ebi inventiv market access virtual conference

WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTHWE’RE WAITING FOR YOU AT THE GLOBAL CROSSROADS. WE KNOW THE WAY IN HEALTHCARE.™

Market Access in the Era of Specialty and Biotech: An EBI Virtual ConferenceDecember 13, 2011

Presented by

WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH2

Introductions and Housekeeping

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 [email protected]

Nathan White, CPCExecutive DirectorAccess & Reimbursement

mailto:[email protected]

WE KNOW THE WAY IN HEALTHCARE > INVENTIV HEALTH

Services include:

Outsourced sales teams and sales support

Advertising, branding and PR

Digital and closed loop marketing

Patient outcomes, REMS and Rx access/adherence

Medical education

Services include:

Phase I-II (FIH or bioequivalence studies)

Phase IIb – Phase IV studies

Strategic partnerships

Bioanalytical services

Clinical data services/technology

Staffing services

Consulting practices include:

Brand management

Business development

Clinical development

Medical affairs

Pricing and market access

Sales

One of the industry’s top global CROs

World’s leading provider of sales, marketing, and communications

solutions for the healthcare industry

The leading management consulting group specializing

in biopharma

INVENTIV HEALTH > TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™4

Industry Megatrends

• By 2016, 8 of top 10 worldwide drugs will be specialty

Specialty trend (spend) gaining lots of attention

SOURCE: Accredo Keynote Address, Armada Summit, May 2011


Industry Megatrends



• About 70% of current pipeline drugs have biomarkers associated with them.

Pharma companies will move toward developing more targeted and tailored therapies and more personalized medicine



Industry Megatrends



• About 70% of current pipeline drugs have biomarkers associated with them.

Pharma companies will move toward developing more targeted and tailored therapies and more personalized medicine

• 600 new drugs in pipeline (40% oncology and 30% of these infused)

Pipeline for specialty is substantial



Industry Megatrends

• Many of today’s Indigent patients will become insured (underinsured)

Legislative and regulatory activity will shape our future



Industry Megatrends



• The government has already restricted commercial co-pay activity and private payers are next

The co-pay card tipping point



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, 2011

The beginning of the end…

http://online.wsj.com/public/quotes/main.html?type=djn&symbol=CVS


Industry Megatrends



• The government has already restricted commercial co-pay activity and private payers may be next

The co-pay card tipping point

• Payers are already demonstrating resistance to high cost specialty products w/o a value proposition

The demonstration of value is becoming more critical



Who cares about value?

TRANSFORMING PROMISING IDEAS INTO COMMERCIAL REALITY™

PPACA ImplementationA Beltway Insider’s Perspective

Jayson Slotnik, JDPartner, Health Policy Strategies, LLC

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 Shortage

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• 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.

Physician Fee Schedule

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.

16

• 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.

Accountable Care Organizations

17

• 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.

Other Shared Savings Models

18

• 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.”

Center for Medicare and Medicaid Innovation (CMI)

19

• 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.

CMI Examples

20

• 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.

CMI Examples

21

• 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.

Comparative Effectiveness

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.”

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 services

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 beneficiaries

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 budgets

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.

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 end


Specialty Industry PanelModerated by Michael McCaughan

Michael McCaughanFounding Partner, Prevision Policy


Kay BarryDirector, Government AccountsShire Human Genetic Therapies

Panelists

Steve Bloom, RPhVice PresidentZIOPHARM Oncology

Steve Bourke, RPhManager, Patient Support and Reimbursement ServicesCelgene Corporation


REMS Considerations in a Market Access Strategy

Jeff FettermanPresident, ParagonRx

© 2011 ParagonRx International LLC

REMS Considerations in a Market Access Strategy


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).

33


Draft REMS Guidance

Guidance for Industry Format and Content of Proposed

Risk Evaluation and Mitigation Strategies (REMS), REMS

Assessments, and Proposed REMS Modifications

DRAFT GUIDANCE

U.S. Department of Health and Human Services Food and

Drug Administration Center for Drug Evaluation and Research

(CDER) Center for Biologics Evaluation and Research (CBER)

September 2009 Drug Safety

Content of Proposed REMS

Goals

Stated to achieve maximum risk reduction

Timetable for Submission of Assessments

Min frequency of 18, 36, 84 months

“Additional REMS Elements”

Medication Guide

Communications Plan

Elements to Assure Safe Use

Implementation Systems

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REMS Enabled Almost 200 Products to Get to Market or Stay on Market

35

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), implementation system (IS)

15 8

MG, CP, ETASU, IS 10 5

MG, ETASU 5 3

CP, ETASU, IS 2 1

CP 15 7

Released 90 45

Total 198 100


Uncertainties 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

36


Uncertainties:Common Beliefs About REMS in Practice

• “Manufacturers are shifting their liability to me”Physicians

• “I need to be reimbursed for activities beyond dispensing”Pharmacists

• “This limits utilization, but increases administrative costs; FDA can’t regulate care delivery ”

Payers and Health Plans

• “These requirements interfere with my internal controls and systems for managing risk”Hospitals

• “I don’t understand what this means to me”Patients

© 2010 ParagonRx International, LLC

37


REMS Challenges:Competing Objectives?

