Smart Segmentation: Success in the Payer-Dominated Pharma Marketplace

Posted on Thursday, August 4, 2016

As physicians lose decision-making authority to payers, drug companies need to segment markets more effectively. In Vivo, July/August 2016, By Roger Longman / Email the Author / View Full Article As physicians lose decision-making authority to payers, drug companies need to segment markets more effectively.  In particular, they need to determine the patient populations prescribers are most likely to treat and that will spark the fewest access battles.  And they need to focus on the specific payer lines-of-business least inclined to block new drugs’ use. Please click here to read the full...

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How Can Migraine Drugmakers Avoid the PCSK9 Debacle?

Posted on Friday, April 8, 2016

The Timmerman Report, By Luke Timmerman, April 4, 2016 One of the big ideas in biotech today is that you can prevent severe, chronic migraine headaches. This story has a lot of juicy ingredients: intriguing biology, bona fide medical value, and a potentially broad impact on millions of people. But if the drugmakers in this emerging category overplay their hand, and don’t pay careful attention to the new drug pricing reality, it could become a train wreck. Think about the PCSK9 drugs. Not long ago, biologists and cardiologists were raving about the cholesterol-lowering power of these antibodies from Amgen and Sanofi/Regeneron Pharmaceuticals. Both drugs won FDA approval to much fanfare last summer. Months later, sales of these drugs are barely a rounding error for either company. The vast majority of prescriptions (about 75 percent by estimates from Amgen) are being denied by payers via prior authorization procedures. And the denials keep coming on appeal. Payers want to see whether these $14,000 list-priced drugs are any better than cheap generic statins at what really counts – reducing heart attack and stroke. Until cardiovascular outcomes data rolls in from clinical trials in 2017, and data accumulates on their long-term safety, payers have tucked these drugs in a tidy little box. They...

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Medicaid May Offer Best Opportunity For Merck’s Zepatier

Posted on Wednesday, April 6, 2016

Newest hepatitis C entrant doesn’t have the best value in all subpopulations, according to analysis by Real Endpoints, but Medicaid’s mandatory discount could make up for those disadvantages. The Pink Sheet, March 28, 2016, By Cathy Kelly / Email the Author / View Full Issue Merck & Co. Inc.may find the unique drug pricing rules in Medicaid help create the best opportunity for its recently approved hepatitis C drug, Zepatier (grazoprevir/elbasvir), relative to prospects in the commercial and Medicare Part D markets. Zepatier is the third all-oral hepatitis C combination drug to reach the market and it has a narrower label than Gilead Sciences Inc.’s market-leading Harvoni (sofosbuvir/ledipasvir). To compensate for those challenges, Zepatier is positioned to compete mainly on price. Its wholesale acquisition cost is $54,600 for a treatment regimen, approximately 30% below Harvoni’s list price (“Merck’s Biggest Impact With Zepatier Approval May Be On HCV Pricing” — “The Pink Sheet,” Feb. 1, 2016). A recent analysis by RealEndpoints’ drug value and pricing tool RxScorecard highlights the complicated considerations that go into commercial strategies across the three major markets – Medicare, Medicaid and commercial plans – and shows how the pricing rules governing one sector, Medicaid, might offer advantages that the others do not. Merck is not indicating that its primarily focus for Zepatier will be Medicaid. The company told...

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A tale of two new hepatitis C drugs

Posted on Thursday, March 10, 2016

Despite discount, Merck’s just approved Zepatier unlikely to win share with most US payers, except in Medicaid, according to RxScorecard™.  New combo from Gilead could ensure company’s dominant position among US payers. Westport, CT, March 10, 2016 It can take more than a big discount to get payers to buy into a new drug. Although Merck is launching its new hepatitis C virus (HCV) medicine, Zepatier, at an approximate 30% discount to the “list” price of the overwhelming market leader, Gilead’s Harvoni, RxScorecard™ analysis shows that it is unlikely to make significant headway in most commercial and Medicare plans. Meanwhile, RxScorecard™ shows that Gilead’s sofosbuvir/velpatasvir (SOF/VEL) combination, likely to be approved this summer, could be a big winner, obsoleting Gilead’s own Harvoni, as Harvoni sidelined Gilead’s first entry, Sovaldi. But SOF/VEL will succeed only if it matches the discounting Gilead is providing with Harvoni. Real Endpoints LLC (RE) came to these conclusions based on its proprietary tool RxScorecard™, which assesses the relative value of marketed and pipeline drugs from a 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. The HCV market has been enormously attractive to drug companies. According...

