EBI inVentiv Market Access Virtual Conference

Market Access in the Era of Specialty and
Biotech: An EBI Virtual Conference
December 13, 2011

Presented by

WE‟RE WAITING FOR YOU AT THE GLOBAL CROSSROADS. WE KNOW THE WAY IN HEALTHCARE.™
WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH

Introductions and Housekeeping

Nathan White, CPC
Executive Director
Access & Reimbursement

Sessions begin promptly at time listed on agenda
We‟ll break for lunch at 12:15 for one hour – please stay signed in!
Questions from listeners are welcome
To contact a panelist or presenter, please email
nwhite@inventivhealth.com

2 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH

World’s leading provider of sales,
marketing, and communications The leading management
One of the industry’s consulting group specializing
top global CROs solutions for the healthcare industry
in biopharma

Services include: Services include: Consulting practices include:
 Phase I-II  Outsourced sales teams and  Brand management
(FIH or bioequivalence studies) sales support  Business development
 Phase IIb – Phase IV studies  Advertising, branding and PR
 Clinical development
 Strategic partnerships  Digital and closed loop marketing
 Medical affairs
 Bioanalytical services  Patient outcomes, REMS and
 Pricing and market access
 Clinical data services/technology
Rx access/adherence
 Sales
 Medical education
 Staffing services


Industry Megatrends

Specialty trend (spend) gaining lots of
attention

• By 2016, 8 of top 10 worldwide drugs will be specialty

SOURCE: Accredo Keynote Address, Armada Summit, May 2011

4 INVENTIV HEALTH > TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™

Industry Megatrends

attention


Pharma companies will move toward
developing more targeted and tailored
therapies and more personalized medicine
• About 70% of current pipeline drugs have biomarkers associated with them.



Industry Megatrends

attention


Pharma companies will move toward
developing more targeted and tailored
therapies and more personalized medicine
• About 70% of current pipeline drugs have biomarkers associated with them.

Pipeline for specialty is substantial

• 600 new drugs in pipeline (40% oncology and 30% of these infused)



Industry Megatrends

Legislative and regulatory activity will shape
our future

• Many of today‟s Indigent patients will become insured (underinsured)



Industry Megatrends

our future


The co-pay card tipping point

• The government has already restricted commercial co-pay activity and private payers are next



The beginning of the end…

CVS Caremark Corp.'s pharmacy-benefit business is recommending
customers stop covering more than 30 drugs next year, including diabetes
treatments and an erectile-dysfunction pill, to save money and combat drug-
maker coupons that promote brand-name medicine over cheaper alternatives
WSJ, November 19th, 2011

Drug-company coupons that promote brand-name medicine over cheaper
alternatives could hike drug costs by $32 billion over the next
decade, according to a study from the industry that manages pharmacy
benefits WSJ, November 3rd, 2011


Industry Megatrends

our future


The co-pay card tipping point

• The government has already restricted commercial co-pay activity and private payers may be next

The demonstration of value is becoming
more critical

• Payers are already demonstrating resistance to high cost specialty products w/o a value proposition



Who cares about value?


PPACA Implementation
A Beltway Insider‟s Perspective

Jayson Slotnik, JD
Partner, Health Policy Strategies, LLC
TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™

Outline
• Recent Payment Developments Related to Specialty
– Accountable Care Organizations (ACOs)
– CMI Examples
– Comparative Effectiveness
• CMS Coverage Update
– New list of NCDs
– Parallel Review
– New Coverage with Evidence Development (CED) Process
• Miscellaneous Topics
– Medicaid Managed Care
– Drug Shortage

13

Physician Fee Schedule
• CMS projects that total payments in CY 2012 will be
approximately 80 billion dollars.
• CMS continues with the third year of a four year phase-in
for practice expense RVU changes:
– CMS estimates that spending for radiation oncology procedures will
fall by 6% from CY 2011.
– Over next two years radiation oncology and radiation therapy
centers are slated for a cumulative cut of 10% and 11% respectively.
– Hem/Onc is only 1%
• Adjustments to quality reporting system, electronic
prescribing and electronic health records incentive program.

14

Accountable Care Organizations
• ACOs (Medicare Shared Savings Program)
are voluntary groups of physicians, hospitals
and other health care providers that have
collectively agreed to manage care for a
defined group of Medicare beneficiaries.
• Only includes Medicare Parts A and B.
• Effective January 1, 2012.
– First agreements will start on April 1,
2012 or July 1, 2012.
• First dollar savings to ACO.

15

Accountable Care Organizations
• Final Rule issued October 20, 2011 with significant changes
to make the structure more appealing to providers for a
three year commitment.
• Two tracks for providers to choose from, one is only upside.
– First dollar savings.
• Beneficiary assignment is prospective. 5,000 minimum per
ACO and measured against a FFS benchmark.
• Reduction in number of quality measures, four key domains
remain the same.
– Still an important part of financial model.

