eyeforpharma - Trends in Market Access newsletter

Singing in harmonyWill EUnetHTA succeed in harmonizing HTA across the EU?

Worth the risk?What can pharma expect from risk-sharing agreements in the years to come?

The importance of real-world evidence in market access is growing, but what rules can pharma follow to close the evidence gaps?

in Market Accesswww.eyeforpharma.com

Trends

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12Worth the risk?With healthcare costs growing and budgets shrinking, how can pharma and payers work together to ensure patients gain access to new medicines?

Contents

4Mind the gapThe importance of real-world evidence in market access is growing, but what rules can pharma follow to close the evidence gaps?

8Singing in harmony

Will EUnetHTA succeed in harmonizing the value

assessment of medicines across the European Union?

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www.eyeforpharma.com/access-europe

Dear colleague,

As an independent function, market access is both logical and practical. Logical, in that it’s all about finding statistical evidence to demonstrate value, and practical, in that it has been a vertical unit seeking to streamline processes from clinical to commercial as fluidly as possible.

Until now. For the first time, market access directors are having to treat the function as a horizontal component – part of everyone’s role, to which everybody needs to be aligned. Access no longer depends on a single unit crunching data and taking it to payers.

Getting Clinical, Research and Marketing to appreciate market access involves change management, competencies, PROs, personalized design and a whole raft of ‘soft’ measures. Increasingly, it also involves working in partnership with payers as risk-sharing and adaptive processes become reality.

The ‘market access problem’ no longer has a beginning and an end. It is a work in progress. A Herculean task that no single person or department, however heroic, can accomplish alone. It requires company-wide cooperation and laser focus from each internal function.

The key theme at our upcoming Access Europe Summit will be installing market access at the heart of company culture. This is easier said than done, especially with the clinical model already disrupted by the onslaught of new technology, data sets and demands for real-world evidence. Yet, re-orienting a company’s culture to focus fully on market access is increasingly seen as a key strategy for future success.

To get the debate started, we ask some fundamental questions and offer the views of industry experts. In Mind the Gap (p4), we ask what rules pharma can follow to develop an evidence plan that truly delivers a value-based approach to market access.

With 77 bodies in 29 countries, European health technology assessment is a fragmented landscape. In Singing in Harmony (p8), we ask whether EUnetHTA will succeed in harmonizing HTA across Europe. Risk-sharing agreements are an increasingly common market access tool; in Worth the Risk? (p12), we ask how they will develop in the years to come.

I hope you enjoy Trends in Market Access.

Paul SimmsChairmaneyeforpharma

Wel

com

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http://www.eyeforpharma.com/access-europe

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The importance of real-world evidence in market access is growing, but what rules can pharma follow to close the evidence gaps?

roving the value of a drug these days means more than convincing payers that a drug is safe and effective in randomized clinical trials. It takes evidence – and lots of it.

“Real-world evidence is crucial if we are to get to a value-based approach to reimbursement,” says Peter Speyer, Global Head of RWE Solutions at Novartis. “It’s a fundamental shift in how we look at value.”

Yet, it is one thing to talk about how you demonstrate the value of a product in day-to-day usage outside of a controlled environment, but it’s quite another to make it happen.

Companies need a long-term evidence plan and the sooner they start thinking about it, the greater their chances of successful market access, says Richard White, Commercial Director at Oxford PharmaGenesis. “A lot of companies start later than they should,” he says.

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patient population and how it compares to your trial population, right through to how this population will be treated by the time you launch (having the evidence against the right comparator). It’s a wide range of needs; you need local data on treatment pathways and incidence, and you need to know what will come out of the clinical trial.”

While this focuses on RWE before launch, the need for such evidence doesn’t stop after launch, says van Engen. “Many payers provide conditional reimbursement requiring manufacturers to submit real-world evidence, on areas with high uncertainty when the product was initially assessed; for example, the effect on long-term, hard endpoints or taking away payer concerns around the treatment duration in real practice. In addition, understanding the impact of different treatment pathways or switching treatments, or assessing effectiveness in subpopulations, or differentiation of the product against current or future competitors, are key components of support for a product post-launch. Lastly, the possibility to continually assess product use in the real-world can support indication expansion.”

