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EBI inVentiv Market Access Virtual Conference

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    • 1. Market Access in the Era of Specialty and Biotech: An EBI Virtual Conference December 13, 2011 Presented byWE‟RE WAITING FOR YOU AT THE GLOBAL CROSSROADS. WE KNOW THE WAY IN HEALTHCARE.™ WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 2. 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.com2 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 3. 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 biopharmaServices 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 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 4. Industry Megatrends Specialty trend (spend) gaining lots of attention • By 2016, 8 of top 10 worldwide drugs will be specialtySOURCE: Accredo Keynote Address, Armada Summit, May 20114 INVENTIV HEALTH > TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 5. Industry Megatrends Specialty trend (spend) gaining lots of attention • By 2016, 8 of top 10 worldwide drugs will be specialty 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.SOURCE: Accredo Keynote Address, Armada Summit, May 20115 INVENTIV HEALTH > TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 6. Industry Megatrends Specialty trend (spend) gaining lots of attention • By 2016, 8 of top 10 worldwide drugs will be specialty 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)SOURCE: Accredo Keynote Address, Armada Summit, May 20116 INVENTIV HEALTH > TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 7. Industry Megatrends Legislative and regulatory activity will shape our future • Many of today‟s Indigent patients will become insured (underinsured)SOURCE: Accredo Keynote Address, Armada Summit, May 20117 INVENTIV HEALTH > TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 8. Industry Megatrends Legislative and regulatory activity will shape our future • Many of today‟s Indigent patients will become insured (underinsured) The co-pay card tipping point • The government has already restricted commercial co-pay activity and private payers are nextSOURCE: Accredo Keynote Address, Armada Summit, May 20118 INVENTIV HEALTH > TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 9. 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, 20119 INVENTIV HEALTH > TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 10. Industry Megatrends Legislative and regulatory activity will shape our future • Many of today‟s Indigent patients will become insured (underinsured) 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 propositionSOURCE: Accredo Keynote Address, Armada Summit, May 201110 INVENTIV HEALTH > TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 11. Who cares about value?11 INVENTIV HEALTH > TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 12. PPACA Implementation A Beltway Insider‟s PerspectiveJayson Slotnik, JDPartner, Health Policy Strategies, LLC TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 13. 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 Shortage13
    • 14. 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
    • 15. 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
    • 16. 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
    • 17. 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
    • 18. 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
    • 19. 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
    • 20. 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
    • 21. 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
    • 22. 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
    • 23. 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 services23
    • 24. 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 beneficiaries24
    • 25. 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 budgets25
    • 26. 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
    • 27. 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 end27
    • 28. Specialty Industry Panel Moderated by Michael McCaughanMichael McCaughanFounding Partner, Prevision Policy TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 29. 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 Corporation29 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 30. REMS Considerations in a Market Access StrategyJeff FettermanPresident, ParagonRx TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 31. REMS Considerations in a MarketAccess Strategy © 2011 ParagonRx International LLC
    • 32. © 2011 ParagonRx International LLC
    • 33. 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). © 2011 ParagonRx International LLC
    • 34. 34 Draft REMS Guidance Guidance for IndustryContent 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 © 2011 ParagonRx International LLC
    • 35. 35REMS Enabled Almost 200 Products to Get to Market orStay 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 © 2011 ParagonRx International LLC
    • 36. 36Uncertainties 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 © 2011 ParagonRx International LLC
    • 37. 37Uncertainties: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 © 2011 ParagonRx International LLC
    • 38. REMS Challenges:Competing Objectives? Achieve patient Preserve patient safety objectives access to drug Compelling for Practical for FDA HCPs © 2011 ParagonRx International LLC
    • 39. 39Beginning 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 © 2011 ParagonRx International LLC
    • 40. 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 © 2011 ParagonRx International LLC
    • 41. 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 © 2011 ParagonRx International LLC
    • 42. 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. 43Science-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 © 2011 ParagonRx International LLC
