Health Economics and
 Reimbursement Implications for
   Emerging Pharmaceutical/
    Biotechnology Companies

     Quality...
Agenda

    Quick Intro

    Pharmaceutical/biopharma policy in
     Canada

    Health Economics and Reimbursement
   ...
Introduction
    Focus on Health Economics,
     Reimbursement and Pricing
         Which innovations deliver ROI and ho...
1984 - Canada Health Act
     Federal legislation
           Physician services
           Hospital care
             ...
Federal Government
    Federal Focus – Regulatory
         Safety & efficacy

    Line of questioning = “can the drug b...
Provincial Government

      Provincial Focus – Providing Coverage
           Will we pay for this drug?

      Line of...
Total Drug/Biopharma Expenditures, Canada
1985 to 2005




       Source: Canadian Institute for Health Information. Avail...
Factors Driving Pharmaceutical
Expenditure
     Increased drug consumption
          More patients are taking medication...
Product Assessment

    Until early – mid 20th century – None
    1950s-1960s – Safety
    1970s-1990s – Efficacy
    ...
Product Assessment
    2009 and beyond

         Remember this –




         And don’t forget this…..




            ...
Product Assessment

    2009 and beyond
         US Health Care Reform
     John Andrews, President and Head of R&D for ...
Making Sense Of It
   Pricing                 Reimbursement

                           Health Canada
 PMPRB - Federal
   ...
ROI for Payers
The 3 Pillars Leading to Reimbursement




                          Health
        Clinical               ...
Importance to Pharma/Biotech?
    Successfully Demonstrating Product Value:
             –  Faster Time to Market
        ...
Clinical Pillar

Clinical Trial Design
  1.    RCT Evidence
  2.    Active Comparator
  3.    Appropriate duration
  4.   ...
Health Economic Pillar
Translating and communicating “value for money”




Health Economics                            Hea...
Industry – R&D Phase I
      Phase I – Clinical trials
       - Safety data, no efficacy data

      Role of Health Econ...
Industry – R&D, Phase II

      Phase II Randomized Controlled Trials
       (RCTs)
           Applications of studies p...
Industry – R&D, Phase III

      Phase III RCT - Efficacy & Safety
           Comparative Evidence

      Role of Healt...
Industry – R&D, Phase IV

    Phase IV - Post-marketing
    Role of Health Economics
         Assessment of actual use
...
Importance to Pharma/Biotech?
    Successfully Demonstrating Product Value:
             –  Faster Time to Market
        ...
Health Economic Pillar

    Demonstrating “Value for Money”
    Early development and validation of cost
     -effective...
Other Factors to Consider

     Affordability
         Budget Impact


     Public Outcry
         High profile or und...
Some Examples

1.    Stelara - Psoriasis

2.    Herceptin – Breast Cancer


3.    Xarelto – THR/TKR

Future Examples…..


...
In Summary

    Health care expenditures will continue to rise
     putting greater pressure on all stakeholders
    Suc...
THANK YOU!




                 Colin Vicente
                 (T) 647-669-1483
                 cvicente@pivina.com
www.p...
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Health Economic and Reimbursement Implications for Emerging Pharmaceutical/ Biotechnology Companies: Strategies and perspectives

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Speaker: Colin Vicente, MSc.
Managing Director
PIVINA Consulting

The biotechnology and pharmaceutical industry is confronting significant short-term and long-term challenges. One of which is the ever increasing financial pressures placed on them through governmental and provincial processes both in Canada and abroad. These pose quickly evolving challenges; however, the overriding issue remains the need for effective market access strategies to gain better and faster commercialization. This seminar focuses on health economic, reimbursement and pricing policies implemented by governments and discussion of best practices adopted by companies with a proven track record in gaining patient access to their products.

Find out more about this session at: http://www.marsdd.com/events/details.html?uuid=f1849c07-4dd1-4043-95d1-cbdbd2f720f6

Published in: Business, Economy & Finance

Health Economic and Reimbursement Implications for Emerging Pharmaceutical/ Biotechnology Companies: Strategies and perspectives