FILLING THE GAPSOnce the evidence gaps have been established, it’s time to work out how to fill them. With funding rarely unlimited, trade-offs will have to be made here; for example, creating a registry may be attractive but running a retrospective e-records review is considerably cheaper. However, cost must also be balanced against the quality of data produced; in the hierarchy of evidence, a new observational study is likely to be taken more seriously than a survey of clinicians, for example.

Data collected through insurance claims or health records present a variety of opportunities and challenges, says Novartis’ Speyer. “To make use of these types of data, the size of the data requires increasingly powerful IT infrastructure. Commercially available claims or health record datasets can have observations on 50 million or more patients. You need to have the right tools to review the data, analyze them and show the results to different users.”

IDENTIFYING THE GAPSWhile the evidence requirements of each product will vary based on myriad factors – including indication, therapy area and territory – there is a framework that companies can follow.

Firstly, evidence must include four categories: unmet need; improved patient outcomes (eg, quality of life); economic benefit (especially in terms of cost-effectiveness of budget impact); and the comparator being used. Secondly, companies can assess what its stakeholders – regulators, payers, clinicians (both primary care and specialty), patients, and patient groups (particularly in rare and orphan diseases) – are looking for.

Timeliness is also crucial, says Anke van Engen, Principal, Consulting Services, at QuintilesIMS. “If you understand real-world evidence needs early, developing them alongside your clinical development plan, then you have time to fill in the gaps. If you start too late, you can find that you have an endpoint that is not accepted by payers – but if you’d thought about it when designing phase III, you’d have been able to consider, in parallel, how to convince payers. You need to anticipate stakeholder needs, bearing in mind that what is required at national level in one country is not necessarily what you need in another.”

She adds: “Capturing the right clinical outcomes in your trial is just one piece. You need to demonstrate your product’s long-term benefits, you need to understand the


Meet our contributors

Peter Speyer Global Head of RWE Solutions

Novartis

Anke van Engen Principal, Consulting Services

QuintilesIMS

Richard White Commercial Director

Oxford PharmaGenesis

Aside from issues with governance, common pitfalls in evidence generation at this stage include failing to adjust adequately for bias in the data and not comparing like with like. “The classic mistake often comes when using real-world datasets that were not collected specifically for your study,” says White. “You may not have all the information collected to apply your RCT inclusion criteria or, maybe, the patient outcomes of interest aren’t coded specifically and you have to make assumptions. It’s quite hard.”

A BIG TENTIf you are creating your evidence plan correctly, many – perhaps most – functions in the organization will be involved, says van Engen. “You need quite a few functions in a broad team involved from the start. A fully integrated evidence plan requires a very good overview. R&D will be designing the trial, then you need the regulatory department and, depending on how the company is structured, medical affairs or whoever runs observational programs, then the market access team. It touches almost everyone.”

White agrees but warns about silos within pharma companies; while clinical development may naturally take on regulatory issues, HEOR/market access and epidemiology should also be involved at an early stage in evidence planning. “Epidemiology studies help define the disease prevalence and incidence, particularly if you are looking at subsets of a population,” he says. “Generally, the integration of other functions is less well done and might happen later to plug gaps.” What’s more, some kind of patient engagement will be needed at an early stage in order to understand the impact of the disease.

KEEP IT LOCALIn an ideal situation, establishing the needs for market access should be handled locally, says White. “HQ always drives things and that’s a challenge [when] needs are at a local or regional level, so local affiliates need to engage with decision makers in their own countries, asking them what information is required to demonstrate that a drug should be reimbursed or on formulary, and communicating that back to HQ.”

This is easier said than done, he concedes, as local affiliates have limited budgets and are chiefly focused on products that are already on the market rather than those that might be in the future. “If you have that specific information at a local level, you’re in a strong position,” says White. “More often, global does something more generic, which is neither fish nor fowl,” he says.

“To make use of these types of data, the size of

the data requires increasingly powerful IT infrastructure”

PETER SPEYER, NOVARTIS

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Different data is required at different times, says van Engen. “There are things you can start at phase II or early in phase III, for instance, whether the outcomes you are measuring in the RCT are relevant to other stakeholders such as payers and patients, and understanding the patient population in the real world versus the set you are measuring.”