    • 44. Beyond REMS: Spectrum of Pharmaceutical Safe-Use PROACTIVE Safe Use (Benefit-Risk Optimization) ACTIVE Safe Use (Risk Mitigation) REACTIVE Safe Use (Crisis Management) © 2011 ParagonRx International LLC
    • 45. Market Access with PROACTIVE Safe Use CASE STUDYProduct 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 FDAIssue • 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 limitedProcess/Tools • Voluntary tools • NDA was submitted without a REMS • As a proactive contingency, a MedGuide-only REMS was developedOutcome • 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 © 2011 ParagonRx International LLC
    • 46. Market Access with PROACTIVE Safe Use CASE STUDYProduct Category Anti-Depressant • Regulatory agencies in two very different markets wereIssue contemplating restricting the prescribing of this product to therapeutic specialists • Voluntary toolsProcess/Tools • RxFMEA® • Ethnography • Pre-empted regulatory restrictionsOutcome • Qualitative measures supported safe use • Cross-functional team developed © 2011 ParagonRx International LLC
    • 47. 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 © 2011 ParagonRx International LLC
    • 48. © 2011 ParagonRx International LLC
    • 49. LUNCH BREAK TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 50. Developing Payer Evidence:The Role of Post Approval Programs TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 51. 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 Access51 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 52. The Global Payer Market: Programs to Support Managed Markets StrategiesNathan White, CPCExecutive Director, inVentiv Patient Access Solutions TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 53. 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 systems53 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 54. 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 improvement54 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 55. 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 LikelySOURCE: 2011 inVentiv Health Payer Study55 INVENTIV HEALTH > TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 56. US Payers Likely To Follow CMS Lead If CMS publicly leverages the resultsof 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 Study56 INVENTIV HEALTH > TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 57. 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 programs57 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 58. 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 rate58 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 59. Reimbursement Support Programs TODAY TOMORROW? Focused on helping patients  Managed markets data couldwith reimbursement access be used to better guide NAMbarriers and assisting the tacticsunderinsured  Could this program type be Used primarily as marketing integrated into a Phase IV studyinitiative to reduce sponsor cost? Captures some data which  CHALLENGE: How do we getcould be valuable to managed all the stakeholdersmarkets and brand teams (vendor, brand teams, managed markets, etc) to share the same Typically doesn‟t capture PRO vision? WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 60. Patient Assistance Programs TODAY TOMORROW? Focused on assisting the  PAPs could begin to collectuninsured (PAP) adherence/compliance data (especially IPAPs) Used primarily as corporateawareness to the public  What confounding factors would inhibit such an evolution Captures some data which (ex. IRS, study populationcould 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? WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 61. Adherence Programs TODAY TOMORROW? Focused on changing patient  Would patients be willing tobehavior and improving patient respond to PRO questionnaireshealth outcomes in an opt-out program? Opt-out programs typically  How can manufacturersadministered through 3rd party partner with payers andand use claims data to manufacturers to utilize PROintelligently message patients more effectively? High touch programs use aclinical case managementapproach WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 62. 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 201062 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 63. 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 payers63 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 64. Observational Studies & Registries: Strategic and Operational ConsiderationsJeff TrotterExecutive Vice President, PharmaNet/i3 TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 65. 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.65 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 66. 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…”66 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 67. Who Needs Real World Data? • Health authorities WellPoints 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 / Germanys 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.67 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 68. 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 value68 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 69. 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…69 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 70. Different Conditions Require Different Processes70 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 71. 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”)71 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 72. 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 (communications72 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 73. Observational Studies Are A Different Animal So, who “owns” it…? • HEOR • Epidemiology • Medical Affairs • Marketing / Product Management • Clinical Operations • Development • Safety / PV73 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 74. 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 research74 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 75. 