tag:blogger.com,1999:blog-81692251614538797842024-03-13T13:03:51.315-07:00Payer Markets Access and ReimbursementAn educational blog about reaching payer markets and ensuring access, coverage, and reimbursement for pharmaceuticals, medical devices, and diagnostics. Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.comBlogger28125tag:blogger.com,1999:blog-8169225161453879784.post-71748075723948820832018-04-10T08:20:00.000-07:002018-04-10T08:27:58.688-07:00Is Fixing Health Care Delivery Rocket Science? Elon Musk Wouldn’t Touch it<br />
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President Trump announced infamously in early 2017 “Nobody knew
health care could be so complicated.” Yet, it shouldn’t take a rocket scientist
to understand how complex a health care delivery system (and this nation’s in
particular) can be. This is a stew of health plans, insurers, pharmacy benefit
managers, physicians, other clinicians, hospitals, health systems (public and
private), drug and device manufacturers, and other suppliers that don’t always mesh
well. Their incentives are extremely different, and their relationship to patient
outcomes and public or population health in general, are well, let’s say it—<i style="mso-bidi-font-style: normal;">complicated</i>.<o:p></o:p></div>
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Think of it in the following way. Elon Musk’s brainchild, <a href="http://www.spacex.com/elon-musk">SpaceX,</a> went through extensive
development before coming up with a rocket that could lift off from the launch
pad. It took numerous attempts to actually reach Earth orbit and complete the overall
goal of returning the booster stage to a recovery site intact for reuse. Many
have seen the <a href="https://www.youtube.com/watch?v=g79K-R7xTFo">brilliant,
colorful explosions</a> of NASA’s attempts in the late 1950s and early 1960s to
prepare one of the military’s missiles as a launch vehicle. <o:p></o:p></div>
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A different example is Mr. Musk’s current troubles in mass
producing his <a href="https://www.tesla.com/model3">Tesla Model 3</a> electric
cars. Tesla has been dealing with numerous obstacles and glitches. Production
is currently a fraction of what Mr. Musk predicted and investors expected.
However, given time and capital (which is not a given), few doubt that he will
succeed. <o:p></o:p></div>
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<h3>
Are We Confident We Can Fix Health Care? </h3>
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People often say, “It’s rocket science” when describing something
that is incredibly difficult to understand, manage, and/or overcome. But rocket
science, like car manufacturing, is based on engineering problems, mechanistic
solutions, and the laws of nature. In fact, rocket manufacture, operation, and
mission success has been achieved repeatedly because although individual
problems do arise, they are eventually overcome. <o:p></o:p></div>
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We have confidence that eventually, the production of electric
cars, orbital and interplanetary vehicles, and even efficient use of renewable
energy will occur. These are scientific and engineering problems; it may take a
while but collectively, we believe the problems will be conquered. <o:p></o:p></div>
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How many of us can say the same thing about our muddied,
muddled health care system? Health care is a messy business that is confounded by
human behavior, access issues tied to socioeconomic factors, unpredictable flaws
in human physiologic function, and our own self-inflicted constructions (e.g.,
health plans, pharmacy benefit managers, and odd benefit designs) to address
them all. Although we may have some confidence in the ability to reach limited
and incremental goals, cost-effective, high-quality health care for all our
citizens remains a distant, uncertain dream. <o:p></o:p></div>
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We have been trying to fix the US health care delivery system
since the HMO Act was signed in 1973. Numerous attempts have been made to <a href="https://en.wikipedia.org/wiki/Health_Maintenance_Organization_Act_of_1973">address</a>
increasing costs (with very limited success) and improve quality. A rocket
scientist wouldn’t want to touch this problem (nor would a brain surgeon—<a href="https://www.nytimes.com/2018/03/05/us/ben-carson-hud.html">Ben Carson</a>
is attempting to lead the Department of Housing and Urban Development, not
Health and Human Services). <o:p></o:p></div>
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<h3>
Good Bets, Bad Bets, Sad Bets</h3>
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We have made significant gains in increasing care access and
reducing the number of uninsured. This has largely been achieved through the <a href="https://www.gpo.gov/fdsys/pkg/PLAW-111publ148/pdf/PLAW-111publ148.pdf">Affordable
Care Act</a> and Medicaid expansion. Yet, political efforts to strip away the
ACA threatens to add millions of Americans back onto the rolls of the
uninsured. <o:p></o:p></div>
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Nonetheless, we’ve place various bets in several areas over
the decades. For example: <o:p></o:p></div>
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<li><span style="font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;"> </span><span style="text-indent: -18pt;">Value-based care (/value-based insurance design/value-based
purchasing)</span></li>
<li><span style="font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;"> </span><span style="text-indent: -18pt;">Capitation</span></li>
<li><span style="font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;"> </span><span style="text-indent: -18pt;">Primary care gatekeepers</span></li>
<li><span style="font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;"> </span><span style="text-indent: -18pt;">Implementation of electronic medical records</span></li>
<li><span style="font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;"> </span><span style="text-indent: -18pt;">Greater use of technology (including “big data”
and diagnostic testing)</span></li>
<li><span style="font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;"> </span><span style="text-indent: -18pt;">Emphasis on quality reporting (NCQA, MIPS/MACRA)</span></li>
<li><span style="font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;"> </span><span style="text-indent: -18pt;">Access to biosimilars</span></li>
<li><span style="font-size: 7pt; font-stretch: normal; font-variant-east-asian: normal; font-variant-numeric: normal; line-height: normal;"> </span><span style="text-indent: -18pt;">Direct contracting with providers</span></li>
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Perhaps we should have bet more heavily in some of these
areas, and others, like biosimilars, are not nearly fully evolved. Yet, the
problem remains. Medical expenditures continue to rise at multiples of the consumer
price index. True competition does not exist at the practice or hospital level.
Nor does sufficient competition exist in most parts of the country at the
health plan level. The concept of <a href="https://www.ncbi.nlm.nih.gov/pubmed/8690550">value-based care</a> has
been around since at least 1995. In 2018, we’re still struggling mightily to prove
the value of the care we purchase, as well as institute broad-based value-based
purchasing of care. <o:p></o:p></div>
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<h3>
<o:p>Mediocrity at High Cost </o:p></h3>
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The US health system has not distinguished itself as the
best in the world, <a href="https://www.healthsystemtracker.org/chart-collection/health-spending-u-s-compare-countries/#item-u-s-similar-public-spending-private-sector-spending-triple-comparable-countries">only
the most expensive</a>. Our quality metrics in many important areas <a href="https://www.healthsystemtracker.org/chart-collection/quality-u-s-healthcare-system-compare-countries/#item-mortality-rates-endocrine-nutritional-metabolic-diseases-fallen-last-15-years">are
mediocre</a> compared with those of other advanced countries. Further attempts
to measure quality have resulted in push back from providers on data reporting
(witness the <a href="http://www.modernhealthcare.com/article/20180111/NEWS/180119963">recent
MedPAC recommendations to stop MIPS</a> in its tracks). Pharmaceutical scientists
have made great strides in effectively treating life-threatening diseases, but
the costs of these therapies challenge the system’s ability to afford them for
patients in need.<o:p></o:p></div>
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Forty-five years after attempting to “fix” the health care
system, our cost problems have only deepened. The system has become so
complex that no ordinary system can understand it (much less rocket
scientists). Further engineering a broken system, which rarely responds as
intended to repair efforts, should no longer be considered a reasonable response.
Drastically simplifying the system, with consumers choosing among competing
doctors and hospitals for their routine and urgent care, is. <o:p></o:p></div>
<br />Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-61858332964866532192018-02-14T13:13:00.001-08:002018-02-14T13:23:46.114-08:00Is It That Trump Fails Again to Understand the Problem?<div class="MsoNormal">
The new budget proposal by the Trump White House attempts to
attack the problem of high drug costs, but the battle tactics do not appear to
be a winning strategy. <o:p></o:p></div>
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President Trump promised in several rallying speeches as
well as in the State of the Union address to <a href="https://khn.org/news/trumps-budget-proposal-swings-at-drug-prices-with-a-glancing-blow/">lower
drug prices</a> for people across the country. However, what is the benefit of
lowering drug prices if the costs paid by Americans will balloon elsewhere? <o:p></o:p></div>
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In the White House budget framework sent to Congress earlier
this week, the Trump Administration sought to pass through to Medicare
recipients the large rebates given to pharmacy benefit managers (PBMs) and
Medicare Advantage plans. The rebates, often 15% or more of the price of the
drug, are given by manufacturers in exchange for coverage by the Medicare
Advantage or Part D plan. There is an unmet need in this country for greater pharmaceutical
cost transparency. Today, health plans, insurers, and PBMs depend on millions
of dollars in rebates as a distinct revenue stream. Getting those rebate
savings into the hands of the consumer is important. Yet, the reaction by
payers will be as dependable as medical costs going up—they will make up for
the rebate revenue shortfall by raising Medicare premiums. In other words, the
balloon squeezed on one side will pop out at the other side. And the Medicare
beneficiary will have to pay somehow for the revenue shortfall. <o:p></o:p></div>
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Health plans say that the rebate revenues help fund other
services and medical needs, and may actually help put a lid on premium
increases. That would be very difficult to prove or disprove. The inference is
that the money is used for some purpose, and should it go away, funds would
have to be sought elsewhere—most likely not the federal government. There is
only one place to turn—the beneficiaries.<o:p></o:p></div>
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Yes, drug prices are very high, but controlling them will require
a lot more than managing rebates. Better price transparency is needed throughout
the system, including how the manufacturers of innovative pharmaceuticals
decide on starting wholesale price at launch and interim price increases. That
can only be achieved in two ways: (1) with strict regulations, such as used in
other advanced countries, or (2) by exerting more control over demand, which
could have damaging effects on drug industry innovation. <o:p></o:p></div>
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Medicaid plans commonly used closed formularies, which
although they accept steep rebates from the pharmaceutical industry, they
generally are the beneficiary of steep drug price discounts as well. Many
expensive drugs are simply not covered, and the result can be frustration from
patients; sometimes, they cannot receive the medication prescribed by their
doctor. Remember though, patients in Medicaid have very limited (if any) cost
sharing. <o:p></o:p></div>
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It seems that there is little in-depth understanding behind
such an initiative by the White House, and one has to assume that it is merely
done to satisfy the populist promise to lower drug costs. It is a superficial
idea that does not address any unintended consequences. <o:p></o:p></div>
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If the President is serious about utilizing these tactics, he won't win this battle much less the war. Perhaps, that is precisely the intention--a show for his base. </div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-8500723565990059682018-01-08T08:38:00.003-08:002018-01-08T08:38:54.253-08:00Is There an Escape From the Rebate Trap?<div class="MsoNormal">
The rebates given to pharmacy benefit managers to secure a
drug’s place on the formulary have become a difficult barrier to coverage for
new products. The rebate income for these PBMs is sometimes passed on to health
plans, insurers, and employer purchasers, but more often it is not. <o:p></o:p></div>
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A big issue is that managed care organizations tend to
become addicted to millions of dollars in rebate “income,” and this mindset
prevents serious consideration of new medications at competitive costs. </div>
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For
biosimilars, Pfizer and Merck have had a difficult time dislodging Janssen,
maker of Remicade<sup>®</sup>, from its preferred formulary position, despite
lower prices based on wholesale acquisition cost (WAC). Janssen has simply
matched the net cost (through increasing rebates), while keeping its WAC costs
high—tempting plans with ever-increasing rebate revenue. The health plans don’t
see the benefit of incurring the administrative costs of moving masses of
patients from the preferred product to a new one, or seeing this revenue stream
interrupted, without an overall further improvement in net costs. <o:p></o:p></div>
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Managed care plans have long said that discounts of 25% or
more will be necessary to release the rebate stranglehold of preferred
products. In the case of infliximab, this has not yet occurred, based on recent
minor inroads made by Merck’s Renflexis<sup>®</sup> biosimilar, despite larger
discounts. Until greater competition is available, which drives down the WAC
prices (and then average sales prices [ASPs]), barriers to accessing new
medications will remain. In fact, when competition does increase, makers of the
originator products, like Janssen, can simply ratchet up their rebates to
maintain a hold on sales (and a billion-dollar plus profit). <o:p></o:p></div>
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Perhaps the best way around this is to force a change in the
marketbasket. This can be accomplished in a couple of ways. The first, by
instituting separate tiers for biosimilars and reference agents, takes the
biosimilars out of the 1 of 2 preferred drug contracting restrictions, and
allows patients to access biosimilars as well as preferred brands. <o:p></o:p></div>
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A second way is to reconsider biologic agents according to
indication-based contracts or mechanism-of-action (MOA) based differences.
