Latest / Targeted Talks / S7 Ep17: Navigating the 505(b)(2) Pathway: Operational, Clinical, and Economic Strategies for Oncology Practices
Transcript
- Untitled - June 12, 2026 00:00:05 Speaker: Hi, and welcome to this episode of Treating Together. I'm your host, Sabrina Serani And today we are hearing from three experts in 505(b)(2) drugs. We'll talk about what these drugs are, how they can benefit oncology practices and patients and where this field is going. 00:00:25 Speaker: So I will have you each give a little introduction of yourselves if we want to start with Jessica. Hi, I'm Jessica White, I'm the vice president of specialty programs and portfolio management for McKesson. I've been a pharmacist for many decades with the history of clinical practice, and now I focus on ensuring that we have a robust portfolio of generic and multi-source products for our cancer facilities who work with us. my name is Derek Burns, senior director of clinical solutions with McKesson. I am also a clinical pharmacist, and my role consists of supporting all of our customers across the US from both an infusion perspective as well as orals or m I'd support. I'm Nick Brady, I'm the director of health informatics at CARTI Cancer Center. my background's in, in pharmacy as well, and more recently in health economics and clinical outcomes research. I manage the drug strategy, among other things, at CARTI Cancer Center. So we will get started for listeners who may not be so deep in the regulatory weeds. Jessica, would you mind explaining what is a 505(b)(2) pathway and how it differs from a traditional NDA process? Well, at a high level, the FDA has a few different pathways for bringing new drugs to market for approval. The traditional pathway way, as you mentioned, is called a 505(b)(1) new drug application, or commonly known as NDA, and it's used for an entirely new product. A manufacturer has to generate all the safety and efficacy data from the early studies through the large clinical trials. And so it's a full, comprehensive, robust process that is also more time and money heavy. And the 505(b)(2) pathway allows drug developers to rely in part on existing data. So information that the FDA already knows through other studies or published literature. And then on top of that, there is still data that's required. But it means these studies have to show what's different or what's improved on top of the existing data. This information combined with these bridging studies leads to this 505(b)(2) approval pathway. And really it reduces the need for duplicative studies, which ultimately speeds up drug development, getting drugs to market faster and lowers the cost burden of bringing these drugs to market. Nick, would you mind going into maybe some of the clinical or patient centered problems that 505(b)(2) drugs are actually solving in oncology? So one of the main things that 505(b)(2) can solve in the practice is disruptions in supply. Some of the things that occur in the market, where a product may become unavailable for long periods of time and maybe on allocation. 505(b)(2) offer a relief from that. Derek, when it comes to 505(b)(2) drugs, what do you see as maybe some of the most common friction points in practices when they try and bring a drug into their workflow? Excellent question. I would say the friction almost never starts with the clinical value of 505(b)(2) From my experience, it starts with operational uncertainty. One common challenge is when a 505(b)(2) launches without a branded name. This can create lots of confusion around specifically ordering systems. I would say Fortunately, most manufacturers have heard this information and have listened to our feedback. Navigating reimbursement post-launch can be another major hurdle, particularly when there's no J code at launch. Maybe no ASP or even the product isn't reflected in the CMS NDC crosswalk. That lack of visibility makes revenue cycle teams understandably cautious. They are. On top of that, the usual concerns around formulary stability, order build changes and workflow disruption and hesitation builds quickly. And in nearly every single case, the real issue isn't resistance to innovation, it's the risk created when coverage, coding and operations at the practice level are not clearly defined up front. Nick, would you be able to speak to maybe what the internal adoption process looks like. Who is at the table when we're looking at bringing 505(b)(2) drugs into practice? So just like Derek mentioned, it's really important that everybody understands the strategy up front. So bringing something into the practice always starts with an economic evaluation. there's a, there's a significant economic opportunity when bringing these drugs in-house. So when comparing that to the, the reference product or the reference generic, we'll assess the economic opportunities there. second, we'll, we'll take a look at what kind of impact that has to the patient. So whenever an economic impact is, is viewed as positive from the practice standpoint, you have to also make sure that it's viewed as positive from the patient standpoint. You never want to raise a patient co-pay. And you have to be a really good steward of that to make sure that the patient does not receive a higher bill because