In pre-launch, the focus should be on the disease and the patient population, including epidemiology, disease burden, treatment pathways, the reimbursement landscape and what the competition is doing. There is also scope for entering early dialogues with payers, she says. “We see more and more that companies are opening dialogue with key payers (for example, when they finalize the phase III protocol) to get advice on the planned clinical trial design and the likely acceptability of the anticipated evidence package at launch.”

Post-launch, you can look at outcomes, compliance and patient-reported outcomes, says White. Safety is also important. “If you construct a long-term evidence plan well, you can incorporate the capturing of pharmacovigilance data,” he says, adding that commercial functions can also benefit. “It can be very powerful pre-launch to look at high-value subsets of the patient population, where the product would show most benefit. They can be identified by co-morbidities or disease characteristics. These days, you tend to see drugs reimbursed for particular subgroups in a particular line of therapy; for commercial, it is important to know how many people are in those groups when planning target indications and price.”

FORGING AHEADThe increasing importance of payers, and structural changes to the pharma industry and the medicines it produces, means that the design of trials is changing. High development costs for smaller patient populations will not be sustainable, and pharma will be looking at alternative models, perhaps along the lines of the Salford Lung Study with its emphasis on a wider population than a traditional trial.

“We are starting a journey,” says van Engen. “There is no question that RWE will become more and more important, but there are a lot of hurdles to overcome if we are to generate it cost-effectively. Technology, such as wearables, may help.”

Larger, well-resourced pharma companies may find it easier to collaborate with payers to collect the evidence required, but smaller outfits with limited funds might find it trickier, particularly in certain indications. With evidence generated later – such as how long patients are on therapy and what the adherence rates are like – often used in conditional reimbursement by payers, legitimate questions may be raised about whether it is the sole responsibility of the manufacturer to pick up the bill of this evidence burden. Only time will tell.

It is probably fair to say that regulators are further down the track than payers when it comes to accepting evidence from pharma, although some forms of data are more accepted than others. Clinical trial registries are well-established, for example, but the situation with other forms of evidence is hazier; for instance, there is no current requirement for pharma companies to register retrospective database analyses.

Pharma needs to tread cautiously, says White. “The average clinical trial takes a couple of years and cost tens of millions of pounds, but a retrospective database study takes a couple of months and costs about £100,000. There’s scope for cherry-picking in RWE and that’s a challenge for the industry in terms of credibility. There’s a level of mistrust over what pharma does with RWE.”

Tempting as it might seem to gently sweep unfavorable information under the carpet, it is unlikely to do pharma’s reputation any good in the long term.


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Singing inharmony

Will EUnetHTA succeed in harmonizing the value assessment of medicines across the European Union?

ealth Technology Assessment emerged from the need of national healthcare systems to rationalize its spending on new medicines but, with 77 HTA organizations spread across 29 countries, European HTA is incredibly fragmented.

The European network for Health Technology Assessment (EUnetHTA) was established to help streamline HTA, in its own words, to “create an effective and sustainable network for HTA across Europe”. Working closely

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with the European Medicines Agency (EMA), the network has sought to facilitate efficient use of resources, optimize knowledge sharing and promote good practice.

On paper, this all sounds like good news, especially for pharma – desperate for a clear steer on HTA requirements across the continent – and for patients desperate for access to innovative new medicines.

“The current fragmented approach to HTA decision-making across Europe is inefficient, and the inefficiencies are even more extreme when you consider that many aspects of the evaluation process are common across HTA bodies,” says Preeti Patel, CEO of pricing consultancy, Global Pricing Innovations. This sentiment is shared by independent global market access consultant Neil Grubert: “There’s a willingness from national governments, payers, regulators and the industry. There is also political will at the EU level because of the enormous duplication of effort, which increases as HTA expands.”

However, as with so many good ideas, there are obstacles, not least the need for any harmonized system to encompass the radically different healthcare systems and policy agendas of the countries represented in EUnetHTA. Given the sheer complexity, is pan-European harmony possible? If it is possible, is it workable, given that EUnetHTA is only attempting to foster voluntary collaboration?