Therefore, the marketbasket is modified to consider anti-TNFs separate from interleukins,
allowing preferred agents in each separate category. This would allow, for
instance, for more effective psoriasis agents to be well covered, and maintain
the preferred position of Humira<sup>®</sup> and Enbrel<sup>®</sup> for
appropriate patients.<o:p></o:p></div>
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A third way is to work out some innovative value-based
contract, in which the manufacturer and health plan/insurer reaches an
agreement on (usually) the expected outcomes of drug use and additional rebates
or performance guarantees if the medication fails to deliver on this
performance. The most important consideration in this agreement is the
practicality of measuring an outcome of interest or ensuring adherence. <o:p></o:p></div>
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The rebate trap seems to be ensnaring more manufacturers of new
biologics and biosimilars. Without greater consideration of the overall good, this
trap can cause systematic problems for the pharmaceutical industry and
discourage drug innovation and accessibility. <o:p></o:p></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-84815010814355205402017-09-13T08:40:00.000-07:002017-09-13T08:40:39.369-07:00Controversy Over the Cost to Bring Pharmaceuticals to Market<div class="MsoNormal">
This is one of the prickliest topics in the health care
industry, and it has been as long as I can remember. One of the publications I
worked with was called Product Management Today. Long defunct, this periodical
followed the pharmaceutical industry quite closely. As a result, we were
familiar with Tufts University’s Center for the Study of Drug Development. This
was the first organization to publish what was considered credible figures as
to what it cost to bring a drug to market. <o:p></o:p></div>
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In the early 1990s, that number was published in the <i>Journal of Medical Economics</i> to be <a href="http://www.sciencedirect.com/science/article/pii/0167629691900014">about $231
million</a>. Remember, these were generally small molecules, and the drug
industry consisted of dozens of big manufacturers identifying their molecular
targets, characterizing them, and cultivating them through the clinical trial
process. In 2003, this number was revised upward to somewhere north of $800
million. In 2016, the Tufts team recalculated the numbers, and it found
essentially a 10-fold difference (not accounting for the inflationary change in
the value of the dollar between 1991 and 2016). They indicated that it costs <a href="http://www.sciencedirect.com/science/article/pii/S0167629616000291#bib0035">$2.7
billion</a> to bring a product to the market today, which also considers the
cost of failed drug development. In other words, they added the opportunity
cost to a pharma company for a drug that was withdrawn or failed clinical
trials (any stage). In their 2016 analysis, they took as their drug sample, 106
investigational drugs, 87 being small-molecule compounds and the remaining 19
biologics. I’m guessing that if biologics represented more than 18% of the
sample, the total average estimate could have been even greater. <o:p></o:p></div>
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The cost to produce a biosimilar is considerably less. This
is partly the result of the lesser clinical trial requirements compared with
new chemical entities. Although this figure has not been convincingly
calculated, I’ve heard it cited to be anywhere up to $250 million. This seems
to be reasonable, based on the development requirements. Unfortunately, several
biosimilar manufacturers have to wait to market their agents because of patent
litigation, and that in itself represents a cost.<o:p></o:p></div>
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Today, the results of another study was released, which
offers a very different number. Published in <a href="http://jamanetwork.com/journals/jamainternalmedicine/fullarticle/2653012"><i>JAMA Internal Medicine</i></a><i>, </i>authors from Oregon Health and
Sciences University and Memorial Sloan Kettering Medical Center found that the
cost to produce 10 cancer medications was really $648 million (range, $204
million to $2.602 billion)—add another $110 million or so for opportunity costs.
This included 5 drugs that received fast-track approval. Not only did the
researchers use US Securities and Exchange filings that cited
manufacturer-reported costs, but they limited the analysis to only
manufacturers without a previous approved drug on the market. The drugs evaluated
included several monoclonal antibodies, so it was reflective of complex
molecule development. <o:p></o:p></div>
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I’d like to point out another question that perhaps skews
the calculation. Rarely these days does “big pharma” get involved with new drug
identification and characterization. True, they are often involved in the
expensive clinical trial phase, but do we read in the paper weekly that a drug
discovery company has licensed or sold the product to a big pharma entity (or
even sold the company itself)? And what is the guarantee that they are not
overpaying for the price of the drug or the company?<o:p></o:p></div>
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The upshot of this is that the 10 companies evaluated in the
more recent study had cumulative revenues resulting from their new agents of
$67 billion from the time of approval (until December 2016 or the time it sold
or licensed the product to another company). The range per product was ranged
from $204.1 million to $22.3 billion. It sounds overall, that they were good buys
for the big pharma companies but not necessarily for the health care system. <o:p></o:p></div>
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In other words, whether it cost $648 million, $800 million,
or $2.7 billion, the research and development costs for these new agents are
made back in a year or less. It is hard for us to listen seriously to pharma
companies who use the cost to develop the agents, or their having to eat the
cost of failed agents, as credible justification for the prices being charged.</div>
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<o:p></o:p></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-29327339474256489622017-04-24T05:54:00.000-07:002017-04-24T05:55:30.041-07:00The Premium Pricing Problem for New Products<div class="MsoNormal">
It is quite common for pharmaceutical manufacturers’ brand directors
to approach new product launches with the mindset that rebates will offset payers’
concerns over premium pricing. This is certainly true for highly utilized
products (or brand new drug categories that represent a major advance over the
state-of-the-art). And what pharmaceutical executive doesn’t believe his or her
product is worthy of premium pricing? Well, if you don’t, you’ll probably be
looking for a new career soon.</div>
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<o:p></o:p></div>
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In discussing specialty products—where all the action seems
to be nowadays—premium pricing as little as 10% of the competitors’ wholesale acquisition
cost (WAC), may be the real barrier to formulary acceptance, preferred
positioning, or both, because the rebate is not important to the plan at
launch. <o:p></o:p></div>
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Does that mean if your product is priced at a 10% premium
but your company is offering even an extremely generous rebate, payers won’t
run to it? Well, that depends.<o:p></o:p></div>
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The rebate is based solely on utilization. At launch and for
the first several months, utilization of your product, ABC self-injectable for
rheumatoid arthritis, is very limited. Some docs may prescribe it, but payers’
prior authorization programs will often limit or prohibit use of ABC, until the
preferred agents are tried first. <o:p></o:p></div>
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For the autoimmune category, Abbvie’s adalimumab (Humira<sup>®</sup>)
dominates marketshare. The plan’s chief financial officer will have the head of
the pharmacy executive who risks losing millions in rebates from Abbvie in
favor of ABC, without unquestionable, world-beating superiority to Humira in efficacy
and safety (not to mention spread of indications). What is the value of your 40%
or even 60% rebate on a product that has very low utilization on day 30? The
plan may well argue that the value is less than zero. If utilization is zero,
the value of your 60% rebate to the plan is zero, and the loss of established
rebates from an existing 1 of 2 contract, for example, could be millions. Also,
instead of receiving those rebates, the plan would be paying 10% more for the limited
product used. <o:p></o:p></div>
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That seems to be a Catch-22. And it is, based on today’s
marketbasket. It may be that the marketbasket needs to be redefined so that a
particular indication no longer affects the market leader’s contract. This
could also happen with the introduction of a biosimilar that offers competitive
pricing to a market leader. <o:p></o:p></div>
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This illustrates one of the leading reasons why plans
considering new products want to see upfront savings—that is, in WAC pricing,
before getting involved in the rebating wars. At least, they will know that
they’re saving something at the front end of a product launch. Furthermore, if
the price is lower from the start, the need for the deep rebate dissipates. <o:p></o:p></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-42621072971585091302017-03-20T08:33:00.000-07:002017-03-20T08:35:52.289-07:00Risk-Adjustment Payments May Come at the Expense of the GOP <div class="MsoNormal">
The health care follies continue on Capitol Hill, and the
latest irony has little to do with the Uninsurance Guarantee Act (aka the
American Health Care Act, TrumpCare, RyanCare). This one has to do with the
only successful attempt by the Republican legislators to obstruct the
Affordable Care Act (ACA), which may well come back and bite them.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The risk-adjustment payments included in the ACA were based
on the assumption that, initially, health plans participating in the exchanges
would be exposed financially with a surge of enrollment from Americans with
chronic illnesses. Until the individual mandate (and its significant penalties)
kicked in, the authors of the ACA understood that the healthy would need
encouragement to join an exchange plan and stabilize the market. These payments
were supposed to be made to insurers over the first 3 years of implementation
of the ACA. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
However, the Republican Party, led by Senator Marco Rubio and
House Speaker John Boehner, pushed for a <a href="https://www.nytimes.com/2014/12/14/us/senate-spending-package.html?_r=1">measure
in the federal budget in 2014</a> that was largely successful in stunting the
individual market that was being cultivated by ObamaCare. This budgetary
provision required the risk-corridor payments to not have a negative effect on
total spending. In other words, the Centers for Medicare and Medicaid Services (CMS)
could not pay out more than it took in. The result: in 2015, CMS released just under
13% of the risk-corridor payments it owed to insurers. This undercut the
ability of several health plan cooperatives to survive, as well as played a
role in driving up premiums on the exchanges. When the federal government could
not make the retroactive and newly owed payments in 2016, even healthy insurers
started exiting the market, feeling the effects on their bottom lines. An
analysis by <a href="http://www.modernhealthcare.com/article/20161205/NEWS/161129937">Modern
Healthcare</a> found, for instance, that Blue Cross Blue Shield of Texas was
owed $917 million for losses incurred in 2014 and 2015. Health Republic
Insurance of New York, a start-up co-operative that ceased operation in 2015, was
owed $463 million. Ten insurers were owed at least $173 million apiece for 2014
and 2015. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In 2017, these insurers want to get paid. In total, they are
owed $8.3 billion in risk-corridor payments for the first 2 years of exchange
operations. In February, a federal judge ruled that the government owed <a href="http://www.modernhealthcare.com/article/20170209/NEWS/170209896">Moda
Health $214 million</a> in risk- corridor payments. That conflicted with the
ruling of another judge, who said that CMS never guaranteed these payments. Blues
plans from Tennessee, Alabama, Idaho, and North Carolina, have sued, as well as
Highmark Inc, and the defunct co-ops Health Republic of Oregon and Land of
Lincoln Mutual Health.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The irony, of course, is that it is no longer the Obama
Administration that is responsible for this litigation. The Republicans are now
in charge, and may have to decide how to settle or pay out these claims. Eight billion
dollars is not a huge by federal government standards, but it would be a bitter
pill for the GOP to swallow. </div>
<div class="MsoNormal">
<o:p></o:p></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-8228140889471742672017-02-09T13:01:00.001-08:002017-02-09T13:01:33.837-08:00The Value Mirage: Will Allowing Health Insurers to Sell Across State Lines Mean Lower Premiums?<div class="MsoNormal">
If an annual premium for a silver-level health insurance
premium is $3,000 (in 2016) in Minnesota, wouldn’t it be appealing to offer
that same plan and coverage to those people paying $5,400 in New York City?
