Rethinking the Risk Equation in
Biopharmaceutical Medicine
Rethinking the Risk Equation in
Biopharmaceutical Medicine
Overview
Expec tations and Obstacles in Healthcare
Patients as ...
3
For a patient, risk largely entails drug safety, such
as concerns over side effects, but patients must
also evaluate the...
www.quintiles.com/newhealthreport
On a fundamental level, risk is always attached to expectations. This idea lies behind t...
Expectations and Obstacles in Healthcare 5
Investors Sums may not add to 100% or be equal to components due to rounding
In...
6 	 2012 | The New Health Report
www.quintiles.com/newhealthreport
Looking more closely at the elements of
tomorrow’s heal...
Expectations and Obstacles in Healthcare 7
Investors Sums may not add to 100% or be equal to components due to rounding
29...
www.quintiles.com/newhealthreport
One could argue that patients take on the most risk in healthcare because their quality ...
Patients as a Part of the System 9
Investors Sums may not add to 100% or be equal to components due to rounding
Given that...
1 0 	 2012 | The New Health Report
www.quintiles.com/newhealthreport
quickly as possible. Given that getting new drugs
on ...
Patients as a Part of the System 1 1
Investors Sums may not add to 100% or be equal to components due to rounding
medicine...
1 2 	 2012 | The New Health Report
www.quintiles.com/newhealthreport
hypothetical scenarios with varying degrees of
both b...
Patients as a Part of the System 1 3
Investors Sums may not add to 100% or be equal to components due to rounding
the valu...
www.quintiles.com/newhealthreport
While patients provide clear but disparate answers about accepting risk, biopharmaceutic...
Biopharma’s Evolving Business Model 1 5
Investors Sums may not add to 100% or be equal to components due to rounding
Bioph...
1 6 	 2012 | The New Health Report
www.quintiles.com/newhealthreport
feel their company should take on more risk, this
fin...
Biopharma’s Evolving Business Model 1 7
Investors Sums may not add to 100% or be equal to components due to rounding
In ad...
1 8 	 2012 | The New Health Report
www.quintiles.com/newhealthreport
Despite the numerous perceived benefits of
risk-shari...
Biopharma’s Evolving Business Model 1 9
Investors Sums may not add to 100% or be equal to components due to rounding
Bioph...
www.quintiles.com/newhealthreport
In healthcare, organizations providing coverage most likely perform some of the most
foc...
Payers Seek More Participation 2 1
Investors Sums may not add to 100% or be equal to components due to rounding
In additio...
2 2 	 2012 | The New Health Report
www.quintiles.com/newhealthreport
the U.K. ones—claim to participate in Phase III
testi...
Payers Seek More Participation 2 3
Investors Sums may not add to 100% or be equal to components due to rounding
coordinate...
www.quintiles.com/newhealthreport
The healthcare-focused investors surveyed for this report rate the biopharmaceutical
ind...
Investor Ambivalence, Optimism 2 5
Investors Sums may not add to 100% or be equal to components due to rounding
Despite th...
2 6 	 2012 | The New Health Report
www.quintiles.com/newhealthreport
When it comes to risk- and cost-sharing between
bioph...
Investor Ambivalence, Optimism 2 7
Investors Sums may not add to 100% or be equal to components due to rounding
Investors ...
www.quintiles.com/newhealthreport
Although biopharmaceutical executives and payers from the U.S. and the U.K. expect
more ...
A Need for New Metrics 2 9
Investors Sums may not add to 100% or be equal to components due to rounding
In comparison, the...
3 0 	 2012 | The New Health Report
www.quintiles.com/newhealthreport
Upwards of three-quarters of biopharmaceutical
execut...
A Need for New Metrics 3 1
Investors Sums may not add to 100% or be equal to components due to rounding
patient-reported o...
3 2 	 2012 | The New Health Report
www.quintiles.com/newhealthreport
In the context of assessing risk and benefit,
one are...
3 3
Given risk’s fundamental place in healthcare—from patients’ well-being to
biopharmaceutical companies’ financial secur...
3 4 	 2012 | The New Health Report
www.quintiles.com/newhealthreport
Much of the data analyzed in this report reveals
the ...
3 5
about the new health report
The New Health Report is based on surveys of biopharmaceutical executives, managed care ex...
clinical | commercial | consulting | capital
Copyright © 2012 Quintiles. 01.15.14-052012
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New healthreport 2012

  1. 1. Rethinking the Risk Equation in Biopharmaceutical Medicine
  2. 2. Rethinking the Risk Equation in Biopharmaceutical Medicine Overview Expec tations and Obstacles in Healthcare Patients as a Part of the System Biopharma’s Evolving Business Model Payers Seek More Participation Investor Ambivalence, Optimism MITIGATING RISK: The Need for New Metrics Conclusion About The New Health Report About Quintiles Contact Information 3 4 8 14 20 24 28 33 T a b l e o f Co n t e n t s
  3. 3. 3 For a patient, risk largely entails drug safety, such as concerns over side effects, but patients must also evaluate the risk of taking one medication over another, or perhaps none at all. Healthcare professionals must weigh the risk in using new drugs versus existing ones. Biopharmaceutical companies, on the other hand, must assess the risk of moving forward with one investigational compound or another, proceeding or pausing in the chain of clinical trials, collaborating with other stakeholders or going it alone—all of this plus a host of other concerns. For payers, the risks involve when and why to reimburse for particular treatments, while investors seek methods of analysis to reduce their risks as they decide where to infuse capital. The New Health Report 2012 shows, however, that today’s stakeholders often disagree—between and within groups—on what risks matter the most. This study arises from a survey of biopharmaceutical executives; patients living with a chronic disease in the United Kingdom or the United States; National Health Service (NHS) executives in the United Kingdom; managed care executives in the United States; and investors with a focus on the life sciences sector. Payer and patient respondents were deliberately culled from both the United Kingdom and the United States under the premise that attitudinal differences and perceptions of healthcare might reveal that an understanding of risk and benefit is not universal. Further, as the global economic crisis has produced austerity budgets throughout Europe, cost-conscious payers in these countries need to make increasingly difficult coverage decisions that accurately weigh the value and risks of new treatments. For stakeholders to make better collective decisions based on value and risk, they first need to assimilate the varying perceptions of the concept, and then take a systematic approach in order to better manage it. Currently, the tools used to balance healthcare risk versus reward remain rather rudimentary, and lessons from other industries could accelerate improvements in patient outcomes. For example, making the most of the available data—from preclinical information to patient outcomes—requires new tools and sophisticated methods to interrogate the data. With more robust sources of data, healthcare players can plan the pathways to the next generation of lower-risk, higher-benefit medications that balance the needs of all stakeholders. As the results of this survey reveal, considerable evidence already suggests a new pathway. The stakeholders must function like teammates, instead of opponents, to make the most of existing opportunities. The resulting collaboration could spawn a range of improved methods for reducing and communicating the risks and benefits of biopharmaceutical medicine. overview The essence of healthcare arises from the tradeoffs between risk and value. Last year’s New Health Report focused on value, and patients, physicians, payers and biopharmaceutical executives defined this concept in many ways. For example, only two percent of patients polled mentioned cost and outcomes when defining value as opposed to 38 percent of biopharmaceutical executives. As with value in healthcare, risk extends across the constellation of stakeholders, and each group sees risk from a unique perspective.