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 STRATEGY75 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 76. 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” happens76 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 77. Payer Utilization of Value EvidenceLujing Wang, MD, MPHSVP & Practice Area Lead, Campbell Alliance TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 78. 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 design78 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 79. 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 results79 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 80. 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 Advocacies80 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 81. 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 Ambassador81 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 82. Session Contact InformationNathan White, CPCExecutive Director, Access & ReimbursementinVentiv Patient Access Solutions(703) 662-1851nwhite@inventivhealth.comWebsite: www.inventivhealth.com/patientaccessJeff TrotterExecutive Vice President, Phase IV DevelopmentPharmaNet / i3(847) 943-2508jtrotter@pharmanet.comWebsite: www.pharmanet.comLujing Wang, MD, MPHPractice Area Leader, Pricing & Market AccessCampbell Alliance(973) 967-2300 ext. 2343lwang@campbellalliance.comWebsite: www.campbellalliance.com WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 83. Innovative Contracting: A Peek Behind the CurtainKatya Svoboda, MPH, MBASr. Practice Executive, Campbell Alliance TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 84. Table of Contents Learning Objectives Methodology & Respondents Innovative Contracting: Overview Innovative Contracting: Yesterday and Today Innovative Contracting: Tomorrow Summary and QuestionsCopyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -84-
    • 85. Learning Objectives1. Recognize the benefits and challenges of implementing innovative pharmaceutical contracts2. Identify factors that make some types of pharmaceutical contracts more successful in meeting objectives than others3. Compare the relevance of innovative contracts in today’s environment vs. an environment with healthcare reform policies implementedCopyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -85-
    • 86. Table of Contents Learning Objectives Methodology & Respondents Innovative Contracting: Overview Innovative Contracting: Yesterday and Today Innovative Contracting: Tomorrow Summary and QuestionsCopyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -86-
    • 87. Methodology & RespondentsPrimary Research MethodologyPrimary research with decision makers from health plans, pharmacy benefit managers (PBMs), and manufacturersprovided 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”Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -87-
    • 88. Methodology & RespondentsPayer RespondentsIn addition to the 20 payer respondents outlined below, three manufacturers were also interviewed for qualitativefeedback—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 110MCopyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -88-
    • 89. Table of Contents Learning Objectives Methodology & Respondents Innovative Contracting: Overview Innovative Contracting: Yesterday and Today Innovative Contracting: Tomorrow Summary and QuestionsCopyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -89-
    • 90. Innovative Contracting: OverviewInnovative Contracting As Defined by RespondentsThe definition of an “Innovative Contract” varies, but most agree that it is generally anything different from acontract 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 doesnt 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 IndependentSource: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -90-
    • 91. Innovative Contracting: OverviewInnovative Contracting As Defined in the ResearchRespondent definitions generally aligned with the three broad categories utilized for the research; however, there isoften 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.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -91-
    • 92. Innovative Contracting: OverviewPayer Interest LevelPayer interest in innovative contracting is growing, supported by several factors such as the emphasis on costreduction 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 needsSource: inVentiv Advance Insights interviews with 20 contracting Payer stakeholders. Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -92-
    • 93. Table of Contents Learning Objectives Methodology & Respondents Innovative Contracting Overview Innovative Contracting: Yesterday and Today Innovative Contracting: Tomorrow Summary and QuestionsCopyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -93-
    • 94. Innovative Contracting: Yesterday and TodayInnovative Contracts Considered and ImplementedSeveral innovative contracts have been considered by health plans in the past; however, many barriers that preventplans 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 dont have price cap; DACON guarantee type of agreement.” product would not be used beyond 7 days protection. Its 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 dont 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 aTwist” types of contracts have become more common place and may no longer be considered “innovative” by many payers (ie Price protection and portfolio rebates)Source: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -94-
    • 95. Innovative Contracting: Yesterday and TodayBarriers to ImplementationThe hesitation by many plans in the past highlights the presence of several barriers to implementing innovative contracts. Asthese 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.” didnt 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 its 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 PBMSource: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -95-