Compelling for FDA

Practical for HCPs

Achieve patient safety

objectives

Preserve patient access to drug


Beginning with the End in Mind:Where Do We Want to End?

REMS commitments

are fulfilled

Patient safety is achieved

Brand experience is

enhanced

Market access

achieved

Two realizations: Overall goal is

appropriate use of medications

REMS alone may not be enough

39


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

One Approach: REMS Based on Precedence


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

Alternative Approach: REMS Based on Scientific Method


Science-Based Management of REMS Lifecycle

• Characterize toxicities and safety concerns

• Identify risks associated with care delivery

• Itemize risks; determine which may require intervention beyond labeling (i.e., REMS)

• Define strategic options for risk mitigation

• Labeling, Appropriate Use Program, REMS

• Select risk mitigation strategy, e.g., REMS and/or non-REMS

• As appropriate, create development-stage risk management plan

• Develop plan with science-based methods

• RxFMEA®• Stakeholder ethnography• Adult education principles

• Create REMS elements• Effective risk communications• Elements to assure safe use• Implementation systems• Assessment protocols

• Create non-REMS elements• REMS promotion• Benefit-risk communications• Appropriate Use Programs

• Create regulatory documents and supporting materials

• Develop assessment protocol• Plan contingencies; prepare

science-based rationale• Document implementation details to

support negotiations• Support mock advisory boards• Assist with FDA negotiations• Establish rapid response process to

edit REMS• Begin implementation readiness

planning

42

Benefit-Risk Assessment

& Strategy

Ph I - III

Timeline for REMS initiated in product development

DesignProgram

Prepare &Negotiate

Regulatory Documents

Implement&

Operate

Peri Approval Launch Post Launch

Assess Effectiveness

Optimize&

Redesign


Science-Based Management of REMS Lifecycle

• Establish REMS Coordination Office (RCO) to proactively manage resources, tasks, timelines

• Produce REMS materials and non-REMS materials.

• Select ETASU operators• Registries, call centers, distribution

centers, IVRS• Develop REMS Implementation

Project Plan• e.g., rep training programs• Effective learning technologies

• Implement REMS Effectiveness Management

Benefit-Risk Assessment

& Strategy

Ph I - III

Timeline for REMS initiated in product development

DesignProgram

Prepare &Negotiate

Regulatory Documents

Implement&

Operate

Peri Approval Launch Post Launch

Assess Effectiveness

Optimize&

Redesign

• Implement assessment protocol(s)• For risk communications• For ETASU• For REMS Effectiveness Mgmt

Process• Define and produce reports of

REMS effectiveness• For risk communications• For ETASU

• Define measures, metrics, and reporting for internal REMS Effectiveness Management process

• Conduct gap analysis and root cause analysis

• Re-design program• Re-design REMS promotion

• Engineer customer experience• Re-define internal

communications & commitments• Re-evaluate lifecycle

management (of REMS)

43


PROACTIVE Safe Use(Benefit-Risk Optimization)

Beyond REMS: Spectrum of Pharmaceutical Safe-Use

ACTIVE Safe Use(Risk Mitigation)

REACTIVE Safe Use(Crisis Management)


Market Access with PROACTIVE Safe Use

Product Category Pulmonary Therapy

Issue

• First in class drug with relatively benign safety profile except transient LFT elevation, but intended for pediatric use, thus expecting greater scrutiny from FDA

• 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 limited

Process/Tools • Voluntary tools

Outcome

• NDA was submitted without a REMS

• As a proactive contingency, a MedGuide-only REMS was developed

• 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

CASE STUDY


Market Access with PROACTIVE Safe Use

Product Category Anti-Depressant

Issue• Regulatory agencies in two very different markets were

contemplating restricting the prescribing of this product to therapeutic specialists