This is the concept behind a key component of the Trump Administration’s current
replacement (or “fix”) for ObamaCare.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
This post will not cite the myriad complex problems
associated with this idea. We’ll describe just one<span style="font-family: "Arial",sans-serif;">—</span>the one that will render the concept almost of no
value. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
That plan in Minnesota contracts with local providers
(physicians and hospitals) for a certain level of payment. Generally, it is
what the market will bear in, say, St. Paul, Minnesota versus what the market
will bear in White Plains, New York. Historically, health costs and premiums
have always been lower in metropolitan Minnesota than in southeastern New York
State. Hospitals charge less for hip replacements, doctors are reimbursed less
for office visits, and yes, health plans in Minnesota may even be a bit better
at leveraging the market, because of their market penetration. If you transport
that Minnesota plan to Westchester County, New York, you leave its advantages
behind. Gopher Health Plan will have to build a brand new provider network in
one of New York’s most expensive counties. Unless it also transports Minnesota
providers to New York, it will pay New York prices. It is conceivable that the greater
competition for providers may actually push reimbursements up—a new plan
entering a market has to entice physicians to sign with their plan (regardless
of a narrow or broad network). What does that mean for physicians or hospitals?
They are in the driver’s seat, and have a bit more leverage with which to
negotiate rates. Remember, that rate negotiation will not start at St. Paul
levels. It will begin at New York metro area figures. This could have an
inflationary effect.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The basic idea of bringing more competition into high-cost
markets is a good one. If 2 or 3 well-run out-of-state insurers were to begin
to operate in many such areas, the additional competition should have a
beneficial effect on rates. But so would encouraging the birth and growth of organically
grown local plans and insurers that were given the financing and resources needed
to be successful. <o:p></o:p></div>
<br />
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In other words, if you see the shimmering image of a
Minnesota health insurer offering great value to New York residents, it is
likely a mirage in the hot, dry health reform air. And finally, this mirage
evaporates quickly, as Minnesota granted average premium <a href="http://mn.gov/commerce-stat/pdfs/rate-release-packet-2017.pdf">increases
of over 50% to exchange plans</a> for 2017, resulting in annual premiums that
are closing in on $5,000. <o:p></o:p></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com1tag:blogger.com,1999:blog-8169225161453879784.post-6898515817012296542017-01-05T05:46:00.000-08:002017-01-05T05:48:08.576-08:00The Pitfalls of Pinning Savings on Biosimilars<div class="MsoNormal">
By Stanton R. Mehr<br />
<br />
With the recent capitulation by the Centers for Medicare
and Medicaid (CMS) that its part B pilot on value-based purchasing was not
going to be implemented, another organization has proposed 2 other avenues to
value-based purchasing, which it thinks will encourage biosimilar use and save
the part B program billions. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The <a href="http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2017/01/can-biosimilar-drugs-lower-medicare-part-b-drug-spending">Pew
Charitable Trusts</a> acknowledge the core problem, that payment of average
sales price (ASP) plus 4.3% encourages use of the higher priced drug. To
address this, Pew offers a consolidated rate plan or a least costly alternative
(LCA) plan. They demonstrated the savings that could accrue with either by utilizing
an economic model based on the introduction of 5 major biosimilars (1 already
approved [infliximab], 3 filed for approval [bevacizumab, pegfilgrastim, and
trastuzumab], and 1 not yet under review<span style="line-height: 115%;"> </span>[rituximab]). Under the model’s
assumptions (a few of which are questionable), either approach would cut costs
dramatically with just these 5 biosimilars. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Under a consolidated payment rate, CMS reimbursements would
be based on a volume-weighted ASP of all reference and biosimilar prescribing,
similar to what is used in the conventional brand–generic arena. Pew suggests
that “<span style="line-height: 115%;">Part B drug spending could be reduced if
providers responded by increasing their use of biosimilars over reference
biologics (or increasing the use of the reference product if it were available
at lower cost… A consolidated payment approach, which would effectively
decrease Medicare payment for higher-cost reference biologics and increase
payment for lower-cost biosimilars, would create a financial incentive for
providers to switch to the latter.” <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="line-height: 115%;">The second approach is the <a href="http://www.pewtrusts.org/en/research-and-analysis/fact-sheets/2016/03/the-least-costly-alternative-approach-for-payment-of-medicare-part-b-drugs">least-costly
alternative</a>, where the payment rate for a higher-cost therapy is set at the
payment of a lower-cost, therapeutically comparable alternative—a form of <a href="http://www.ncpanet.org/pdf/leg/feb12/mac_onepagerfinal.pdf">maximum
allowable cost (MAC)</a> used in the generic marketplace. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="line-height: 115%;">Either approach would depend on the
substitutability of a biosimilar for a biologic, as well as an acknowledgement
that if the part B payment is lower than the providers’ purchase cost, they
will avoid treating part B patients who need these agents and send them to potentially
more expensive treatment settings. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="line-height: 115%;">Based on these two alternative payment
policies, the Pew Charitable Trusts believes that the part B program can save,
based on 2014 Medicare expenditures for the 5 reference products, $4.32 billion
(or a 21% savings) with the consolidated payment approach and $3.56 billion (or
a 35% savings) with the LCA.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="line-height: 115%;"><br /></span></div>
<div class="MsoNormal">
<span style="line-height: 115%;">These savings figures are unlikely, however, because
the devil is in the details, once again. A few key assumptions are important to
note: <o:p></o:p></span></div>
<div class="MsoNormal">
<i><span style="line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal">
<i><span style="line-height: 115%;">These 5 biologics
are assumed to have lost exclusivity and patent protection, and to have begun
facing competition from biosimilars.</span></i><span style="line-height: 115%;"> The time horizon may be
problematic here, as clearing the patent litigation is taking far longer than
expected, meaning that launches are experiencing unanticipated delays, unless
the manufacturer decides to launch “at risk.” <o:p></o:p></span></div>
<div class="MsoNormal">
<i><span style="line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal">
<i><span style="line-height: 115%;">The price
of each reference biologic remains constant at the average of its 2014 payment
rate. </span></i><i><span style="line-height: 115%;">Reference biologic and biosimilar ASPs do not change during the year. </span></i><span style="line-height: 115%;">Unfortunately,
we know this is not the case, as several biologics facing the possibility of
biosimilar competition have been subject to alarming price increases, often
twice a year, which affect the ASPs.</span></div>
<div class="MsoNormal">
<i><span style="line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal">
<i><span style="line-height: 115%;">Biosimilar
prices are 35% lower than those of reference biologics.</span></i><span style="line-height: 115%;"> The
authors of the analysis based their assumption on pricing differentials found
in Europe. So far, the pricing differential of 15% for the 2 launched
biosimilars would result in minimal savings, according to the Pew Charitable
Trusts’ sensitivity analysis. A 35% decrease may not be evident until
competition intensifies, with more than 1 biosimilar available for the reference
product.<o:p></o:p></span></div>
<div class="MsoNormal">
<i><span style="line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal">
<i><span style="line-height: 115%;">Under the
current payment policy, use of biosimilars is 50% of the total biologic
utilization.</span></i><span style="line-height: 115%;"> This assumption is also based on the uptake in
Europe, and will not likely be seen in the US without steep price discounts.<o:p></o:p></span></div>
<div class="MsoNormal">
<i><span style="line-height: 115%;"><br /></span></i></div>
<div class="MsoNormal">
<i><span style="line-height: 115%;">Biosimilar
prices and uptake are not affected by the number of biosimilars available. The
launch of multiple biosimilars for the same reference biologic does not create
any additional effect on prices or utilization. </span></i><span style="line-height: 115%;">This would
seem to violate a basic precept of competition in this area, but it could mean
that model savings are understated. We’ll have to wait and see how far prices
are driven down by additional competition.</span></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The concept of a value-based payment model, which would help
encourage use of the lower priced, effective product, is laudable, but savings
calculated based on economic modeling (here and for other estimates of
biosimilar adoption) have been overly optimistic. Perhaps the numbers pan out
over the long term, but today, they may not present a strong enough case to
influence CMS or legislative action. <o:p></o:p><br />
<br />
<i style="background-color: white; color: #666666; font-family: "trebuchet ms", trebuchet, verdana, sans-serif; font-size: 13.2px;">SM Health Communications provides writing, consulting, and market research services for the payer, pharmaceutical, and health care markets. For information on its payer access consulting services and its proprietary P&T Insight™, please visit <a href="http://www.smhealthcom.com/" style="color: #888888; text-decoration: none;">www.smhealthcom.com</a> or contact <st1:city w:st="on"><st1:place w:st="on">Stanton</st1:place></st1:city> R. Mehr, President, at <st1:personname w:st="on">stan.mehr@smhealthcom.com</st1:personname>.</i></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-14301135946916403512016-12-16T07:06:00.000-08:002016-12-16T07:06:42.124-08:00Are 2 Biosimilars to the Same Originator Product Biosimilar to Each Other? <div class="MsoNormal">
In Europe, <a href="http://www.gabionline.net/Biosimilars/General/Biosimilars-approved-in-Europe">several manufacturers are marketing approved biosimilars</a> to the same originator product. In fact, 7 manufacturers compete for the
biosimilar filgrastim market, 5 biosimilar versions of epoetin are sold, and 3
biosimilars of infliximab seek marketshare from Remicade<sup>®</sup>.