THE NATIONAL PREROGATIVEPerhaps the biggest barrier to harmonization is decisions on pricing and reimbursement – that HTA exists to support – are seen as a national prerogative. “It is difficult to see this changing,” says Grubert. “The European Commission has been reasonably explicit in saying that will remain as it is. Even though there is pressure for more pan-European harmonization, we’re seeing an increase in regional and even local HTA activity.” For instance, Spain and Italy have multiple regional HTA agencies represented within EUnetHTA.

“Regional and local bodies in the UK often conduct HTA in the absence of an appraisal by the National Institute for Health and Care Excellence (NICE),” he says. “In addition to NICE’s judgments, these reinforce geographic inequalities in access – the so-called ‘postcode lottery.’”

NHS England is trying to tackle such variations by establishing four new Regional Medicines Optimisation Committees to cooperate on the evaluation of drugs not appraised by NICE. One committee will be designated to review a drug on behalf of all four. “It remains to be seen how this new system will work in practice,” says Grubert.

Geographic inequalities in access of any kind are a major headache for pharma and patients and, to help eradicate them, EUnetHTA has undertaken a series of programs, starting with the two-year Joint Action 1 (JA1) which ran until 2012. The organization’s own report on JA2, which finished last year, pointed to its success in changing the way information on the benefits and risks of a medicine in the European public assessment report (EPAR) is presented. “This has resulted in improvements to the report structure,” it says, adding that JA2 also fostered the development and use of patient registries for data collection, and created a framework to allow the timely provision of information from the regulatory benefit-risk assessment in the effectiveness assessments of medicines.

A BIG BATEMA and EUnetHTA have identified more areas of importance including more “structured interactions” on marketing authorization applications (such as pre-submission dialogue at the time of concluding the regulatory assessment), as well as improved regulatory reports to support HTA (for instance, the inclusion of patient-reported outcomes).

Joint Action 3, co-funded by the European Commission, is now in play and will run until 2020. Its focus is on increasing the use, quality and efficiency of joint HTA work at the

“ In principle, there’s a willingness from national governments, payers, regulators and the industry.” NEIL GRUBERT, INDEPENDENT CONSULTANT


European level. This renewed emphasis on joint working could have a significant knock-on effect, encouraging HTA authorities to re-use information from other bodies’ assessments.

“Some of the smaller EU member states in central and eastern Europe are more open to [sharing],” says Grubert.” Whereas in larger markets, there is relatively little use of either joint reports or other agencies’ assessments.”

Among JA3’s ambitious goals is a push to bring together data requirements for both benefit/risk and value assessments in a single development plan. There is certainly some way to go here as broader regulatory harmonization has been underway for the last two decades. “There is a whole new set of data requirements and hurdles, and companies can discover too late that the design of their trials doesn’t meet these requirements,” warns Grubert.

This is why the EMA’s involvement is crucial, he says. “As a pan-European body, [the EMA] could have a broader role in co-ordinating multi-HTA activity, which is consistent with greater EU alignment of data requirements.” However, there are areas where HTA harmonization is problematic. “It’s easier in clinical domains, where things are arguably more clear cut. Once you venture beyond that, it’s more difficult to reach concessions. I don’t see much prospect of that.”

BLITZING BUREAUCRACY“Bureaucracy is a predictable part of the policy process,” says Patel. “Back in 2013, when the permanent secretariat for European cooperation on HTA was being discussed, bureaucracy was one of the key hurdles identified. It is going to need a unified implementation team, where transparency, empowerment and flexibility are the driving values to overcome the likely red tape ahead.”

In the meantime, HTA is likely to get more complicated, says Grubert. “The movement to adaptive pathways will present more challenges, since HTA will need to be more

What can we expect from JA3?

