1. Real world data (RWD) collected outside clinical trials reflects outcomes in the real world. Real world evidence (RWE) generated from RWD can help understand effectiveness, maximize value for payers, and manage uncertainty given evolving research and development. 2. Managed entry agreements (MEAs) are used to formally incorporate RWD to manage product entry addressing uncertainty while maximizing payer value through performance-linked reimbursement or coverage with evidence development. 3. Challenges to the use of RWE include implementation burdens, governance of data collection and analysis, and methodological issues in dealing with less controlled real world data.

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

2. Why RWE matters for payers
December 2015 2
Content
1. RWD and RWE – what and why?
• What is RWD/RWE
• Why might it be important for payers?
2. Do payers live in the ‘real world’?
• Managed entry agreements (MEAs) to address uncertainty
and maximize value for payers
3. Challenges
• Implementation
• Governance
• Methods to deal with messiness

3. Why RWE matters for payers
December 2015 3
Preview: Five global challenges1
The environment for global R&D is evolving
Challenge 1: Increasing
importance of specialised
and stratified medicines
Challenge 2: Rising drug
development costs
Challenge 3: Closer
benefit/risk monitoring by
regulators over a
medicine’s lifecycle
Challenge 4: Increase in
demand for RWE and
relative effectiveness by
payers, and regulators
Challenge 5: Disconnect between
regulators and payers/HTA bodies
evidence needs
1 Mestre-Ferrandiz, Towse, Pistollato and Lewis. 2014. Securing a
future for innovative medicines: a discussion paper. London: ABPI.

4. Why RWE matters for payers
December 2015 4
1. RWD and RWE – what and why?

5. Why RWE matters for payers
December 2015 5
1. RWD and RWE – What and why?
?

6. Why RWE matters for payers
December 2015 6
• Real world data (RWD)
• Collected outside of an experimental clinical trial
setting: reflects outcomes in the ‘real world’.
• Electronic health records, clinical registries,
surveys, observational data from cohort studies,
etc. (messy data)
• Real world evidence (RWE)
1. RWD and RWE – What and why?

7. Why RWE matters for payers
December 2015 7
1. Understanding outcomes in the ‘real world’
• Efficacy  Effectiveness
• Representative populations (co-morbidities,
spectrum of ages, treatment delivery less
controlled etc.); additional insights e.g.
adherence, costs.
1. RWD and RWE – What and why?

8. Why RWE matters for payers
December 2015 8
2. Evolving R&D pipeline
• Declining R&D investment in drugs - often
attributed to rising cost of developing new
products
• More specialised and stratified medicines
– Highly targeted, small populations, high
uncertainty
1. RWD and RWE – What and why?
2 Daniel et al. (2015) Health Affairs, 34 (2) pp. 319-327
3 Scannell et al. (2012). Nature reviews Drug discovery, 11 (3) pp. 191-200
Source: Daniel et al (2015)2:
Annual new drug approvals by FDA and Industry spending on R&D, 1994-2013
Reduced R&D
productivity
Number of new
drugs approved per
$billion halved every
9 years since 19503

9. Why RWE matters for payers
December 2015 9
3. Timing of decision-points for regulators and
payers are changing
• Regulators: Accelerating access to medicines
that have the potential to address a high unmet
need (uncertainty vs. urgency)
– E.g.: EAMS (UK), ATU (France), BTD (U.S)
• Payers: Making decisions based on a limited
evidence base.
1. RWD and RWE – What and why?
Adaptive pathways

10. Why RWE matters for payers
December 2015 10
1. Understanding outcomes in the ‘real world’
2. Evolving R&D pipeline
3. Timing of decision-points for regulators and
payers are changing
USING RWE TO MANAGE UNCERTAINTY
1. RWD and RWE – What and why?

11. Why RWE matters for payers
December 2015 11
2. Do payers live in the ‘real world’?

12. Why RWE matters for payers
December 2015 12
• In England the National Institute for Health and
Care Excellence (NICE) produces evidence-based
guidance to the NHS (payer).
• Decisions based on robust clinical
and cost-effectiveness evidence
• [not selected if it is expected that there is
insufficient evidence]
• Yes
• Optimised
• No
• Only in research (we’re too uncertain)
2. Do payers live in the ‘real world’?
Managed entry
agreements

13. Why RWE matters for payers
December 2015 13
• Managed entry agreements (MEAs)
• Performance-based risk-sharing arrangements (PBRSA), outcomes-based
schemes, pay-for-performance, patient access schemes...
• Formal utilisation of RWD to manage the entry of a
product. Can be in many forms, for example:
• commitment to collecting confirmatory evidence of
effectiveness in real-life settings
• linking reimbursement explicitly to patient
outcomes
• capping expenditure
• Ensures the payer receives value for money
2. MEAs

14. Why RWE matters for payers
December 2015 14
Source: University of Washington PBRSA database. May 2015
2. MEAs

15. Why RWE matters for payers
December 2015 15
2. MEAs
• MEAs to address uncertainty
and maximise value for payers4
Clinical uncertainty
Value for money
Budget impact
4 Garrison, L.P., Towse, A., et al.
(2013). (5) pp. 703-719

16. Why RWE matters for payers
December 2015 16
• Reimbursement based on
outcome - ‘Rebate’ for non-
responders
• Manufacturer pays for the
medicine beyond a certain
number of doses
• Reimbursed for a specified period
of time whilst further evidence /
RWD are collected
Performance-
linked
reimbursement
Coverage with
evidence development
Outcomes guarantee
Dose capping
REALWORLDDATA2. MEAs

17. Why RWE matters for payers
December 2015 17
3. Challenges
Implementation, Governance, Methods

18. Why RWE matters for payers
December 2015 18
• Substantial administrative burden
• Can be complicated to negotiate with providers
• Capacity for data collection
• Electronic health records, registries, patient
identifiers for data linkage5
• Coverage with evidence development:
• sufficient time to address resolvable uncertainty
• Not straightforward to ‘de-list’ a drug (an ‘acquired
right’?)
3. Challenges: Implementation
5 Chapman & Karlsberg-Schaffer (2015). OHE Consulting report:
https://www.ohe.org/publications/assessing-use-multi-indication-
medicines-review-current-data-capabilities-uk

19. Why RWE matters for payers
December 2015 19
• Who manages (and pays for) data collection /
analysis?
• Information governance
• Data protection: patient consent
• De novo versus routinely-collected data
• Audit or research?
3. Challenges: Governance6
6 Cole, Garrison, Mestre-Ferrandiz & Towse (2015) OHE
Consulting Report. London: https://www.ohe.org/publications/data-
governance-arrangements-real-world-evidence

20. Why RWE matters for payers
December 2015 20
3. Challenges: Methods
• Methodological challenges in dealing with
messy RWD
• Incomplete data
• Confounders and biases
• Quality of data
• Precedent set by medical technologies
evaluation?

21. Why RWE matters for payers
December 2015 21
• Understanding outcomes in the real world
• Being responsive to an evolving R&D pipeline
• There is an expanding experience with regulatory
mechanisms that allow earlier access to medicines
in development  Payers need to be on board
• HTA moving from Yes/No  Agreements
• MEAs can explicitly link payment with value
• There are implementation, governance and
methodological challenges to the implementation of
MEAs.
Conclusion
Why RWE Matters to Payers

22. Why RWE matters for payers
December 2015 22
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Thank you
acole@ohe.org