16

Other Shared Savings Models
• Advanced Payment ACO Model
– Three types of payment: (1) an upfront fixed payment; (2) an
upfront variable amount based on the number of its historically
assigned beneficiaries; (3) a monthly payment of varying amount
based on the number of its historically assigned beneficiaries.
– Only two types of organizations are eligible: ACOs that do not
include an inpatient facilities and have less than 50 million in total
annual revenue; or, ACOs is which the only inpatient facilities are
CAH and/ or Medicare low volume rural hospitals and have less than
80 million in revenue.
• Pioneer ACO
– Designed for health care organizations and providers that are
already experienced in coordinating care for patients.
17

Center for Medicare and
Medicaid Innovation (CMI)
• Created by Congress with 10 billion dollars over 10
years to “test innovative payment and service
delivery models to reduce program expenditures,
while preserving or enhancing the quality of care”
for those who get Medicare, Medicaid or CHIP
benefits.
• CMI will “test models of care that deliver better
healthcare, better health and reduced costs through
improvement.”
18

CMI Examples
• Bundled Payments for Care Improvements
– There are four broadly defined models of care.
– Three models involve a retrospective bundled payment arrangement,
and one model would pay providers prospectively.
– Applicants would propose the target price, which would be set by
applying a discount to total costs for a similar episode of care as
determined from historical data. Participants in these models would
be paid for their services under the traditional fee-for-service
system.
– At the end of the episode, the total payments would be compared
with the target price. Participating providers may then be able to
share in those savings.

19

CMI Examples
• Comprehensive Primary Care Initiatives
– The CPC initiative will test two models simultaneously: a service
delivery model and a payment model to strengthen the role of
primary care.

• State Demonstrations to Integrate Care for Dually
Eligible beneficiaries
– Selected states will receive up to $1 million to design strategies for
implementing person-centered models that fully coordinate primary,
acute, behavioral and long-term supports and services for dual
eligible individuals.

20

Comparative Effectiveness
• Funding: FY 2010 – 2012: Appropriations of $10M, $50M, and
$150M, respectively. 2013-2019: Mix of public and private funding.
• Scope: To inform coverage, findings cannot be construed as
coverage/payment recommendations, HHS Secretary can set co-pay
differentials based on effectiveness, however.
• Value proposition is no longer based solely on safety &
efficacy.
• Post-approval, stakeholders look for evidence that new therapies
are differentiated from existing treatment.
• Patients, payers, and prescribers want to know which patient
populations optimally respond to new treatments.
• Changing investment decisions.

21

Updated NCD List
• First list was issued in 2008.
– Many of the proposed NCDs were conducted.
– Not clear what will happen to the remaining list
• CMS issued notice on September 28, 2011, comment period closed.
• The Notice states that “Medicare may be paying for potentially
ineffective or harmful items and services, and there may be
potentially high value items and services that are being
underutilized” as a driver for this effort.
• Current Notice “introduces” “minimal benefit” concept.
– “CMS is inviting your input concerning any items and services you
believe may be inappropriately used (i.e., underused, overused, or
misused) or provide minimal benefit in hospitals, clinics, emergency
departments, doctors’ offices, or in other healthcare settings.”

22

Parallel Review
• In joint Notice statement, the agencies state that “parallel review is
intended to reduce the time between FDA marketing approval and
CMS national coverage determinations, thereby improving the
quality of patient health care by facilitating earlier access to
innovative medical products for Medicare beneficiaries.”
• Agencies established a voluntary pilot program for devices that
does not change the existing separate and distinct review standards
for FDA device approval and CMS coverage determination.
• CMS is open for conducting parallel review for drugs/biotech
products???
– Good idea for currently non covered items or services

23

Changes to CED
• CMS issued Notice on November 7, 2011, comment period closes January 20,
2012.
• Coverage with Evidence Development (CED) is currently used by CMS to provide
conditional payment for items and services while generating clinical data to
demonstrate their impact on health outcomes.
– The goal is to improve health outcomes for Medicare beneficiaries
• CMS states that the “intended outcome is to mature CED so that it fulfills its
potential as a mechanism that simultaneously reduces barriers for innovation and
enables CMS to make better informed decisions that improve health outcomes for
Medicare beneficiaries.”
• Agency seeks comments on:
– Implementation of CED through the national coverage determination (NCD) or
other avenues under Part A and Part B;
– Potential impact of CED on the Medicare program and its beneficiaries.
– Suggested approach to CED to maximize benefit to Medicare beneficiaries

24

Medicaid Managed Care
• Public insurance program for low income Americans
is single largest healthcare program in the US.
• In 2011, average monthly Medicaid enrollment is
projected to exceed 55 million.
• 17 states currently “carve out” prescription drugs.
• ACA will dramatically reduce this number due to
changes in rebate formula and state budgets

25

Drug Shortage
• Number of prescription drug shortages nearly tripled between
2005 and 2010.
• More than 200 drugs are on the current shortage list kept by
the American Society of Health-System Pharmacists.
– Resulting from ASP system
• Changing reimbursement formula discussed, but no changes
proposed.
• FDA sent letter to manufacturers encouraging them to voluntarily
notify the agency of impending shortages.
– Pending legislation to mandate notification.

26

Trends in Specialty Care
• Expansion of pharmacy benefit tools on specialty
products.
• Greater use of guidelines driving coverage.
• Outcomes based payment structures.
• Adherence—growth of programs at specialty level
• REMS
• Will Biosimilars make a difference?
– Guidance by year end

27

Specialty Industry Panel
Moderated by Michael McCaughan

Michael McCaughan
Founding Partner, Prevision Policy

Panelists

Steve Bloom, RPh
Vice President
ZIOPHARM Oncology

Kay Barry
Director, Government Accounts
Shire Human Genetic Therapies

Steve Bourke, RPh
Manager, Patient Support and Reimbursement Services
Celgene Corporation


REMS Considerations in a
Market Access Strategy

Jeff Fetterman
President, ParagonRx

REMS Considerations in a Market
Access Strategy

© 2011 ParagonRx International LLC

33

Risk Evaluation and Mitigation Strategy (REMS)

Authority granted to FDA as
part of FDA Amendment Act of 2007

Likely a reaction to
 High profile drug withdrawals
 Growing risk aversion of public

Required if FDA determines such strategy “is
necessary to ensure that the benefits of the
drug outweigh the risks of the drug”*

* FDC Act § 505-1(a)(1), as amended by FDAAA §901(b).