In the US, this situation is not a reality yet. It will be one day, however,
and it raises a couple of important questions.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
We know that the biosimilars are not exactly the same
structurally as the originator products, but how similar may they be to each
other? In other words, at some point, payers will prefer one biosimilar version
of filgrastim over another one, as some do currently with Zarxio<sup>®</sup>
versus Neupogen<sup>®</sup>. We can assume that with 3 filgrastim biosimilars
sold in the US, payers will seek to leverage 1 against the others and make it
their preferred or only available form of filgrastim available. However, is
another manufacturer’s version of filgrastim biosimilar to Zarxio? We can also
assume that the new manufacturer’s product has received US Food and Drug
Administration approval through testing for comparability only with the
originator product—not against Zarxio. How about compared with Teva’s product
tbo-filgrastim (a follow-on biologic, not a biosimilar according to the
regulatory and statutory rules)? <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
What does this mean for switching products, much less
interchangeability? Is one biosimilar interchangeable with another? Based on
what we know about the FDA, the answer is likely no, as the agency seems to be
having difficulty devising interchangeability guidelines for a biosimilar and
its originator product. <o:p></o:p></div>
<br />
<div class="MsoNormal">
Why is this important? Consider the patient with Crohn’s
disease in 2019 who changes health plans. The patient was receiving biosimilar
A, and the new plan covers only biosimilar B. Maybe he or she needs to enroll
in a new plan in 2020, and the reverse is true. Regardless of whether we like
it, that patient may be unintentionally providing real-world evidence of
interchangeability. </div>
<div class="MsoNormal">
<o:p></o:p><br />
<br />
<i style="background-color: white; color: #666666; font-family: "trebuchet ms", trebuchet, verdana, sans-serif; font-size: 13.2px;">SM Health Communications provides writing, consulting, and market research services for the long-term care and payer markets. Its proprietary P&T Insight™ virtual P&T Committee program is the leading mock P&T Committee product in the field. For more information, please visit <a href="http://www.smhealthcom.com/" style="color: #888888; text-decoration: none;">www.smhealthcom.com</a> or contact <st1:city w:st="on"><st1:place w:st="on">Stanton</st1:place></st1:city> R. Mehr, President, at <st1:personname w:st="on">stan.mehr@smhealthcom.com</st1:personname>.</i></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-13489136430158343092016-10-26T17:22:00.002-07:002016-10-26T17:22:56.181-07:00How Economic Value Became Part of the P&T Committee Considerations Today <div class="MsoNormal" style="background-color: white; color: #666666; font-family: "Trebuchet MS", Trebuchet, Verdana, sans-serif; font-size: 13.2px;">
<div class="MsoNormal">
<st1:city w:st="on"><st1:place w:st="on"><b><i>Stanton</i></b></st1:place></st1:city><b><i> R. Mehr, President, SM Health Communications LLC</i></b></div>
</div>
<div class="MsoNormal" style="background-color: white; color: #666666; font-family: "Trebuchet MS", Trebuchet, Verdana, sans-serif; font-size: 13.2px;">
<b><i><a href="mailto:stan.mehr@smhealthcom.com" style="color: #888888; text-decoration: none;">www.smhealthcom.com</a></i></b><br /><b><i><a href="mailto:stan.mehr@smhealthcom.com" style="color: #888888; text-decoration: none;">stan.mehr@smhealthcom.com</a></i></b></div>
<div class="MsoNormal" style="background-color: white; color: #666666; font-family: "Trebuchet MS", Trebuchet, Verdana, sans-serif; font-size: 13.2px;">
<b><br /></b></div>
<div class="MsoNormal">
Years ago, the undeclared rule of law was that a Pharmacy
and Therapeutics (P&T) Committee’s deliberations must be free of cost
concerns. This rule is increasingly being overturned. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The P&T Committee, as a formulary decision-making body,
was supposed to decide a new agent’s fate based only on the clinical evidence
for efficacy and safety. According to the standard protocol, once the P&T
Committee’s decided to add a product to formulary, it was then the pharmacy
contracting executives’ responsibility to simply get it for the best price
available. This created a handy shield to prevent public complaint that a
health plan or insurer was really making decisions based treatment cost. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The preeminence of 2 trends has caused payers to rethink
this firewall. First, over the course of 25 years, multitiered copayment
designs have become the standard. The very idea of a 3-tier plan, for instance,
is to prefer products that medical and pharmacy executives believe patients
should be incentivized to use, based on some facet of value. In practical terms,
if tier 1 is for generics only, what is the difference between tier 2
(preferred brands) and tier 3 (nonpreferred brands)? The clinical difference
between a preferred drug and, say, “me-too” agents on tier 3 is often
insignificant. Most often, it comes down to which offers the best net price.
Medicaid and exchange plans seem to be reverting to 2 tier plans (generic and
covered brands), but these, too, are based on perceived value.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The second trend is the movement towards value-based benefit
design (VBBD). At its simplified core, VBBD tries to determine whether certain
drugs have more value (in terms of proof of clinical effectiveness, safety, or
cost) compared with others. As a result, formulary decision makers are
increasingly seeking comparative-effectiveness information or head-to-head
study results to help determine the value of a new treatments. This information
is added to P&T Committee discussions (sometimes included, if available, in
drug information monographs). The result of which is a determination of whether
prior authorization or step edits may be warranted to access the drug and what
those criteria might be. P&T Committee members will have a hand in those
decisions as well. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
It only then makes sense to integrate the discussion of a
drug’s cost into that of its clinical merits at the P&T Committee level,
rather than to keep the greater value picture separate from formulary
decisions. <o:p></o:p></div>
<br />
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The double-digit growth of specialty pharmacy spending has
injected new urgency into the conversation about value for payers. The P&T
Committee is (still) the arbiter of value for the pharmacy benefit and for
specialty pharmaceuticals. That is why at least two-thirds of P&T
Committees are now fully invested in cost considerations. The old firewall has
been breached.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<i style="background-color: white; color: #666666; font-family: "Trebuchet MS", Trebuchet, Verdana, sans-serif; font-size: 13.2px;">SM Health Communications provides writing, consulting, and market research services for the long-term care and payer markets. Its proprietary P&T Insight™ virtual P&T Committee program is the leading mock P&T Committee product in the field. For more information, please visit <a href="http://www.smhealthcom.com/" style="color: #888888; text-decoration: none;">www.smhealthcom.com</a> or contact <st1:city w:st="on"><st1:place w:st="on">Stanton</st1:place></st1:city> R. Mehr, President, at <st1:personname w:st="on">stan.mehr@smhealthcom.com</st1:personname>.</i></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-56559486366693409662016-06-16T11:00:00.000-07:002016-06-16T11:02:04.104-07:00Medicare Advisory Commission Calls for Major Medicare Changes, More Risk for Plans<div class="MsoNormal">
Major changes may be in the works for Medicare Part D,
should the <a href="http://www.medpac.gov/documents/reports/executive-summary-(june-2016-report).pdf?sfvrsn=0">recommendations
of the nonpartisan Medicare Payment Advisory Commission</a> (MedPAC) be
accepted.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
A report from MedPAC released on June 15th, recommended
that, to sustain fiscal sustainability of the Part D Program, beneficiary,
insurer, and Medicare shares of the payment should be restructured. One of the main
objectives seems to be shielding the beneficiary from extremely high cost
sharing over time: Today, even after they exceed the catastrophic cost
threshold of the coverage gap or “donut hole,” they are liable for 5% of drug
costs. For some specialty medications, this could be well over $5,000 beyond
what they had already spent on the deductible ($360) and 25% cost sharing (up
to $3,310) and the coverage gap ($4,850 cumulatively). MedPAC recommends capping
a Medicare recipient’s cost sharing for Part D drugs at about $4,850. They estimate
that some seniors will be on the hook for more than $1,000 above what they presently
pay if they reach the coverage gap, because of restructured cost sharing within
the donut hole. Patients with low-income subsidies would pay less. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
According to the report, “Medicare’s overall subsidy of
basic Part D benefits would remain unchanged at 74.5%, but plan sponsors would
receive more of that subsidy through capitated payments rather than open-ended
reinsurance payments.” To compensate for the average reduced beneficiary contribution,
MedPAC proposes that insurers pick up the slack—currently, Medicare pays for 80% of catastrophic
coverage; MedPAC wants to gradually scale that back to only 20%, with insurers
covering the remainder. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
This means that insurers will be at greater risk, and
their costs will rise, with 3 principal implications: (1) much tougher
negotiations with pharmaceutical companies on high-priced medications, (2)
higher member premiums, and (3) tighter formulary restrictions (more drug
exclusions and greater utilization of utilization management tools). Of note,
MedPAC recommends that health plans have more flexibility in using standard
utilization management tools to control drug costs.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Furthermore, MedPAC offers greater incentives (i.e., lower
cost sharing) for recipients who use generic drugs. This may be applicable to
future Part D–covered biosimilars as well. <o:p></o:p></div>
<div class="MsoNormal">
Although the move is not aimed at saving short-term money, MedPAC
believes that its recommendations could save the program as much as $10 billion
over 5 years. They noted that spending for Medicare Part D jumped by 60% over
an 8-year period ending in 2014 ($73 billion). This is largely the result of
the rapid influx of specialty drugs (e.g., hepatitis C agents) and price
increases in generic and branded drugs in many categories.</div>
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<o:p></o:p></div>
<br />
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The Commission’s recommendations stop well short of the
calls from the Presidential candidates for Medicare to negotiate drug prices
directly with manufacturers. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
To better understand the implications of these possible changes to the Medicare payer market, contact us today at stan.mehr@smhealthcom.com. </div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com2tag:blogger.com,1999:blog-8169225161453879784.post-5969831037426030932016-04-13T13:49:00.002-07:002016-04-13T13:49:34.989-07:00Do We Need the Interchangeable Designation for Biosimilars?<div class="MsoNormal">
I think the question of whether a biosimilar is
“interchangeable” to a reference or innovator product can be answered with a
mixture of science and faith. That may sound like a classic contradiction, but
hear me out on this. The nature of biologic agents prohibits FDA from applying
the AB-type ratings to biosimilars that it uses to describe bioequivalent
generic drugs. However, from a practical standpoint, does it really matter?