we're going after an internal strategy. with terms of, uh, who's at the table, you have to have everybody at the table who's going to be a part of this. So the person running the strategy needs to have around them somebody in charge of pre certification, somebody in charge of pharmacy, whether that be medically integrated dispensing pharmacy or an infusion admixture pharmacy, typically both at larger practices. you want to have somebody in charge of, of, uh, watching the claims, billing and coding all of those things. switching patients from, one product to another as, as opportunities change, if you have a quorum of all of these departments or these department heads, you can really make an impact and shift quickly, which is really where you find the opportunity. considering all of all of your combined years of experience, does anyone have any practical strategies that have maybe overcome some of these friction points that Derek was talking about earlier. I'll take a stab at this first. I would say the single strategy that a practice can employ, is going to echo a lot of what Nick just mentioned, but front loading all alignments across the organization. So before the first dose is even given, practices that succeed, designate this cross-functional group, as mentioned by Nick, whether it's pharmacy revenue cycle, someone on the billing side of things, but primarily a practice champion, someone at the practice that has their hands in all of these different functions needs to lead these efforts. they can pressure test coverage well before the first dose is given. confirm buy and bill economics. And remember that changes every single quarter with changes in ASP and then come together and agree on where these drugs fit or where they don't fit? looking at treatment pathways, looking at operational efficiencies within the practice that will prevent any downstream surprises. And the other key tactic is starting potentially narrow and very intentional. You don't have to jump in and take all of these drugs and bring them all into your inventory all at once. But pilot each drug with a defined patient population before any sort of broad rollout. And that will help build confidence, fast and then turns a theoretical value discussion into actual experience. I'll add another perspective to build on to what Derek shared. And that is it's critical when we think about these products, we want the oncologists, their teams, their clinical pharmacists to be able to focus on patient care and operations like Derek has outlined. But what's really critical as well is partnering throughout the ecosystem with biopharma partners, as well as wholesaler or distributor partners who really understand how these products come to market. So one of the things that we're experiencing in my role, where I'm responsible for sourcing a lot of these products and engaging with biopharma partners is helping. We mentioned earlier educating on the strategy of these products. They are not generics, but they're not exactly brands either. They live in this in-between world. And so the more that we can do to understand our practice needs, that we support practices like Nick at Car-T to understand what's really happening in the day to day, and liaise with biopharma partners to educate on when you're bringing this product to market, is it going to have that unique J code? Is it going to be therapeutically equivalent? What is the true differentiator and what does that mean for the practice, the patient and the reimbursement model? And when we're thoughtful about supporting how these are commercialized, that will lead to the downstream impacts that Derek mentioned in that come to life in the practice. I think it's important that practitioners don't have to be experts in that, but that they understand what's happening Upstream before they even see these products come to be available for their practice. And just just to echo what, what Derek said, with the practice champion, I think it's really important that the practice champion has one succinct source of information. So as these things are disseminated to the respective groups, it's really important to keep everybody in the loop, even if their department may not be involved, so that everyone understands what the what the whole strategy is, and not just their segmented piece of it. That way, the information, when it gets down to the individuals who are actually making the changes in the charts or making the phone calls, deciding or changing patients from one drug to another, they're not confused about what somebody has told them versus another person has told them. There's there's one source of information. There's one place to go and find it. And there's no way for somebody to be confused about what the, what the strategy of the organization is Well, at the center of all of this. It all comes back to the patient. So when we have a 505(b)(2) drug that is well integrated, we have all of these challenges and friction points smoothed out. What does that look like for the patient experience. So I think from a patient experience, from a practice experience and for the whole system in general, everything needs to be aligned. I think for the patient, that's going to be a smoother experience, as you mentioned, fewer delays, less