34

Draft REMS Guidance

Guidance for Industry
Content of Proposed REMS Format and Content of Proposed
Risk Evaluation and
 Goals Mitigation Strategies
(REMS), REMS
 Stated to achieve maximum risk Assessments, and Proposed
reduction REMS Modifications

 Timetable for Submission of DRAFT GUIDANCE
Assessments
U.S. Department of Health and Human Services
Food and
 Min frequency of 18, 36, 84 months Drug Administration Center for Drug Evaluation and
Research

 “Additional REMS Elements” (CDER) Center for Biologics Evaluation and
Research (CBER)

 Medication Guide September 2009
Drug Safety
 Communications Plan
 Elements to Assure Safe Use
 Implementation Systems


35

REMS Enabled Almost 200 Products to Get to Market or
Stay on Market

Program Elements in REMS Programs Number %
of
Products
Medication guide (MG) 35 18
MG, communication plan (CP) 26 13
MG, elements to assure safe use (ETASU), 15 8
implementation system (IS)
MG, CP, ETASU, IS 10 5
MG, ETASU 5 3
CP, ETASU, IS 2 1
CP 15 7
Released 90 45
Total 198 100


36

Uncertainties of REMS

Promise
 Improved patient safety

Possible unintended consequences
 Administrative, financial, and logistic challenges for
 Pharmaceutical companies
 Payers, health plans, and suppliers
 Healthcare providers
 Patients

© 2010 ParagonRx International, LLC

37

Uncertainties:
Common Beliefs About REMS in Practice

Physicians • “Manufacturers are shifting their liability to me”

• “I need to be reimbursed for activities beyond
Pharmacists
dispensing”

Payers and Health • “This limits utilization, but increases administrative
Plans costs; FDA can‟t regulate care delivery ”

• “These requirements interfere with my internal
Hospitals
controls and systems for managing risk”

Patients • “I don‟t understand what this means to me”

© 2010 ParagonRx International, LLC

REMS Challenges:
Competing Objectives?

Achieve patient Preserve patient
safety objectives access to drug

Compelling for Practical for
FDA HCPs


39

Beginning with the End in Mind:
Where Do We Want to End?

REMS
Patient safety
commitments
is achieved
are fulfilled
Two realizations:
 Overall goal is
appropriate use of
medications
 REMS alone may not
Brand Market be enough
experience is access
enhanced achieved


One Approach: REMS Based on Precedence

Approach
 Determine what REMS elements FDA required in similar
situations in past
 Create the rationale for why such elements are appropriate
to address risks of your product

Critique
 Expedient
 Difficult to defend
 Not optimized for unique risks/benefits of product


Alternative Approach: REMS Based on Scientific Method

Approach
 Systematically evaluate the care delivery process to
identify how it may fail to protect patients from AEs
 Define interventions that target the most serious hazards

Critique
 Optimizes REMS for unique risks and benefits of product
 Improves ability to defend REMS
 Requires more effort and time


42

Science-Based Management of REMS Lifecycle
Timeline for REMS initiated in product development
Ph I - III Peri Approval Launch Post Launch

Prepare &
Benefit-Risk Implement Optimize
Design Negotiate Assess
Assessment & &
Program Regulatory Effectiveness
& Strategy Operate Redesign
Documents

• Create regulatory documents and
• Characterize toxicities and safety • Develop plan with science-based supporting materials
concerns methods • Develop assessment protocol
• Identify risks associated with care • RxFMEA® • Plan contingencies; prepare
delivery • Stakeholder ethnography science-based rationale
• Adult education principles
• Itemize risks; determine which may • Document implementation details to
require intervention beyond labeling • Create REMS elements support negotiations
(i.e., REMS) • Effective risk communications
• Support mock advisory boards
• Define strategic options for risk • Elements to assure safe use
• Implementation systems
• Assist with FDA negotiations
mitigation
• Labeling, Appropriate Use • Assessment protocols • Establish rapid response process to
Program, REMS • Create non-REMS elements edit REMS
• Select risk mitigation • REMS promotion • Begin implementation readiness
strategy, e.g., REMS and/or non- • Benefit-risk communications planning
REMS • Appropriate Use Programs
• As appropriate, create development-
stage risk management plan © 2011 ParagonRx International LLC

43

Science-Based Management of REMS Lifecycle
Timeline for REMS initiated in product development
Ph I - III Peri Approval Launch Post Launch

Prepare &
Benefit-Risk Implement Optimize
Design Negotiate Assess
Assessment & &
Program Regulatory Effectiveness
& Strategy Operate Redesign
Documents

• Establish REMS Coordination • Conduct gap analysis and root
Office (RCO) to proactively • Implement assessment protocol(s)
manage cause analysis
• For risk communications
resources, tasks, timelines • For ETASU • Re-design program
• Produce REMS materials and non- • For REMS Effectiveness Mgmt • Re-design REMS promotion
REMS materials. Process
• Engineer customer experience
• Select ETASU operators • Define and produce reports of
REMS effectiveness • Re-define internal
• Registries, call centers, distribution
centers, IVRS • For risk communications communications & commitments
• Develop REMS Implementation • For ETASU • Re-evaluate lifecycle
Project Plan • Define measures, metrics, and management (of REMS)
• e.g., rep training programs reporting for internal REMS
• Effective learning technologies Effectiveness Management
process
• Implement REMS Effectiveness
Management


Beyond REMS: Spectrum of Pharmaceutical Safe-Use

PROACTIVE Safe Use
(Benefit-Risk Optimization)