Process/Tools

• Voluntary tools

• RxFMEA®

• Ethnography

Outcome

• Pre-empted regulatory restrictions

• Qualitative measures supported safe use

• Cross-functional team developed

CASE STUDY


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

Conclusions


LUNCH BREAK


Developing Payer Evidence:The Role of Post Approval Programs


Jeff TrotterExecutive Vice PresidentPhase IV Development

Presenters

Nathan White, CPCExecutive DirectorAccess & Reimbursement

Lujing Wang, MD, MPHSVP and Practice Area LeadPricing & Market Access


The Global Payer Market:Programs to Support Managed Markets Strategies

Nathan White, CPCExecutive Director, inVentiv Patient Access Solutions


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 systems


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 improvement


US Payers Likely To Use Patient Reported Outcomes (PRO) In Future Decisions

26%

68%

5%

Very LikelyLikelyNot Likely

# of lives = 4,353,435

# of lives = 51,127,435

# of lives = 19,701,655

Mean 4.5

n=22

SOURCE: 2011 inVentiv Health Payer Study

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 1=Not likely, 7= Very likely)


US Payers Likely To Follow CMS Lead

14%

86%

1%

Very LikelyLikelyNot Likely

If CMS publicly leverages the results of 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)

SOURCE: 2011 inVentiv Health Payer Study

n=22


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 programs


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 rate


TOMORROW?TODAY

Reimbursement Support Programs

Focused on helping patients with reimbursement access barriers and assisting the underinsured

Used primarily as marketing initiative

Captures some data which could be valuable to managed markets and brand teams

Typically doesn’t capture PRO

Managed markets data could be used to better guide NAM tactics

Could this program type be integrated into a Phase IV study to reduce sponsor cost?

CHALLENGE: How do we get all the stakeholders (vendor, brand teams, managed markets, etc) to share the same vision?


TOMORROW?TODAY

Patient Assistance Programs

Focused on assisting the uninsured (PAP)

Used primarily as corporate awareness to the public

Captures some data which could be valuable to managed markets teams

Typically doesn’t capture PRO

PAPs could begin to collect adherence/compliance data (especially IPAPs)

What confounding factors would inhibit such an evolution (ex. IRS, study population bias, misclassification)?

Would patient advocates object to muddying the waters of a free drug program?


TOMORROW?TODAY

Adherence Programs

Focused on changing patient behavior and improving patient health outcomes

Opt-out programs typically administered through 3rd party and use claims data to intelligently message patients

High touch programs use a clinical case management approach

Would patients be willing to respond to PRO questionnaires in an opt-out program?

How can manufacturers partner with payers and manufacturers to utilize PRO more effectively?


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 2010


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 payers


Observational Studies & Registries:Strategic and Operational Considerations

Jeff TrotterExecutive Vice President, PharmaNet/i3


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.


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…”


Who Needs Real World Data?

• Health authorities

• Pricing commissions

• Payers

• Regulatory authorities

• Physicians / providers

• Policy makers

• Patients

WellPoint's CER Guide Describes How It Will Determine Usefulness Of Studies

Observational Studies Of "Real-World" Questions

The guidelines state that, "while randomized, controlled clinical trials remain the gold 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-based information by providing effectiveness data, or data on outcomes achieved in a 'real-world' setting.“

German Pharma Law Require Firms to Prove Drugs' Value Within a Year /Germany's Comparative Effectiveness Debate Concludes; Dossier Refinement Begins

The holder of the marketing authorization will be required to hand in a comprehensive 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.


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 value

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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…


Different Conditions Require Different Processes

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Key Components

RCT Component Observational Study

Support for approval Strategic Goal Support for “real world” data

Efficacy Measures Safety, effectiveness, value

Randomization, inclusion/exclusion criteria, protocol, monitored

Controls Inclusion/exclusion

Sample size based on hypothesis

Statistical Power Possibly, based on expected 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”)


Operational Issues & Challenges

• Site selection

• Site training and start-up

• Site “interaction” (monitoring) and management

› Site motivation

› Protocol “adherence”

• Inclusion

• Procedures

• Data management

› Accommodating multiple measures

› EDC issues

› Data quality

• SDV

• Analysis

› Biases, etc.

› Findings

› Reporting (communications


Observational Studies Are A Different Animal

So, who “owns” it…?

• HEOR

• Epidemiology

• Medical Affairs

• Marketing / Product Management

• Clinical Operations

• Development

• Safety / PV


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 research


Operational Planning: Building The Study From The Ground Up

REPORTS

LEGAL, REGULATORY, IRB REVIEW

MATERIALS PRODUCTION AND DISTRIBUTION SITE RECRUITMENT AND TRAINING

PATIENT ENROLLMENT, OUTCOMES TRACKING,

DATA COLLECTION

SITE SUPPORT

ANALYSES

NEWSLETTERS

PUBLICATIONS ABSTRACTS, PRESENTATIONS

MEETINGS

STRATEGY

ANALYSIS PLAN COMMUNICATIONS PLAN

DATA COLLECTION FORMS, PROCESSES, AND LOGISTICS

SCIENTIFIC ADVISORY PANELSITE IDENTIFICATION (FIELD

INVOLVEMENT)

• What are the strategic goals underlying the study?