  4. 4. www.quintiles.com/newhealthreport On a fundamental level, risk is always attached to expectations. This idea lies behind the business concept of the risk-return tradeoff, which states that increasing the potential of the return raises the risk. To understand the risk-return tradeoffs in healthcare, The New Health Report 2012 asked biopharmaceutical executives, managed care executives in the United States, National Health Service executives in the U.K. and healthcare-focused investors a series of questions designed to uncover different perceptions as to what the future of healthcare might look like. In terms of the general health of people born today, most of the respondents see longer lives ahead. For instance, the majority of biopharma executives and U.K. payers expect lifespan to reach an average of 90 years, and nearly half of U.S. payers and half of investors agree. Regarding the health of people in general, just under half of the respondents from most groups predict improvements, and a slightly higher percentage of U.K. payers agree. Expectations and Obstacles in Healthcare
  5. 5. Expectations and Obstacles in Healthcare 5 Investors Sums may not add to 100% or be equal to components due to rounding In terms of the capabilities of medicines in the future, the responses are less certain. Fewer than half of the experts from biopharma and U.S. payers and even fewer of the investors expect to see cancer becoming a manageable disease in the near future, but U.K. payers are more optimistic. When asked about the likelihood of a cure for Alzheimer’s over the next generation, the stakeholders answer similarly to their responses on managing cancer, although the investors rank Alzheimer’s disease as more likely to be cured. Those medical milestones, however, will come at a cost. For example, less than one-fifth of U.S. payers and one-quarter of biopharma experts expect cost-effective healthcare in the United States over the next generation in comparison to other countries. In contrast, about half of U.K. payers expect cost-effective healthcare— more than twice the amount of their American counterparts. R e s t r a i n e d o p t i m i s m f o r a n u n c e r t a i n f u t u r e L e ss t h a n o ne- fif t h o f U. S . pay er s a nd o ne- q ua r t er o f t he b i o ph a rm a EXECS e x pec t cos t- effec t i v e he a lt h c a re in t he Uni t ed S tat e s ov er t he ne x t gener at i o n in co mpa ris o n to ot her co un t rie s . Life expectancy for the average person will be 90 years Most cancers will become a manageable disease A cure for Alzheimer’s will be found The nation will become healthier overall US / UK healthcare will be considered cost-effective compared to other developed countries 64% 45% 45% 45% 45% 40% 68% 50% 55% 37% 59% 51% 43% 41% 24% 19% 59% 47% 45% N A Biopharma, Payers, Investors | Percent who consider it very or somewhat likely that in the lifetime of people born today... I N V E S T O R SB I O P H A R M A P AY E R S
  6. 6. 6 2012 | The New Health Report www.quintiles.com/newhealthreport Looking more closely at the elements of tomorrow’s healthcare, stakeholders were asked about their optimism or pessimism related to future healthcare quality and pharmaceuticals. In terms of the quality of healthcare a decade from now, two-thirds or more of biopharma executives, U.S. payers and U.K. payers, plus nearly three- quarters of investors express optimism, but less than half of U.K. and U.S. patients agree. In fact, fewer than 40 percent of U.K. patients claim to be optimistic about tomorrow’s quality of healthcare. The disconnect between U.K. payers (66 percent) and U.K. patients (38 percent) is striking and may indicate an underlying lack of confidence in the future direction of the NHS. Despite eight out of 10 biopharma executives being optimistic about the quality of prescription medications in 10 years, they do anticipate challenges. Foremost, these experts expect to travel a rough road with regulators from the U.S. Food and Drug Administration (FDA). A lack of capital and the increased reluctance of payers to reimburse for new medication are also serious concerns. In general, investors agree with the concerns over a changing regulatory landscape, but show less concern over financing, perhaps because investors live every day in a world of financial risk. Biopharma, Payers, Investors, Patients | 2012 ; Biopharma, US Payers, Physicians, US Patients | 2011 Percent who are somewhat or very optimistic about the future of healthcare QUALITY OF HEALTHCARE IMPROVED 10 YEARS FROM NOW QUALITY OF PRESCRIPTION MEDICINES IMPROVED 10 YEARS FROM NOW 0 % 2 0 % 4 0 % 6 0 % 8 0 % 1 0 0 %0 %2 0 %4 0 %6 0 %8 0 %1 0 0 % 2 0 1 1 2 0 1 2 U S P H Y S I C I A N SU K P A Y E R S I N V E S T O R SB I O P H A R M A U S P A Y E R S U S P A T I E N T S U K P A T I E N T S 64% 63% 44% 54% 72% 76% 59% 72% 69% 68% 66% 74% 49% 38% 80% 81% 93% 68% N/A N/A N/A N/A N/A N/AN/A N/A N/A N/A
  7. 7. Expectations and Obstacles in Healthcare 7 Investors Sums may not add to 100% or be equal to components due to rounding 29% More difficult FDA approval process 12% Increased requests for more data 19% Increased payer reluctance to cover new medications 10% Global economic downturn 20% Lack of funding / capital 9% Other Biopharma | Which is the biggest challenge facing your company? A l ack o f c a pi ta l a nd t he in cre a sed relu c ta n ce o f pay er s to reimb ur se fo r ne w med i c at i o ns a re seri o us co n cerns .
  8. 8. www.quintiles.com/newhealthreport One could argue that patients take on the most risk in healthcare because their quality of life hangs in the balance. Consequently, they stand to gain the most from understanding their own health. Yet when asked to rate their overall health, three-quarters of U.S. patients consider their health good to excellent which seems unlikely in a country where more than two-thirds of the population is overweight or obese. By comparison, only about 50 percent of U.K. patients give themselves similar assessments. In short, U.S. patients see themselves as healthy—probably healthier than they are—and U.K. patients are likely providing somewhat more accurate self-evaluations. Patients as a Part of the System
  9. 9. Patients as a Part of the System 9 Investors Sums may not add to 100% or be equal to components due to rounding Given that the population of patients in this survey all suffer from a chronic disease, no surprise comes from their overwhelming response to being adequately informed about the benefits of taking their medicines. More than 90 percent of both U.K. and U.S. patients feel they know the benefits of taking their medication—an expected result from respondents in which two-thirds take at least three prescription medications, and more than a quarter of them take more than five (data not shown). Some variations among the patients start to appear when examining their beliefs about the risks behind those prescriptions. Although both patient groups show this drop in confidence when moving from understanding the benefits of a medication to assessing its side effects, the data do reveal differences between the two cohorts. For instance, U.S. patients appear far more confident than U.K. patients when it comes to information about side effects, 86 to 69 percent, respectively. Likewise, U.S. patients exhibit a similar offset when it comes to knowing about a drug’s potential risk (84 percent), when compared with the U.K. patients (64 percent). Direct-to-consumer advertising in the United States may partly explain these differences, as patients are bombarded with lengthy disclaimers about potential side effects and safety concerns. Another explanation may be the litigious nature of the United States, where physicians are more apt to discuss the side effects and not just the benefits of medications. In any case, these data reveal an opportunity for biopharmaceutical companies to better communicate the risk-benefit tradeoffs of medicines in terms meaningful to patients. In the U.S and the U.K., patients give the biopharmaceutical industry little credit for making medications safe and effective. Both patient populations believe that physicians do the best job of that, followed by patient-advocacy groups. In addition, fewer than half of the patients feel like the biopharmaceutical industry does a good job of making new medications available as Patients | Percent who feel adequately informed about... U S P AT I E N T S U K P AT I E N T S The benefits of taking your medication 94% 92% Side effects 86% 69% 64% Potential risks of taking it 84% How the drug works in your body 71% 55% How it compares to existing medication 66% 51% U. S . pat ien t s a ppe a r fa r m o re co nfid en t t h a n U.K . pat ien t s w hen i t co me s to info rm at i o n a b o u t sid e effec t s .