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Hurricane Sandy Disrupts “The Disruptors”

Posted on Monday, October 29, 2012

At Real Endpoints, we know the importance of showing mothers respect – especially Mother Nature. It took a storm the magnitude of Sandy to disrupt “The Healthcare Disruptors”. But with a hurricane wrapped in a Nor’easter bearing down on the East Coast – and continued uncertainty about what the coming days may bring – the wisest course of action was to postpone the Real Endpoints Symposium until 2013. We had a committed audience attending – and a stellar line-up of speakers who are steadfast in their promise to speak at a date TBD. We hope the few months delay means an even bigger audience will be able to tune in. If you’re at a drug or diagnostic company, it can often seem as if innovation is under siege.   And if you’re at a payer, it can just as often seem you’re fighting a battle against needless, expensive new products. At Real Endpoints, we believe new reforms that prioritize quality of care above volume of care create fresh opportunities for payers, providers, and manufacturers to collaborate – to contain costs and produce breakthrough medical technologies. In the coming weeks we’ll have more to say about the 2013 event with insights directly from our disruptors. For now, stay in touch –...

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Clinical Utility: An Ever Higher Bar To Clear For Molecular Diagnostics

Posted on Monday, October 15, 2012

Before covering a pricey molecular diagnostic, payers want proof that the test in question is both efficacious and adds new therapeutic value. As Dr. Ira Klein, Chief of Staff to Aetna’s Chief Medical Officer, told Real Endpoints in this recent podcast “we have to understand that the test gives the member or doctor actionable information.” What Klein and execs at other payers want are data concretely linking a particular test to improved outcomes and health benefits, essentially its so-called “clinical utility.” And “that is where we [payers and diagnostic companies] need to talk”, says Ted Snelgrove, chief commercial officer for Crescendo Biosciences, a Bay Area biotech developing a multi-biomarker blood test for rheumatoid arthritis disease activity, and formerly the commercial guru behind Genomic Health’s Oncotype Dx assay. Snelgrove, who will be speaking alongside Aetna’s Klein at our inaugural Real Endpoints Symposium (Nov 1-2, in Philadelphia – sign up here), takes issue with changing evidentiary standards that are growing ever harder for diagnostic makers to clear. To win reimbursement these days, it’s not enough to show via prospective-retrospective trials that a particular test changes a treatment decision. You’ve also got to publish the data in peer-reviewed journals and win the blessing of either influential technology assessment bodies (e.g. BlueCross Blue...

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Patient-Based Pricing: An Answer To The Soaring Cost of Innovation?

Posted on Friday, September 21, 2012

Roche’s investor day on Sept. 5 provided heartening news for breast cancer patients. Executives outlined an array of increasingly targeted therapeutic permutations to combat the tumor, building on its leadership with Herceptin. But payers will have come away worried. The slew of new drugs, combinations and conjugates points to rapidly-multiplying per-patient costs, as (likely) premium-priced individual treatments are teamed up. Roche seems to be aware of the tension. Even as it promoted more effective versions of existing blockbusters like Herceptin, it also discussed a new model for how such drugs ought to be paid for: patient-based pricing. Marketing chief David Loew talked about moving “from pack-based to patient-based pricing”, borrowing from a concept that is gaining traction scientifically –personalized medicine—and applying it to the commercial marketplace. “Different prices will be applied…depending on indication, setting, and combination,” he told investors. How this works without causing administrative chaos is unclear — but the alternative, sum-of-the-parts pricing, is equally nightmarish. Those holding their breath for the era of cheaper Herceptin (whose patents are due to expire in 2014 in Europe and five years later in the US will likely have to wait far longer. That’s because Roche has redefined the boundaries on  its Her-2 breast cancer franchise, conveniently expanding Herceptin’s commercial life cycle with...

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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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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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Medco Enters Europe: One Company’s Hurdle Is Another’s Opportunity

Posted on Tuesday, February 21, 2012

With falling prices and growing reimbursement hurdles, Europe is the last place most pharma want to be right now. One man’s hurdle is another’s opportunity, though. So it is for Medco, the US-based pharmacy benefit manager, which has recently launched a Europe-focused international operation, underpinned by various legacy collaborations including in Germany, the UK and the Netherlands. The idea: to apply its US expertise and experience in the European context, where different systems and different stakeholders face nonetheless similar challenges. And yes, they’re mostly around cost. Europe spends $1.7 trillion annually on health care, the vast majority in chronic diseases. Most if not all of the EU 27 are seeking to rein in health spend, and realizing (after plenty of attempts) that simply cutting drug prices won’t work. Enter Medco. It’s essentially trying to export to the EU its US patient adherence programs (or “advanced clinical solutions”) and mail-order/specialty pharmacy experience to help European payers improve the efficacy and outcomes of the drugs they do pay for. Much of the focus thus far has been in Germany, Europe’s largest market, where Medco in October 2011 bought out a joint venture with wholesaler and service provider Celesio AG. As a result of this, Medco already provides medication to patients on behalf...

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