ACTIVE Safe Use
(Risk Mitigation)

REACTIVE Safe Use
(Crisis Management)


Market Access with PROACTIVE Safe Use
CASE STUDY
Product Category Pulmonary Therapy

• First in class drug with relatively benign safety profile except
transient LFT elevation, but intended for pediatric use, thus
expecting greater scrutiny from FDA
Issue • Other concerns: Lack of long-term safety data (unknown
risks, rare events), potential off-label use, very conservative
review division, lack of pregnancy data, data from disease
state registry may be limited

Process/Tools • Voluntary tools

• NDA was submitted without a REMS
• As a proactive contingency, a MedGuide-only REMS was
developed

Outcome • Voluntary safe-use management measures were also
developed to mitigate risk
• The outcome at this point is enhanced client confidence in
the likelihood they will obtain a first-round approval from
FDA


Market Access with PROACTIVE Safe Use
CASE STUDY
Product Category Anti-Depressant

• Regulatory agencies in two very different markets were
Issue contemplating restricting the prescribing of this product to
therapeutic specialists

• Voluntary tools
Process/Tools • RxFMEA®
• Ethnography

• Pre-empted regulatory restrictions
Outcome • Qualitative measures supported safe use
• Cross-functional team developed


Conclusions

Medication risks can restrict access to markets

REMS can help achieve regulatory clearance, but
REMS can also inhibit access

Optimal REMS designs can preserve market access

Proactive management of safe medication use is
essential to support commercialization


LUNCH BREAK


Developing Payer Evidence:
The Role of Post Approval Programs


Presenters

Nathan White, CPC
Executive Director
Access & Reimbursement

Jeff Trotter
Executive Vice President
Phase IV Development

Lujing Wang, MD, MPH
SVP and Practice Area Lead
Pricing & Market Access


The Global Payer Market:
Programs to Support Managed Markets Strategies

Nathan White, CPC
Executive Director, inVentiv Patient Access Solutions

European Landscape

• Coverage largely through government
sponsored/managed insurance
• Well-defined health technology assessment
(HTA) process
• HTA/Payer relationship is strong (i.e. UK‟s NHS
& NICE)
• Emphasis on medical innovation: “me too”
products are not favored in HTA process
• HIT is a critical part of coverage and
reimbursement systems


US Landscape

• Complex evidence development and utilization
• Many national payers and PBMs have developed in-house HTA‟s
› Research could be viewed as subjective
› Rely heavily on claims data and chart review
• CMS coordinates to some degree with AHRQ on evidence needs
› AHRQ-sponsored review of evidence for colorectal screenings
› NCD for treatment of actinic keratoses
• “Me-too” products still have market potential
• National HIT standards implementation
still has room for improvement


US Payers Likely To Use Patient Reported Outcomes
(PRO) In Future Decisions
How likely are you to use PRO to make
coverage and reimbursement policy
decisions in the future?

(on a scale of 1 to 7 where # of lives = 4,353,435
1=Not likely, 7= Very likely)
5% # of lives = 19,701,655

26%

n=22
68%
Very Likely
# of lives = 51,127,435
Likely
Mean 4.5
Not Likely

SOURCE: 2011 inVentiv Health Payer Study


US Payers Likely To Follow CMS Lead

If CMS publicly leverages the results
of these studies, how likely are you to
follow CMS’ lead in utilizing PRO to
guide your coverage decisions?

(on a scale of 1 to 7 where
1=Not likely, 7= Very likely)
1%

14%
n=22

Very Likely
Likely
Not Likely

86%

SOURCE: 2011 inVentiv Health Payer Study


Evidence Development: Pre- and Post-Approval

• Prospective
› Clinical study data
• May include PRO endpoints and cost-benefit analysis
› FDA approved label
• Retrospective
› Pharmacy claims analysis
› Chart review
› Budget impact modeling
› Cost effectiveness analysis (limited use in US)
› Registry
› Phase IV outcomes study with PRO
› Commercial marketing programs


What Is This Evidence Used For?

• Determining relevant “access barrier” criteria
› Step therapy
› Prior authorization
› Quantity limits
• Deciding which benefit the therapy is placed in (medical v.
pharmacy v. specialty)
• Reimbursing at an appropriate rate


Reimbursement Support Programs

TODAY TOMORROW?

 Focused on helping patients  Managed markets data could
with reimbursement access be used to better guide NAM
barriers and assisting the tactics
underinsured
 Could this program type be
 Used primarily as marketing integrated into a Phase IV study
initiative to reduce sponsor cost?

 Captures some data which  CHALLENGE: How do we get
could be valuable to managed all the stakeholders
markets and brand teams (vendor, brand teams, managed
markets, etc) to share the same
 Typically doesn‟t capture PRO vision?


Patient Assistance Programs

TODAY TOMORROW?

 Focused on assisting the  PAPs could begin to collect
uninsured (PAP) adherence/compliance data
(especially IPAPs)
 Used primarily as corporate
awareness to the public  What confounding factors
would inhibit such an evolution
 Captures some data which (ex. IRS, study population
could be valuable to managed bias, misclassification)?
markets teams
 Would patient advocates
 Typically doesn‟t capture PRO object to muddying the waters of
a free drug program?


Adherence Programs

TODAY TOMORROW?

 Focused on changing patient  Would patients be willing to
behavior and improving patient respond to PRO questionnaires
health outcomes in an opt-out program?

 Opt-out programs typically  How can manufacturers
administered through 3rd party partner with payers and
and use claims data to manufacturers to utilize PRO
intelligently message patients more effectively?