  10. 10. 1 0 2012 | The New Health Report www.quintiles.com/newhealthreport quickly as possible. Given that getting new drugs on the market provides the income that feeds biopharma, the industry seems unlikely to halt or slow down drug development for anything other than risk or benefit concerns. Notably, both groups of patients realize the role of regulators in the timing of medicines reaching the market. A misunderstanding of the process is clearly evident, however, as more than 60 percent of U.S. patients credit physicians with making drugs available as soon as possible, and more than a third of patients in the U.S. and the U.K. feel patient advocacy groups have significant bearing on drug development. Despite both patient populations showing a lack of faith in the biopharmaceutical industry’s ability to ensure safe and effective drugs, patients want the industry to work even faster. Nearly 90 percent of U.K. patients think that it takes too long to get new drugs to patients. Some of the negative responses from U.K. patients, however, might have been heightened by media coverage which regularly highlights instances in which the NHS has declined to fund a new medication. Although the majority of U.S. patients seems to think that no one—except physicians—does a very good job of getting drugs on the market as fast as possible, only 69 percent of those patients say that the process takes too long, which is nearly 20 percent fewer than U.K. patients. Perhaps most interesting of all, a high percentage of both patient populations express an interest in taking more risk with medications. More than 70 percent of U.S. patients and four out of five U.K. patients believe it should be their right to take a high-risk medication if they hope for some improvement in their health. In other words, these responses indicate that many patients want Patients | Group does an excellent/ good job of… DOCTORS PATIENT ADVOCACY GROUPS PHARMACEUTICAL COMPANIES REGULATORY AUTHORITIES HEALTH INSURANCE PROVIDERS 0 % 2 0 % 4 0 % 6 0 % 8 0 %0 %2 0 %4 0 %6 0 %8 0 % MAKING SURE MEDICATIONS ARE SAFE AND EFFECTIVE MAKING SURE NEW DRUGS ARE AVAILABLE TO PUBLIC AS QUICKLY AS POSSIBLE U S P AT I E N T S U K P AT I E N T S
  11. 11. Patients as a Part of the System 1 1 Investors Sums may not add to 100% or be equal to components due to rounding medicines faster rather than safer, if they must choose. Nonetheless, half of U.S. patients also feel that medications get approved too quickly without balancing safety. Taken together, the responses from U.S. patients highlight some disconnected thinking regarding risk: they want and expect medications quickly, but aren’t fully aware of the trade-offs involved. Simply thinking about risk often differs from acting on it. Instead of wondering how patients respond when faced with the risks related to prescription pharmaceuticals, their behaviors provide a much clearer picture. To get at those behaviors, patients were asked if they ever turned down or stopped taking a medication because of safety or side-effect concerns. Roughly speaking, only about one-third of U.K. patients said that they had, compared to half of U.S. patients. So even if most U.S. patients want the right to take a risky medicine if they choose to, at least half of them might forego the drug for fears related to safety or side effects. Again, the safety- and side effect–laden advertising in the United States —and the related litigious environment—might cause some of this difference between the patient populations. To explore how patients approach assessing risk and value, they were presented with several Patients | Do you agree or disagree that... The process of getting new drugs to patients takes too long. 69% 88% We take too long to make drugs available, which costs lives by forcing people to go without potentially beneficial therapies. 71% 87% 81% Patients should be able to choose to take potentially risky medication even if it is not approved for use if they feel it is their only chance to improve their health. 72% In this country, we are too quick to approve new prescription medications without understanding all of the possible safety issues. % who agree 50% 31% U S P AT I E N T S U K P AT I E N T S Patients | Have you ever…. Turned down a medication that your doctor has prescribed because of concerns about safety or side effects. % answering yes 51% 27% Stopped taking a medication before checking with your doctor because of side effect or safety concerns. 46% 35% U S P AT I E N T S U K P AT I E N T S Mo re t h a n 70 percen t o f U. S . pat ien t s a nd ne a rly 9 0 percen t o f U.K . pat ien t s b el ie v e i t sho ul d b e t heir ri gh t to ta k e a hi gh - risk med i c at i o n if t he y ho pe fo r so me improv emen t in t heir he a lt h.