› Direct impact on how the project/study should be ‘operationalized’

• Direct impact on budget and ROI

• Work backwards from the deliverable

• Don’t consider any individual component in a vacuum


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” happens


Payer Utilization of Value Evidence

Lujing Wang, MD, MPHSVP & Practice Area Lead, Campbell Alliance


Pros and Cons of Late Stage Evidence Generation

Evidence Analysis

Very

Slight

Slight

Rel

evan

ce

Credibility

Very

XEvidence Generation

Y

Repositioning

What to generate: study endpoints

How to generate: study design

Pros

Real-world data with balanced demographics

Long-term outcomes in a large population

Ability to address payers’ concerns

Ability to define specific patient (sub)population

Partnership to boost credibility of results

Cons

Intuitive suspicion of manufacturer-sponsored studies

Lack of credible adjudication of methodology

Perceived subjectivity of patient-reported outcomes measures

Limited actionability of study results

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


Payer Communication of Value Evidence

Principles of Payer Communication

Simplicity

A complete story that can be told in a definite time window

Concise and crisp takeaways that can stay in memory

Transparency

Avoidance of “black box” design and subjective assumptions

Key foundations for audience to interpret study results

Credibility

Well-accepted methodology and validated design

Third-party endorsement and KOL partnership

II IIII

Successful communication with payers requires following three principles.


Stakeholder Engagement

Stakeholder Profiles Engagement PlanPotential Access

Stakeholder Groups

Pharmacy Stakeholders

Provider Stakeholders

Financial Stakeholders

Operational Stakeholders

Key Opinion Leaders

Societies and Advocacies

Roles and responsibilities

Evolving interests and incentives

Interaction and influence

Attitudes and perceptions

What messages to communicate

How to deliver the messages

Who to own the relationship

When to engage the stakeholders

PULL THROUGH

PUSHTHROUGH

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.


Organizational Requirements

Hypothesis Validation

Evidence Generation

Value Communication

Rigorous Scientist Credible Ambassador Strategic Visionary

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.


Session Contact Information

Nathan White, CPCExecutive Director, Access & ReimbursementinVentiv Patient Access Solutions(703) [email protected]: www.inventivhealth.com/patientaccess

Jeff TrotterExecutive Vice President, Phase IV DevelopmentPharmaNet / i3(847) [email protected]: www.pharmanet.com

Lujing Wang, MD, MPHPractice Area Leader, Pricing & Market AccessCampbell Alliance(973) 967-2300 ext. [email protected]: www.campbellalliance.com


Innovative Contracting: A Peek Behind the Curtain

Katya Svoboda, MPH, MBASr. Practice Executive, Campbell Alliance

Copyright © 2011. All Rights Reserved. Confidential Property of Campbell Alliance Group, Inc. -84-

Table of Contents

Learning Objectives

Methodology & Respondents

Innovative Contracting: Overview

Innovative Contracting: Yesterday and Today

Innovative Contracting: Tomorrow

Summary and Questions


Learning Objectives

1. Recognize the benefits and challenges of implementing innovative pharmaceutical contracts

2. Identify factors that make some types of pharmaceutical contracts more successful in meeting objectives than others

3. Compare the relevance of innovative contracts in today’s environment vs. an environment with healthcare reform policies implemented


Table of Contents

Learning Objectives







Methodology & RespondentsPrimary Research MethodologyPrimary research with decision makers from health plans, pharmacy benefit managers (PBMs), and manufacturers provided insight into innovative contracting platforms.

Methodology

Interviewing Methodology 23 in-depth telephone interviews, each lasting 45 minutes

Target Respondents

20 targeted payers 15 managed care plans, including national plans, regional affiliates, regional independents 5 PBMs

3 targeted manufacturers

Target Audience

Targeted payer roles Pharmacy directors Medical directors Other: program/contracting managers

Targeted manufacturer roles Managed markets or contracting related

Recruitment Criteria

Active member of plan’s pharmacy and therapeutics (P&T) committee within the past 12 months

High level of involvement in contracting policies and strategies Experience considering and/or implementing an “innovative contract”


Methodology & RespondentsPayer RespondentsIn addition to the 20 payer respondents outlined below, three manufacturers were also interviewed for qualitative feedback—their input has been incorporated into the research findings.

