Posts by vimelanie

Evidence and Endpoints in Cancer: Can Both Payers and Regulators be Satisfied?

Posted on Wednesday, March 27, 2013

How can oncology drug developers design their trials to satisfy both regulators and payers, and thereby maximize both access and commercial success?  It’s an increasingly urgent question as cancer programs continue to dominate pipelines, and drugs bills. Yet “there’s a fundamental tension” between the clear evidentiary base required to get a drug approved, and the emerging, sometimes inconsistent data sought by payers to justify funding that drug, notes Roy Baynes, SVP Oncology Therapeutics at Gilead Sciences Inc. Above all, he emphasizes the need for close engagement with payers, at least in Europe, from an early stage. Collaborating prospectively with governmental payers may help address the reality that “individual sponsors have little leverage,” he says.  (In the US, it’s not at all clear to us that payers want much to do with pharmas before products get very close to market.  And in oncology specifically, payers still can’t really say “no” to paying for products approved by the FDA; European governments have no such inhibitions.) There are some rules that now beginning to hold across the board, though, notwithstanding often considerable differences in evidentiary standards across treatment-type, positioning, and disease area. Having a “meaningful comparator is obviously important,” point out Baynes, who will be speaking at NextLevel Pharma’s PharmAccess Leaders’ Forum in...

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UnitedHealth-Mayo: More Data, More Open. But Not Quite Neutral

Posted on Tuesday, January 22, 2013

UnitedHealth’s outcomes-focused research alliance with Mayo Clinic, announced Jan. 15, reminds us of big data’s central role in creating a value-driven US health care system.  The tie-up claims to have created the biggest-yet trove of claims-plus-clinical patient records in the US, combining over 100 million claims records from United’s Optum’s health services division with over 5 million clinical records from Mayo. As such, it’s powerful. Collating top-level insurance claims with in-depth clinical reports is as good as it gets right now for real-world-evidence hunters; it paints the most complete picture of patients’ disease progression that’s available large scale. That’s why payers and drug firms that have already teamed up in the quest for RWE are striving to bring providers into the fold. (You can hear more about AstraZeneca and partner HealthCore‘s efforts to build a consortium at the Real Endpoints’ Symposium on March 11-12.) Optum and Mayo are likewise inviting other organisations to contribute to, and fish in, this pool of longitudinal data: the alliance takes the physical form of Optum Labs, an ‘open innovation facility’ where players – including drug firms, payers, providers, academics – can, with further resources and questions of their own, “come together to conduct research, innovate and improve outcomes for patients,” said Andy Slavitt, Optum’s group...

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Deal Away, But Don’t Forget What Payers Think

Posted on Thursday, January 10, 2013

As pharma and biotech execs at JP Morgan in San Francisco craft the next round of life- and/or growth-extending deals, they’ll hopefully remember that the key issue is now reimbursability, not approvability. A survey released this week by BayBio, the California Research Institute and PwC (flagged up by Xconomy) provides a timely reminder. More than half of the 157 Californian-biotech CEOs questioned said that securing insurance coverage and reimbursement for their products became more difficult in the past year; meantime there were fewer reports of FDA-linked delays. The growing payer-challenge is already reflected in the next round of large mergers touted by bankers. Among the $10 billion-plus candidates is eye-care group Bausch & Lomb – less because it’s in a sexy specialist ophthalmology niche, than because most of its products avoid the payer challenge altogether: they’re non-reimbursed OTC treatments (such as contact lens fluid) and generics. Licensing transactions, too, are now being valued at least in part according to reimbursement-linked criteria. “We spend a huge amount of time” testing potential in-licensing candidates with payer and physician groups, claimed AZ’s business development chief Shaun Grady on a panel at BIO last year.  Targeted products for well-defined diseases (rare, symptomatic ones if possible) feature high on the reimbursability scale. That’s why companies like Epizyme are...

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As Pressure Builds on US Prices, Is Pharma Ready?

