between 2000 and 2014. For each drug, we measured the elapsed time between initial approval and each subsequent indication. We then summarized, by molecule type, the percentage of drugs with >1 indication, the average time to the second indication, the total count of indications, and the speed of expansion (calculated as the ratio of total additional indications to the total number of drugs at each year post-initial approval).
RESULTS: Our sample included 233 treatments, comprising 162 SMs and 71 biologics. Among these, 67 drugs had more than one indication (40 SMs and 27 biologics). For drugs with multiple indications, the average time to the second indication was 3.5 years for SMs and 6.6 years for biologics. On average, SMs had 2.43 indications versus 3.21 for biologics. The rate of indication expansion was similar for SMs and biologics during the first nine years following initial approval but plateaued after nine years for SMs and after 14 years for biologics.
CONCLUSIONS: Indication expansion was more common and occurred over a longer period for biologics, potentially reflecting more intense generic competition in SM markets. Compared to the status quo, MPN will shorten the exclusivity period for both SMs and biologics, which may reduce incentives for additional indication expansions.
METHODS: Using Citeline’s Biomedtracker database, we constructed an analytic dataset of US approval histories (2000-2024) for novel drugs categorized as new molecular entities or biologics, which received initial approvals between 2000 and 2014. For each drug, we measured the elapsed time between initial approval and each subsequent indication. We then summarized, by molecule type, the percentage of drugs with >1 indication, the average time to the second indication, the total count of indications, and the speed of expansion (calculated as the ratio of total additional indications to the total number of drugs at each year post-initial approval).
RESULTS: Our sample included 233 treatments, comprising 162 SMs and 71 biologics. Among these, 67 drugs had more than one indication (40 SMs and 27 biologics). For drugs with multiple indications, the average time to the second indication was 3.5 years for SMs and 6.6 years for biologics. On average, SMs had 2.43 indications versus 3.21 for biologics. The rate of indication expansion was similar for SMs and biologics during the first nine years following initial approval but plateaued after nine years for SMs and after 14 years for biologics.
CONCLUSIONS: Indication expansion was more common and occurred over a longer period for biologics, potentially reflecting more intense generic competition in SM markets. Compared to the status quo, MPN will shorten the exclusivity period for both SMs and biologics, which may reduce incentives for additional indication expansions.
Conference/Value in Health Info
2025-11, ISPOR Europe 2025, Glasgow, Scotland
Value in Health, Volume 28, Issue S2
Code
HPR185
Topic
Health Policy & Regulatory, Methodological & Statistical Research
Topic Subcategory
Pricing Policy & Schemes, Reimbursement & Access Policy
Disease
No Additional Disease & Conditions/Specialized Treatment Areas