Mountain(3)

East North Central

(3)

South Central

(1)

West North Central

(0)

Pacific(2)

South Atlantic

(3)

Mid-Atlantic(4)

New England(3)

Hawaii(1)

Account Type Participants

National 3

Regional Affiliate 4

Regional Independent 8

PBM/SPP 5

Function Participants

Medical 4

Pharmacy 10

Other 6

Health Plan Lives Participants

National 26M

Regional Affiliate 14M

Regional Independent 7M

PBM/SPP 110M


Table of Contents

Learning Objectives







Innovative Contracting As Defined by Respondents

Innovative Contracting: OverviewInnovative Contracting As Defined by RespondentsThe definition of an “Innovative Contract” varies, but most agree that it is generally anything different from a contract with a standard access and/or market share driven rebate.

Risk Sharing Performance Based

Anything that is not "standard"*

Price Protection0

2

4

6

8

10

12

10 10

7

2

Num

ber

of R

espo

nses

“Something outside of the norm that recognizes the need for change, managed care needs, and willingness to collaborate and partner, to become a partner of choice.”

—Medical Director, Regional Independent

“Innovative contracting is anything that is beyond the traditional rebate contract: an access rebate plus a supplemental rebate based on utilization.”

—Contracting Manager, Regional Affiliate

“Shared risk—ways in which multiple stakeholders (payer, physician, and pharma) are accountable for care—right patient, right drug at right time, if drug doesn't work who pays? Clinical effectiveness through real-world data.”


“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.”

—Pharmacy Manager, Regional Independent *“Standard” defined as anything beyond a basic access rebate and market share rebate.

n=20

Source: inVentiv Advance Insights interviews with 23 contracting stakeholders (20 payers and 3 manufacturers). Interviews conducted 2/17/2011 – 3/28/2011.


Innovative Contracting: OverviewInnovative Contracting As Defined in the ResearchRespondent definitions generally aligned with the three broad categories utilized for the research; however, there is often overlap between a risk-share agreement and a performance-based contract.

Innovative Contracting Contract Types

Performance-Based Contracts

An outcome or behavior is measured and tied to the structure of the contract.

For example, the manufacturer can commit to an outcome or the plan can commit to programs to support behaviors such as adherence.

The rebate level can be tied to whether the outcome or behavior is achieved.

Risk-Sharing Agreements

Manufacturer assumes some risk based on anticipated utilization, adverse events, performance, or some other factor.

Variation to the expected level will require payment or concessions by a one of the parties.

For example, the manufacturer can commit to effectiveness within 10 doses and cover the costs for patients requiring more than 10 doses—the manufacturer takes on the risk.

Traditional With a “Twist”

A standard contract with a rebate is tied to another factor besides market share or volume.

This can include a price increase cap, escalating rebates, rewards for loyalty, portfolio contracts, or anything that is in addition to the standard contract.

2 31


Average Interest Level in Implementing Innovative Contracts Among Participants

TOMORROWInterest Level: 6.0

TODAYInterest Level: 5.1

Innovative Contracting: OverviewPayer Interest LevelPayer interest in innovative contracting is growing, supported by several factors such as the emphasis on cost reduction and outcomes.

HighLow1 7

6.0TOMORROW

5.1TODAY

Some level of interest but not a major focus for most

Contracts often considered but not implemented due to barriers (such as stand-alone data systems, lack of integration between medical and pharmacy benefit) or lack of enough financial incentive

Interest has grown as some barriers have been overcome

Internal stakeholders are starting to become more open to new contracting ideas

Still considered to be a pilot vs. a regular way to doing business

Several aspects of the Patient Protection and Affordable Care (PPAC) Act increases interest including electronic medical record (EMR) and outcomes focus.

Internal data systems will be more capable to support reporting needs

4.4YESTERDAY

YESTERDAYInterest Level: 4.4

Source: inVentiv Advance Insights interviews with 20 contracting Payer stakeholders. Interviews conducted 2/17/2011 – 3/28/2011.


Table of Contents

Learning Objectives


Innovative Contracting Overview





Several innovative contracts have been considered by health plans in the past; however, many barriers that prevent plans from serious consideration and implementation remain.

02468

10

Considered, not ImplementedConsidered and ImplementedNeither

0

5

10

15


Performance-Based Contracts Financial Risk-Sharing Agreements Traditional With a Twist

02468

10


*Note some respondents determined an innovative contract could be both a performance based and financial risk sharing agreement. Many of the “Traditional with a Twist” types of contracts have become more common place and may no longer be considered “innovative” by many payers (ie Price protection and portfolio rebates)

“With performance-based contracts with an endpoint—the administrative hassle to define if endpoint has been reached is sometimes fuzzy.”