 High touch programs use a
clinical case management
approach


Patient Support Programs:
The “Package” Approach

• Post-approval RCT sought to demonstrate superior effectiveness
of buprenorphine medication-assisted therapy paired with
interventional coaching (in opioid dependent patients)
• CAC and trained registered nurses conducted telephonic
interventions designed to encourage appropriate compliance &
persistency
• The study concluded that patients were more likely to take their
therapy every day and less likely to abuse, compared to controls

What can we learn from this example?
• Better patient support leads to better patient outcomes, reducing
overall payer spend
• Additional messaging to payers on total value of package (product
+ program)
Source: Supplement to Journal of Managed Care Pharmacy, Feb 2010

Role of Commercial Programs In Evidence
Development

• The primary direct link to patients after approval
• Types of programs:
› Reimbursement
› Patient assistance
› Adherence
• Control arms could be added with a non-interventional survey or
interventional care coordination to demonstrate therapy or
therapy/program effectiveness to payers


Observational Studies &
Registries:
Strategic and Operational Considerations

Jeff Trotter
Executive Vice President, PharmaNet/i3

Post-approval Research Today – Safety & Value

• Requirement
› In some countries, „real world‟ post-approval experience data must be
submitted to maintain market approval.
› Increasingly, some form of safety surveillance / risk management program
will be mandated and enforced.
• Responsibility
› Corporate accountability for post-approval safety is increasingly expected
by various constituencies.
› Documentation of clinical / economic / humanistic value is critical for
commercial acceptance and accelerated product uptake.
• Opportunity
› If managed proactively, safety surveillance obligation can be controlled.
› An observational study can be a cost-effective, high ROI mechanism for
fulfilling the post-approval obligation for both safety and effectiveness
data.


Real World Perspectives, Real World Research

“The conditions under which products are
examined for regulatory approval are
generally not the conditions under which
they are actually used…”


Who Needs Real World Data?

• Health authorities WellPoint's CER Guide Describes How It Will Determine
Usefulness Of Studies
• Pricing commissions Observational Studies Of "Real-World" Questions

The guidelines state that, "while randomized, controlled clinical trials remain the gold
• Payers standard for producing reliable efficacy and safety data, WellPoint recognizes that there
are circumstances in which RCTs alone may not be sufficient for decision-making.
Accordingly, a well-conducted CER or observational study may complement RCT-
• Regulatory based information by providing effectiveness data, or data on outcomes achieved
in a 'real-world' setting.“
authorities
• Physicians / German Pharma Law Require Firms to Prove Drugs' Value
providers Within a Year /
Germany's Comparative Effectiveness Debate Concludes;
Dossier Refinement Begins
• Policy makers
The holder of the marketing authorization will be required to hand in a comprehensive
• Patients dossier to the G-BA, which needs to contain information on:
• the authorized indications;
• the actual medical benefit of the product;
• the additional medical benefit of the product compared with existing therapies;
• the number of patients and patient groups for which the product is relevant;
• the cost of the therapy to the statutory health insurance funds; and
• requirements for quality-assured use of the product.


Real World Studies & Registries Are Needed
Because…

►…RCTs can be too artificial in intent and design, and
therefore poorly reflective of actual medical practice
► Tight inclusion criteria

► Experimental protocol

► Tight procedural control

► Randomization, blinding, placebo, etc.

► Short in duration

► Homogeneous sites

►We need to know how a product is used and how it
“performs” under real world conditions
► Safety

► Clinical outcomes (CER)

► Economic value

► Humanistic value


But The Real World Can Be Really Messy!

►What are we trying to prove?
►What can we prove?
►Should we be trying to “prove” anything?
►Considering…
►Not typically testing a hypothesis
►Potentially shaky statistical foundation
►Inexperienced research sites
►Liberal inclusion criteria
►Strong likelihood of various biases
►Imperfect ability to identify all confounders
►Hawthorne effect
►Inconsistent understanding of observational research

…is there a “perfect” observational study? Probably not…

Different Conditions Require Different Processes


Key Components

RCT Component Observational Study
Support for approval Strategic Goal Support for “real world” data

Efficacy Measures Safety, effectiveness, value

Randomization, Controls Inclusion/exclusion
inclusion/exclusion criteria,
protocol, monitored
Sample size based on Statistical Power Possibly, based on expected
hypothesis event rate, but often lacking

Investigators, subjects Participants Practitioners, patients
Consent, EC/IRB, privacy Approval Consent, EC/IRB, privacy
(notification)
As short as necessary Timeframe Longer-term (“sustain
and maintain”)


Operational Issues & Challenges

• Site selection • Data management
• Site training and start-up › Accommodating multiple
measures
• Site “interaction”
› EDC issues
(monitoring) and
management › Data quality
• SDV
› Site motivation
› Protocol “adherence” • Analysis
• Inclusion › Biases, etc.
• Procedures › Findings
› Reporting (communications


Observational Studies Are A Different Animal

So, who “owns” it…?
• HEOR
• Epidemiology
• Medical Affairs
• Marketing / Product Management
• Clinical Operations
• Development
• Safety / PV


Highlights From Study On Observational Research

• Motivation: “Schizophrenic” RFPs
› i.e., uncertainty, inconsistency, imprecision, over-engineering, etc.

• Many functional areas have some involvement in observational research
studies
• Many different purposes underlie these studies
• “Observational research” goes by many names
• Sponsors have varying levels of “comfort” with observational research
• Most sponsors do not have defined processes for observational studies
› Design, Procurement, Operational, Analytical, etc.

