Posts made in March, 2012

German Scoreboard: Payers 1, Pharma 1

Posted on Thursday, March 29, 2012

AstraZeneca and other biopharmas wait with bated breath for the first drug price tags to emerge from Germany’s new early added-benefit assessment process. So who’s winning as this hastily-introduced system undergoes its final tweaks? For now, we think it’s 1-1,  payers and pharma. But that score could soon change. Industry has lost out on reference pricing: if negotiations between sponsors and the sick funds association hit the wall (as several are expected to do, especially in the early days), then an arbitration committee will refer to a European reference price made up of prices from a list of 15 European countries, including beleaguered and bankrupted Greece.  Calls for the basket to include a far shorter list of wealthier and healthier economies — as is applied, for instance, to vaccines prices — were ignored. But orphan drug sponsors will be reassured that Germany’s reimbursement authority the G-BA has declared that these niche drugs will only undergo benefit assessments only if and when they hit the E50 million sales threshold. That follows the snafu around InterMune’s IPF treatment Esbriet — the system’s guinea-pig orphan — which HTA body IQWiG declared to be of little or no added-benefit once side-effects were taken into consideration.  G-BA had to paper over this high-profile decision...

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Cancer Pathways: A Bitter Pill For Biopharma

Posted on Wednesday, March 28, 2012

One big message from the first experiments with cancer pathways: they’re making it easier to predict therapy winners and losers.  That emerged loud and clear from Real Endpoints’s March 20th webinar exploring cancer pathways. (If you missed the live event, you can access a free archived version by clicking on this link.) In the new pathways world “we’d have no choice but to cover” a new drug that’s very expensive but improves overall survival, noted Lee Newcomer, UnitedHealthcare’s senior vice president of  Oncology, Genetics and Women’s Health. But in doing so, United will also “jettison” those therapies that don’t clear that efficacy bar. And it’s going to so do quickly: Newcomer predicted that insurers like United will jettison poorly-performing drugs to find space in the formulary for new therapies “in as little as three to five years.” The winners, then (surprise surprise) are the more efficacious drugs. “If you are less efficacious you don’t have a strategy,” Newcomer emphasized bluntly. Meanwhile, “for products that are ‘as good’” says Newcomer, “it comes down to price.” Indeed, in a world where cancer pathways dominate, a late market entrant either has the out-of-the-park efficacy to vault to first-in-class or must find another means of driving wide adoption. The only means of doing so in Newcomer’s opinion is by lowering a drug’s price...

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The Healthcare Round-Up: 3/21 -3/28

Posted on Wednesday, March 28, 2012

All eyes are on Capitol Hill this week as the Supremes hear oral arguments in one of the most important –and politicized—cases in decades: the constitutionality of the Affordable Care Act, the signature piece of legislation passed thus far in Barack Obama’s presidency. It’s anybody’s guess how the Court will vote –questions on day 2 tied to the constitutionality of the individual mandate were pointed and seemed to fluster the administration’s lawyer Donald Verrilli. One thing seems clear: Justice Anthony Kennedy’s view of the mandate will play a crucial role in whether that provision stands. As Scotusblog reports, if Kennedy can find a limiting principle in the federal government’s defense of the insurance mandate or think of one of his own, it could survive—and his arguments just might convince Chief Justice John Roberts to side with the four liberal justices who are already signaling they will support it. But if Kennedy, who expressed skepticism about the mandate, rules against it, the one piece of health reform that insurers really liked will go by the wayside. Whether that scuttles payment reforms already at work by major insurers is another question. Indeed, as CIGNA CEO David Cordani told Bloomberg recently, “With or without the healthcare law, the economic forces are driving...

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Is France Creating Its Own NICE?

Posted on Monday, March 26, 2012

Sort of. It seems that the French are getting more comfortable with the idea of calling health-economics by its real name, and of carrying out explicit cost-effectiveness evaluations a la NICE in the UK. Equally worrying for pharma is that France — with its top-ranking pharma-per-capita spend — is also looking to its other neighbour, Germany, for ideas on how to further tighten entry hurdles for new pharmaceuticals. The new HTA acronym to note: CEESP, the Commission d’Evaluation Economique et de Sante Publique (the commission for economic evaluation an public health). This body, until recently buried in an advisory capacity within the corridors of the country’s overarching drug reimbursement body, HAS, has had its teeth sharpened. Thanks to the latest iteration of France’s finance and social security law, CEESP now has the same legal status as HAS’ powerful Transparency Commission (which basically determines reimbursability). It will analyse just how watertight companies’ economic models are for their new drugs, and that will inform decisions by the country’s drug pricing agency. Furthermore, the pricing agency may soon empower CEESP to carry out cost-effectiveness analyses of new drugs prior to reimbursement decisions. To date, CEESP has only rarely commented on the cost-benefits of individual drugs. As such, its bumped-up role (with legal underpinning) marks “a...