Let’s look at this from the perspective of the FDA and that of the clinician.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
The <a href="http://www.fda.gov/Drugs/DevelopmentApprovalProcess/HowDrugsareDevelopedandApproved/ApprovalApplications/TherapeuticBiologicApplications/Biosimilars/ucm241719.htm">FDA
defines interchangeable products</a> as being:<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: x-small;">“biosimilar to an FDA-approved reference product, and can be
expected to produce the same clinical result as the reference product in any
given patient. An interchangeable product may be substituted for the reference
product without the intervention of the health care provider who prescribed the
reference product.<o:p></o:p></span></div>
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<span style="font-family: Arial, Helvetica, sans-serif; font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: x-small;">“In addition, for a biological product that is administered
more than once to an individual, the risk in terms of safety or efficacy of
alternating or switching between the biological product and the reference
product will not be greater than the risk of using the reference product
without alternating or switching. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: x-small;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: Arial, Helvetica, sans-serif; font-size: x-small;">“An application for an interchangeable biological product
also must include data or information to show that the proposed interchangeable
biological product is expected to produce the same clinical result as the
reference product in any given patient. In addition, for a product that will be
administered more than once to an individual (as many biological products are),
the application must include information that demonstrates that the risk in
terms of safety or diminished effectiveness of alternating or switching between
use of the proposed interchangeable product and the reference product is not
greater than the risk of using the reference product without alternating or
switching.”</span><o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
The need for scientific studies characterizing the
pharmacokinetic and pharmacodynamic profiles of the new agent and clinical
studies to determine the biosimilarity of the product to the reference product
is unquestioned. That said, what the FDA is basically saying in their
definition, is that the manufacturer must conduct additional “switching”
studies to prove that patient outcomes will be roughly the same after the
patient is taken off a reference product and given the biosimilar and vice
versa, and this must apply to any patient, not just a patient with an isolated
indication. That's the science. <o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Here's the faith: If the FDA grants extrapolation to the
biosimilar for the full set of indications, as it did for Celltrion’s
Inflectra® version of infliximab, then it believes that patient outcomes will
be roughly the same for any of these patients (despite the absence of
large-scale clinical studies in some extrapolated indications). Interchangeability
is then further defined by whether the switching studies have been done in all
possible indications. Celltrion’s <a href="http://www.businesswire.com/news/home/20160318005262/en/Celltrion-Healthcare-Switching-Remsima%C2%AE%E2%96%BC-infliximab-originator-negative">switching
studies</a> were limited to rheumatoid arthritis and inflammatory bowel disease
(not psoriasis, psoriatic arthritis).<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
FDA takes it one step further, to define an interchangeable
product as one not needing permission by a clinician in order for it to be
substituted for the reference product by the pharmacy. That last bit is still a
work in progress, as states grapple with passing legislation that allow
pharmacists (community or specialty pharmacy–based) the authority to substitute
biosimilars without needing a clinician’s permission.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
From the physician’s standpoint, must prescribers have faith
that Inflectra is interchangeable at the point of prescribing, based on FDA's
ruling? It certainly can be prescribed for any new patient for whom Remicade®
can be prescribed, assuming the health plan or insurer covers the medication in
the first place. If a patient is already receiving Remicade therapy, can it be
switched for the biosimilar if the clinician and patient care to do that (i.e.,
for cost reasons)? There is no stipulation that it cannot. If the switch is
made, does that mean that this particular physician believes that the drug is
interchangeable? This is merely semantics.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
For all practical purposes, the answer is yes. Celltrion’s
product has been used in Europe and elsewhere for many years in doctor’s
offices for all of these indications, without untowards differences in
outcomes.<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
Whereas the approving a drug to be biosimilar to another is
extremely complicated, but I don’t think the interchangeability question is.
The FDA feels the need to justify a level of certainty reflected by an AB-type
rating given to conventional generic drugs, but this cannot be achieved in
biologics. It then seems like a matter of faith: If FDA is willing to
extrapolate the indications, they believe the therapeutic outcomes will be
equivalent, even for diseases for which the biosimilar was not directly tested.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
As we continue to await FDA’s long-delayed guidance on how
it will designate the interchangeability of biosimilars, there seems to be
little practical difference between expected equivalent outcomes in untested
indications and the anticipated benefits of interchangeability.<o:p></o:p></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-85382410311543502852016-01-29T11:33:00.001-08:002016-01-29T11:49:00.902-08:00Market Access, Sales Training, and the Mock P&T<div class="Draft" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 18.48px; margin-bottom: 0.0001pt; text-indent: 0pt;">
<span style="font-family: "times new roman" , serif;">Stanton R. Mehr, President, SM Health Communications LLC<o:p></o:p></span></div>
<div class="Draft" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 18.48px; margin-bottom: 0.0001pt; text-indent: 0pt;">
<a href="mailto:stan.mehr@smhealthcom.com" style="color: #888888; text-decoration: none;"><span style="font-family: "times new roman" , serif;">stan.mehr@smhealthcom.com</span></a><span style="font-family: "times new roman" , serif;"><o:p></o:p></span></div>
<div class="MsoNormal">
<a href="http://www.smhealthcom.com/" style="background-color: white; color: #888888; font-family: 'Times New Roman', serif; font-size: 13.2px; line-height: 18.48px; text-decoration: none; text-indent: 0pt;">www.smhealthcom.com</a></div>
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<span style="font-size: 12pt; line-height: 107%;"><span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-size: 12pt; line-height: 107%;"><span style="font-family: "trebuchet ms" , sans-serif;">Over the past few years, I’ve espoused the need for and virtues
of the mock Pharmacy & Therapeutics (P&T) Committee. One of our clients
pointed out that I’ve neglected an extremely important benefit of conducting a
mock P&T Committee. It is one that yields dividends in an area that cannot
be overemphasized. <o:p></o:p></span></span></div>
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<span style="font-size: 12pt; line-height: 107%;"><span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></span></div>
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<span style="font-size: 12pt; line-height: 107%;"><span style="font-family: "trebuchet ms" , sans-serif;">How many of your account managers, and even National Accounts executives,
have sat in on a real P&T Committee? I’ll bet hardly any, as pharmaceutical
companies are pretty much <i>persona non
grata </i>when it comes to an actual, live formulary decision making for health
plans and insurers. Some internal and third-party sales education programs try
to give trainees exposure to the concept, but it is nearly impossible to get
first-hand views of a P&T Committee in action.<o:p></o:p></span></span></div>
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<span style="font-size: 12pt; line-height: 107%;"><span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></span></div>
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<span style="font-size: 12pt; line-height: 107%;"><span style="font-family: "trebuchet ms" , sans-serif;">Beyond obtaining a coverage decision on your product or that of
your competitor, a rock solid mock P&T Committee will also provide a video
record (in the form of a live feed or postmeeting DVD) of the entire
proceedings. Most often, the people viewing the Committee meeting are product
directors, market access managers, and brand executives. That’s great, but when
the Committee members discuss a product’s shortcomings and benefits, wouldn’t
that be exactly what the sales team needs to hear? What would be the value of
learning the key drawbacks of a competitors product from the experienced
members of a P&T Committee? What would be the value of packaging those
comments, with the account team's strategy for addressing the same issues that will
be brought up in the field?<o:p></o:p></span></span></div>
<div class="MsoNormal">
<span style="font-size: 12pt; line-height: 107%;"><span style="font-family: "trebuchet ms" , sans-serif;"><br /></span></span></div>
<div class="MsoNormal">
<span style="font-size: 12pt; line-height: 107%;"><span style="font-family: "trebuchet ms" , sans-serif;">When we talk about our P&T Insight™ program to potential
clients, realizing this opportunity often gets their attention. Although we
don’t consider it the key deliverable of the mock P&T Committee, it is a
very attractive component, which complements sales training efforts, including
launch activities.</span></span></div>
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<span style="font-family: "trebuchet ms" , sans-serif; font-size: 12pt; line-height: 107%;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "trebuchet ms" , sans-serif; font-size: 12pt; line-height: 107%;">For more information on this important benefit of our program
and on P&T Insight™ in general, please contact me at </span><a href="mailto:stan.mehr@smhealthcom.com" style="font-family: 'Trebuchet MS', sans-serif;"><span style="font-size: 12pt; line-height: 107%;">stan.mehr@smhealthcom.com</span></a><span style="font-family: "trebuchet ms" , sans-serif; font-size: 12pt; line-height: 107%;">. </span></div>
<div class="MsoNormal">
<i style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 14.8px;"><span style="font-family: "trebuchet ms" , sans-serif; font-size: 8pt;"><br /></span></i></div>
<div class="MsoNormal">
<span style="font-size: 12pt; line-height: 107%;"><span style="font-family: "courier new";"><o:p></o:p></span></span><i style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 14.8px;"><span style="font-family: "trebuchet ms" , sans-serif; font-size: 8pt;">SM Health Communications provides writing, consulting, and innovative market research services for the payer markets. Its proprietary P&T Insight™ virtual P&T Committee program is the leading mock P&T Committee product in the field. We’ve participated in many market research projects involving biosimilar development and launch, from the point of view of the biosimilar and the innovator drug manufacturer. For more information, please visit </span></i><a href="http://www.smhealthcom.com/" style="background-color: white; color: #888888; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 14.8px; text-decoration: none;"><i><span style="font-family: "trebuchet ms" , sans-serif; font-size: 8pt;">www.smhealthcom.com</span></i></a><i style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 14.8px;"><span style="font-family: "trebuchet ms" , sans-serif; font-size: 8pt;"> or contact Stanton R. Mehr, President, at stan.mehr@smhealthcom.com.</span></i></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-80961287821135696312015-12-17T16:21:00.001-08:002015-12-17T16:21:59.194-08:00Biosimilars, Coverage Decision Making, and Getting the Answers You Need<div class="Draft" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 18.48px; margin-bottom: 0.0001pt; text-indent: 0pt;">
<span style="font-family: 'Times New Roman', serif;">Stanton R. Mehr, President, SM Health Communications LLC<o:p></o:p></span></div>
<div class="Draft" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 18.48px; margin-bottom: 0.0001pt; text-indent: 0pt;">
<a href="mailto:stan.mehr@smhealthcom.com" style="color: #888888; text-decoration: none;"><span style="font-family: 'Times New Roman', serif;">stan.mehr@smhealthcom.com</span></a><span style="font-family: 'Times New Roman', serif;"><o:p></o:p></span></div>
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<span style="color: #888888; font-family: 'Times New Roman', serif;"><a href="http://www.smhealthcom.com/" style="color: #888888; text-decoration: none;">www.smhealthcom.com</a></span></div>
<div class="Draft" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 18.48px; margin-bottom: 0.0001pt; text-indent: 0pt;">
<br /></div>
<div class="MsoNormal">
As I’ve written in past columns, the fact of the matter is,
a biosimilar won’t receive <i>de facto</i> preferred
positioning on a health plan or insurer’s formulary. Over the past few years, we’ve
come to realize that so many issues are in play, and many opposing factors that
can relegate a new biosimilar agent to nonpreferred status or to put it at the
head of the line in tier 2. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
“It all depends…” is an answer that will have the most
experienced pharmaceutical executives rolling their eyes. But in biosimilar
product launches, marketing, and access, there are simply too many variables in
a new market in which little real payer experience exists. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
For example, let’s say Product X is a new biosimilar TNF
inhibitor, and let’s assume for the sake of argument all the patent,
exclusivity, and approval challenges have been worked out. The FDA did not
designate the agent to be interchangeable to the reference product.</div>
<div class="MsoNormal">
<span style="font-family: Symbol; text-indent: -18pt;"><br /></span></div>
<div class="MsoNormal">
</div>
<ul>
<li><span style="text-indent: -18pt;">Did FDA grant the biosimilar the full slate of
indications (i.e., extrapolation)?</span></li>
<li><span style="text-indent: -18pt;">What was the reference drug’s manufacturer reaction
to the new product entering the market—did they cut net prices for their own product?