• Sponsors have varying expectations for the “conclusiveness” of findings from
observational studies
• Sponsors are concerned that regulatory/health authorities “don‟t get it”
• Sponsors plan to become increasingly involved in observational research


Operational Planning:
Building The Study From The Ground Up

PUBLICATIONS ABSTRACTS, PRESENTATIONS
• What are the strategic REPORTS
goals underlying the ANALYSES
study?
SITE
› Direct impact on how the SUPPORT MEETINGS
PATIENT ENROLLMENT,
project/study should be
OUTCOMES TRACKING,
„operationalized‟
DATA COLLECTION
NEWSLETTERS
• Direct impact on budget
and ROI

• Work backwards from MATERIALS PRODUCTION AND DISTRIBUTION SITE RECRUITMENT AND TRAINING

the deliverable LEGAL, REGULATORY, IRB REVIEW

• Don‟t consider any DATA COLLECTION FORMS,
SCIENTIFIC ADVISORY PANEL
SITE IDENTIFICATION (FIELD
PROCESSES, AND LOGISTICS INVOLVEMENT)
individual component in
a vacuum ANALYSIS PLAN COMMUNICATIONS PLAN

STRATEGY


Observational Research & Registries: Best Practices

• Be realistic in study planning
• Set appropriate expectations (internally and externally)
› Observational study as part of overall “portfolio”
• Strive for organizational inclusiveness and consensus
• Develop guidelines addressing study design and SOPs addressing unique
operational requirements
• Interact with stakeholders during planning stages (and concurrently)
• Maintain a collaborative stance with research partners
› Minimize operational constraints
• Expect change: “shift” happens


Payer Utilization of Value Evidence

SVP & Practice Area Lead, Campbell Alliance

Pros and Cons of Late Stage Evidence Generation

Late-stage evidence generation should aim to demonstrate how a product can provide meaningful
benefits to fulfill a justifiable need, at a reasonable and predictable cost

Evidence Analysis

Very
Evidence
X
Generation
Relevance

Slight Very
Pros Cons
 Real-world data with  Intuitive suspicion of
balanced demographics manufacturer-
Y  Long-term outcomes sponsored studies
Slight
Repositioning in a large population  Lack of credible
 Ability to address adjudication of
Credibility payers‟ concerns methodology

 Ability to define specific  Perceived subjectivity
What to generate: patient (sub)population of patient-reported
study endpoints outcomes measures
 Partnership to boost
credibility of results  Limited actionability of
How to generate: study results
study design


Payer Communication of Value Evidence

Successful communication with payers requires following three principles.

Principles of Payer Communication

I Simplicity II Transparency III Credibility

 A complete story that  Avoidance of “black  Well-accepted
can be told in a box” design and methodology and
definite time window subjective validated design
assumptions
 Concise and crisp  Third-party
takeaways that can  Key foundations for endorsement and
stay in memory audience to interpret KOL partnership
study results

Stakeholder Engagement

The right value evidence needs to be delivered to the right audience at the right time by the right
people. Stakeholder mapping and engagement is pivotal in rolling out the study outputs efficiently
and effectively.

Potential Access
Stakeholder Groups Stakeholder Profiles Engagement Plan
PULL
THROUGH
Pharmacy
Stakeholders
Roles and What messages to
responsibilities communicate
Provider Stakeholders
Evolving interests How to deliver the
and incentives messages
Financial Stakeholders

Interaction and Who to own the
Operational
influence relationship
Stakeholders

Attitudes and When to engage
Key Opinion Leaders
perceptions PUSH the stakeholders
THROUGH
Societies and
Advocacies


Organizational Requirements

The right value evidence needs to be delivered to the right audience at the right time by the right
people. Stakeholder mapping and engagement is pivotal in rolling out the study outputs efficiently
and effectively.

Hypothesis Evidence Value
Validation Generation Communication

Strategic Visionary Rigorous Scientist Credible Ambassador


Session Contact Information

Nathan White, CPC
Executive Director, Access & Reimbursement
inVentiv Patient Access Solutions
(703) 662-1851
nwhite@inventivhealth.com
Website: www.inventivhealth.com/patientaccess

Jeff Trotter
Executive Vice President, Phase IV Development
PharmaNet / i3
(847) 943-2508
jtrotter@pharmanet.com
Website: www.pharmanet.com

Practice Area Leader, Pricing & Market Access
Campbell Alliance
(973) 967-2300 ext. 2343
lwang@campbellalliance.com
Website: www.campbellalliance.com


Innovative Contracting: A Peek
Behind the Curtain

Katya Svoboda, MPH, MBA
Sr. Practice Executive, Campbell Alliance

Table of Contents

Learning Objectives

Methodology & Respondents

Innovative Contracting: Overview

Innovative Contracting: Yesterday and Today

Innovative Contracting: Tomorrow

Summary and Questions

Copyright © 2011. All Rights Reserved.
Confidential Property of Campbell Alliance Group, Inc. -84-

Learning Objectives

1. Recognize the benefits and challenges of implementing innovative pharmaceutical contracts

2. Identify factors that make some types of pharmaceutical contracts more successful in meeting
objectives than others

3. Compare the relevance of innovative contracts in today’s environment vs. an environment with
healthcare reform policies implemented


Table of Contents

Learning Objectives







Primary Research Methodology
Primary research with decision makers from health plans, pharmacy benefit managers (PBMs), and manufacturers
provided insight into innovative contracting platforms.