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The Healthcare Round-Up: 3/14 – 3/21

Posted on Thursday, March 22, 2012

Put a spring in your step and read Real Endpoints’s weekly round-up of reimbursement related news. Overseeing Cancer Drug Regimens: Here’s a scary find.  On March 16 researchers from Medco Research Institute reported new data at the American Society for Clinical Pharmacology and Therapeutics annual meeting showing that a high percentage of patients on oral kinase inhibitors like Gleevec or Tarceva are also taking medicines that reduce the effectiveness of the cancer treatment. In total, the Medco researchers looked at the pharmacy claims of 11,600 cancer patients taking one of nine oral kinase inhibitors during a 29-month period that ended mid-2010. The researchers specifically looked at the secondary drugs prescribed these patients, with an eye for those known to spark potential drug-drug interactions, for instance proton pump inhibitors (PPIs), steroids, calcium channel blockers, and some antibiotics and antifungal treatments.  Based on their analysis, 23-57% of the patients were simultaneously taking a drug that had the potential to reduce the effectiveness of the cancer treatment; even more unnerving, 23-74% of patients received secondary drugs that could have increased the toxic side-effects associated with the cancer medicine.  How could this happen? While oncologists prescribed the vast majority of cancer drugs, other therapies were the purview of primary care physicians; because of...

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Providers Have A Treasure Trove of Health Outcomes Data: When Will Pharma Dig In?

Posted on Wednesday, March 21, 2012

If you’ve been reading our past blog entries (see here, here, and here), you know pharmas are scrambling to woo insurers and pharmacy benefits managers to get access to real world evidence that supports the value –and hence utilization—of their drugs. But as the race to lock-up access to valuable outcomes-based data continues, there are other data troves that, thus far, remain untapped–at least by industry players. These include the data warehoused in so-called integrated delivery systems (IDS) as well as the various health information exchanges (HIEs) designed to enable the safe, secure transfer and retrieval of data housed by disparate provider groups in a given geography. After all, IDSs like Geisinger Health System and Kaiser Permanente care for individuals on an in-patient and out-patient basis, tracking patients via electronic medical records. Meantime, by collating disparate data points into a continuity of care document, HIEs — both privately-run as well as state-based groups—also begin to integrate information about drug dosages, co-morbidities and outcomes to create a more complete clinical picture. Regardless of the data source, this indepth view has far more utility in building a case for a product’s market access than the claims data pharmas have traditionally relied upon. So if these data are so valuable why aren’t...

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The Healthcare Round-Up: 3/7 – 3/13

Posted on Wednesday, March 14, 2012

The Legality of Co-pay cards: It’s no secret co-pay cards are a contentious issue; now, they’ve been taken to the courts. Last week, the consumer advocacy group, Community Catalyst, filed suit against 8 drug companies seeking to ban the use of co-pay cards on behalf of unions that provide drug benefits for civilian and uniformed municipal workers in New York City, carpenters in New England, and plumbers in various states. Among the drug companies specifically named in the lawsuit: Pfizer, which set off the most recent conflagration when it launched its $4 co-pay card for branded Lipitor after the drug’s patent expired this past November.  In its suit, Community Catalyst argues that co-pay cards are an illegal inducement “designed to undermine cost-sharing arrangements.”  In effect, the existence of co-pay cards provides patients with a financial disincentive to use cheaper medicines, while the majority of the bill is still paid for by insurers or pharmacy benefit managers. Community Catalyst’s arguments echo those made by the Pharmaceutical Care Management Agency in a November report estimating that co-pay cards will increase prescription drug costs by $32 billion over the next decade.  Meanwhile, proponents of the practice note that co-pay cards don’t just make things economically feasible for patients; often spending less out-of-pocket...

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The Healthcare Round-Up: 2/28 – 3/6

Posted on Tuesday, March 6, 2012

Blue Shield of CA Seeks Damages from Physician Group: Last week Blue Shield of California filed for $10.5 million in damages from Monarch HealthCare, since last fall a division of UnitedHealthcare’s Optum. The tension between Blue Shield and Monarch is likely to be a sign of things to come as the healthcare market continues to restructure and the line between payers and providers blur. Blue Shield alleges that Monarch, a 2300-physician association serving nearly 200,000 patients, is in violation of its contract with the payer. Among Monarch’s alleged missteps: misinforming patients that its contract with Blue Shield would terminate January 1, 2012 and advising members to switch to competing health plans to remain with in-network doctors.  As a result, Blue Shield claims it lost a majority of its 2,400 Medicare Advantage patients and believes it became less attractive to commercial customers during the fall enrollment season.  According to the Los Angeles Times, Blue Shield has notified Monarch that it will terminate its contract with the doctor group on May 1, 2013.  Blue Shield of California isn’t the first payer to have troubles with Monarch: after the Optum acquisition, Anthem Blue Cross pulled out of a pilot for an accountable care organization.  For its part, Monarch calls Blue Shield’s allegations “mischaracterizations”....

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Why Value-Based Pricing May Be Dead

Posted on Friday, March 2, 2012

Perhaps it was too good to be true.  A value-based approach to pricing branded medicines that would increase access and improve outcomes, but also control costs….and stimulate innovation by keeping companies happy. Such was the proposal released by the UK Department of Health in late 2010. Briefly, the idea was to introduce a range of maximum price thresholds reflecting the different values medicines offer. These thresholds would be determined by various factors, including an evaluation of unmet need, the availability of alternatives, the degree of therapeutic innovation, as well as calculations tied to broader societal benefits and savings. Seems sensible, doesn’t it? Except it now looks as if VBP may not happen at all. The UK coalition government is struggling hard to get its wider package of structural health reforms approved by Parliament – reforms that would, among other things, increase doctors’ power to commission and buy drugs, and allow more private care provision. Now VBP isn’t part of that Health Care Reform Bill. But it’s linked, politically, if not legally. The UK industry association, the ABPI, has an official line: “The Government has said it will be part of the negotiation on the new pricing scheme that starts sometime this year.” But it doesn’t specify which pricing scheme....

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