  12. 12. 1 2 2012 | The New Health Report www.quintiles.com/newhealthreport hypothetical scenarios with varying degrees of both benefit and risk. In circumstances in which a cancer drug could extend a person’s life by a decade, the patients considered two side-effect risks, one related to nausea (a 15 or 75 percent risk) and another related to heart attack (a 5 or 50 percent risk). Across all of these scenarios, U.K. patients express far more willingness to accept the risks for the potential 10-year return. Even when facing a 50 percent risk of a heart attack, nearly 80 percent of U.K. patients still want the treatment, but less than half of U.S. patients do. U.K. patients continue to show less aversion to risk than U.S. patients when presented with chronic pain–based scenarios, but in almost all cases patients in both countries were less willing to accept an increased risk for a lesser benefit. While nearly six out of 10 U.S. patients and nine out of 10 U.K. patients would be interested in a drug that reduced chronic pain to a manageable level with a 15 percent risk of nausea, the number of patients interested in the same drug with a 50 percent risk of heart attack drops precipitously among both groups (26 percent for U.S. patients, 40 percent for U.K. patients). These findings have several implications for the biopharmaceutical industry. As with other stakeholders, patients go through a process of assessing risk versus benefit by weighing factors of varying importance to them. As shown above, patient tolerance for risk is dependent upon the perceived value of a medication relative to its safety profile, although it appears that many patients struggle with assessing risk based on the probability of an adverse event. This underscores the industry’s imperative to better communicate U S P AT I E N T S 20% 20% 60% U K P AT I E N T S 21% 29% 50% Very/Somewhat Interested Not sure Not very/Not at all interested Patients | If there were a new medication that was available that could reduce the symptoms you currently have and improve your day-to- day life, but had an increased risk of a serious event like a heart attack, how interested would you be in it? U S P AT I E N T S 26% 20% 54% U K P AT I E N T S 20% 33% 47% Patients | If there were a new medication that was available that could improve your condition so much that you would live longer, but had an increased risk of a serious event like a heart attack for some, how interested would you be in it? Very/Somewhat Interested Not sure Not very/Not at all interested
  13. 13. Patients as a Part of the System 1 3 Investors Sums may not add to 100% or be equal to components due to rounding the value and risks of new medications in terms that are meaningful to patients. Further, coupled with increasing payer scrutiny for demonstrable proof of a new product’s superiority versus existing therapies, the biopharmaceutical industry must strive to develop more sensitive measures that incorporate patient-important outcomes into clinical development. 15%RISKOFNAUSEA 75% RISK OFNAUSEA5%RISKOFHEART ATTACK 5 0 % R I S K O F H E A R T AT TA C K 46% 77% 84% 48% 88% 49% 92% 55% 1 5 % R I S K O F 7 5 % R I S K O F 5% RISK OF 50%RISKOF15%RISKOF 75% RISK O F 5% RISK OF 50%RISKOF N A U S E A N A U S E A H EART ATTACK HEARTATTACKNAUSEA N AU SEA H EART ATTACK HEARTATTACK EL IM IN A T E S PAIN M AN AG EA B LE PA IN LEVEL 75% 54% 60% 83% 59% 63% 58% 84% 89% 42%47% 40% 26% 31% 86% 48% We tested a series of 12 scenarios around a hypothetical new medication, which included a condition (cancer or chronic pain), a benefit (extended life or better QOL) and a risk (safety or side effect). Each patient indicated how interested he/she would be in the new medication. U S P AT I E N T S U K P AT I E N T S C A N C E R / E X T E N D L I F E 1 0 Y E A R S C H R O N I C P A I N % who are interested
  14. 14. www.quintiles.com/newhealthreport While patients provide clear but disparate answers about accepting risk, biopharmaceutical executives paint a much more clouded picture. Asked to assess the level of risk their company must take when exploring new opportunities, the group as a whole could not agree. Roughly equal amounts of them respond that they should reduce their risk, keep the same risk or take on more risk. Although these data seem to suggest confusion, the lack of a homogenous perception of risk may be partly explained by various companies’ current location on the risk tolerance spectrum. Those with stronger pipelines and less patent exposure may have less of an appetite for risk than those who are facing such challenges. Biopharma’s Evolving Business Model
  15. 15. Biopharma’s Evolving Business Model 1 5 Investors Sums may not add to 100% or be equal to components due to rounding Biopharmaceutical executives agree, however, that regulators should accept more risk. When asked to indicate which stakeholders should take on more risk in the healthcare industry, 65 percent of biopharma execs say government regulators in the U.S. or the U.K. Nearly 60 percent of the executives also believe that payers should accept more risk. Perhaps surprisingly, half of the biopharmaceutical executives point the risk finger at their own industry. Taken collectively with the previous indication that only 36 percent of the executives B I O P H A R M A E X E C U T I V E S 38% Reduce risk profile 36% Take on more risk 27% Maintain existing risk profile Biopharma | For your company to be successful in the future, will it need to... 0 % 2 0 % 4 0 % 6 0 % 8 0 % 1 0 0 % Biopharma | Which group(s) need to take or accept more risk to improve pharmaceutical agents and public health? B I O P H A R M A The FDA Health insurance companies Pharmaceutical companies Investors Physicians Thir t y-si x percen t o f b i o ph a rm a e x ec u t i v e s feel t heir co mpa n y sho ul d ta k e o n m o re risk . t his find in g und er sco re s t he l ack o f agreemen t w i t hin t he b i o ph a rm aceu t i c a l ind us t ry o n i t s ro l e in risk a nd w here to t r a nsfer i t.
  16. 16. 1 6 2012 | The New Health Report www.quintiles.com/newhealthreport feel their company should take on more risk, this finding underscores the lack of agreement within the biopharmaceutical industry on its role in risk and where to transfer it. For the industry to be successful in transferring or mitigating risk, it is helpful to determine where in the development process biopharma execs perceive the most risk. Asked to estimate the risk across the drug development and clinical testing cycle, 55 percent of biopharma respondents understandably say that Phase III testing poses the largest risk. At both the early and post-marketing stages, the executives see relatively small risks. The focus on Phase III as the highest risk makes perfect sense, given the high cost of this stage of testing, as well as the overall investment of resources and time that are on the line at this point. Confidence among biopharma execs to accurately assess the risk/opportunity ratio at the various development phases raises some questions, however. Overall, the executives show high confidence in their ability to assess risk across the drug creation cycle. The surprise comes in the trend—indicating higher confidence in their ability to assess risk versus opportunity at earlier stages and progressively less as the process moves forward. It would seem intuitive that biopharma companies would have more data to assess risk over time as they gather more evidence and a better understanding of the drug. But a lack of confidence in the underlying data used for Phase III risk assessment is an acknowledgement that the level of risk is higher. That only 62 percent of biopharma execs feel they have adequate information to assess risk at Phase III is likely a reflection of the increasing stakes at this stage from a financial and reputational perspective. Nonetheless, with nearly four out of 10 execs saying they don’t have enough information, the need for more robust sources of data becomes very clear. If the biopharmaceutical industry applied a wider, more encompassing lens to gathering data and then relied on more sophisticated tools and techniques to unearth the true insights embedded in the data, it could start along a path toward better decisions about risk-value tradeoffs. For example, better endpoints at early development stages could make Phase III results more confirmatory, and thereby less prone to risk. PHA SE I TE S TING PHA SE II TE S TING PHA SE III P OS T APPROVAL Biopharma | At what stage(s) of the drug development process do you see the greatest risks? Biopharma | Percent who feel they have necessary data to accurately assess risk vs. opportunity for new products B I O P H A R M A PRECLINIC AL TE S TING B I O P H A R M A B I O P H A R M A 77% 11% 77% 15% 69% 31% 62% 55% 61% 16%
  17. 17. Biopharma’s Evolving Business Model 1 7 Investors Sums may not add to 100% or be equal to components due to rounding In addition to incorporating better sources of data into clinical development to alleviate some of the risk along the development lifecycle, risk- sharing agreements between biopharmaceutical companies and payer organizations hold potential as well. In fact, 60 percent of biopharma execs expect to see more risk- and cost-sharing agreements with payers in the next five years. Further benefits—beyond the obvious reduction of risk for the biopharmaceutical industry— should come from such sharing. Respondents see enhanced patient population targeting as the top potential benefit of such agreements, as data collected by payers could help biopharmaceutical companies improve their ability to personalize prescriptions to a population that would benefit more than others. Likewise, the executives believe that such agreements would improve access to drugs and accelerate time to market. Such risk- sharing agreements between drug companies and payers might also drive earlier interactions between the two stakeholders, which could fuel faster, broader access to new drugs. The collaborations could also enhance outcomes data, according to 60 percent of the executives. Getting these stakeholders to interact throughout the process could lead to other benefits. For example, more than half of them believe that such risk-sharing would increase sales and nearly half expect such risk-sharing to improve patient adherence. Biopharma | Do you think risk- and/or cost-sharing agreements with payers will become more common in the next five years? 60% YES R i s k- s h a r i n g a g r e e m e n t s b e t w e e n d r u g c o m p a n i e s a n d p a y e r s m i g h t a l s o d r i v e e a r l i e r i n t e r a c t i o n s b e t w e e n t h e t w o s t a k e ho l d e r s . If t he b i o ph a rm aceu t i c a l ind us t ry a ppl ied a w id er , m o re en co mpa ssin g l ens to g at herin g data a nd t hen rel ied o n m o re so phis t i c at ed too l s a nd t echni q ue s to une a r t h t he t rue insi gh t s emb ed - d ed in t he data , i t co ul d s ta r t a lo n g a pat h towa rd b e t t er d ecisi o ns a b o u t risk-va lue t r a d eo ffs .