EUnetHTA’s Joint Action 3 (JA3) consists of seven ‘work packages’, ranging from implementation to evaluation. Of

particular interest to pharma is the emphasis in JA3 on joint working, such as the sharing and re-use of data between

different HTA bodies. The work packages are:

1Network

Co-ordination The aim is to provide scientific

and technical co-ordination support for European

collaboration activities in HTA, leading to the development of

a final sustainable model for permanent co-operation

2Dissemination

To create a stakeholder registry and develop a post-2020 model of the European HTA network. To communicate and explain the methodologies, tools and

products which are the focus of work package 6

3Evaluation

Annual reports on efficiency gains and a final report looking at how

things will work after 2020

4Joint Production

Will produce 33 joint assessments and 4 collaborative assessments on pharma products and provide

input on recommendations for a sustainable model of

European collaboration on joint assessments after 2020

5Life Cycle Approach to Improve Evidence

GenerationWill establish an organizational

structure for early dialogues and evaluate how an actual agreement between industry and EUnetHTA

partners could be set up. The plan is to produce common research questions and minimum data set

for registries post-launch

6Quality Management,

Scientific Guidance and Tools

Aims to produce a concept paper for quality management, along

with process definitions and SOPs (including checklists and document templates) for joint

work

7Implementation

and ImpactWill deliver a report on

mechanisms to support and encourage the reuse of jointly

produced HTA reports and reuse of national and regional HTA

information

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extended than at present, for example, with more post-marketing research or gathering of real-world evidence. It’s interesting to consider how that might work at a pan-European level – how easy would it be to implement? The simple logistics of the process are difficult if you’re trying to apply it for all new drugs. What we could see is a growing gulf between transformative innovation and the rest of the product pipeline. [In the UK] the Accelerated Access Review (AAR) has offered interesting ideas about what could be done to provide fast access to transformative technologies,” he says.

BREXIT COMPLICATIONSGiven the Brexit vote, the UK will need to carefully consider its relationship and alignment with the European regulators and the HTA network, says Patel. “A scenario such as that seen with Norway and Iceland, would probably be the most convenient path. The alternative post-Brexit EU environment, where UK membership is fully terminated, is likely to have significant detrimental impact on timely access to innovative and new medicines for British citizens.”

Whatever happens on the political front, there is an increasing focus on genuine innovation in healthcare plus a will to accelerate access to drugs that make a significant difference to patients’ lives. However, cost remains a big issue. “The role of cost-effectiveness in HTA is well-established in north-west Europe and is gathering momentum in France, but there is resistance from other countries,” says Grubert. “If that is addressed, it could be crucial in advancing the harmonization agenda, particularly if the HTA network wants more convergence on clinical views. There is also the question of cost-effectiveness and budget impact, and how to embrace a longer-term perspective. The challenge is how to provide funding and access for drugs that are recommended by HTA bodies.”

Given the complex nature of the HTA landscape, are the issues insurmountable? “One of the founding principles of the European Union is to build a common future; an EU-wide HTA decision-making network is a natural extension of that,” says Patel. “There are surely challenges ahead in its implementation, such as harmonizing evaluations, however EU policy is a progressive process. The ultimate goal following JA3 would be an EU Directive governing HTA harmonization. That would be real progress. There is a long journey ahead.”

“The alternative post-Brexit EU environment, where UK membership

is fully terminated, is likely to have

significant detrimental impact on timely

access to innovative and new medicines for

British citizens.” PREETI PATEL,

GLOBAL PRICING INNOVATIONS


Preeti Patel CEO

Global Pricing Innovations

Neil Grubert Independent global

market access consultant


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Worththe risk?

anaged-entry or risk-sharing agreements are an increasingly common tool for healthcare systems in Europe and beyond to justify the cost of new medicines. Such agreements share the risk between payer and pharma company, most often with the cost of reimbursement on one hand and some sort of rebate on the other.

Within Europe, agreements tend to fall into two types, finance-based and performance-based. The first, in which payers restrict access to a drug on clinical criteria (such as second or third-line treatment) or on volume (where treatments can be sold at a capped price), is by far the most common. With the second, payment is contingent on how well the drug performs; this type is much rarer, partly because of the cost of administering it.

“Financial-based programs are always going to be more easy to implement, but they address very different concerns from a performance-based agreement,” explains Alex Bastian, Head of Global Value, Access & Pricing at biopharma company Incyte. “If the concern is the total budget impact or inappropriate use in larger patient groups, then a financial agreement might be sensible to tie volume to price in order to moderate the overall financial impact of very high utilization. These are common for population-based financial agreements, where the aggregate, rather than individual patients, is the concern.”