    • 96. Innovative Contracting: Yesterday and TodayActonel and JanuviaDespite the barriers, two contracts have gained significant exposure for their innovation in the marketplace: Actoneland 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 materializedSource: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -96-
    • 97. Innovative Contracting: Yesterday and TodayOther Contracts ImplementedInnovations in contracting are also taking place behind the scenes with several other types of contracts that fit thedescription 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.Source: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -97-
    • 98. Innovative Contracting: Yesterday and TodayCharacteristics of Innovative ContractsContracts that have been considered or implemented tend to have certain product and therapeutic categorycharacteristics 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.Source: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -98-
    • 99. Table of Contents Learning Objectives Methodology & Respondents Innovative Contracting: Overview Innovative Contracting: Yesterday and Today Innovative Contracting: Tomorrow Summary and QuestionsCopyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -99-
    • 100. Innovative Contracting: TomorrowBenefit Management Trends and Alignment With Innovative ContractsSeveral trends in benefit management are aligned with the objectives stated for implementing an innovative contract.As these trends continue, they create an environment where stakeholders are more open to innovative contracts. Trends in Benefit Management Objectives of Innovative Contracts1 1 Responsibility for payment is shifting. Risk (and cost) shift to manufacturer. Cost Shifting  Higher co-pays/coinsurance for patients Risk Shifting  Manufacturer to stand by performance  Demand for higher rebates from claims manufacturers  Shared incentive created to meet goals2 2 New ways to reduce costs are constantly Both short and long-term costs considered. being explored.  Short-term: Reduce cost of drugs Cost Cost  Formulary changes/new tiers  Long-term: Reduce total cost of patient Reduction  Use of NDC Blocks Reduction care such as high cost adverse events and  Use of Step Edits disease progression3 True patient value is becoming the focus. 3 Focus shifts to outcomes vs. utilization.  Value-based benefit design  Clinical end points are key  Consumer-driven plans Outcomes Value Focus  Effective use including adherence and  Clinical pathways Focus compliance is a focus4 Payers need to better forecast costs. 4 Some contracts have potential benefits. Budget  Price increases taken often and in excess Budget  Price protection and escalating rebates Predictability of any benchmarks Predictability considered innovative by some  Payers seeking price increase caps  Outcomes data can be a cost predictor Trends mentioned in benefit management align well with the goals of innovative contracting.Source: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -100-
    • 101. Innovative Contracting: TomorrowPlans for the FutureRegardless of previous history with innovative contracts, all participants agreed that these will become moreprevalent in the future. Likely Characteristics of Treatments Suited for an Innovative Contract  Chronic conditions are more likely to be targeted due to the potential savings with positive outcomes.  Clear end goal must be measureable, within two years and widely agreed upon as a success criterion.  High-cost treatments or high volume of patients will likely be targeted for the savings potential.  Number of products will be a factor, as there must be an alternative to be able to gauge cost savings. Things Mentioned That Need to Change to Support Innovative Contracting  Internal organizational buy-in  Data capture and availability  Financial incentive  Legal hurdles for approval  IT integration of pharmacy and  Adequate timeframe for results medical benefit data  Agreement on correct measurements for category Specific Therapeutic Categories Mentioned  Asthma  Diabetes  Oncology  Allergy  Multiple sclerosis  Certain types  Psoriasis  Rheumatoid arthritis  Cardiovascular  HCV  Hypertension  AnticholesterolSource: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -101-
    • 102. Innovative Contracting: Tomorrow—Impact of the PPAC ActPPAC Provisions TestedPayer research was conducted to assess whether the PPAC Act will enable/hinder/not affect implementation ofmore innovative contracts in the future. Four provisions generated the most discussion. Provisions of PPAC Tested With Respondents Comparative Effectiveness Research Biosimilar Regulatory Pathway Patient with Pre-Existing Conditions Uninsured Becoming Insured Medicare Advantage Five Star Ratings Increase in Medicaid Rebate Accountable Care Organizations Medical Home Concept Medication Therapy Management Most Likely to Impact Innovative Contracting Comparative Effectiveness Research Biosimilar Regulatory Pathway Uninsured Becoming Insured Increase in Medicaid RebateSource: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -102-