  18. 18. 1 8 2012 | The New Health Report www.quintiles.com/newhealthreport Despite the numerous perceived benefits of risk-sharing agreements with payers, biophar- maceutical executives appear hesitant to actually put them into practice. When asked about potential issues that could cause problems, most of the executives indicate trouble from all of them. At the top, 71 percent of the biopharmaceutical executives say that the agreements will eat up too much in administrative costs. The executives do indeed expect improved outcomes data from such agreements, yet claim that understanding clinical versus real-world outcomes could be another obstacle exacerbated by risk-sharing agreements with payers. The list goes on, and the executives paint a picture in which such agreements look far off at best and maybe unlikely at all. As an overview of the opinions that the biopharmaceutical executives express, they appear to see the need for changes in how they handle risk, but they see no way forward. In fact, they still perceive regulators as the bottleneck, while appearing unable to agree on whether the pharmaceutical industry itself should accept more or less risk. In addition, the executives indicate— across a variety of metrics—the potential value of developing risk-sharing agreements with payers, but then check off virtually every reason that precludes such forward motion. Biopharma | Percent saying risk-sharing agreements would mean significant/slight improvements in... B I O P H A R M A Enhanced patient population targeting 70% Increased patient access to drugs that otherwise would not make it to market 65% Drugs available to patients more quickly 63% Improved outcomes data 60% Increased sales for manufacturers 53% Shorter timeline to market for manufacturer 52% Improved adherence 47% B i o ph a rm a e x ec u t i v e s ack n ow l ed ge t he p ot en t i a l va lue o f d e v elo pin g risk-sh a rin g agreemen t s w i t h pay er s , b u t t hen check o ff v ir t ua l ly e v ery re a s o n t h at preclud e s su ch fo r wa rd m ot i o n.
  19. 19. Biopharma’s Evolving Business Model 1 9 Investors Sums may not add to 100% or be equal to components due to rounding Biopharma | Percent saying these are somewhat/significant problems with risk-sharing agreements B I O P H A R M A Administration costs too high 71% Difficult to pre-assess what outcomes will result in real-world use of agent, rather than clinical trials 69% Difficult to agree on definition of success with payers / manufacturers 68% Regulatory risk 63% Information produced might be useful to competitors 63% Difficult to accurately measure success in a performance-based risk-sharing agreement 60% Have to shift post-marketing resources from enhancing the product to proving the product 54%
  20. 20. www.quintiles.com/newhealthreport In healthcare, organizations providing coverage most likely perform some of the most focused analysis of risk. For this study, the payers consist of managed care executives in the United States (U.S. payers) and National Health Service executives in the U.K. (U.K. payers). In assessing their own allocation of risk versus opportunity, the majority of payers—nearly two-thirds—express confidence that they get the balance about right. Despite the vast differences that distinguish the single-payer system in the United Kingdom and the multi-payer system in the United States, the two payer groups take very similar views on their organizations’ current handling of risk. When it comes to other stakeholders, however, payers want them taking on more risk to improve pharmaceutical agents and public health. Both U.K. and U.S. payers—68 and 77 percent, respectively—want the biopharmaceutical industry to accept more risk, and more than half of both groups also feel that regulators should shoulder more risk. Perhaps surprisingly, particularly given the payers’ claims of effective risk balancing, nearly half of U.S. payers and 39 percent of U.K. payers reply that their own groups also need to accept a higher level of risk to benefit public health. Unlike U.S. payers, half of U.K. payers feel that investors must risk more, as well. Overall, the payers favor spreading risk across a wide section of healthcare stakeholders. Payers Seek More Participation
  21. 21. Payers Seek More Participation 2 1 Investors Sums may not add to 100% or be equal to components due to rounding In addition to a strong preference for spreading risk among multiple stakeholders, payers also seek increasing involvement in the entire lifecycle of a medicine. As a step toward this, the payers in this survey—70 percent of the U.K. payers and 79 percent of U.S. payers—expect more risk- and cost-sharing agreements between themselves and the biopharmaceutical industry over the next five years. In parallel with that evolution, the payers want more interaction across the drug- development cycle. Portions of the payers already indicate some participation in drug development. Among U.K. payers, for example, one-quarter or less of them indicate taking part in preclinical and Phase I testing. For Phases II and III, the percentages increase, rising to 52 percent for the latter. For post-marketing surveillance, 59 percent of U.K. payers claim some level of involvement. So out of those five stages of drug development, the majority of U.K. payers only participate toward the end. A similar trend appears in the responses from U.S. payers, although with slightly higher involvement at the preclinical stage, and then less involvement at the other stages in comparison with U.K. payers. For instance, only 31 percent of U.S. payers—21 percentage points fewer than U S P AY E R S 11% 27% 63% U K P AY E R S 23% 18% 59% Payers | Which comes closest to your feeling about how your organization balances risks and opportunities? We need to reduce risk by taking a more conservative approach We need to take more risks to capture more opportunities We do a good job balancing risks and opportunities 0 % 2 0 % 4 0 % 6 0 % 8 0 % 1 0 0 % Payers | Which group(s) need to take or accept more risk to improve pharmaceutical agents and public health? U K P AY E R SU S P AY E R S The FDA; UK: Government regulators Health insurance companies; UK: Primary Care Trusts and other providers Pharmaceutical companies Investors Physicians Patients
  22. 22. 2 2 2012 | The New Health Report www.quintiles.com/newhealthreport the U.K. ones—claim to participate in Phase III testing. Given the general consensus that Phase III carries the highest risk of all, payers clearly desire more involvement at that stage of drug development. In fact, this survey finds that payers want more involvement at every stage. In a general comparison of the responses for current versus desired involvement, the numbers nearly double in many instances. For preclinical testing, for instance, only 18 percent of U.K. payers claim current involvement, but 43 percent—nearly two and a half times as many—say that they should be involved. As expected, both groups of payers also show strong interest in gaining more involvement in Phase III testing. The lack of involvement by payers in drug development indicates that the biopharmaceutical industry does not interact effectively with its customers—who are increasingly the payers, more so than physicians and patients—about the products that it should be making. If the payers’ predicted increase in risk-sharing agreements does arise in the next five years, these stakeholders also expect significant returns— particularly for patients. As a group, the payers believe that risk-sharing between themselves and the biopharmaceutical industry will give patients quicker access to drugs. Interestingly, U.K payers respond more strongly on these points than U.S. payers. Indeed, such risk-sharing should return higher benefits in a single-payer system, where a Payers | How involved is your organization / how involved should it be at the following stages of drug development? I S I N V O LV E D S H O U L D B E I N V O LV E D I S I N V O LV E D S H O U L D B E I N V O LV E D PRECLINICAL P H ASE ITESTING PHASEIITESTING PHASE IIITESTIN G POST APPROVAL 23% 45% 24% 44% 27% 48% 31% 61% 42% 76% PRECLINICAL P H ASE ITESTING PHASEIITESTING PHASE IIITESTIN G POSTAPPROVAL 18% 43% 25% 48% 36% 64% 52% 70% 59% 84% U S P A Y E R S U K P A Y E R S