Is the price of Product X now 20% lower than the new price of the reference product
or maybe even par with it?</span></li>
<li><span style="text-indent: -18pt;">Are prescribers comfortable starting their newly
diagnosed patients on Product X, or will they still prefer the reference
product?</span></li>
<li><span style="text-indent: -18pt;">If the reference product fails to yield a
satisfactory outcome, should Product X be tried next?</span></li>
<li><span style="text-indent: -18pt;">What about Medicare Part D or Part B coding and reimbursement?</span></li>
<li><span style="font-family: Symbol; text-indent: -18pt;"><span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal;"> </span></span><span style="text-indent: -18pt;">Will the payer institute a separate biosimilar
tier and will Product X be on it?</span></li>
<li><span style="font-family: Symbol; text-indent: -18pt;"><span style="font-family: 'Times New Roman'; font-size: 7pt; font-stretch: normal;"> </span></span><span style="text-indent: -18pt;">Will patient assistance programs make it easy to
afford and access Product X?</span></li>
</ul>
<br />
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The answers to these imperative questions will affect launch
expectations as well as opportunities for gaining acceptance and marketshare.
It is plain that blanket answers will be of limited use, as each health plan
and insurer will set different priorities and react in different ways to a new
biosimilar situation.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Market research, and mock P&T programs in particular,
such as P&T Insight™, can go a long way towards identifying the biosimilar opportunities
and challenges that exist in several types of commercial and public plans. Contact
us today to discuss how we can help untangle the answers to all of these questions.
This will help inform your U.S. market access, pricing, and marketing strategies
to ensure that outcomes meet sales expectations.</div>
<div class="MsoNormal">
<o:p></o:p></div>
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<br /></div>
<div class="MsoNormal">
<i style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 14.8px;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">SM Health Communications provides writing, consulting, and innovative market research services for the payer markets. Its proprietary P&T Insight™ virtual P&T Committee program is the leading mock P&T Committee product in the field. We’ve participated in many market research projects involving biosimilar development and launch, from the point of view of the biosimilar and the innovator drug manufacturer. For more information, please visit </span></i><a href="http://www.smhealthcom.com/" style="background-color: white; color: #888888; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 14.8px; text-decoration: none;"><i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">www.smhealthcom.com</span></i></a><i style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 14.8px;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;"> or contact Stanton R. Mehr, President, at stan.mehr@smhealthcom.com.</span></i></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-35316200250984529062015-10-02T13:17:00.000-07:002015-10-02T13:17:16.839-07:00Biosimilar Launches: Ready, Set, Not-so-Fast!<div class="Draft" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 18.48px; margin-bottom: 0.0001pt; text-indent: 0pt;">
<span style="font-family: 'Times New Roman', serif;">Stanton R. Mehr, President, SM Health Communications LLC<o:p></o:p></span></div>
<div class="Draft" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 18.48px; margin-bottom: 0.0001pt; text-indent: 0pt;">
<a href="mailto:stan.mehr@smhealthcom.com" style="color: #888888; text-decoration: none;"><span style="font-family: 'Times New Roman', serif;">stan.mehr@smhealthcom.com</span></a><span style="font-family: 'Times New Roman', serif;"><o:p></o:p></span></div>
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<span style="color: #888888; font-family: 'Times New Roman', serif; text-decoration: none;"><a href="http://www.smhealthcom.com/" style="color: #888888; text-decoration: none;">www.smhealthcom.com</a></span></div>
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<br /></div>
<div class="MsoNormal">
<i><span style="font-family: "Times New Roman",serif;">I’ve written as recently as this
past January on the impending FDA decision to approve Sandoz’s version of
filgrastim (brand name, Zarzio). By March, FDA had approved the agent, but
Sandoz was unable to launch until September 3 because of legal action by Amgen
that claimed Sandoz did not adhere to the specific, somewhat tortuous pathway that
a biosimilar manufacturer has to follow to demonstrate that that their agent has
not violated the patent of the innovator’s manufacturer. This pathway, promulgated
by legislation, includes the ability for the innovator’s manufacturer to
respond in kind to steps taken by the biosimilar company, all of which must be
done within a certain time table. Here’s a piece that I wrote for the Health
Payer Council (www.healthpayercouncil.com) a few months ago that more fully explained
this situation, which is frustrating payers’ desire to start saving some money
on specialty drugs. <o:p></o:p></span></i></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">We are on
the cusp of the long-awaited new era in biologic treatment, the introduction of
biosimilars to the armamentarium. They are estimated to save the health care
system tens of billions of dollars over the course of a decade, and should
start saving dollars to some extent (through better contracting with the
innovator product, discounted pricing from the biosimilar manufacturer, or
both) the moment the initial launch takes place. However, a scenario familiar
to all payers may yet unfold that can significantly slow the pace of biosimilar
introductions. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">Challenges
to product patents have a long and infamous history in the US pharmaceutical
industry. They have been the cause of delayed generic introductions and
accusations of manufacturer collusion, and the source of relentless bad press
for the pharmaceutical industry. Yet, they work. They delay the loss of
millions of dollars in revenue for brand manufacturers, and can postpone by
years the launch of more cost-effective agents. Therefore, patent challenges to
biosimilars were inevitable, and there are other legal challenges as well. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">The
Biologics Price Competition and Innovation Act of 2009, a subsection of the
Affordable Care Act, not only directed FDA to set up the 351(k) pathway for
biosimilars but also set up a framework for working through biosimilar patent
disputes. Although similar to the statutory regulations contained in the
Hatch–Waxman Act to address conflicts over patents for branded products by
generic drug manufacturers, there are complex differences. According to one
analysis of the Act.<sup>1</sup> “The filing of a biosimilar application under
the Biologics Act constitutes an act of ‘infringement’ sufficient to allow the
maker of the innovative product to bring an action against the follow-on
applicant in federal district court, but a series of patent exchanges must
occur between the parties before any such suit is initiated.” <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">The first
step in this complicated process is that the biosimilar manufacturer supply a
copy of its application to the innovator company within 20 days of application
acceptance. Then within 60 days, the innovator must send the biosimilar
manufacturer a list of patents it believes would be infringed by the new agent.
At this point, the originator’s manufacturer is compelled to list which, if
any, of these patents it may be willing to license to the biosimilar’s
manufacturer. Within another 60 days, the prospective biosimilar manufacturer
is directed to detail for each patent on the list their factual and legal support
for why it believes that the patent is not valid, unenforceable, or will not be
infringed or a statement that the applicant does not intend to begin commercial
marketing of the biological product before the official patent expiration date.<sup>
</sup>Within yet another 60 days, the originator’s manufacturer must refute
these arguments.<sup>1</sup> Each of these steps in general represent
opportunities for noncompliance and ongoing litigation.<sup>2,3</sup> <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">Sandoz,
which gained the FDA nod for its biosimilar version of filgrastim (Zarzio) on
March 6, has been battling Amgen over its US patent.<sup>4</sup> Amgen’s
product patent for filgrastim (Neupogen) expired in 2013. However, biosimilar
manufacturing is more complex and more variable than that of conventional
generic products. US patent law (unlike European patent law) stipulates that
Sandoz must reveal its manufacturing process to Amgen so that the latter can better
determine whether its patents have been violated. Sandoz, however, has not
complied. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">In May, a
U.S. Court of Appeals overturned a March 19 ruling by Judge Richard Seeborg,
from the San Francisco federal court, disallowing the launch of Zarxio until an
appeal by Amgen is heard. Judge Seeborg had ruled that the “patent dance”
outlined above was not mandatory but optional. Amgen appealed, arguing further
that Zarxio would cause “irreparable price erosion” to Neupogen. However, this
win can cost Amgen plenty down the line. In the event that Amgen ultimately loses
its appeal, it must post a bond to reimburse Sandoz for each day of lost sales
revenue from Zarxio.<sup>5</sup> As
lawsuits and motions are fired back and forth across the biosimilar
battlefield, this sets up precedents for other legal actions involving
biosimilars, explains legal experts.<sup>3,5</sup> (The appeals court later ruled
on July 22 that provision of the biosimilar application to the originator
company within 20 days of filing was indeed optional, clearing the way for a
launch after September 2.)<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">In an
unrelated case, Sandoz filed suit to have Amgen’s patent for etanercept
invalidated, even before Sandoz filed a biosimilar application. In this
instance, the judge threw out the case because Sandoz had not yet filed the
application and thus had no standing under the Act. (Sandoz subsequently filed
for FDA review on October 2, and it is unclear whether the company will refile its
suit).<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">Celltrion
filed a 351(k) biosimilar application for its own form of infliximab (Remsima)
in 2014, but the patent for Johnson & Johnson’s pioneer product Remicade
was not set to expire until 2018 in the US (it expired in 2014 in Europe, where
Remsima is available currently). In February, the US Patent and Trademark
Office rejected the 2018 patent expiration, however, and Celltrion has said
that if FDA approval is received, it will launch this year.<sup>6,7</sup> A
statement from J&J claimed that it will "pursue all available appeals"
to protect its patent through the 2018 expiration date.<sup>7</sup> <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">Another
aspect of legal challenges to biosimilars will involve their use in combination
therapies. As the patent expiration approaches for some biologics, their
manufacturers have sought to expand their market by pairing their product with
another agent or conjugate. Can the approved biosimilar component be
substituted and paired with the combination agent, and will the outcomes be the
same? </span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;"><br /></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">This issue may be tested legally for biosimilars, particularly for
oncology agents like trastuzumab.<sup>8</sup> <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">This is a very
slow learning process for payers who are hoping to see biosimilar savings or at
least innovator company discounts, but finding it difficult to predict when this
vision may be realized. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;"><br /></span></div>
<div class="MsoNormal">
<i style="color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 14.8px;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">SM Health Communications provides writing, consulting, and innovative market research services for the payer markets. Its proprietary P&T Insight™ virtual P&T Committee program is the leading mock P&T Committee product in the field. We’ve participated in many market research projects involving biosimilar development and launch, from the point of view of the biosimilar and the innovator drug manufacturer. For more information, please visit </span></i><a href="http://www.smhealthcom.com/" style="color: #888888; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 14.8px; text-decoration: none;"><i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">www.smhealthcom.com</span></i></a><i style="color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 14.8px;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;"> or contact Stanton R. Mehr, President, at stan.mehr@smhealthcom.com.</span></i></div>
<div class="MsoNormal">
<i style="color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.2px; line-height: 14.8px;"><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;"><br /></span></i></div>
<div class="MsoNormal">
<b><span style="font-family: "Times New Roman",serif;">References<o:p></o:p></span></b></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">1. The
Biologics Price Competition and Innovation Act of 2009. (<a href="http://fdaregulatory.net/index.php/fda-regulatory-articles/buiologics">http://fdaregulatory.net/index.php/fda-regulatory-articles/buiologics</a>).