“We considered and implemented quantity cap; DACON guarantee type of agreement.”

—Pharmacy Manager, Regional Independent

“We considered but did not implement the Merck/Januvia offer.”

—Pharmacy Director, Regional Independent

“Yes, we considered and implemented with an antibiotic manufacturer—guaranteed that product would not be used beyond 7 days with financial protection for any use beyond 7 days.”


“No, we considered GNE/Avastin limit which ties to efficacy to some degree, but will tie back to total usage. Only high level, theoretical discussions.”


“We considered but not implemented; never been approached by manufacturer.”

—VP Trade Relations, PBM

“We may not even enter a deal with a manufacturer if we don't have price protection. It's become very standard.”

—BD Director, PBM

“Typically, we don't like the twist (e.g., bundling), but it depends on the twist.“

—Pharmacy Director, Regional Affiliate

“Currently portfolio contracts, a few loyalty contracts—if renewed after second year, additional $ paid out—a couple price increase caps. Not a fan of portfolio contracts.”

—Pharmacy Director, Regional Independent

Num

ber o

f Res

pond

ents

Innovative Contracting: Yesterday and TodayInnovative Contracts Considered and Implemented

n=20n=20 n=20



Barriers Faced When Implementing an Innovative Contract

The hesitation by many plans in the past highlights the presence of several barriers to implementing innovative contracts. As these barriers are lifted, there will be a greater willingness and ability to implement innovative contracts.

The Right Partner Defined Measurements Data

Internal Buy-In ROI / Incentive Limitations Contract Negotiations

“Having a relationship to support innovative contracts is important. Going back to the manufacturer and letting them know you didn't account for certain things and vice versa.” —BD Director, Large PBM

“Legal—anti-kick-back statutes are a major barrier; it’s a very difficult area to negotiate and sign a contract in.”


“When you start moving away from the norm, there is not a lot of comfort. You need to educate internal stakeholders and gain internal buy-in for an innovative strategy.”

—VP, Large PBM

“It’s hard to measure outcomes accurately and involves a lot of coordination between pharmacy data and medical claims data.”


“Negotiating what and how long to measure, time to results, etc. is a challenge.”


“End result is not worth the effort: rebate increase by 1%. Not worth it even if it's a high-volume drug.”


Innovative Contracting: Yesterday and Today Barriers to Implementation



Despite the barriers, two contracts have gained significant exposure for their innovation in the marketplace: Actonel and Januvia.

Drug Contract Type Description Comments

Actonel Financial Risk-Sharing

Payment by manufacturer for bone fractures above and beyond the expected fracture rate

Must prove patients were on treatment if fracture occurs

Several respondents considered the contract and some had implemented.

Challenges were cited in obtaining payments for fractures due to requirements to prove drug was taken and type of fracture.

Due to requirements, contract can be administratively burdensome.

JanuviaPerformance-

Based/Financial Risk-

Sharing

Adherence rate of patients on Januvia and other orals for the treatment of diabetes

A1C levels

Several plans were offered the contract, but none interviewed implemented the contract (Cigna, not interviewed, is known to have implemented it).

The requirements to track both adherence levels and A1c levels of patients were barriers to implementation since many plans were not set up to capture these data.

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 materialized

Innovative Contracting: Yesterday and TodayActonel and Januvia



Innovations in contracting are also taking place behind the scenes with several other types of contracts that fit the description of an innovative contract.

Contract Type Examples Provided by Respondents Comments

Performance-Based

Adherence goals are linked to financial incentives. Clinical endpoints are measured and tied to a

financial incentive.

Data challenges often cited as barrier to implementation.

Plans with good data capabilities are better enabled (typically plan with its own PBM or an IHS).

Requires the right category with specific endpoints to measure (diabetes often mentioned).

Financial Risk-Sharing

Antibiotics—effectiveness within 7 days, cost of additional use covered by manufacturer.

Hypertension—Manufacturer guaranteed effectiveness of its treatment, if other drugs needed to be added to therapy, the cost would be covered.

Conceptually considered a good idea and payers would like to shift the risk.

Data is also a challenge here.

Traditional With a Twist

Protection against cost increases, several terms used to describe it including “price protection,” “price cap,” and “price guarantee” or “price ceiling.”

Loyalty Contracts—Incremental discounts for years of service/access.

Portfolio contracts—Rebate is based on market share of a basket of products.

Price increases generally a big concern. Price protection is becoming a common request by

payers and more common in contracts. Best price implications need to be considered with

price protection. Portfolio contracts not considered desirable or

innovative any more by most.