  1. 1. Health Economics and Reimbursement Implications for Emerging Pharmaceutical/ Biotechnology Companies Quality Work • Valuable Strategies and Perspectives Results MaRS • Future of Medicine Series 1
  2. 2. Agenda   Quick Intro   Pharmaceutical/biopharma policy in Canada   Health Economics and Reimbursement   Delivering ROI 2
  3. 3. Introduction   Focus on Health Economics, Reimbursement and Pricing   Which innovations deliver ROI and how?   Past decade working with or for industry   Evolution of Patented Medicine Prices Review Board (PMPRB)   Creation of Common Drug Review (CDR)   Bill 102+, payer negotiations 3
  4. 4. 1984 - Canada Health Act   Federal legislation   Physician services   Hospital care   Universality, accessibility, comprehensiveness, portability, public administration   Not pharmaceuticals / Biotech / medical devices 4
  5. 5. Federal Government   Federal Focus – Regulatory   Safety & efficacy   Line of questioning = “can the drug be used” compared to (usually) placebo   Product assessment (NOC) / Post-marketing   Ensure Patented Medicine Prices are not excessive (PMPRB)   Drug coverage for   Military, Prisoners, First Nations & Inuit Canadians 5
  6. 6. Provincial Government   Provincial Focus – Providing Coverage   Will we pay for this drug?   Line of questioning = “Is it worthwhile compared to what’s available”   Formulary Assessment   Drug Coverage Programs   Hospital-Based Care 6
  7. 7. Total Drug/Biopharma Expenditures, Canada 1985 to 2005 Source: Canadian Institute for Health Information. Available at http://secure.cihi.ca/cihiweb/products/ 7 drug_expenditure_1985_2008_e.pdf
  8. 8. Factors Driving Pharmaceutical Expenditure   Increased drug consumption   More patients are taking medications   Patients are taking more medications   More expensive new drugs   New drugs have higher acquisition costs   Increased price of existing drugs   Prices increase just as they do with other products 8
  9. 9. Product Assessment   Until early – mid 20th century – None   1950s-1960s – Safety   1970s-1990s – Efficacy   1997- Access (i.e., reimbursement) 9
  10. 10. Product Assessment   2009 and beyond   Remember this –   And don’t forget this….. 10
  11. 11. Product Assessment   2009 and beyond   US Health Care Reform John Andrews, President and Head of R&D for NeurAxon, “Currently the US offers the quickest access to market for companies like mine, and if there is going to be a change to reimbursement rates, and if there is going to be reimbursement at different rates, then it is certain to extend timelines for getting to the market and increase costs.”   Further Globalization   Comparative Effectiveness 11
  12. 12. Making Sense Of It Pricing Reimbursement Health Canada PMPRB - Federal Product Assessment Price Ceiling CDR - National More Product Assessment Provinces Negotiate Prices/Rebates Provinces Further Product Assessment
  13. 13. ROI for Payers The 3 Pillars Leading to Reimbursement Health Clinical Payer Economic Evidence Priorities Evidence 13
  14. 14. Importance to Pharma/Biotech? Successfully Demonstrating Product Value: –  Faster Time to Market –  Quicker Uptake –  Maximizing Product Potential $ Doing it right Time Development Launch Post-Launch Doing it wrong 14
  15. 15. Clinical Pillar Clinical Trial Design 1.  RCT Evidence 2.  Active Comparator 3.  Appropriate duration 4.  Meaningful endpoints 5.  Representative patient population (??) Remember the payer’s line of questioning….. 15
  16. 16. Health Economic Pillar Translating and communicating “value for money” Health Economics Health Outcomes & Pricing Reimbursement 16
  17. 17. Industry – R&D Phase I   Phase I – Clinical trials - Safety data, no efficacy data   Role of Health Economics   Modeling target product profile (TPP)   Understanding disease burden   Price justification   Is a drug worth developing?
  18. 18. Industry – R&D, Phase II   Phase II Randomized Controlled Trials (RCTs)   Applications of studies planned from pharmacoeconomic perspective   Role of Health Economics   Answers questions posed in Phase I   Is the TPP being met?   To what extent?   Proceed to Phase III?
  19. 19. Industry – R&D, Phase III   Phase III RCT - Efficacy & Safety   Comparative Evidence   Role of Health Economics   ‘Piggy-back’ pharmacoeconomic analysis   Best evidence for   Federal approval   Payer Reimbursement   Quality of Life/resource utilization
  20. 20. Industry – R&D, Phase IV   Phase IV - Post-marketing   Role of Health Economics   Assessment of actual use   Effectiveness rather than efficacy   Comparison to other drugs and services   Modelling
  21. 21. Importance to Pharma/Biotech? Successfully Demonstrating Product Value: –  Faster Time to Market –  Quicker Uptake –  Maximizing Product Potential $ Doing it right Time Development Launch Post-Launch Doing it wrong 21
  22. 22. Health Economic Pillar   Demonstrating “Value for Money”   Early development and validation of cost -effectiveness models   Incorporating appropriate outcomes in your clinical trials 22
  23. 23. Other Factors to Consider   Affordability   Budget Impact   Public Outcry   High profile or underserved diseases   Many provinces have defined priorities   Physician/patient advocacy 23
  24. 24. Some Examples 1.  Stelara - Psoriasis 2.  Herceptin – Breast Cancer 3.  Xarelto – THR/TKR Future Examples….. 24
  25. 25. In Summary   Health care expenditures will continue to rise putting greater pressure on all stakeholders   Successful companies will be those that see a need to deliver ROI to payers and adopt early life-cycle strategies   Clinical   Economic   Payer Priorities 25
  26. 26. THANK YOU! Colin Vicente (T) 647-669-1483 cvicente@pivina.com www.pivina.com Its all about ROI 26

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