Posted on Friday, December 14, 2012

Free drug pricing in the US has fewer than five years to run, thanks to mounting pressure on health care spend and resulting efficiency drives.  That’s the message to pharma investors, be it from fund-managers speaking at Bloomberg Industries Healthcare event in London on Dec. 10, or from analysts such as as Citi’s Andrew Baum. It’s tempting not to believe it. After all, for now, US drug price increases are actually at a five year high in the mass retail market, according to Bloomberg Industries’ healthcare research director Sam Fazeli. And hospital drug price increases, too, have rebounded since 2009. “For now, the game’s the same in the US: you can price at whatever you like,” he concluded.  With Europe on its knees, status quo in the US is what many pharma are relying on. They’d better make sure they have a plan B when the dream ends, though. “There’s a lot of momentum behind evidence-based therapy and paying-for-performance in the US. We have to be ready to hear about how some of that translates into drug pricing,” warned fund manager Dan Mahony of Polar Capital Holdings at the Bloomberg meeting. Zaltrap provided an early example of drug price pressure in the US: Hit hard by Memorial Sloan Kettering’s decision not to use it –...

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Reimbursement “Furies” Real, But Won’t Avenge Pharma Til 2017, Says Citi

Posted on Tuesday, December 4, 2012

“Beware the Three Furies,” warns Citi analyst Andrew Baum.  In a report for pharma investors published Nov. 29., Baum turns to classical mythology to describe shared savings models, drug pathways and ACOs — the forces that will soon dominate US health care plans. He’s chosen an interesting analogy: The Three Furies were goddesses of vengeance, who punished the wicked for their crimes; they’re also described as “tormenting those who have yet to atone for their sins”. So we, and plenty of others, agree that pharma should be nervous. “Reimbursement, not R&D pressure,” is the is the biggest risk facing pharma investors, writes Baum. But although “alarmed” by the drivers, and potential consequences, of US healthcare cost containment (particularly given the dire state of the EU), Baum reckons drug firms’ earnings won’t feel the full brunt of US pricing pressure “until at least 2017.” He argues that for the next five years, the revisions to the US healthcare system will have the greatest impact on medtech, hospitals, and diagnostics, with less focus on pharmacy-related costs.  Even in the case of drug pathways, singled out as the most important long-term structural risk to the biopharma industry “meaningful adoption will remain slow” in Baum’s view. To back that up, he cites research by...

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HTA Has To Harmonize. It’s A Money Thing.

Posted on Thursday, November 29, 2012

There was bad news and some less bad news for drug firms at the recent NextLevel Pharma Pharmaccess Leaders’ Forum in Berlin, Germany.  The bad news: added-benefit hurdles, in the form of Health Technology Assessments, continue to spread fast as a (mostly) scientific tool for politicians to control access to new drugs. The less bad news: efforts to drive convergence between different countries’ HTA methods are showing signs of success. That may at least help pharma get a grip on how to navigate HTA. And get a grip they must. HTA bodies, like England’s NICE or Germany’s IQWiG, aren’t themselves payers, but they strongly influence payers. Some countries have had HTA for a decade or more, yet pharma still has room for improvement when it comes to dealing with them. “They get about 6 out of 10,” opined Olivier Wong, former senior advisor to France’s health ministry and Haute Autorite de Sante, having come from a state of “not caring.” Pharma should by now be expert in dealing with those who evaluate their products’ benefits. Meeting those evaluation criteria is, after all, probably the single most important factor influencing the size of industry’s commercial return, at least in Europe and several other major markets.  HTA should be up there with...

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Want Better Access? Then Take Some More Risk

Posted on Tuesday, November 20, 2012

Biopharma is an industry seeped in an above-average concentration of risk. Scientific, clinical and regulatory uncertainties add to more typical commercial and market-driven risks. Given that, you’d think pharma execs would be a little more willing to stick their necks out and embrace (or at least explore) change. Some are. They get that payer cost-pressures and pipeline productivity challenges are forcing new, make-or-break approaches to clinical development, payer interactions, and commercial positioning. Yet toward the by-now-rather-less-radical idea of more closely integrating regulatory and HTA requirements, the pharma sector’s attitude is “somewhat capricious,” notes Mel Walker, recently appointed VP Market Access at Otsuka Pharmaceuticals Europe, after six years at GSK. That even a few companies still resist this idea seems odd, since it’s pharma (along with patients) that has most to benefit from a more harmonized regulatory-HTA process. Some drug industry execs are worried that putting regulators in the same room as HTAs — an idea that has been piloted in Europe, in the context of scientific advice, since 2010 — “may lead to HTA somehow influencing regulators to say ‘no’ to more products”, illustrates Walker, who will chair a discussion on HTA/regulatory convergence at the PharmAccess Leaders’ Forum in Berlin later this month. Alasdair Breckenridge, chairman of the UK regulator...