FDA Regulatory.Net 2013. Accessed June 19, 2015.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">2. Stotland
Weiswasser E, Gauger M. Biosimilar patent disputes: an update of the last 6
months. Law 360 March 31, 2015 (</span><a href="http://www.law360.com/articles/637389/print?section=appellate"><span style="font-family: "Times New Roman",serif;">http://www.law360.com/articles/637389/print?section=appellate</span></a><span style="font-family: "Times New Roman",serif;">). Accessed June 15, 2015. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">3. Rosenthal
M. Biosimilars arena still littered with litigation. Specialty Pharmacy
Continuum June 4, 2015. (<a href="http://www.specialtypharmacycontinuum.com/ViewArticle.aspx?d=Web%2BExclusives&d_id=530&i=June%202015&i_id=1199&a_id=32622">http://www.specialtypharmacycontinuum.com/ViewArticle.aspx?d=Web%2BExclusives&d_id=530&i=June%202015&i_id=1199&a_id=32622</a>).
Accessed June 20, 2015.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">4. Ledford
H. First biosimilar drug set to enter US market. Nature January 13, 2015 (</span><a href="http://www.nature.com/news/first-biosimilar-drug-set-to-enter-us-market-1.16709"><span style="font-family: "Times New Roman",serif;">http://www.nature.com/news/first-biosimilar-drug-set-to-enter-us-market-1.16709</span></a><span style="font-family: "Times New Roman",serif;">). Accessed June 16, 2015. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">5. McDermid
R. Court blocks Novartis AG (NVS)'s recently approved "biosimilar"
form of Amgen (AMGN)'s Neupogen. Biospace.com May 8, 2015
(http://www.biospace.com/news_story.aspx?StoryID=376077). Accessed June 19,
2015.<o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">6. Staton
T. Celltrion revs up Remicade biosim for U.S. rollout this year. Fierce Pharma
April 1, 2015 (</span><a href="http://www.fiercepharma.com/story/celltrion-revs-remicade-biosim-us-rollout-year/2015-04-01"><span style="font-family: "Times New Roman",serif;">http://www.fiercepharma.com/story/celltrion-revs-remicade-biosim-us-rollout-year/2015-04-01</span></a><span style="font-family: "Times New Roman",serif;">). Accessed June 16, 2015. <o:p></o:p></span></div>
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">7. Johnson
& Johnson announces Patent and Trademark Office action related to Remicade
(press release). PR Newswire February 18, 2015 (http://www.prnewswire.com/news-releases/johnson--johnson-announces-patent-and-trademark-office-action-related-to-remicade-300035468.htm).
Accessed June 15, 2015.<o:p></o:p></span></div>
<br />
<div class="MsoNormal">
<span style="font-family: "Times New Roman",serif;">8. Nelson
KM, Gallagher GC. Biosimilars lining up to compete with Herceptin: opportunity
knocks. Expert Opin Ther Patents. 2014;24(11):1149-1153.<o:p></o:p></span></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-88132064372666666492015-07-29T06:09:00.002-07:002015-07-29T06:19:06.490-07:00Pharmaceutical Pricing: Real Value vs. Revenue Forecasting<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0pt;">
<span style="font-family: "Times New Roman",serif;">Stanton R.
Mehr, President, SM Health Communications LLC<o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0pt;">
<a href="mailto:stan.mehr@smhealthcom.com"><span style="font-family: "Times New Roman",serif;">stan.mehr@smhealthcom.com</span></a><span style="font-family: "Times New Roman",serif;"><o:p></o:p></span></div>
<div class="MsoNormal">
</div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0pt;">
<span style="font-family: "Times New Roman",serif;"><a href="http://www.smhealthcom.com/">www.smhealthcom.com</a></span><span style="font-family: "Times New Roman",serif;"><o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0pt;">
<br /></div>
<div class="MsoNormal">
The pharmaceutical industry sometimes forgets how payers calculate the value of their products. Payers do not view value solely through the lenses of clinical efficacy, safety,
and utility. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In the prelaunch phase, before drug pricing is set, payers
are often given a wide range of figures, either by company reps or in market
research studies, as an FYI, instead of asking the payers what approximate
price would make financial sense based on the product’s apparent value. It seems an obvious question, but it does happen, and too often. This
leaves payers (and most other stakeholders) with the impression that the price
is an actuarial business decision: let’s pick a price point that maximizes revenue.
This doesn’t mean the price is indefensible, but it does imply there is no
transparency or clinically based logic to the pricing. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
This was clearly the impression Gilead left with the launch
of Sovaldi, generating tremendous animosity in the face of drug launch that
should have been triumphant. This public relations debacle was a nightmare on several
levels: the ink was not only aimed at the public and providers, but the payers
as well. Everyone, including corporate employers, felt blindsided by the
initial $84,000 price tag of treatment. Few doctors, health plans, or hepatitis
C patients would give Gilead the opportunity to make its case that this represented
real value versus the price of a liver transplant. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
As it turned out, Gilead’s concept of real value was
reconsidered under threats from major PBMs to exclude coverage, in favor of
AbbVie’s competitor product. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Also a little more than a year ago, doctors from Memorial
Sloan Kettering Cancer Center in New York decried the high cost of oncology
drugs, and called on the industry for price transparency. The same question is being raised over many oncology drugs, including the $150,000 cost of Revlimid, which produce much more incremental benefits.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
This week, another
article appeared in the <i>New York Times</i>
addressing the high price of other oncology medications. Also this week, the
first of a new class of hypercholesterolemia drugs, the PCSK9 inhibitors, will
be approved by the Food and Drug Administration, for use in patient populations
that could theoretically bust the pharmaceutical bank. It’s announced pricing
was above the estimates payers had been anticipating. I would not be surprised if
we heard a renewed, vigorous call for Medicare to be given the power to negotiate
drug prices. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
For the pharmaceutical company like Gilead, if the price of
a liver transplant is $300,000, isn’t a Sovaldi price tag of $84,000 a bargain
in comparison? Well, no, said the payers, in unison. Interestingly, Gilead did
achieve one goal though: Even with heavy discounting demanded by payers,
Sovaldi is challenging for the number 1 spot in terms of pharmaceutical sales
revenue.<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Too many specialty drugs today and in the pipeline tomorrow
carry price tags that do not align with their claimed value. Biopharmaceutical
companies should expend considerably more time and effort incorporating payers’
assumptions and opinions on the value of new medications before setting price,
or at least really gauge their reaction to proposed pricing well before launch.
This will result in at least some degree of price acceptance at launch or at
least the impression that the company cares about the payer perspective. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal">
In a value-based health system, this will matter a great
deal. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Questions: </div>
<div class="MsoNormal">
(1) Does your prelaunch market research allow for payer consideration of potential price points? </div>
<div class="MsoNormal">
(2) Is the goal of the market research to validate the company's concept of drug value or to gather data on what coverage decision makers think?</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #666666; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">SM Health Communications provides writing, consulting, and
innovative market research services for the payer markets. Its proprietary
P&T Insight™ virtual P&T Committee program is the leading mock P&T
Committee product in the field. We’ve participated in many market research
projects involving biosimilar development and launch, from the point of view of
the biosimilar and the innovator drug manufacturer. For more information,
please visit </span></i><a href="http://www.smhealthcom.com/"><i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #888888; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">www.smhealthcom.com</span></i></a><i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #666666; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;"> or
contact Stanton R. Mehr, President, at stan.mehr@smhealthcom.com.</span></i><span style="color: #666666; font-family: "Trebuchet MS",sans-serif; font-size: 8.0pt;"><o:p></o:p></span></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-31206617750899366542015-05-25T07:54:00.003-07:002015-05-25T07:54:35.290-07:00Which Types of Questions Cannot be Answered by Payer Market Research?<div class="Draft" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px; text-indent: 0pt;">
<span style="font-family: 'Times New Roman', serif;">Stanton R. Mehr, President, SM Health Communications LLC<o:p></o:p></span></div>
<div class="Draft" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px; text-indent: 0pt;">
<a href="mailto:stan.mehr@smhealthcom.com" style="color: #888888; text-decoration: none;"><span style="font-family: 'Times New Roman', serif;">stan.mehr@smhealthcom.com</span></a><span style="font-family: 'Times New Roman', serif;"><o:p></o:p></span></div>
<div class="Draft" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13.1999998092651px; line-height: 18.4799995422363px; text-indent: 0pt;">
<a href="http://www.smhealthcom.com/" style="color: #888888; text-decoration: none;"><span style="font-family: 'Times New Roman', serif;">www.smhealthcom.com</span></a></div>
<div class="MsoNormal">
<b><br /></b></div>
<div class="MsoNormal">
This question frequently comes up in discussions of projects
that are already underway. In the process of creating the survey tool, research
sponsors want the most direct, unambiguous response they can get to their critical
questions. </div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In the vast majority of instances, it is possible to meet this need
based not only on how the question is asked but on which format is chosen. For
example, in-depth telephone interviews have the ability to both clarify and
confuse: having the ability to “drill down” into an answer helps to clarify,
but the interviewee may raise personal conflicting perspectives in a long and
winding response. Multiple choice survey questions can also restrict variance
in response, as long as the choices are worded well and account for all
possible responses.</div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
There are, however, some research questions that really
cannot be answered by payers. We cannot expect a medical director to recall individual
patients who have a particular condition who are being treated in a certain way,
unless they happened to review an identical case just the other day. Asking
them to provide information that may violate HIPAA would of course be
prohibited. Questions regarding strategic directions of a plan or payer may be
proprietary or as is often the case, needs to be targeted to a C-suite level
survey sample.</div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In many cases, payer responses to a particular question will
vary considerably, based on plan type, geographic location, and often by whether
they serve a commercial (or even individual, exchange, or small/large groups),
Medicare, or Medicaid populations. For these projects, it is often possible to
lay out unambiguous responses for each payer segment, if the research sample is
sufficiently large. <o:p></o:p></div>
<br />
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
I’ve found that nearly all market research questions are
answerable. Removing ambiguity in those responses (involving estimating
probabilities and cautious interpretation of results) is a subject for future
discussion. This can be best answered through the use of one of several format
choices: in-depth telephone surveys, Web-based surveys, the use of on-line
