Product Contracting

Real Endpoints’ RxScorecard™ predicted launch failure of major new anti-cholesterol drugs

Posted on Thursday, February 11, 2016

Analysis from 2015 showed that because PCSK9 inhibitors had not proved more than incremental value for most patients, payers would dramatically restrict their usage. Poor Q4 sales show that’s exactly what happened. Westport, CT, February 11, 2016 In a press release issued July 7, 2015,  Real Endpoints LLC (RE) predicted that the two soon-to-be-launched PCSK9 inhibitors from Amgen and Regeneron/Sanofi would not get substantial market uptake. RE based this conclusion on its proprietary tool RxScorecard™, which assesses the relative value of marketed and pipeline drugs from a patient’s and payer’s point of view. RE defines value as a full assessment of a drug’s efficacy, safety, convenience, adherence and economic attributes in comparison to other therapies in the indication. RxScorecard indicated that while both products offered potential efficacy benefits, they demonstrated little incremental value for most patients because of their lack of meaningful outcomes data at launch and their expected high pricing. As a result RE said last July that “Payers will have an extraordinary opportunity to control costs in this class.” That’s exactly what they did. Now that Q4 sales are in for both Praluent and Repatha, the magnitude of their launch failure is clear. Praluent sold only $7 million in Q4; Amgen has not released data on Repatha,...

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‘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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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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Shifting Docs’ Incentives May Push Pharma Towards Portfolio Deals

Posted on Tuesday, October 9, 2012

As cost-of-care-focused experiments start — at last — to shift doctors’ incentives away from prescribing the most expensive treatment, there’s opportunity for pharma to offer ‘portfolio’ deals, spanning a range of drugs, and support services, across an entire therapeutic area. At least, that’s the view of Harvard Pilgrim’s CMO Michael Sherman, who is among the handful of payers testing new care delivery models with physician groups. You can hear more from him in this short podcast, and at the Real Endpoints Symposium on Nov. 1-2. One of Harvard Pilgrim’s ‘total-cost-of-care’-focused pilots is around bundled payments for diabetic care. For now, it doesn’t include drugs — but, given their contribution to the budget, Sherman would love it if they did. “The pilots can happen without pharma, but they’d be more powerful with,” he says. Most drug firms aren’t in a hurry to sell their products as part of a bulk-buy approach — not least because of the precedent this may set for individual drug prices. But a few, especially those working in me-too-heavy areas like diabetes, are open to the idea. “Companies with a rich TA-specific portfolio might be able to have a good discussion with payers” about a bundled or “all-you-can-eat”deal, says one pharma market access director. The pharma may...

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The Real-World Evidence Buzz Now Matters As Payers Push For Risk-Based Pricing

Posted on Friday, September 14, 2012

Everyone’s talking about real-world evidence (RWE). But should pharma care? Is it driving coverage decisions? The answer’s getting closer to ‘yes’. (For proof of that, join a frank payer-pharma discussion on the subject at our RE Symposium November 1-2.) There’s good reason to be talking RWE: in theory, it’s the key to a more efficient, sustainable health care system. If payers and providers could track which drugs and treatment pathways lead to the best outcomes at the lowest cost, then they’d be sleeping a lot easier right now. Cancer pathways, medical homes and the entire ACO wave all involve measuring and interpreting outcomes (aka RWE). But these experiments are in their infancy. And they don’t involve individual drugs; they look at overall treatment regimens. There are –relative to the number of products on the market — very few examples to date of where outcomes data has led explicitly to a change in coverage for a drug.  At one extreme, real-world evidence of harm caused by thalidomide, approved to treat nausea during pregnancy, led to that drug’s withdrawal during the 60s but that was a regulatory decision. So was Avastin’s revoked breast cancer label. But the dearth of concrete examples of RWE driving yes/no coverage decisions belies a growing wave of...