  23. 23. Payers Seek More Participation 2 3 Investors Sums may not add to 100% or be equal to components due to rounding coordinated attack on disease might be easier to orchestrate than in the U.S. multi-payer system. Somewhat oddly, and like the biopharmaceutical executives surveyed, about half of payers expect such risk-sharing agreements to improve patient adherence, although such a connection does not seem immediately obvious. Moreover, few strategies can boast making significant improvements in adherence, which is notoriously low. Similar to the biopharmaceutical executives, the payers convey many concerns that must be addressed to implement such risk-sharing agreements. Of significant interest, these responses indicate the different level of control that might be possible in a single- versus a multi- payer system. For example, U.K. payers express less concern over related administration costs and the related parties’ ability to agree on successful outcomes. So although both groups of payers seek more involvement in the drug development process, neither shows high confidence that risk-sharing agreements can be developed in the current climate. Payers | Percent saying risk-sharing agreements would mean significant/slight improvements in... Increased patient access to drugs that otherwise would not make it to market 68% 89% Drugs available to patients more quickly 59% 93% 75% Improved outcomes data 61% Increased sales for manufacturers Shorter timeline to market for manufacturer Real-world validation of pharmaceutical risk/benefit Improved adherence 61% 77% 69% 70% U S P AY E R S U K P AY E R S 61% 69% 44% 59% Payers | Percent saying these are somewhat/significant problems with risk-sharing agreements Administration costs too high 72% 59% Difficult to pre-assess what outcomes will result in real- world use of agent, rather than clinical trials 64% 59% 64% Difficult to agree on definition of success with payers / manufacturers 61% Difficult to accurately measure success in a performance-based, risk-sharing agreement Have to shift post-marketing resources from enhancing the product to proving the product 56% 50% U S P AY E R S U K P AY E R S 59% 75%
  24. 24. www.quintiles.com/newhealthreport The healthcare-focused investors surveyed for this report rate the biopharmaceutical industry as high-risk. In fact, 94 percent of the investors see more risk in placing capital in the biopharmaceutical industry than in other sectors. Moreover, almost none of the investors—only 6 percent—rate the biopharmaceutical industry as less risky for investing than other areas. Consequently, this high-risk expectation forms one of the strongest examples of consensus in the results of this year’s survey. Investor Ambivalence, Optimism
  25. 25. Investor Ambivalence, Optimism 2 5 Investors Sums may not add to 100% or be equal to components due to rounding Despite the high risk of investing in the biopharmaceutical industry, 73 percent of investors feel optimistic about the prospects for investments in this area. One-third of investors even expect to invest more in this industry over the next three to five years, and only 17 percent intend to invest less. Still, even more of the investors—65 percent—expect to increase their investments in biotechnology specifically, and only 13 percent expect to invest less in that field. Given that investors see high risk in investing in the biopharmaceutical market as it is, one would imagine that could keep them from suggesting that the drug industry should take on any more risk. In fact, 47 percent of the investors feel that the biopharmaceutical industry does a good job of balancing risk with rewards. Among those who disagree, however, most of them—37 percent— believe that the drug industry should take on additional risk. With investors always interested in spreading the risk and feeling that they already take big risks to invest in this industry, some of them naturally want to see the drug industry raising its risk bar, too. I N V E S T O R S 44%Significantly greater risk 50% Slightly greater risk 6% Less risk Investors | Does investment in the biopharmaceutical sector represent greater or less risk than other sectors? Investors | Are you pessimistic or optimistic about the investment prospects in the biopharmaceutical industry in the next 5 years? I N V E S T O R S 73% Optimistic 27% Pessimistic S e v e n t y t h r e e p e r c e n t o f i n v e s t o r s f e e l o p t i m i s - t i c a b o u t t h e p r o s p e c t s f o r i n v e s t m e n t s i n t h e b i o p h a r m a c e u t i c a l i n d u s t r y. O nly si x percen t o f in v e s- to r s r at e t he b i o ph a rm a- ceu t i c a l ind us t ry a s l e ss risk y fo r in v e s t in g t h a n ot her sec to r s .
  26. 26. 2 6 2012 | The New Health Report www.quintiles.com/newhealthreport When it comes to risk- and cost-sharing between biopharma and payers, investors display ambivalence. Only 42 percent of them expect such agreements to be common in five years. Likewise, investors stand largely divided on the potential benefits of such agreements for themselves and for patients. Investors | Increasing / decreasing investment in specific sectors in the next three to five years D E C R E A S EI N C R E A S E S TAY T H E S A M E P H A R M A C E U T I C A L C O M P A N I E S B I O T E C H N O L O G Y C O M P A N I E S 17% 50% 33% 65% 22% 13% Investors | Do you think risk/cost-sharing agreements between biopharmaceutical companies and payers will become more common in the next five years? I N V E S T O R S 42%Yes 58% No I N V E S T O R S ’ V I E W O F B I O P H A R M A I N D U S T R Y They need to reduce risk by taking a more conservative approach They need to take more risks to capture more opportunities They do a good job balancing risks and opportunities Investors | Which statement comes closest to your feeling about how the biopharmaceutical industry balances risks and opportunities? 16% 37% 47%
  27. 27. Investor Ambivalence, Optimism 2 7 Investors Sums may not add to 100% or be equal to components due to rounding Investors | What are the implications of risk-sharing agreements between biopharma and managed care for firms like yours? D I S A G R E EA G R E E N E I T H E R These agreements will generally mean less return on our investment. We will invest less in this sector if these agreements become more common. These agreements will mean more access to the market for new drugs. 49% 14% 37% 22% 53% 46% 45% 9% 25% I n v e s t o r s a r e r a t h e r i n d i f f e r e n t w i t h r e g a r d s t o r i s k- a n d c o s t- s h a r i n g a g r e e m e n t s b e t w e e n b i o p h a r - m a c e u t i c a l c o m p a n i e s a n d p a y i n g o r g a n i z a t i o n s .
