Presentation by Amanda Cole, OHE

1. Amanda Cole, Economist
acole@ohe.org
Why RWE Matters to Payers:
Incorporating RWE in Health Economic
Analysis to Maximise Value
7th December
Health Economics
Global Congress 2015

2. Why RWE matters for payers
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Content
1. RWD and RWE – what and why?
• What is RWD/RWE
• Why might it be important for payers?
2. Do payers live in the ‘real world’?
• Managed entry agreements (MEAs) to address uncertainty
and maximize value for payers
3. Challenges
• Implementation
• Governance
• Methods to deal with messiness

3. Why RWE matters for payers
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Preview: Five global challenges1
The environment for global R&D is evolving
Challenge 1: Increasing
importance of specialised
and stratified medicines
Challenge 2: Rising drug
development costs
Challenge 3: Closer
benefit/risk monitoring by
regulators over a
medicine’s lifecycle
Challenge 4: Increase in
demand for RWE and
relative effectiveness by
payers, and regulators
Challenge 5: Disconnect between
regulators and payers/HTA bodies
evidence needs
1 Mestre-Ferrandiz, Towse, Pistollato and Lewis. 2014. Securing a
future for innovative medicines: a discussion paper. London: ABPI.

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1. RWD and RWE – what and why?

5. Why RWE matters for payers
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1. RWD and RWE – What and why?
?

6. Why RWE matters for payers
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• Real world data (RWD)
• Collected outside of an experimental clinical trial
setting: reflects outcomes in the ‘real world’.
• Electronic health records, clinical registries,
surveys, observational data from cohort studies,
etc. (messy data)
• Real world evidence (RWE)
1. RWD and RWE – What and why?

7. Why RWE matters for payers
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1. Understanding outcomes in the ‘real world’
• Efficacy  Effectiveness
• Representative populations (co-morbidities,
spectrum of ages, treatment delivery less
controlled etc.); additional insights e.g.
adherence, costs.
1. RWD and RWE – What and why?

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2. Evolving R&D pipeline
• Declining R&D investment in drugs - often
attributed to rising cost of developing new
products
• More specialised and stratified medicines
– Highly targeted, small populations, high
uncertainty
1. RWD and RWE – What and why?
2 Daniel et al. (2015) Health Affairs, 34 (2) pp. 319-327
3 Scannell et al. (2012). Nature reviews Drug discovery, 11 (3) pp. 191-200
Source: Daniel et al (2015)2:
Annual new drug approvals by FDA and Industry spending on R&D, 1994-2013
Reduced R&D
productivity
Number of new
drugs approved per
$billion halved every
9 years since 19503

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3. Timing of decision-points for regulators and
payers are changing
• Regulators: Accelerating access to medicines
that have the potential to address a high unmet
need (uncertainty vs. urgency)
– E.g.: EAMS (UK), ATU (France), BTD (U.S)
• Payers: Making decisions based on a limited
evidence base.
1. RWD and RWE – What and why?
Adaptive pathways

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1. Understanding outcomes in the ‘real world’
2. Evolving R&D pipeline
3. Timing of decision-points for regulators and
payers are changing
USING RWE TO MANAGE UNCERTAINTY
1. RWD and RWE – What and why?

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2. Do payers live in the ‘real world’?

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• In England the National Institute for Health and
Care Excellence (NICE) produces evidence-based
guidance to the NHS (payer).
• Decisions based on robust clinical
and cost-effectiveness evidence
• [not selected if it is expected that there is
insufficient evidence]
• Yes
• Optimised
• No
• Only in research (we’re too uncertain)
2. Do payers live in the ‘real world’?
Managed entry
agreements

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• Managed entry agreements (MEAs)
• Performance-based risk-sharing arrangements (PBRSA), outcomes-based
schemes, pay-for-performance, patient access schemes...
• Formal utilisation of RWD to manage the entry of a
product. Can be in many forms, for example:
• commitment to collecting confirmatory evidence of
effectiveness in real-life settings
• linking reimbursement explicitly to patient
outcomes
• capping expenditure
• Ensures the payer receives value for money
2. MEAs

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Source: University of Washington PBRSA database. May 2015
2. MEAs

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2. MEAs
• MEAs to address uncertainty
and maximise value for payers4
Clinical uncertainty
Value for money
Budget impact
4 Garrison, L.P., Towse, A., et al.
(2013). (5) pp. 703-719

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• Reimbursement based on
outcome - ‘Rebate’ for non-
responders
• Manufacturer pays for the
medicine beyond a certain
number of doses
• Reimbursed for a specified period
of time whilst further evidence /
RWD are collected
Performance-
linked
reimbursement
Coverage with
evidence development
Outcomes guarantee
Dose capping
REALWORLDDATA2. MEAs

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3. Challenges
Implementation, Governance, Methods

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• Substantial administrative burden
• Can be complicated to negotiate with providers
• Capacity for data collection
• Electronic health records, registries, patient
identifiers for data linkage5
• Coverage with evidence development:
• sufficient time to address resolvable uncertainty
• Not straightforward to ‘de-list’ a drug (an ‘acquired
right’?)
3. Challenges: Implementation
5 Chapman & Karlsberg-Schaffer (2015). OHE Consulting report:
https://www.ohe.org/publications/assessing-use-multi-indication-
medicines-review-current-data-capabilities-uk

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• Who manages (and pays for) data collection /
analysis?
• Information governance
• Data protection: patient consent
• De novo versus routinely-collected data
• Audit or research?
3. Challenges: Governance6
6 Cole, Garrison, Mestre-Ferrandiz & Towse (2015) OHE
Consulting Report. London: https://www.ohe.org/publications/data-
governance-arrangements-real-world-evidence

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3. Challenges: Methods
• Methodological challenges in dealing with
messy RWD
• Incomplete data
• Confounders and biases
• Quality of data
• Precedent set by medical technologies
evaluation?

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• Understanding outcomes in the real world
• Being responsive to an evolving R&D pipeline
• There is an expanding experience with regulatory
mechanisms that allow earlier access to medicines
in development  Payers need to be on board
• HTA moving from Yes/No  Agreements
• MEAs can explicitly link payment with value
• There are implementation, governance and
methodological challenges to the implementation of
MEAs.
Conclusion
Why RWE Matters to Payers

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©2015 OHE
Thank you
acole@ohe.org