Methodology

Interviewing
 23 in-depth telephone interviews, each lasting 45 minutes
Methodology

 20 targeted payers
 15 managed care plans, including national plans, regional affiliates, regional independents
Target Respondents
 5 PBMs
 3 targeted manufacturers

 Targeted payer roles
 Pharmacy directors
 Medical directors
Target Audience
 Other: program/contracting managers
 Targeted manufacturer roles
 Managed markets or contracting related
 Active member of plan’s pharmacy and therapeutics (P&T) committee within the past
12 months
Recruitment Criteria
 High level of involvement in contracting policies and strategies
 Experience considering and/or implementing an “innovative contract”

Payer Respondents
In addition to the 20 payer respondents outlined below, three manufacturers were also interviewed for qualitative
feedback—their input has been incorporated into the research findings.

West North New England Account Type Participants
Mountain
Central (3)
(3)
(0) East North National 3
Central Regional Affiliate 4
(3)
Regional Independent 8
PBM/SPP 5

Function Participants
Mid-Atlantic
(4) Medical 4
Pharmacy 10
Other 6
South
Pacific Atlantic
(2) (3) Health Plan Lives Participants
National 26M
South
Central Regional Affiliate 14M
(1)
Hawaii Regional Independent 7M
(1) PBM/SPP 110M


Table of Contents

Learning Objectives







Innovative Contracting As Defined by Respondents
The definition of an “Innovative Contract” varies, but most agree that it is generally anything different from a
contract with a standard access and/or market share driven rebate.

“Something outside of the norm that recognizes the
Innovative Contracting As Defined by Respondents
need for change, managed care needs, and willingness
n=20
to collaborate and partner, to become a partner of
choice.”
—Medical Director, Regional Independent
12
10 10
10 “Innovative contracting is anything that is beyond the
Number of Responses

traditional rebate contract: an access rebate plus a
supplemental rebate based on utilization.”
8 7 —Contracting Manager, Regional Affiliate
6
“Shared risk—ways in which multiple stakeholders
4 (payer, physician, and pharma) are accountable for
2
care—right patient, right drug at right time, if drug
2 doesn't work who pays? Clinical effectiveness through
real-world data.”
0 —Medical Director, Regional Independent
Risk Sharing Performance Based Anything that is Price Protection
not "standard"* “Elements beyond standard access and market share.
Risk-based contract, performance tied to
compliance, tied to clinical measures. Risk-based in
terms of an outcome. Product performance that can
yield additional discounts.”
*“Standard” defined as anything beyond a basic access rebate and market share rebate. —Pharmacy Manager, Regional Independent

Source: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.


Innovative Contracting As Defined in the Research
Respondent definitions generally aligned with the three broad categories utilized for the research; however, there is
often overlap between a risk-share agreement and a performance-based contract.

Innovative Contracting Contract Types

1 2 3
Performance-Based Contracts Risk-Sharing Agreements Traditional With a “Twist”

 An outcome or behavior is  Manufacturer assumes some risk  A standard contract with a rebate is
measured and tied to the structure based on anticipated tied to another factor besides
of the contract. utilization, adverse market share or volume.
events, performance, or some other
 For example, the manufacturer can  This can include a price increase
factor.
commit to an outcome or the plan cap, escalating rebates, rewards for
can commit to programs to support  Variation to the expected level will loyalty, portfolio contracts, or
behaviors such as adherence. require payment or concessions by a anything that is in addition to the
one of the parties. standard contract.
 The rebate level can be tied to
whether the outcome or behavior is  For example, the manufacturer can
achieved. commit to effectiveness within 10
doses and cover the costs for
patients requiring more than 10
doses—the manufacturer takes on
the risk.


Payer Interest Level
Payer interest in innovative contracting is growing, supported by several factors such as the emphasis on cost
reduction and outcomes.

Average Interest Level in Implementing Innovative Contracts Among Participants

1 Low High 7

4.4 5.1 6.0
YESTERDAY TODAY TOMORROW

YESTERDAY TODAY TOMORROW
Interest Level: 4.4 Interest Level: 5.1 Interest Level: 6.0

 Some level of interest but not a  Interest has grown as some  Several aspects of the
major focus for most barriers have been overcome Patient Protection and
 Contracts often considered but not  Internal stakeholders are starting Affordable Care (PPAC) Act
implemented due to barriers (such as to become more open to new increases interest including
stand-alone data systems, lack of contracting ideas electronic medical record
integration between medical and  Still considered to be a pilot vs. a (EMR) and outcomes focus.
pharmacy benefit) or lack of enough regular way to doing business  Internal data systems will be
financial incentive more capable to support
reporting needs
Source: inVentiv Advance Insights interviews with 20 contracting Payer stakeholders. Interviews conducted 2/17/2011 – 3/28/2011.


Table of Contents

Learning Objectives


Innovative Contracting Overview





Innovative Contracts Considered and Implemented
Several innovative contracts have been considered by health plans in the past; however, many barriers that prevent
plans from serious consideration and implementation remain.
Performance-Based Contracts Financial Risk-Sharing Agreements Traditional With a Twist
10 10 20
Number of Respondents

0 0 0
Considered, not Implemented Considered, not Implemented Considered, not Implemented
Considered and Implemented Considered and Implemented Considered and Implemented
Neither n=20 Neither n=20 Neither n=20
“Yes, we considered and implemented with an “We may not even enter a deal with a
“We considered and implemented quantity antibiotic manufacturer—guaranteed that manufacturer if we don't have price
cap; DACON guarantee type of agreement.” product would not be used beyond 7 days protection. It's become very standard.”
—Pharmacy Manager, Regional Independent with financial protection for any use beyond —BD Director, PBM
7 days.”
—Medical Director, Regional Independent
“We considered but did not implement the “Typically, we don't like the twist
Merck/Januvia offer.” “No, we considered GNE/Avastin limit which (e.g., bundling), but it depends on the twist.“
—Pharmacy Director, Regional Independent ties to efficacy to some degree, but will tie —Pharmacy Director, Regional Affiliate
back to total usage. Only high
level, theoretical discussions.” “Currently portfolio contracts, a few loyalty
“With performance-based contracts with an —Medical Director, Regional Independent contracts—if renewed after second
endpoint—the administrative hassle to define
year, additional $ paid out—a couple price
if endpoint has been reached is sometimes “We considered but not implemented; never increase caps. Not a fan of portfolio
fuzzy.” been approached by manufacturer.” contracts.”
—Medical Director, Regional Independent —VP Trade Relations, PBM —Pharmacy Director, Regional Independent