  28. 28. www.quintiles.com/newhealthreport Although biopharmaceutical executives and payers from the U.S. and the U.K. expect more risk-sharing ahead, such agreements could come in many forms. The form itself, however, will determine the likelihood of success from such arrangements. Despite that fact, biopharmaceutical executives and payers express different views on the most likely risk-sharing plans. Among the biopharmaceutical executives, nearly three-quarters of them support agreements in which patient adherence determines future discounts to the manufacturer. They also show similar support of agreements in which some aspect of patient outcome serves as the goal. The biopharma execs show less enthusiasm for some other possible forms of risk-sharing, including population-based performance guarantees. As the numbers show, however, this group spreads its interests across a collection of approaches to risk-sharing. Mitigating Risk: The Need for New Metrics
  29. 29. A Need for New Metrics 2 9 Investors Sums may not add to 100% or be equal to components due to rounding In comparison, the payers display equally widespread opinions. Both groups of payers prefer agreements based on coverage with evidence development (CED), which depends on how well a drug performs against a specific outcome, and the population-based performance approach, in which in drug must meet some long-term benefit to merit coverage. More than biopharmaceutical executives or U.S. payers, U.K. payers provide the most aligned opinion, with 95 percent of them supporting the CED-based option. Notably, this option ties for first among U.S. payers and ranks second with the biopharmaceutical executives. So despite the support of a variety of options in risk-sharing agreements, these data indicate that these three groups of stakeholders could possibly agree on how to get started with this transition. If the biopharmaceutical industry and payer organizations could agree on a way forward, that might generate a variety of risk-sharing agreements. Two key interests, especially from the patient perspective, involve getting new therapies to the market faster and making those therapies more effective. With regard to speed-to-market, half of biopharmaceutical executives feel that risk- sharing agreements will decrease that time, but that expectation drops to 43 and 32 percent for U.S. and U.K. payers, respectively. In terms of risk- sharing agreements increasing the innovative and effective aspects of new therapies, nearly three- quarters of U.K. payers show optimism there, and a majority of the respondents from U.S. payers and biopharma agree. When considering a range of other ways to decrease the time-to-market for new therapies, none generates a strong consensus among the stakeholders. Even with the most agreed-upon concept—pre-competitive collaborations among biopharma companies—it only gains favor from about half of most of the groups, and even less from U.K. payers. Overall, the options generate widely disparate responses and the lack of majority support. To enhance the innovation of new drugs, however, the stakeholders display some level of agreement. Biopharma, Payers | Percent who support specific types of risk-sharing plans U S P AY E R S U K P AY E R SB I O P H A R M A Adherence- based deals Coverage with Evidence Development (CED) Individual performace guarantees Discounts to managed care plans for better formulary placement Contracting to provide copay offsets Population- based performance guarantee 0 % 2 0 % 4 0 % 6 0 % 8 0 % 1 0 0 % 73% 77% 66% 69% 84% 95% 67% 59% 69% 60% 68% 61% 59% 64% 30% 56% 84% 89%
  30. 30. 3 0 2012 | The New Health Report www.quintiles.com/newhealthreport Upwards of three-quarters of biopharmaceutical executives and payers, plus 61 percent of investors, hold hope for pre-competitive collaborations among biopharmaceutical companies. Nonetheless, other responses (data not shown) in this survey indicate that 69 percent of biopharmaceutical executives support pre- competitive alliances, but only 37 percent of them claim that their company currently participates in them. Overall, the responses suggest that some biopharma executives believe that pre- competitive alliances might extend—or at least not shorten—the time that it takes to bring a new drug to market, but the alliances could increase the innovative aspects of new drugs. Although that could create a more precise approach than today’s often scattershot strategy, a majority of these executives also indicate that creating such alliances must overcome a series of problems, including defining the boundary between pre-competitive and proprietary data and protecting intellectual property. So these alliances might appeal to the executives more in theory than in practice. To manage risk effectively, stakeholders need reliable ways to measure it. That is, the healthcare industry needs powerful tools to estimate the risk/benefit tradeoffs generated by a new drug. The results from this survey show that the biopharmaceutical industry and payers in the U.K. and the U.S. apply a variety of tools to address this problem. For example, most of them look at patient-reported outcome measures and minimum clinical efficacy, and about half use quality-adjusted life years. For each of these metrics, though, the stakeholders only rate these tools as more or less mediocre in assessing the risk-benefit profile of a new drug. For example, nearly three-quarters of U.K. payers rely on 52% 43% 32% 50% 57% 41% 31% 28% 32% 72% 25% 41% 43% 41% 41% Biopharma, Payers | Percent who feel the following will decrease time-to-market for new therapies U S P AY E R S U K P AY E R SB I O P H A R M A Risk-sharing agreements between biopharma and payers/managed care Pre-competitive collaborations among biopharma companies Direct government participation in drug development Outcomes research from quasi-governmental bodies governing real-world research practices such as PCORI/NICE Managed care / payer input in drug development 55% 63% 73% 75% 72% 73% 27% 44% 55% 31% 60% 57% 32% 29% 36% Biopharma, Payers | Percent who feel the following will mean getting more innovative and effective therapies to market U S P AY E R S U K P AY E R SB I O P H A R M A Risk-sharing agreements between biopharma and payers/managed care Pre-competitive collaborations among biopharma companies Direct government participation in drug development Outcomes research from quasi-governmental bodies governing real-world research practices such as PCORI/NICE Managed care / payer input in drug development
  31. 31. A Need for New Metrics 3 1 Investors Sums may not add to 100% or be equal to components due to rounding patient-reported outcome measures, but only a bit more than half of them judge this as an excellent or good tool for measuring risk. In other cases, the stakeholders give high marks to some tools that they use infrequently. For instance, nearly three-quarters of U.S. payers believe that minimum clinical efficacy measures risk effectively, but only 44 percent of them use this tool. To some extent, these responses indicate that stakeholders use some of their least favorite methods and forego some of the more effective ones. These data illustrate one of the problems with most risk-based tools: that they fail to recognize the underlying predispositions toward value and therefore make it extremely difficult to understand the tradeoffs involved in such equations. Without considering the values attached to the risk—which can sway the perception of the risk/ benefit proposition—stakeholders are unable to assign the proper weight to different values that influence perception of risk. Patient Reported Outcome (PROs) Minimum Clinical Efficacy (MCE) Quality Adjusted Life Years (QALYs) Number Needed to Treat (NNT) Clinical Utility Index (CUI) Number Needed to Harm (NNH) Disability Adjusted Life Years (DALYs) Proprietary instruments Biopharma, Payers | How well do the following types of data do in accurately assessing a biopharmaceutical product’s risk/benefit profile? 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Excellent Good B I O P H A R M A Excellent Good U S P AY E R S Excellent Good U K P AY E R S N/A Patient Reported Outcome (PROs) Minimum Clinical Efficacy (MCE) Quality Adjusted Life Years (QALYs) Number Needed to Treat (NNT) Clinical Utility Index (CUI) Number Needed to Harm (NNH) Disability Adjusted Life Years (DALYs) Proprietary instruments 56% 60% 71% 53% 44% NA 47% 44% 66% 41% 31% 46% 29% 24% 21% 17% 20% 21% 12% 19% 16% 22% 31% 11% Biopharma, Payers | Do you currently use the following types of data? B I O P H A R M A P AY E R S % answering yes