The price-per-patient type of financial program might be more prudent when there are very different costs within a treated group – such as where some patients take a medication for more than two years where others only take it for three months. “It might make sense to cap the cost per patient, limiting the financial exposure to these ‘super

With downward pressure on healthcare budgets globally, how can pharma and payers work together to find equitable ways to ensure patients gain access to much-needed new medicines?

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Worththe risk?

responders’,” says Bastian. “However, when the concern is about efficacy or safety, financial-based agreements certainly won’t address those concerns.”

TIME AND MONEYWith any disease, the timeframe has to be reasonable and the persistence on therapy good enough to measure the impact within the given time period, says Bastian. “Long-term outcomes – for example, survival – might take years to mature, whereas other measures – such as the ability to tolerate a therapy – will be seen soon after initiation of treatment in most cases.”

The acceptability of an agreement for all parties is obviously important, but so too is the question of feasibility, says Soeren Mattke, Senior Scientist at the research organization, RAND Corporation. “If you say that a drug is expensive but it’s worth it because it offers tangible value, then you must have the data infrastructure to show that it’s working.”

Data expenses can be related to data collection, search, measurement and information gathering, or analysis and adjudication, says Bastian, costs that vary by market, scope of agreement, measure, existing data collection infrastructure and other factors. “If you’re an integrated delivery network and have good IT and data systems, you will have much more capability to mine data without additional costs,” he says. However, most agreements are too small for large data analytics capabilities. “In this case, data collection isn’t the difficult part, it’s the analytics and adjudication that’s tough.”

For both payers and pharma companies, defining what represents value is crucial in performance-based agreements, as is the ability to accurately measure performance/outcomes under real-world conditions, says Andrew Hobbs, Managing Director of strategic consultancy, Pope Woodhead. This has been a major problem for payers because it requires the ability to create and follow a paper trail for individual patients. For instance, list price may be paid on the basis that rebates will be offered if the medicine does not perform as expected, yet accessing the right data to determine the drug’s performance can be difficult.

Short-term response criteria, or the patient’s ability to tolerate a drug, can be relatively easy to define and inexpensive to measure and track, says Hobbs. However, simple long-term performance measures can be more difficult to agree upon, as many of the variables are outside of the company’s control. “What can be helpful is a pay performance culture in the healthcare delivery system supported by the data infrastructure,” he says.

Without a common motivation, simple performance criteria and the right data environment, the concern may be that pharma gets market access at a good price but may not be fully held to account for performance, says Hobbs.

“A drug might demonstrate a 20%

“ No-one wants to commit to the infrastructure to collect the information” ANDREW HOBBS, POPE WOODHEAD


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mortality reduction in clinical trials, but much less in the real world – so what’s the threshold then?” asks Mattke. “What is the trigger for the performance bonus or penalty?”

SCHEMES IN PRACTICEChoosing financial-based agreements over performance-based ones is often a question of money, where the administrative burden and financial cost associated with data collection are high.

A paper co-written by Bastian cites issues with both UK and Italian managed entry schemes. The NHS has tended to opt for a basic discount, negotiating with pharma companies on price alone; from October 2011, 34 out of 35 NHS schemes were confidential discounts, in the main because they are simpler to manage and cheaper. “This is well-outlined in the UK where there was a lot of displeasure with the data collection process,” says Bastian, who points to the Italian situation, which is much more nuanced.

In Italy, the Medicines Agency AIFA favors schemes that see pharma offering a price reduction until patients show signs of responding to treatment (cost-sharing with general discounts), or schemes where companies reimburse payers for those patient who fail to respond (payment by results). All data tracking in these cases requires evaluation of the drugs’ effectiveness, yet, given that there are so many such agreements in Italy, there is a worry around dual entry of patient data by doctors, as well as over the return on investment of evidence-based schemes.

In the US, Novartis has signed performance-related

deals with insurers for its new heart failure drug Entresto. Although payers can track hospitalizations, this raises interesting questions. “Worsening cardiac function leading to a hospital admission can be coded as renal failure. The kidneys weaken because of heart failure. So there begins to be an ambiguity,” says Mattke.

Some therapy areas may offer less of a challenge and so might be ripe for performance-related deals, he says. For instance, osteoporosis. “Hip fractures are reasonably easy to track. You get hospitalized for hip replacement surgery and that’s unambiguous and easy to see.”