*Note some respondents determined an innovative contract could be both a performance based and financial risk sharing agreement. Many of the “Traditional with a
Twist” types of contracts have become more common place and may no longer be considered “innovative” by many payers (ie Price protection and portfolio rebates)

Barriers to Implementation
The hesitation by many plans in the past highlights the presence of several barriers to implementing innovative contracts. As
these barriers are lifted, there will be a greater willingness and ability to implement innovative contracts.

Barriers Faced When Implementing an Innovative Contract

The Right Partner Defined Measurements Data

“Having a relationship to support innovative
“It’s hard to measure outcomes accurately
contracts is important. Going back to the “Negotiating what and how long to
and involves a lot of coordination between
manufacturer and letting them know you measure, time to results, etc. is a challenge.”
pharmacy data and medical claims data.”
didn't account for certain things and vice —Pharmacy Director, Regional Affiliate
—Pharmacy Director, Regional Affiliate
versa.” —BD Director, Large PBM

Internal Buy-In ROI / Incentive Limitations Contract Negotiations

“When you start moving away from the
“End result is not worth the effort: rebate “Legal—anti-kick-back statutes are a major
norm, there is not a lot of comfort. You need
increase by 1%. Not worth it even if it's a barrier; it’s a very difficult area to negotiate
to educate internal stakeholders and gain
high-volume drug.” and sign a contract in.”
internal buy-in for an innovative strategy.”
—Pharmacy Director, Regional Affiliate —Medical Director, Regional Independent
—VP, Large PBM


Actonel and Januvia
Despite the barriers, two contracts have gained significant exposure for their innovation in the marketplace: Actonel
and Januvia.

Drug Contract Type Description Comments
 Payment by manufacturer  Several respondents considered the contract and some had
for bone fractures above implemented.
Financial Risk- and beyond the expected  Challenges were cited in obtaining payments for fractures due
Actonel fracture rate to requirements to prove drug was taken and type of fracture.
Sharing
 Must prove patients were on  Due to requirements, contract can be administratively
treatment if fracture occurs burdensome.

 Adherence rate of patients  Several plans were offered the contract, but none interviewed
on Januvia and other orals implemented the contract (Cigna, not interviewed, is known
Performance- for the treatment of to have implemented it).
diabetes  The requirements to track both adherence levels and A1c
Based/
Januvia  A1C levels levels of patients were barriers to implementation since many
Financial Risk- plans were not set up to capture these data.
Sharing  Lack of enough financial incentive also prevented
implementation as it was not considered to be enough for the
effort required to implement the contract.

The exposure that these two have received could be reason enough to implement them, as both parties benefit in
some way:
 Payers: Viewed as innovative and focused on true patient value, may attract new employers and covered lives
 Manufacturers: Can be perceived as confident on the efficacy of the treatment and a focus on patients; may also
open the door to payer contracting discussions that would not have otherwise materialized

Other Contracts Implemented
Innovations in contracting are also taking place behind the scenes with several other types of contracts that fit the
description of an innovative contract.

Contract Type Examples Provided by Respondents Comments
 Adherence goals are linked to financial incentives.  Data challenges often cited as barrier to
 Clinical endpoints are measured and tied to a implementation.
Performance- financial incentive.  Plans with good data capabilities are better enabled
Based (typically plan with its own PBM or an IHS).
 Requires the right category with specific endpoints
to measure (diabetes often mentioned).
 Antibiotics—effectiveness within 7 days, cost of  Conceptually considered a good idea and payers
additional use covered by manufacturer. would like to shift the risk.
Financial Risk-  Hypertension—Manufacturer guaranteed  Data is also a challenge here.
Sharing effectiveness of its treatment, if other drugs
needed to be added to therapy, the cost would be
covered.
 Protection against cost increases, several terms  Price increases generally a big concern.
used to describe it including “price protection,”  Price protection is becoming a common request by
“price cap,” and “price guarantee” or “price payers and more common in contracts.
Traditional With a ceiling.”
 Best price implications need to be considered with
Twist  Loyalty Contracts—Incremental discounts for price protection.
years of service/access.
 Portfolio contracts not considered desirable or
 Portfolio contracts—Rebate is based on market innovative any more by most.
share of a basket of products.


Characteristics of Innovative Contracts
Contracts that have been considered or implemented tend to have certain product and therapeutic category
characteristics that seem to be more aligned with the goals of an innovative contract.
n=20
Characteristics of Innovative Contracts
Type of Condition Chronic Acute

Type of Benefit Pharmacy Medical Either

Position of Drug in Market Leader 2nd Player Other

Competitive Environment Moderate Crowded Little or None

Administration of Drug Oral Injectable Other Both

Size of Patient Population Large Small Other Moderate

Life Cycle of Drug Middle Beginning End Other

Type of Physician Generalist Specialist Either

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Types of therapeutic categories and drugs targeted in the past may be an indication of where innovative
contracting activity will take place in the future.

Table of Contents

Learning Objectives







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