Innovative Contracting: Yesterday and TodayOther Contracts Implemented



Characteristics of Innovative Contracts

Contracts that have been considered or implemented tend to have certain product and therapeutic category characteristics that seem to be more aligned with the goals of an innovative contract.

Type of Condition

Type of Benefit

Position of Drug in Market

Competitive Environment

Administration of Drug

Size of Patient Population

Life Cycle of Drug

Type of Physician

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Chronic

Pharmacy

Leader

Moderate

Oral

Large

Middle

Generalist

Acute

Medical Either

2nd Player Other

Crowded Little or None

Injectable Other Both

Small Other Moderate

Beginning End Other

Specialist Either

n=20

Innovative Contracting: Yesterday and TodayCharacteristics of Innovative Contracts

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.



Table of Contents

Learning Objectives







Focus shifts to outcomes vs. utilization.

Clinical end points are key

Effective use including adherence and compliance is a focus

Outcomes Focus

Both short and long-term costs considered. Short-term: Reduce cost of drugs Long-term: Reduce total cost of patient

care such as high cost adverse events and disease progression

Risk (and cost) shift to manufacturer. Manufacturer to stand by performance

claims Shared incentive created to meet goals

True patient value is becoming the focus.

Value-based benefit design Consumer-driven plans Clinical pathways

Value Focus

New ways to reduce costs are constantly being explored. Formulary changes/new tiers Use of NDC Blocks Use of Step Edits

Cost Reduction

Responsibility for payment is shifting. Higher co-pays/coinsurance for patients Demand for higher rebates from

manufacturers

Cost Shifting

1

2

3

Trends in Benefit Management Objectives of Innovative Contracts

Cost Reduction

1

2

3

Risk Shifting

Some contracts have potential benefits.

Price protection and escalating rebates considered innovative by some

Outcomes data can be a cost predictor

Payers need to better forecast costs.

Price increases taken often and in excess of any benchmarks

Payers seeking price increase caps

4 4

Budget Predictability

Budget Predictability

Trends mentioned in benefit management align well with the goals of innovative contracting.

Several 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.

Innovative Contracting: TomorrowBenefit Management Trends and Alignment With Innovative Contracts



Regardless of previous history with innovative contracts, all participants agreed that these will become more prevalent 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

Legal hurdles for approval

Agreement on correct measurements for category

Data capture and availability

IT integration of pharmacy and medical benefit data

Financial incentive

Adequate timeframe for results

Specific Therapeutic Categories Mentioned

Asthma

Allergy

Psoriasis

HCV

Diabetes

Multiple sclerosis

Rheumatoid arthritis

Hypertension

Oncology

Certain types

Cardiovascular

Anticholesterol

Innovative Contracting: TomorrowPlans for the Future



Payer research was conducted to assess whether the PPAC Act will enable/hinder/not affect implementation of more 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 Rebate

Innovative Contracting: Tomorrow—Impact of the PPAC ActPPAC Provisions Tested



The funding for comparativeness effectiveness research will create an environment where more stakeholders are aware 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.”


Innovative Contracting: Tomorrow—Impact of the PPAC ActComparative Effectiveness Research and Outcomes Focus



Over 17 million new patients are expected to be insured by 20161 through private health exchanges, which may create 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.

1Estimate from Avalere Health

“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, National

Innovative Contracting: Tomorrow—Impact of the PPAC Act Uninsured Becoming Insured through Private Health Exchanges



Will Help Innovative Contracting

Manufacturers often cite best price implications as reasons additional rebates cannot be provided in innovative contracting structures. Payers do not want to give up any existing rebates and want additional incentives to meet performance goals.

Since Medicaid rebates have been increased, many believe manufacturers will have additional discounting ability to offer incentives to payers for innovative contracts without having best price implications.

Will Not Help Innovative Contracting

Due to deeper discounts in the Medicaid channel, many believe manufacturers will be more frugal with commercial channel discounts to offset those discounts.

Many manufactures have already been providing discounts beyond the 23% due to limitations on annual price increases (limited to CPI) that have forced them to increases rebates. For them the increased rebate has no impact.

"Forever we've heard from manufacturers 'we can't break best price’”


“They will have to give so much on the Medicaid side, that we will have to pass on the Commercial side.”


Providing 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 provide same 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 be financial implications.

Innovative Contracting: Tomorrow—Impact of the PPAC Act Medicaid 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 that Medicaid has the best price for drugs net of all discounts and rebates. There are two schools of thought on how this may impact innovative contracting.



Branded Manufacturers

Many believe the anticipated introduction of biosimilars may prompt branded manufacturers to take actions to defend their business.