  32. 32. 3 2 2012 | The New Health Report www.quintiles.com/newhealthreport In the context of assessing risk and benefit, one area that warrants further examination is comparative effectiveness research (CER). As payers and quasi-governmental agencies in the U.S. rush to embrace CER, some clarity as to the utility and construct of CER can be gleaned by looking at the perception among U.K payers as to the benefits produced by health technology assessments (HTA)—a different yet related form of product appraisal. U.K. payers seem unimpressed by the overall performance of HTA on a number of different measures. Less than a third of them feel that HTA initiatives perform very or extremely well on improving patient outcomes, and less than a quarter feel that HTA does a good job of ensuring that the right patient population receives the right medication. These findings contrast sharply with the perception of CER among U.S. payers, the majority of whom say that CER performs well on both measures. Given that the U.K. has more than 10 years experience in putting HTA into practice, U.K. payer skepticism as to their utility should be seen as a learning opportunity for U.S.-based organizations looking to conduct CER initiatives. Critical to the future application of CER is the data and methodology employed in the research. CER methods should not only address technical aspects of study design, subject selection, analytic techniques, and process and outcome measurement, but also address such weighty issues as ethical, humanistic and feasibility considerations related to real-world research. Payers | Percent who believe current CER / HTA initiatives are doing extremely / very well on... U S P AY E R S U K P AY E R S Improving patient outcomes / improving effectiveness 56% 32% Ensuring the right patient population receives the right medication 51% 23% 43% Improving patient safety 44% Controlling cost for members in your plan 40% 5%
  33. 33. 3 3 Given risk’s fundamental place in healthcare—from patients’ well-being to biopharmaceutical companies’ financial security—the interconnected stakeholders know surprisingly little about how to measure and manage it. Overall, each group of stakeholders desires more control over the risks that they face and prefers to reduce their own risk by transferring it to others whenever possible. These perceptions may arise from a law of nature of sorts—protect yourself. But risk in healthcare involves us all. As such, the risks must be balanced so that each stakeholder accepts a fair share, and the members of the healthcare system must find ways to accurately measure and communicate risk and benefit to each other. Conclusion
  34. 34. 3 4 2012 | The New Health Report www.quintiles.com/newhealthreport Much of the data analyzed in this report reveals the need for deeper knowledge of the inherent risks in healthcare and medicine. For example, some of the patient responses indicate a lack of understanding of how the drug development process actually works. Likewise, the comparison of patients from the U.K. and the U.S. shows a need for better education about balancing risk and benefit. At the same time, biopharmaceutical executives report little confidence in many of the tools that they use to evaluate the risk/benefit balance of a drug in development. In today’s world of data and informatics, computation should improve risk assessment and management, but access to robust sources of data to feed the model is severely lacking. Instead, no one stands behind a confident consensus regarding how to measure risk, how to reduce it, how to manage it or how to weigh the tradeoffs. Without that confidence in the data which underpins assessments, a more effective system to enhance health around the world cannot be built. To address this challenge, the biopharmaceutical industry must develop new approaches—and do that as soon as possible. The results of this survey indicate that the biopharmaceutical industry can act now in several ways: collaborating early with payers on new compounds under development; striking pre-competitive alliances among industry competitors to enhance the innovative characteristics of new compounds; and developing risk-sharing agreements to enhance patient-population targeting. If the biopharmaceutical industry fails to adapt to the changing landscape of risk in healthcare, other stakeholders—perhaps the paying organizations, well-versed as they are in measuring and working with risk—will move ahead on their own, and the responses from both U.K. and U.S. payers about their interests in earlier involvement in drug development presages that possibility. The ultimate goal revolves around reducing risk for everyone. To enhance the health of patients— while keeping the biopharmaceutical industry and investors financially healthy and payers balancing their inputs and outlays—healthcare must accurately assess the value of and risks behind a promising compound as soon as possible and then track that balance across the entire drug development cycle. Only then can the world make the most of modern medical capabilities.
  35. 35. 3 5 about the new health report The New Health Report is based on surveys of biopharmaceutical executives, managed care executives in the U.S., National Health Service executives in the U.K., patients living with chronic disease in both the U.S. and the U.K., and investors who focus on the healthcare sectors. Each survey was conducted by Richard Day Research of Evanston, Illinois, U.S.A., a Market Probe company, on behalf of Quintiles. Richard Day Research was responsible for all survey design, data analysis and data reporting. Data for this survey were collected between January 8 and March 14, 2012. Screened and included in the sample were 102 biopharmaceutical executives at the director level or above, 75 managed care executives in the United States at the director level or above, 72 National Health Service executives (director or above) in the U.K., 509 U.S. and 500 U.K. adults ages 18+ diagnosed with a chronic health condition who are receiving treatment, and 100 investment professionals (vice president and above) employed in private equity firms, investment banks, or venture capital firms that focus on the healthcare/biopharma sector. Professionals were recruited via postal mail, telephone, fax and e-mail and completed the survey in a self-administered online questionnaire. Patient interviews were conducted via landline and cellular telephone. With pure probability samples of these sizes, one could say with 95 percent probability that the results have a sampling error of +/– 10 percentage points for biopharmaceutical executives and investors, +/– 11 percentage points for managed care executives, +/– 4 percentage points for U.S. and U.K. patients. about quintiles Quintiles is the only fully integrated biopharmaceutical services company offering clinical, commercial, consulting and capital solutions worldwide. Our network of more than 25,000 professionals in 60 countries has an eye on the future while delivering results today with an unwavering commitment to patients, safety and ethics. Quintiles helps biopharmaceutical companies develop and commercialize products to improve and lengthen patients’ lives while demonstrating value to stakeholders. Visit www.quintiles.com for more information and www.quintiles.com/news for additional company news. contact info For media inquiries: Mari Mansfield, Media Relations, Quintiles +1 919 998 2639 mari.mansfield@quintiles.com For all other inquiries: Adam Istas, Corporate Communications, Quintiles +1 708 948 7070 adam.istas@quintiles.com
  36. 36. clinical | commercial | consulting | capital Copyright © 2012 Quintiles. 01.15.14-052012

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