    • 103. Innovative Contracting: Tomorrow—Impact of the PPAC ActComparative Effectiveness Research and Outcomes FocusThe funding for comparativeness effectiveness research will create an environment where more stakeholders areaware of the importance of outcomes and how they can be effectively measured and utilized. Comparative Effectiveness Research and Outcomes Focus  Most agree that outcomes are already a focus and healthcare reform will only accelerate the progress on how outcomes can be used practically.  The research will help set the parameters by which data are collected and analyzed to allow innovative contracts to be set up in the future.  Innovative contracts that measure outcomes can benefit from any standards that are created by allowing manufacturers and payers to agree on terms more easily.  Although payers are limited from making formulary decisions based on this research funded by the government, payers expect manufacturers to use this data when it supports their products.  In addition, as organizations such as AHRQ develop detailed guidelines on conducting unbiased studies for comparative effectiveness, CMS is likely to lead with policy decisions when data is compelling. Commercial payers are likely to follow in this case. "Data releases by government will have an impact on benefit design, formulary and reimbursement. Manufacturers may want to use the data for Innovative Contracting.” —Pharmacy Director, Regional AffiliateSource: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -103-
    • 104. Innovative Contracting: Tomorrow—Impact of the PPAC ActUninsured Becoming Insured through Private Health ExchangesOver 17 million new patients are expected to be insured by 20161 through private health exchanges, which maycreate some opportunity for innovative contracting. Uninsured Becoming Insured Through Private Health Exchanges  Many believe there may be a pool of higher risk patients due to lack of treatment over a prolonged period of time (due to pre-existing conditions, for example).  Plans may want to mitigate some risk by implementing an innovative contract that tracks and improves patient outcomes.  Manufacturers may want to target treatment naïve patients and may offer an innovative contract to be a preferred treatment option. This may include additional value added services such as disease management programs or targeted patient financial assistance programs.  If there is a concentration of these patients on specific plans, there may be a way to target them in a specific way through innovative contracts. “The newly insured may be sicker than average patient and may require extra attention. Innovative contracting is possible to address them and provide additional resources. If patients move in and out of plans more frequently, it may be harder to address those patients. —Medical Director, National1Estimate from Avalere HealthSource: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -104-
    • 105. Innovative Contracting: Tomorrow—Impact of the PPAC ActMedicaid Rebate: Increase From 15% to 23% (Best Price Implications)Manufacturers are required to increase their rebates to the Medicaid channel and to also continue to ensure thatMedicaid has the best price for drugs net of all discounts and rebates. There are two schools of thought on how thismay impact innovative contracting. Will Help Innovative Contracting Will Not Help Innovative Contracting  Manufacturers often cite best price implications as  Due to deeper discounts in the Medicaid channel, reasons additional rebates cannot be provided in many believe manufacturers will be more frugal with innovative contracting structures. Payers do not commercial channel discounts to offset those want to give up any existing rebates and want discounts. additional incentives to meet performance goals.  Many manufactures have already been providing discounts beyond the 23% due to limitations on  Since Medicaid rebates have been increased, many annual price increases (limited to CPI) that have believe manufacturers will have additional forced them to increases rebates. For them the discounting ability to offer incentives to payers for increased rebate has no impact. innovative contracts without having best price implications. "Forever weve heard from manufacturers we cant break “They will have to give so much on the Medicaid side, that best price’” we will have to pass on the Commercial side.” —Pharmacy Director, Regional Affiliate —Medical Director, Regional IndependentProviding a price(net of discounts and rebates) to any customer that is lower than the price provided to Medicare would require the manufacturer to also providesame discount to the Medicaid channel, which could add significant cost. Manufacturers must be careful to not go beyond their Medicaid best price or there will befinancial implications.Source: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -105-
    • 106. Innovative Contracting: Tomorrow—Impact of the PPAC ActIntroduction of BiosimilarsThe FDA was given the authority to create a regulatory pathway for biosimilars to be approved, which could createsome potential for different types of innovative contracts. This could be an opportunity for brandedmanufacturers, biosimilar manufacturers, or both. Branded Manufacturers Biosimilar Manufacturers  Many believe the anticipated introduction of  Biosimilar manufacturers may be the ones who biosimilars may prompt branded manufacturers to attempt to use innovative contracting to gain access take actions to defend their business. with payers and gain share from brands.  An innovative contract could build an outcomes and  Payers may be lured by cost savings and product value story to payers. guarantees by biosimilar manufacturers.  This would help “lock in” payers to share in long-term  Manufacturers will need to have strong clinical data to goals rather than simply providing deeper discounts on convince payers. traditional contracts. "Contracting discussions have already been escalated by “Biosimilar manufacturer will be a bit more creative since branded manufacturers, maybe in anticipation. Depends they are trying to gain share.” on price point of biosimilars.” —Director, National Plan —Pharmacy Director, Regional AffiliateSource: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -106-
    • 107. Table of Contents Learning Objectives Methodology & Respondents Innovative Contracting: Overview Innovative Contracting: Yesterday and Today Innovative Contracting: Tomorrow Summary and QuestionsCopyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -107-