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Drug Approvals Need Shades Of Grey

Posted on Monday, November 12, 2012

FDA’s Endocrinologic and Metabolic drugs advisory committee on Nov. 8 voted 8-4 in favor of recommending Novo’s latest insulin degludec (Tresiba) for approval. The detailed debate and deliberation underscored how unsuitably black-and-white the drug approval process is.  In the end, FDA (just like the European Medicines Agency), will say either ‘yes’ or ‘no’.  Yet the difference between acceptable risk and unacceptable risk among drug treatments isn’t a well-defined one. Nor is the threshold or criteria separating insufficient data from sufficient data. Now, as it happens, in Tresiba’s case the committee also unanimously voted in favor of a post-approval CV outcomes trial, reflecting lingering uncertainties about the drug’s risks.  But that’s unusual — and the conditions, timelines and the potential impact of the results remain unclear. What’s needed is a drug approval system in shades of grey — incremental steps on the way to full approval, for drugs that aren’t definite rejects, nor dead-cert approvals (e.g. most drugs). Programs including FDA’s accelerated approval and EU’s conditional approval go some way towards that, but only rarely. (Just 6 drugs were approved conditionally by EMA between 2009-2011, less than 10% of the total) A handful of projects run by regulators and academics around the world have been seeking, for several years now, to define and progress new, adaptive approaches to...

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Sanofi Blinks First: Zaltrap Price Cut Proves HTA Has Reached The US

Posted on Monday, November 12, 2012

Sanofi’s decision last week to cut the price of its colon cancer drug Zaltrap by up to 50% showed that the US market is no longer immune to European-style drug price pressure. Never mind that the move was partly a result of a messed-up calculation on Sanofi’s part: this was a defining moment in the evolution of America’s troubled health care system. That the price of a drug was cut at all, and voluntarily (albeit under pressure), is notable enough: prices usually go up, especially in the US. But the size of the cut (deeper than almost all of the discounts squeezed out of pharma by European cost-watchdogs’ rule-dominated systems), and the fact that we’re talking about a drug for cancer (until recently among the most price-protected TAs) that’s, technically at least, an NME, is even more remarkable. Zaltrap’s high price of $9-11,000 per month, its questionable efficacy (extending overall survival by just 1.5 months) and safety concerns such as a boxed warnings over fatal GI bleeding were what prompted leading cancer specialists at Memorial Sloan-Kettering Cancer Center to boycott the treatment. The MSKCC scientists were behaving just like an EU-style health technology assessment agency: they were in effect importing the spirit, if not the institution, of a NICE-like hurdle to the US. (There’s no way, incidentally, that Zaltrap...

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Discounting For Access: The QALY Math Is Spreading

Posted on Tuesday, November 6, 2012

Last week, England & Wales’ cost-watchdog  NICE approved reimbursement for two drugs for advanced melanoma, Roche’s Zelboraf and Bristol’s Yervoy. As is so often the case at NICE, both drugs had initially been rejected, and both in the end came through with confidential discounts to the list-price. But this isn’t just a story about discounting, nor is it just about the UK. Everyone knows that winning reimbursement in England & Wales boils down to math –  math that culminates in a controversial cost-per-quality-adjusted life year (QALY) figure that has to be below a threshold of £30,000 usually or £50,000 for ‘end-of-life’ treatments such as Yervoy and Zelboraf. What’s less well known is that the oft-criticized QALY is gaining traction among cost-pressured US payers too (as well as in other markets such as France). According to a 2012 oncology survey by Reimbursement Intelligence, almost half (45%) of US payers, (mostly large ones) view assessment of QALY as a viable model for the US health care system. Given this could soon be relevant in the world’s largest market, too, what were the most important variables playing into the reimbursement arithmetic for Yervoy and Zelboraf? Several UK headlines suggested that for both drugs, it was discounting that made the numbers work. That’s true of Yervoy, but not...

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