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Risk-Sharing: Not Easy, But Impossible To Ignore

Posted on Monday, April 23, 2012

So risk-sharing deals haven’t taken off with the gusto that their compelling logic suggests they should have. Even in Europe — the ripest territory for such contracts, given the alternative may be no reimbursement at all — there have been only a dozen or so deals. And several of those are mostly about sharing financial risk, rather than tying price or indeed payment to performance and outcomes. The hurdles are better documented than most of the schemes themselves, and most come under the ‘boring but important’ category. Administration. IT systems. Coding complexity. Staff time.  This NEHI roundtable documented them most recently, relegating risk-shares to “exception rather than the rule”. And yet we’re all still talking about risk-sharing. Like a toddler with a tantrum, they’re difficult, but impossible to ignore. Why? Because noone really believes the practical stumbling blocks can stand in the way of what looks to be an increasingly important–if not the only–option for pharmas seeking reimbursement in Europe, especially for their pricey cancer drugs. Think about the alternatives. One is straightforward discounts. They’re already an unofficial requirement for a passage past the health technology assessment body NICE in the UK (given that few companies can meet its requirements for compelling OS data). But as discounts proliferate, so too...

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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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Payer’s Delight: European Drug Prices Could Spiral Downward Thanks To Germany

Posted on Thursday, February 2, 2012

A little-reported fact about Germany’s new early-benefit assessment system (AMNOG to most people) is that the current law requires making public the rebates agreed to between drug firms and the country’s sick funds association (GKV). That’s a huge departure from the current cozy situation, where only ‘list’ prices are revealed. (That’s the case in most other key markets, too). And it matters to drug firms, since close to 30 countries in the world, including 19 in Europe, currently refer to published German prices in order to determine their own. Thus, transparent rebates will mean lower prices in other markets.  But that’s not all. Here’s another little-reported fact about AMNOG: if the first-in-kind negotiations between the sick fund association and drug firms don’t lead to an agreed price, then an arbitration committee is summoned, and pricing is determined on the basis of…yes, a European reference price. (This flow-chart helps illustrate the steps in the process.) Details of just how that European reference price will be calculated are still being debated. But whatever the outcome, the potential for a downward price spiral in European drug prices “is more than an idle threat,” notes Maarten Meulenbelt, a partner at Sidley Austin in Brussels. There’s still a chance that the part of the German...

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Innovative Contracting: Healthcare Reform A Key Catalyst

Posted on Tuesday, January 17, 2012

By Katya Svoboda and Alexis Matos Given the difficulty of implementing risk-sharing deals in Europe, should manufacturers in the U.S. even bother setting up these complex arrangements? After all, these innovative contracts, typically tied to a drug’s performance, are notoriously tough to put in place. In many cases the systems required to capture the relevant data are missing, and the lack of coordination between medical and pharmacy benefits means conflicting incentives could be operating within the same payer organization. Still, we believe the Affordable Care Act is the necessary catalyst for more innovative contracting. Three features of the ACA have the greatest potential for stimulating interest in developing innovative contracts:  comparative effectiveness research, private health exchanges, and a biosimilar approval pathway. Let us explain. One of the sticking points of pay-for-performance (P4P) agreements is getting payers and product makers to agree on the actual standards against which a given drug or device should be measured. Since the ACA supports comparative effectiveness research efforts, the law facilitates the creation of outcomes-based standards that all parties can agree on when establishing contracts. Enhanced data systems will then help payers and manufacturers measure and share outcomes markers. New health care exchanges, which are expected to insure more than 17 million new patients...

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The Healthcare Round-Up: 12/26/11 – 1/4/12

Posted on Wednesday, January 4, 2012

It’s hard to jump back into work after two weeks of drinking egg nog, eating springerle and lebkuchen, and debating healthcare reform with the in-laws. That’s why Real Endpoints is here to help. In today’s edition of “The Healthcare Round-Up”, we’ve pulled together the best healthcare/ reimbursement related news you may have missed as you were counting down to 2012,  finalizing your too-packed J.P. Morgan Healthcare conference calendar, or discussing the merits of Teva’s new CEO, the erudite Jeremy Levin. From next week onwards, we’ve resolved to post the round-up at the start of the work week, in time to help you impress colleagues during your regular conference calls. (Er, resolutions come with a grace period, right?) Make sure to tell us what you like — and what you don’t. Post a comment at the bottom of the page; or, for the more circumspect, email comments to 1. Accounting for accountable care: Accountable care organizations aren’t just coming – as of January 1, 2012 they’re… here! Recall that Medicare revealed the names of its 32 pioneer ACOs in late December and this new delivery system, which emphasizes efficiency as well as outcomes, went live on Sunday. Come April 1st, when the standard Medicare Shared Savings program gets underway,...

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