‘DrugAbacus’, a Comparative Cancer Drug Pricing Platform Powered by Real Endpoints’ RxScorecard™, is Launched

Posted on Friday, June 19, 2015

Westport, CT, June 19, 2015 – Real Endpoints (RE) is pleased to announce that its RxScorecard™ is the information technology platform supporting Memorial Sloan Kettering Cancer Center’s DrugAbacus – an interactive tool for considering the basis of cancer drug prices. Conceived by Dr. Peter B. Bach, Director of the Center for Health Policy and Outcomes at Memorial Sloan Kettering (MSK), DrugAbacus was launched at MSK’s DrugAbacus generates a dollar-value for cancer drugs available in the United States (beginning in 2001 with Gleevec) based on a user’s settings for six different domains of potential value including the treatment’s survival benefit, side effects, and the incidence of the condition targeted. Memorial Sloan Kettering licensed the Real Endpoints RxScorecard platform for research purposes so users can generate “Abacus prices” and compare them with actual prices of these drugs at the time of launch in a visual and intuitive format. “We believe RxScorecard is the only tool available that provides a 360 degree comparison of the multiple components of a drug’s value in an independent, objective and systematic approach. We developed the IT platform to make it very easy for users to access our analysis, and are delighted that Dr. Bach selected this platform for DrugAbacus,” said Julie Eskay Eagle, RE’s Vice...

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Wall Street Journal publishes article on new cancer pricing tool from Memorial Sloan Kettering using RE’s RxScorecard technology

Posted on Friday, June 19, 2015

June 19, 2015 – Memorial Sloan Kettering Cancer Center, one of the nation’s top cancer hospitals, has created an interactive calculator that compares the cost of more than 50 cancer drugs with what the prices would be if they were tied to factors such as the side effects the drugs produce, and the amount of extra life they give patients. Please click here to access the article....

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Why Payers Don’t Really Control the Drug Benefit — and Why They Need to

Posted on Tuesday, January 8, 2013

It’s certainly the biggest change in healthcare in my business lifetime: the transformation from a fee-for-service economy fueled by abundant dollars to an essentially capitated world of financial tradeoffs.  The transformation will likely take longer than we expect. (What transformation doesn’t?) Still, payers and providers –and the various big and small service providers hoping to serve them — are already trying to improve  swaths business processes as diverse as connectivity, transparency, and consumer communication (see the David Shaywitz/Tony Wolff skeptical take on at least the digital aspect of all this) . But relatively little of this re-engineering aims at the purchase and management of drugs.  (We’ll be talking about the most important innovations at the Real Endpoints Symposium, March 11-12, in Philadelphia). There are a few experiments on the margin.  Some payers are playing with tougher formularies (e.g., UnitedHealth de-preferred major market leaders Januvia and Humira, with significant success in moving the former’s market share to Onglyza and less success with Humira).  “Pathways” in oncology (attempts to standardize physicians on specific drugs) show promise.  And now that Medicare, through its star ratings, is paying plans to improve adherence, there’s an opportunity for new models that predict when patients will adhere to their meds and when they won’t. (For the...

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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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The Value Debate: Can Personalized Drugs Support Personalized Pricing?

Posted on Wednesday, October 10, 2012

“Personalized health care requires a new reimbursement model,” declared Roche’s VP Global Pricing & Market Access Jens Grueger in the elegant London county hall debating chamber on Monday, at the Office of Health Economics (OHE)-sponsored gathering of payers, pharma and economists. The venue was appropriate.  Debate centered around whether the move towards more personalized medicine could reasonably support more personalized pricing.  Roche, with plenty of targeted medicines at stake, thinks, perhaps wishfully, that more differential, ‘value-based’ pricing is one answer to the soaring cost of innovation. Not all payers are so enthusiastic. Grueger’s calling for more differential pricing not just for the same drug in different indications (as already happens in rare cases today) but also within indications. Such “segment-specific” pricing might, for example, see a breast cancer drug priced differently when used in the late-stage setting versus in the adjuvant setting. As Grueger argued, the price would be “based on the value that the medicine brings” in particular settings for particular patients. Most commonly in HTA-driven countries today, a drug is granted an ‘average’ price based on its value across a range of settings. But, emphasized Grueger, that one-price-fits-all- indications strategy doesn’t suit the kinds of medicines that Roche and others are developing (drugs that, just like on-market Avastin, have potential across...

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Payers, Churn & What It Means for Total Cost of Care

Posted on Tuesday, October 2, 2012

One question we get from pharmaceutical and diagnostic clients quite frequently: do payers really care about lowering the costs of care if the cost savings don’t show up for a few years?  The problem they’re talking about is churn: a payer invests in a new cost-saving therapeutic program … only to see the savings redound to his payer-competitor when the patient switches plans (which they do every 3-5 years). Take adherence.  It should be an obvious win-win for patients, payers, and pharmaceutical companies (shameless plug: we’ll be defining what’s wrong and what could be right with adherence at our Real Endpoints Symposium, Nov 1-2, in Philadelphia). But, by and large, solutions to improving adherence have been elusive.  “We made a huge investment in adherence,” one head of managed markets at a major drug company told us.  “And we’ve gotten zero return.  Zero.  We can’t even bring up the subject to top management.” Adherence would be a tough nut to crack even if providers, payers and pharma were completely aligned.  It’s enormously difficult and expensive to get people to take their medicines as they should.  But the problem’s been compounded because payers haven’t always been particularly helpful in the process.  One reason: they haven’t felt the economic need to spend...