confusion, making sure that whenever someone is speaking to the patient about that therapy, everyone at the practice is on the same page and therapy that fits their care, in their setting better. I would add to that when we spoke earlier about what are some of the the clinical or patient centered problems that 505(b)(2) drugs are actually addressing? And I think, Derek, you mentioned creating a space for supply redundancy, and that's certainly one of the areas of focus. But another area that we see in some of these clinical differentiators is making these therapies that are well known drugs, proven mechanisms of action. It's making them easier for patients to tolerate. And so what we can find is that with some of the clinical improvements, whether it's a modified dosage form or taking out an additive that causes toxicity or changing the dosage schedule by going from a short acting to a long acting, there's lots of different tweaks that can be applied in these 505(b)(2) seconds, but ultimately, when done effectively, they can make it easier for cancer patients to stay on, tolerate and have better adherence to these drugs, improving their outcomes today, tomorrow, and long term. And that's an area where I think there's a lot of opportunity. The more the more we improve in the ecosystem of commercializing these products, bringing them to the practices, navigating all the complexities that the team here has outlined. At the end of the day, it can make significant long term outcomes to the patients, and we can educate and inform on that. Jessica, one thing I'd like to reemphasize of what you just mentioned is around that piece to patient safety. So as we have multiple agents on the market in each of these categories, they might be prepared different. Some might be taken with food, some might not. Some might have actually different doses. And when a practice is all on the same page, then there would be no issue to patient safety, or they would be mitigating that risk as much as possible to ensure that whatever is intended for that patient is what is entered into. That electronic medical record is what is ordered from the wholesaler, what is dispensed to the patient, prepared and administered, and ultimately then build out to the payer. And just just to piggyback onto that, for the patient, it should be seamless, right? It should be totally seamless from one product to another. The patient should be aware that they're on a 505(b)(2) but that shouldn't impact the speed or quality of their care. For the practice I think that there should be some economic value there. Anything that you're doing a huge number of times should be somewhat economically viable for the practice. And then for the system, it just adds a degree of being robust to the to the entire health care system. And that supply chain is more robust. The practice being able to source products is more robust. It's it's good for the system overall. And then for the practice that has maybe been hesitant to You adopt these drugs? I know we've talked about really talked about a lot of the benefits, but what are maybe some advice or some takeaways that you could offer physicians or practice administrators for easing this alignment or, improving this process or, really making sure that we have all of the stakeholders in place. I would say a great place to start is just do a couple of test patients. You don't have to jump in with both feet and do an entire patient population at one time. You can say, all right, we'll do one or two patients that we think should work based on the criteria that we've set out. go ahead and do those patients build their insurance and then wait for the results to come back. That way you don't have a huge liability out there waiting to be paid. And you're not one hundred percent sure that your claims are going to be covered. I would anticipate that for any customer or practice that has been burned. it's unintentional. It's a staff member wasn't aware. They weren't educated. They didn't know they were potentially making a mistake or something was misbehaved or they did all the billing correctly. but no one's self audited and made sure that they were truly getting paid what they were supposed to. So I would say education and communication internally, for whatever practice site is choosing to go into 505(b)(2) And I would even say if a practice has decided 505(b)(2) are not for us at this moment in time, they should still be educating because those drugs are available in ordering systems. They're going to be showing up in EMRs and potential regimens that physicians are entering. you might see some referrals come in. you're going to see biopharma, reaching out to talk about certain drugs, and you are going to see certain payers pick up these drugs as preferred options in the future. So it's going to be more of a not yet versus never. So as practices are faced with this information in the real world, making sure that they are well educated and communicated with on an ongoing basis. And then, Jessica, let's circle back to the regulatory aspect of all of this. Where do you see 505(b)(2) development heading in oncology over the next couple of years? It is absolutely not slowing down. And if I had to sum it up with all the time that we spend with