In this case study, we take the two categories (ADCs and anti-PD-1/L1) of drug interventions and chart their paths of price and estimated demand from 2024 to 2029. The major assumptions are shown below. ASP data from Keytruda, Opdivo, and anti-PD-L1's indicates that a low level of rebating is in place today and manufacturers indicate that they will continue to maintain or raise prices. With the anti-PD-L1's increasing market share in their respective indications and new entrants from China, the dominance that the IO duo once had has quickly come into the crosshairs. These two driving factors will lead to an excess supply of these interventions leading to pressure to reduce prices. Alternately, with the strong clinical outcomes from ADCs in clinical trials, they are expected to be the rising stars in 1L and 2L further displacing the anti-PD-1/L1 category and likely chemotherapy regimens to some extent. This strong demand typically drives manufacturers to increase prices and too high of demand can lead to shortages, a need for greater manufacturing capacity, and therefore higher production costs.
An initial estimate suggests that the anti-PD-1/L1 class will prove to be more price elastic than the ADC class despite a runway for sharper increases with the latter. The recent development partnership between Merck & Daiichi-Sankyo and Merck & Kelun-Biotech will likely help Merck determine the long-term share impact to Keytruda, as well as, help them stay current and science-driven given the partners' experience with elaborate development programs like the KEYNOTE and DESTINY trials.
Media Sources: Merck, Daiichi-Sankyo, Reuters.
| Supply | Demand | |||||
| Type | 2024 | 2026 | 2029 | 2024 | 2026 | 2029 |
| Antibody-drug conjugates | Low | Moderate | High | High | Very High | Very High |
| Anti-PD-1 antibodies | Very High | Very High | Very High | Very High | Very High | Very High |
| Anti-PD-L1 antibodies | High | High | High | High | High | High |
| Generic chemotherapies | Very High | Very High | Very High | Very High | Very High | Very High |
| HER2-specific small molecules | Moderate | Moderate | Moderate | Moderate | Moderate | Low |
| HER2-specific antibodies | Moderate | Moderate | Moderate | Moderate | Moderate | Low |