However, Bastian warns: “When you choose measures that are disconnected from data systems or require interpretation or are not routinely measured/tracked, then you have problems.”

BE BOLDRisk-sharing agreements can evolve to take in new evidence or newly approved indications, making them effective at both gaining market access and keeping a product on the market. Bastian cites Genentech’s Lucentis, originally sold under a price cap arrangement that was modified to a discount agreement when macular degeneration and macular edema were added to its indications. Similarly, the same manufacturer’s Tarceva in the UK was switched from a disclosed discount to a confidential discount four years later when more indications were added.

For more complex arrangements to come into play that seek to manage uncertainty in real-world performance, there needs to be a willingness by both parties to engage and create solutions that provide patient access under conditions of uncertainty, says Hobbs. “Unfortunately, this takes time and needs to be anticipated by pharma. Engagement should start early; if not, the line of least resistance is often the default position.”

Even if payers can navigate the data collection successfully,

“ When you choose measures that are disconnected from data systems or require interpretation or are not routinely measured/tracked, then you have problems” SOEREN MATTKE, RAND CORPORATION

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regulatory restrictions can hamper progress, such as limits on what data they can ‘own’. “If payers and providers want these performance-based agreements to work, they have to think through the logistics, including data sharing and privacy obstacles,” says Mattke.

For risk-sharing agreements to realize their potential, all parties need to be bold, says Hobbs. “It requires a degree of collaboration, co-creation and trust that doesn’t exist universally,” he says. “It’s happening in patches, and there are going to be pathfinders, but there’s limited experience and competence. We see an increasing amount of work being done, but also a lot of abortive activity because either the wrong products are being considered or companies are unable to engage or negotiate. To be successful, there has to be a compelling reason for all parties; with most things you can find a solution if you’ve got enough committed people.”

Agreements need to be made on a collaborative not adversarial basis, advises Mattke. “If pharma thinks they are forced into a relationship then that is a bad point to start a negotiation. It needs to be a partnership and be based on mutual trust.” Yet, sometimes pharma is its own worst enemy, he adds. “I’ve heard payers in Europe call certain pharma companies cowboys because of their behavior in price negotiations, and that is the polite comment.”

LOOKING TO THE FUTURESince financial pressure on the healthcare landscape shows no sign of easing, shared-risk agreements in some form or other appear to have a bright future, not least if patients are to gain access to new technologies. “Spending on prescription drugs has picked up considerably yet European countries are capping healthcare spending, so something has to give, one way or the other,” says Mattke. “Many drugs have become cheaper and there was a windfall of blockbusters going off-patent, like Crestor and Lipitor, but we have exhausted those.” The rise of specialty drugs is likely to throw the issue of cost even further into focus, he says.

In areas such as cancer, the advent of faster, earlier approvals is going to challenge the ability to measure performance or expected outcomes, says Bastian. “Given the strong public and political pressure to cover medications for grave diseases or orphan indications, the pressure to reimburse will remain, but the question of value will persist. Thus, performance-based agreements may still fit well for areas where these concerns exist.”

A broader range of contracting solutions are likely to become more prevalent, says Hobbs. “You can have a situation where a drug is unaffordable because of the cost density – in other words, it is curative and cost-effective but all the cost comes in Year One, with a significant population, so it becomes a financing problem. The main question then is, does society want to pay for this treatment and, if so, how can it afford it?”

Feasibility is a big consideration, says Mattke. “Can we maintain this agreement in the long run? We have to keep in mind the effect sizes in clinical trials versus RWE – that’s a very thorny issue in pricing negotiations. Effect sizes are probably smaller in the real world but for most drugs we don’t know how much. We need to understand ‘value’ versus ‘real-world value’.”

Whatever payers choose to do, the problem of how to collect the information may prove insurmountable for many, while agreements may not yet be designed well enough to maximize returns for payers. As Mattke says: “Some managed entry schemes are wishful thinking. They assume a data nirvana that simply doesn’t exist.”


Alex Bastian Head of Global Value, Access & Pricing Incyte

Soeren Mattke Senior Scientist RAND Corporation

Andrew Hobbs Managing Director Pope Woodhead


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