biopharma partners, it's coming up in every meeting. So we're seeing companies, some of whom have been traditional branded companies, exploring and continuing to escalate their pipeline in 505(b)(2) oncology. We're also seeing a great deal of traditional generic manufacturers who are now building out a robust pipeline for today, for the next several years into the future. A lot of them are focused on oncology and then looking at what other therapeutic areas can we enter next? We will continue to see these, just the interest, the strategy, but also the fact that they are accelerated approvals. So these are going to happen much more quickly than we're used to with traditional NDAs. And so with that, we will see a focus less about marginal tweaks to molecules and more about these companies strategizing. How can we solve delivery access as well as capacity problems? How can we take known drugs that we know are safe, we know are efficacious, and how can we make these changes to make them more effective in today's oncology reality? And with that, we'll continue to see a focus, as we talked about a little bit earlier on some of these older oncolytics and supportive care that have experienced cycles of supply disruption. We're seeing more pipeline that looks at not only what can we change to make the product easier to administer, less complex admixtures, less toxicity for patients, but also, how can we revive and create supply redundancy in a pipeline where we are experiencing drug shortages? With some of these oncolytics have been around for decades. I believe we'll continue to see more of that. And we are really coming to the the wrap up here. So if each of you I know we've covered a lot of ground and we've covered. You circled back to a lot of main themes. But if each of you could share maybe one key takeaway for the practice administrator or advanced practitioner or physician to walk away with from this discussion here today. I would want any of the listeners to walk away with this one fact that 505(b)(2) drugs are an operational tool and can be a component of overall strategy within your practice. that includes clinical aspect operational and overall economics. And I would urge every listener to approach this conversation from all three elements, not just be focused on economics or the operational piece, but include clinical operations and financial health. That way, every single person within your organization feels connected to that and part of that overall decision. I would encourage practices that if they've seen one 505(b)(2) they've seen one 505(b)(2) that they're all going to behave differently. And that what's most critical in understanding this regulatory pathway is it spurs us on to ask the right questions. What is actually different about this product? What evidence supports it? How does it fit into the care delivery for my patients? And then to acknowledge it's probably not going to be in all. And it's probably not going to be a nothing that as we've talked about, there's likely going to be a place in every oncology practice in today and the future for 505(b)(2) teams. So the more you can educate on the regulatory process, the more you can educate on what this individual product is bringing to the market and apply it to your patient care, you'll be able to work out what that looks like in your practice. Those are both great points from from Jessica and Derek. I would just add that 505(b)(2) are a great way to bring back value to the practice. And you can use that value to improve patient care and to ultimately improve the patient experience. And that's what we're all trying to do. one key aspect of this is most customers and practices are going to be faced with having to carry multiple drugs within a specific chemical entity on their shelf. And that could be based on what the payer is wanting. It could be based on a patient factor, but likely they could have two drugs in one category in their inventory at the same time. So it's going to be very key that they manage that effectively, have things labeled appropriately so that they ensure that they are not only dispensing and giving the correct drug to that patient, but also billing the drug correctly. Billing units might be different. The J codes for billing might be different. And in a case where there's not a trade name or a branded name with that 505(b)(2) it would be very, very easy for one person in that location to misidentify and mis bill and mis administer a drug. And to add to that point. Derek. What's interesting about we talked about the pipeline. What we're seeing is that most if not, I don't want to say all, but most of the oncology products are now launching with a brand name, are now following a commercial pathway that mimics a brand product. So that problem that's been somewhat extensive in the past as, as companies were dabbling in the 505(b)(2) we'll see some level of correction to that just by nature of them launching with with the branded products, it's still a risk and agree that there needs to be education. But I believe that risk will lessen as we see this different come to market strategy continue to expand in the oncology space. I agree and very thankful that biopharma has taken a lot of that feedback and made those necessary changes.