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Highlights from ExL Pharma's 6th Pharmaceutical & Medical Device Pricing & Reimbursement Conference

  1. 1. ExLPharma’s6th Pharmaceutical& Medical Device Pricing& ReimbursementConferenceHighlights<br />July 26-27, 2010<br />Bridgewater, NJ<br />
  2. 2. Questions to address with pricing and pharmaceconimic modeling…<br />How do manufacturers price a product?<br />What constitutes a “value proposition”?<br />How is healthcare reform going to affect pricing in the future<br />
  3. 3. What’s the right price?<br />
  4. 4. How do manufacturers price products?<br />Offensive!<br />Too<br />High<br />Too<br />Low<br />$$ <br />Lost<br />
  5. 5. Step 1: Determine the perceived value of the product<br />Clinical advance (dosing, delivery, etc.)<br />Improved Safety<br />Improved Efficacy<br />Unmet Medical Need<br />
  6. 6. Vested interests motivating perceptions<br />Brand Value<br />Product Attributes (efficacy, safety, MOD)<br />Unmet Need<br />Untreated Disease<br />High Volume Market<br />Perceived Benefits<br />Clinical advance <br />Economic Value<br />Cost Effectiveness<br />RxEcon Studies<br />Cost Savings<br />Medical Cost Offset<br />Budget Impact<br />PMPM Increase<br />PAYERS<br />PHYSICIANS<br />
  7. 7. Step 2: Consider Market Factors<br />Market Access<br />Tier Placement = Market Share?<br />Distribution fees<br />Wholesaler PPD and FFS rates on rise<br />SPPs becoming more aggressive<br />Healthcare legislation<br />Medicaid<br />Med D<br />
  8. 8. Is Tier Placement a Function of Market Share Success?<br />
  9. 9. Focus on Net Revenue vs. Access At All Costs<br />Assumptions: A $1000 price point and a 25% rebate<br />
  10. 10. Focus on Net Revenue vs. Access At All Costs<br />Assumptions: A $1000 price point and a 25% rebate<br />
  11. 11. Inelasticity of Price Points<br />Thresholds may be evident when the price goes above $400 and $700 WAC per month. <br />4th tier<br />3rd tier<br />2nd tier<br />
  12. 12. Middlemen Everywhere!<br />
  13. 13.
  14. 14. What’s the “value proposition”?: <br />Pharmacoeconomics<br />
  15. 15. Key Organizations Driving Quality<br /> Quality<br /> NCQA(& HEDIS)<br />PQA<br />CMS<br />AQA<br /> QIOs<br />AHRQ<br />NQF & <br />Supplier<br />Council<br /> AHIP <br />Quality<br />NCQA (& <br />HEDIS)<br />delete<br />PQA<br />CMS <br />AQA<br />QIOs<br />AHRQ<br />NQF & <br />Supplier<br />Council<br />AHIP <br />
  16. 16. Adopting Measures for Reporting and Payment<br />Quality Metrics<br />Developing Consensus<br />Measurement Development<br />Measurement Development<br />Developing Consensus<br />Adopting Measures for Reporting and Payment<br />
  17. 17. Two Approaches to Pharmaceconomic Modeling<br />Establish Predictability of Cost Outlay<br />Budget Impact Analysis<br />Market Share Changes<br />Drug Volume/Market Penetration<br />Provide Evidence for Potential Cost Offsets<br />Pharmacoeconomic Analysis<br />Cost Minimization<br />Cost Effectiveness<br />Cost Utility<br />Cost Benefit<br />
  18. 18. Publication of RxEcon Data Has Impact on Formulary Decision Making<br />Survey included 95 key decision makers<br />77% of responders always/often rely on journals for formulary decision making<br />HE&OR and MC journals rated highest for symptomatic diseases<br />Clinical journals rated highest for chronic diseases<br />Source: Journal Use for Formulary Decision-making in Managed Care. Presented at AMCP 20th Annual Meeting & Showcase, San Francisco, CA, April 16-19 2008. <br />
  19. 19. Health Outcomes to Support Pricing and Reimbursement<br />
  20. 20. The Question of “Effectiveness”<br />Will the product work under real-world conditions?<br />Concomitant disease<br />Patient adherence<br />Real world prescribing patterns<br />
  21. 21. Key Pricing and Effectiveness Questions<br />How is our product truly unique?<br />Mechanism of action<br />Route, frequency, onset, duration<br />Efficacy, tolerability, safety<br />How does this translate into clinical outcomes?<br />Real world populations, subpopulations<br />Ease of use<br />Who will value the differentiation?<br />Patient/caregiver<br />Quality organization<br />Payer/Purchaser<br />Provider<br />How much do these stakeholders influence our target market?<br />
  22. 22. Responders<br />Price Pressure<br />Responders<br />All patients<br />All patients<br />Responders<br />Responders<br />Price Pressure<br />All patients<br />All patients<br />Value of Product Differentiation <br />“Fail First”<br />High Interchangeability<br />“Open Access”<br />Low Interchangeability<br />“Own a patient type”<br />
  23. 23. Quality and Health Reform <br />National strategy for quality improvement<br />HHS Secretary to develop by 1/1/2011<br />$95million/year 2010-2014<br />Development, endorsement, dissemination of quality measures<br />Reduced payments for readmissions <br />AMI, HF, Pneumonia<br />To begin 10/1/2012<br />Quality will be tied to reimbursement<br />
  24. 24. Evidence <br />Generation<br />Value<br />Demonstration<br />Development<br />Use<br />Validation<br />Performance Measurement Life Cycle<br /><ul><li>RCTs
  25. 25. HTAs
  26. 26. Observational studies
  27. 27. Practice Guidelines
  28. 28. Consensus Statements
  29. 29. Publication
  30. 30. Dissemination
  31. 31. Campaigns
  32. 32. Coverage and reimbursement
  33. 33. Accreditation
  34. 34. Public reporting
  35. 35. Data standards
  36. 36. Operational definitions
  37. 37. Numerator/denominator
  38. 38. Field testing
  39. 39. Revision
  40. 40. Endorsement</li></li></ul><li>Start with the End in Mind<br />What do we want to say?<br />What evidence would support that claim?<br />What studies would yield this evidence?<br />When would we need this evidence?<br />When would we need to start?<br />
  41. 41. Health Outcomes and Drug Development<br />Generic Entry<br />Shape the Landscape<br />Define the Product<br />Launch<br />-12 mo<br />-24 mo<br />+12 mo<br />+24 mo<br />Prelaunch<br />LCM<br /><ul><li>Unmet needs
  42. 42. Burden of illness
  43. 43. Real world treatment patterns
  44. 44. Quality gaps
  45. 45. Early economic modeling</li></ul>Generic Entry<br /><ul><li>Economic trial endpoints
  46. 46. Economic modeling
  47. 47. Pragmatic trials, prospective cohorts
  48. 48. Comparative effectiveness
  49. 49. Real world treatment patterns</li></li></ul><li>Still have any questions? For additional information on ExLPharma’s Pricing & Reimbursement Conferences, please visit<br />