An innovative contract could build an outcomes and value story to payers.

This would help “lock in” payers to share in long-term goals rather than simply providing deeper discounts on traditional contracts.

Biosimilar Manufacturers

Biosimilar manufacturers may be the ones who attempt to use innovative contracting to gain access with payers and gain share from brands.

Payers may be lured by cost savings and product guarantees by biosimilar manufacturers.

Manufacturers will need to have strong clinical data to convince payers.

"Contracting discussions have already been escalated by branded manufacturers, maybe in anticipation. Depends on price point of biosimilars.”


“Biosimilar manufacturer will be a bit more creative since they are trying to gain share.”

—Director, National Plan

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 create some potential for different types of innovative contracts. This could be an opportunity for branded manufacturers, biosimilar manufacturers, or both.



Table of Contents

Learning Objectives








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.

Innovative contracting has been explored by several payers and manufacturers and will continue to be as the environment changes and barriers to implementation are removed.


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?


Campbell Alliance Contacts

Katya Svoboda Senior Practice Executive

973-967-2300 [email protected]

Alexis MatosAssociate Consultant973-967-2300 x2404

[email protected]

Research related to “Innovative Contracting: A Peek Behind the Curtain” led by Suhash Bhavsar with support from Alexis Matos.




Future of US Patient Financial Assistance

Clorinda WalleySr. Director, Chronic Disease Fund

• Pasto Pre-Med D and Healthcare Reform

• Presento Post Med D and Beginning of Healthcare Reform

• Futureo Healthcare Reform

Financial Assistance State of Affairs

Past

• Free Drug ProgramsoNo InsuranceoMajority Financial Requirements <250% FPL

• Marketing CardsoCommercial InsuranceoNo Financial Requirements

• Copayment AssistanceoBeginnings in 2002o501c(3) foundation set the Financial Requirements

•Free Drug ProgramsoNo InsuranceoMajority Financial Requirements <75k

•Marketing CardsoCommercial InsuranceoNo Financial Requirements

• Private ProgramsoCommercial InsuranceoFinancial Requirements as determined by Manufacturer

typically <$100K• Copayment Assistance

oMedicare D benefit 2005

Present

• Free Drug ProgramsoNo InsuranceoRendered UninsuredoFinancial Requirements <100k

• Marketing CardsoCommercial InsuranceoNo Financial Requirements

• Private ProgramsoCommercial InsuranceoFinancial Requirements as determined by

Manufacturer typically <$100K• Copayment Assistance

oMedicare Exclusive Programs

Future

Uncertainty of Healthcare Reform• Copayment Assistance

oMedicare Exclusive Programs• By 2020 Med-D “donut hole” disappears

oNeed for copayment assistance will decrease dramatically• “Mandated Insurance”

oCMS Estimates by 2019 32.5 million uninsured Americans will be insured

oro93% of Americans will have healthcare coverage

Need for copayment assistance will increase dramatically

Marketing Cards Private Programs

Need for Free Drug Programs will decrease

Future

"When you peel back the onion, and you look past the surface, you start to see much more pronounced impacts," said John Poisal, deputy director of the National Health Statistics Group at CMS' Office of the Actuary, and one of the authors of the study.One of those layers, he said, is the high projected rate of insured people likely by 2019. Enrollment in private insurance will increase from 15.8 million in 2014 to 30.6 million in 2019.Research also determined that when federally-mandated COBRA subsidies expire in 2011, the unemployed will be stuck paying for a large share of their insurance coverage, which will lead to slightly higher out-of-pocket health costs starting that year. But by 2014, when many people who did not have insurance will be insured, out-of-pocket spending will drop by 1.1%, instead of rising by 6.4% percent, which was the pre-reform projection. However, the reduction in out-of-pocket spending won't last, and, by 2018, employee spending will actually grow faster than had reform not passed.

To Quote CMS on the Future of Healthcare Reform

End Thoughts

Predictions of the future of healthcare will continue to be made and as the past has demonstrated, the cost will increase in conjunction with the need to assist patient’s access to therapy.


Payer Industry PanelModerated by Marc Palmer

Marc PalmerCEO, inVentiv Medical Management


James Marttila, Pharm.D, MBADirector, Pharmaceutical Contracts and Formulary ManagementMayo Clinic

Panelists

David Calabrese, RPh, MPHVP, Clinical OperationsMedMetrics Health PartnersClinical Editor, Formulary Journal

Elise Berliner, PhDDirector, Technology Assessment ProgramCenter for Outcomes and EvidenceAgency For Healthcare Research and Quality


Closing Comments

Nathan White, CPCExecutive Director, inVentiv Patient Access Solutions