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The Healthcare Round-Up: August 3 -19

Posted on Monday, August 20, 2012

The Olympics (and shark week) are over, the dog days have officially arrived, and here at the West Coast branch of Real Endpoints, it’s back to work as the little people head back to school. (Already!) Given Mitt Romney’s choice of Paul Ryan as his running mate, it’s a sure bet healthcare (especially Medicaid and Medicare) will remain a subject of debate in the run-up to the presidential election. So will the subject of “big medicine” and standardization. Atul Gawande’s New Yorker piece on the topic continues to generate discussion in the blogo- and twitter-spheres as well as #longread recommendations. And it’s no wonder. If you’re like me you’ve probably taken for granted (or refused to believe) that a chain like the Cheesecake Factory can provide high quality food and service for a reasonable price. What Gawande does so well is show you the non-obvious steps that CF uses to manage the process and highlight where—and how—such standardization would make a difference in healthcare delivery. Even better are the specific examples he cites, whether it’s Steward Hospital’s tele-ICU service or Brigham and Women’s Hospital’s attempt to standardize joint-replacement surgery. In the latter case, it’s interesting to see how the creation of a dedicated process –for instance, one that requires...

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Could German Pricing Reform Lead to More US-Style Payer Competition?

Posted on Tuesday, July 31, 2012

It’s an odd, chalk-and-cheese notion: that a typically European, rather socialist form of pricing and reimbursement reform such as AMNOG, Germany’s system of early added-benefit assessment for new drugs, could help drive more free-market-style competition between the country’s statutory health insurance (SHI) funds. There are signs that it’s happening, though — albeit via a roundabout route. That matters to pharma, since more competition among payers means a more aggressive efficacy drive. That may in turn call for direct contracting with individual drug firms, be it to help generate compelling outcomes data, improve adherence or whatever. Unlike most other European payers, Germany’s SHIs are awash with cash. That’s in part thanks to an increase in individuals’ health care contribution rate, as a percentage of gross wage, to 15.5% from January 2011. But AMNOG helped too, causing a drop in drug expenditure of 6.5% in the first half of 2011. This comfortable position means few, if any, SHIs have to charge top-up premiums to their insured in order to cover costs. That means less competition, since, to any individual, all of the 150 or so funds look similar. But less competition is precisely the opposite of what government has been trying to promote since 2009, with reforms designed to increase pricing...

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The Healthcare Round-Up: 4/14 – 4/21

Posted on Saturday, April 21, 2012

The next big data visualization graphic: This week Express Scripts published its annual drug report. The big news: the cost of nonadherence. Indeed, $317 billion of the $408 billion in pharmacy-related waste accumulated in 2011 was due to failed medical adherence, more money than the combined drug costs associated with treating diabetes, congestive heart failure and cancer – combined. Working towards solutions for nonadherence obviously frees up a lot of resources that might be devoted to the coverage of new specialty medicines. (For pharma, it might even be a way to structure a risk-sharing contract. But we digress.) According to a piece in the Wall Street Journal on the growing importance of Big Data, one emerging strategy—and business opportunity—at payers, pharmacy benefit managers, and even providers, is the development of analytic capabilities. Mark it under the mantra “you control what you don’t measure.” Key data intensive areas include not just patient adherence, but also probability of relapse, as well as cost (especially total cost of care). How are different stakeholders using the data? As WSJ spells out, providers such as Health Management Associates and the California physicians group Heritage Provider Network are trying to predict—and hopefully eliminate or avoid—unnecessary hospital readmissions. Express Scripts wants to improve adherence to medications,...

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The Healthcare Round-Up: 3/28 – 4/4

Posted on Thursday, April 5, 2012

Reducing unnecessary care: On Wednesday April 4, nine physician societies, together with the ABIM Foundation and Consumer Reports, released a list of 45 procedures or tests (5 per specialty) that are overused and adding to soaring healthcare costs as part of a new educational initiative called Choosing Widely. Another 8 specialty boards are preparing lists of relevant tests their members should be more judicious about ordering. Once again it’s a reminder that there’s growing support for the idea that in certain areas of healthcare it’s critical to embrace a “less is more” mentality. Among the tests garnering extra scrutiny: CT scans for chronic sinusitis, dual energy X-ray scans for osteoporosis in women younger than 65, and MRIs to evaluate lower-back pain. But given the grievous nature of cancer, it’s the recommendations by the American Society of Clinical Oncology that could prove most controversial, especially guidance to avoid chemotherapy use in advanced cancer patients who are unlikely to benefit. As Sharon Begley of Reuters reports, ASCO’s recommendations were driven by medical considerations, but, importantly, cost was also a major factor.  The NYT suggests doctors will be more likely to embrace the notion of doing less since the guidelines come directly from physician groups (as opposed to a government sponsored organization...

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