    • 108. Summary and QuestionsInnovative contracting has been explored by several payers and manufacturers and will continue to be as theenvironment changes and barriers to implementation are removed. Innovative Contracting Summary Yesterday and Today  Several types of innovative contracts have been explored from altering existing contracts slightly to trying entirely new structures of contracts.  Several barriers have prevented payers from accepting innovative contracting offers in the past and many of those barriers still exist today. Tomorrow  Several changes from PPAC are expected to be enablers of innovative contracting while there is debate on the impact of other aspects.  Significant barriers still exist for innovative contracts to become commonplace, but there is enough interest to project that more contracts will be implemented in the future.  Certain therapeutic categories will be better suited for an innovative contract—the financial impact on the payer will be a key factor in which ones are targeted.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -108-
    • 109. Summary and Questions (Continued) Innovative Contracting Summary Critical Success Factors for Innovation  As payers and manufacturers consider these innovative contracting structures, there must be willingness to invest in a partnership by both parties, and the right partner must be chosen carefully.  Some payers will be better able to implement an innovative contract (e.g., ability to integrate pharmacy and medical data to link treatment to clinical outcomes).  Providing enough financial incentive to the payer is critical to a true partnership and demonstrates willingness to share in the risk and confidence in the products. Questions?Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -109-
    • 110. Campbell Alliance Contacts Katya Svoboda Alexis Matos Senior Practice Executive Associate Consultant 973-967-2300 x7489 973-967-2300 x2404 ksvoboda@CampbellAlliance.com amatos@CampbellAlliance.com Research related to “Innovative Contracting: A Peek Behind the Curtain” led by Suhash Bhavsar with support from Alexis Matos.Copyright © 2011. All Rights Reserved.Confidential Property of Campbell Alliance Group, Inc. -110-
    • 111. Future of US Patient Financial AssistanceClorinda WalleySr. Director, Chronic Disease Fund TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 112. Financial Assistance State of Affairs• Past o Pre-Med D and Healthcare Reform• Present o Post Med D and Beginning of Healthcare Reform• Future o Healthcare Reform
    • 113. Past• Free Drug Programs o No Insurance o Majority Financial Requirements <250% FPL• Marketing Cards o Commercial Insurance o No Financial Requirements• Copayment Assistance o Beginnings in 2002 o 501c(3) foundation set the Financial Requirements
    • 114. Present• Free Drug Programs o No Insurance o Majority Financial Requirements <75k• Marketing Cards o Commercial Insurance o No Financial Requirements• Private Programs o Commercial Insurance o Financial Requirements as determined by Manufacturer typically <$100K• Copayment Assistance o Medicare D benefit 2005
    • 115. Future• Free Drug Programs o No Insurance o Rendered Uninsured o Financial Requirements <100k• Marketing Cards o Commercial Insurance o No Financial Requirements• Private Programs o Commercial Insurance o Financial Requirements as determined by Manufacturer typically <$100K• Copayment Assistance o Medicare Exclusive Programs
    • 116. Future Uncertainty of Healthcare Reform• Copayment Assistance o Medicare Exclusive Programs• By 2020 Med-D “donut hole” disappears o Need for copayment assistance will decrease dramatically• “Mandated Insurance” o CMS Estimates by 2019 32.5 million uninsured Americans will be insured or o 93% of Americans will have healthcare coverage  Need for copayment assistance will increase dramatically  Marketing Cards  Private Programs  Need for Free Drug Programs will decrease
    • 117. To Quote CMS on the Future of Healthcare Reform"When you peel back the onion, and you look past the surface, you startto see much more pronounced impacts," said John Poisal, deputydirector of the National Health Statistics Group at CMS Office of theActuary, and one of the authors of the study.One of those layers, he said, is the high projected rate of insured peoplelikely by 2019. Enrollment in private insurance will increase from 15.8million in 2014 to 30.6 million in 2019.Research also determined that when federally-mandated COBRAsubsidies expire in 2011, the unemployed will be stuck paying for a largeshare of their insurance coverage, which will lead to slightly higher out-of-pocket health costs starting that year. But by 2014, when many peoplewho did not have insurance will be insured, out-of-pocket spending willdrop by 1.1%, instead of rising by 6.4% percent, which was the pre-reform projection. However, the reduction in out-of-pocket spendingwont last, and, by 2018, employee spending will actually grow faster thanhad reform not passed.
    • 118. End ThoughtsPredictions of the future of healthcare will continue to bemade and as the past has demonstrated, the cost willincrease in conjunction with the need to assist patient‟saccess to therapy.
    • 119. Payer Industry Panel Moderated by Marc PalmerMarc PalmerCEO, inVentiv Medical Management TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™
    • 120. Panelists David Calabrese, RPh, MPH VP, Clinical Operations MedMetrics Health Partners Clinical Editor, Formulary Journal James Marttila, Pharm.D, MBA Director, Pharmaceutical Contracts and Formulary Management Mayo Clinic Elise Berliner, PhD Director, Technology Assessment Program Center for Outcomes and Evidence Agency For Healthcare Research and Quality120 WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH
    • 121. Closing CommentsNathan White, CPCExecutive Director, inVentiv Patient Access Solutions TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™

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