2. Questions to address with pricing and pharmaceconimic modeling… How do manufacturers price a product? What constitutes a “value proposition”? How is healthcare reform going to affect pricing in the future
16. Adopting Measures for Reporting and Payment Quality Metrics Developing Consensus Measurement Development Measurement Development Developing Consensus Adopting Measures for Reporting and Payment
17. Two Approaches to Pharmaceconomic Modeling Establish Predictability of Cost Outlay Budget Impact Analysis Market Share Changes Drug Volume/Market Penetration Provide Evidence for Potential Cost Offsets Pharmacoeconomic Analysis Cost Minimization Cost Effectiveness Cost Utility Cost Benefit
18. Publication of RxEcon Data Has Impact on Formulary Decision Making Survey included 95 key decision makers 77% of responders always/often rely on journals for formulary decision making HE&OR and MC journals rated highest for symptomatic diseases Clinical journals rated highest for chronic diseases Source: Journal Use for Formulary Decision-making in Managed Care. Presented at AMCP 20th Annual Meeting & Showcase, San Francisco, CA, April 16-19 2008.
20. The Question of “Effectiveness” Will the product work under real-world conditions? Concomitant disease Patient adherence Real world prescribing patterns
21. Key Pricing and Effectiveness Questions How is our product truly unique? Mechanism of action Route, frequency, onset, duration Efficacy, tolerability, safety How does this translate into clinical outcomes? Real world populations, subpopulations Ease of use Who will value the differentiation? Patient/caregiver Quality organization Payer/Purchaser Provider How much do these stakeholders influence our target market?
22. Responders Price Pressure Responders All patients All patients Responders Responders Price Pressure All patients All patients Value of Product Differentiation “Fail First” High Interchangeability “Open Access” Low Interchangeability “Own a patient type”
23. Quality and Health Reform National strategy for quality improvement HHS Secretary to develop by 1/1/2011 $95million/year 2010-2014 Development, endorsement, dissemination of quality measures Reduced payments for readmissions AMI, HF, Pneumonia To begin 10/1/2012 Quality will be tied to reimbursement