communities, or employing scenario-based research, like mock P&T
Committees.<o:p></o:p></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-73317727018681962652015-03-24T12:26:00.001-07:002015-03-24T12:38:32.772-07:00What Will Be the Single Greatest Change in Paying for Biopharmaceuticals Over the Next 5 Years?<div class="MsoNormal">
<b>By Stanton R. Mehr</b></div>
<div class="MsoNormal">
<b>President, SM Health Communications</b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Within the next 5 years,
pharmaceutical companies will start to reach that long-predicted tipping point,
when specialty pharmaceuticals have become too expensive for the health system
to afford and payers will have begun to aggressively push back, curtailing
access to products that do not provide value in line with the price being
charged. <o:p></o:p></div>
<div class="MsoNormal" style="text-indent: 36.0pt;">
This year,
specialty pharmaceuticals are expected to account for more than one-quarter of
all US pharmaceutical sales.<sup> </sup>By the year 2020, this figure may reach
50%. Manufacturers cite the relatively small patient populations that many of
these new biologics will treat, the difficulty in manufacturing, and the risk
in bringing them to market as factors behind high retail pricing. At pricing
levels that we are seeing today with the new hepatitis C agents, health
plans and other payers are more willing to aggressively exclude these from
coverage if alternatives exist, even if the manufacturer offers significant
discounts. In addition, we are seeing price increases in conventional generic medications
because of fewer manufacturers producing the lower-cost agents, as well as a curiosity
by drug makers to see how much they can jack up prices before payers begin to
push back (consider the price of doxycycline today). <o:p></o:p></div>
<div class="MsoNormal" style="text-indent: 36.0pt;">
By 2020,
what will the market bear, and how will it pay? Change may be largely driven by
the high out-of-pocket requirements from members of non-Medicaid plans, as
payers shift as much cost as they can, until a tipping point is reached. <o:p></o:p></div>
<div class="MsoNormal" style="text-indent: 36.0pt;">
The
implication of this scenario is that payer pricing and contracting will have to
change considerably—and a risk-based or outcomes-based arrangement may finally
have its day in the sun. This raises the questions of “how much risk” and “what
type of outcomes?” <o:p></o:p></div>
<div class="MsoNormal" style="text-indent: 36.0pt;">
Risk-based
contracting for medications has been tried, on a very small scale. It was
attempted last decade in the osteoporosis arena, but had limited success. There
are a few reasons for its lack of expansion. It has long been an undercurrent in
managed care that health plans did not want to engage in risk-based contracts
for 2 main reasons: (1) the administrative work and administrative systems
needed to monitor critical performance metrics cited in these contracts and (2)
the loss of today’s rebates through such an arrangement. Pharmaceutical
manufacturers avoided risk-based contracts because (1) well, they are risky and
(2) they have concerns about how performance will be measured. One other word
about the risk for drug makers: Patient outcomes are often not solely the
result of medications and medication-taking behaviors. It is difficult to control
for all factors that would ensure a high level of satisfaction that a negative
drug outcome was solely related to the performance of the medication (e.g.,
lowering cholesterol levels optimally may require rigorous medication use in
addition to improved diet and exercise). <o:p></o:p></div>
<div class="MsoNormal" style="text-indent: 36.0pt;">
The
search for incremental value at the upper end of the pricing range will
inevitably reach a point where risk-based contracts are seriously considered
and implemented. This may be abetted by companion diagnostic testing to lessen
the risk of therapeutic failure, but in any case, payers will have the right to
ask for far better proof of value.<o:p></o:p></div>
<div class="MsoNormal" style="text-indent: 36.0pt;">
This
proof may be in population-based measures (e.g., average length of stay reduced
by 2.5 days for groups of patients versus an active comparator) or in clinical
outcomes (e.g., greater differences in complete response achieved). <o:p></o:p></div>
<br />
<div class="MsoNormal" style="text-indent: 36.0pt;">
Progressive
biopharmaceutical manufacturers will seek to measure these types of outcomes
earlier in the investigational trial program through comparative-effectiveness
research to ensure that they can quantify the risk for themselves. Only then
will they persuade that the high price they place on new products will truly
bring value to the health system. <o:p></o:p></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-7128721110680032362015-01-20T07:02:00.001-08:002015-01-20T07:02:17.854-08:00A Postmarketing Surveillance Effort for New Biosimilar Agents<div class="Draft" style="text-indent: 0pt;">
<span style="font-family: "Times New Roman",serif;">Stanton R.
Mehr, President, SM Health Communications LLC<o:p></o:p></span></div>
<div class="Draft" style="text-indent: 0pt;">
<a href="mailto:stan.mehr@smhealthcom.com"><span style="font-family: "Times New Roman",serif;">stan.mehr@smhealthcom.com</span></a><span style="font-family: "Times New Roman",serif;"><o:p></o:p></span></div>
<div class="Draft" style="text-indent: 0pt;">
<a href="http://www.smhealthcom.com/"><span style="font-family: "Times New Roman",serif;">www.smhealthcom.com</span></a><span style="font-family: "Times New Roman",serif;"><o:p></o:p></span></div>
<div class="Draft">
<br /></div>
<div class="MsoNormal">
Consider the following hypothetical scenario: A new
infliximab biosimilar is approved for use in patients with rheumatoid arthritis
and Crohn’s disease. Nine months after its introduction, an unexpected safety
problem is revealed in 8% of patients—severe vestibular dysfunction, resulting
in disabling imbalance and dizziness. How would this adverse effect be linked with
the new drug and how quickly would this link be established? That may be
dependent on how the drug is identified (with the same or different
nonproprietary name as the innovator) and the capability of the adverse effect
reporting system. It is one thing to monitor for side effects associated with
the reference drug, but it is quite another to be able to identify something
that is entirely new.</div>
<div class="MsoNormal">
<span style="text-indent: 36pt;"><br /></span></div>
<div class="MsoNormal">
<span style="text-indent: 36pt;">In November 2013, the Academy of
Managed Care Pharmacy hosted a Task Force conference discussing the highly
anticipated approval process for new biosimilar agents and how to monitor their
safety and efficacy. The results of this Task Force was published January 2015 the </span><i style="text-indent: 36pt;"><a href="http://www.ncbi.nlm.nih.gov/pubmed/25562770">Journal of Managed Care and SpecialtyPharmacy</a>.</i></div>
<div class="MsoNormal">
<i style="text-indent: 36pt;"><br /></i></div>
<div class="MsoNormal">
<span style="text-indent: 36pt;">The Food and Drug Administration
(FDA) was charged by Congress with implementing the pathway to approval, called
the 351(k) pathway. Over the years, the FDA has been cautious about releasing
details of the biosimilar regulations; many in the United States (including clinicians
and manufacturers of innovator products) are concerned about the efficacy and
safety of biosimilars, which are not simply generic copies of their biologics. The
experience of the European Medicines Agency may be instructive here: Since
2007, it has<a href="https://www.blogger.com/[http://www.ema.europa.eu/ema/index.jsp?curl=pages/special_topics/document_listing/document_listing_000318.jsp&mid=WC0b01ac0580281bf0]"> approved several biosimilars</a></span><span style="text-indent: 36pt;">,
including versions of filgrastim, epoetin, infliximab, and follitropin, without
any significant red flags in terms of safety or efficacy. This extensive
clinical use of biosimilars in Europe does not erase all concerns about these
agents, however.</span></div>
<div class="MsoNormal">
<span style="text-indent: 36pt;"><br /></span></div>
<div class="MsoNormal">
<span style="text-indent: 36pt;">There is no shortage of expensive
biologics whose patents have expired or are near expiration. An unpublished analysis
from Express Scripts estimated that the introduction of biosimilars for 11
biologic agents whose patents have expired could result in more than $250
billion savings for the US health system over 10 years. Two important caveats
to this estimate are (1) this analysis is was based on 30% savings per
prescription (today, this is more conservative, at 15% to 20%, according to our
market research) and (2) it does not consider the potential costs of any </span><i style="text-indent: 36pt;">new and unforeseen</i><span style="text-indent: 36pt;"> adverse drug events
(ADEs) resulting from the use of new biosimilars. However, the second point is
of more relevance to this discussion.</span></div>
<div class="MsoNormal">
<span style="text-indent: 36pt;"><br /></span></div>
<div class="MsoNormal">
<span style="text-indent: 36pt;">Biosimilars are not exact copies
of the innovator, or reference, agent. Biologics are complex proteins, and
differences in manufacturing processes alone are enough to result in unique physical
structures—for example, a new fold in the molecule may occur, which may expose
more or less of its surface to target cell receptors. It may also result in
slightly different chemical structures, such as glycation, which may not result
in clinical differences. Does this mean that biosimilars are as efficacious and
have the same safety profile as the reference medications? Although the
ordinary use of biologics like TNF-alpha inhibitors in practice cannot exactly
be called </span><i style="text-indent: 36pt;">safe</i><span style="text-indent: 36pt;">, the experience
accumulated over more than a decade has provided a solid picture of their
safety profiles.</span></div>
<div class="MsoNormal">
<span style="text-indent: 36pt;"><br /></span></div>
<div class="MsoNormal">
<span style="text-indent: 36pt;">The 351(k) pathway does not
require large-scale clinical trial programs to prove that the use of a
biosimilar results in the same outcomes as the innovator product, so we may not
have full confidence that the biosimilar agent performs exactly the same way
that the innovator drug does. For this reason, policy experts cite the need for
a mechanism to evaluate real-world outcomes with newly approved biosimilar
agents, including a method of collecting data on the long-term use of these biologics.
This effort would also be helpful to validate biosimilars’ effectiveness
compared with their reference products.</span></div>
<div class="MsoNormal">
<span style="text-indent: 36pt;"><br /></span></div>
<div class="MsoNormal">
<span style="text-indent: 36pt;">The Task Force’s recommendations
may start the ball rolling to establish a mechanism for how this postmarketing
surveillance will be performed, who will coordinate it, and how any results or
safety signals will be reported. I suggest you read the report. It opens a
window onto the current pharmaceutical surveillance system and raises important
questions.</span></div>
<div class="MsoNormal" style="text-indent: 36.0pt;">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<br />
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #666666; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">SM Health Communications provides writing, consulting, and
innovative market research services for the payer markets. Its proprietary
P&T Insight™ virtual P&T Committee program is the leading mock P&T
Committee product in the field. We’ve participated in many market research
projects involving biosimilar development and launch, from the point of view of
the biosimilar and the innovator drug manufacturer. For more information,
please visit </span></i><a href="http://www.smhealthcom.com/"><i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #888888; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">www.smhealthcom.com</span></i></a><i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #666666; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;"> or
contact Stanton R. Mehr, President, at stan.mehr@smhealthcom.com.</span></i><span style="color: #666666; font-family: "Trebuchet MS",sans-serif; font-size: 8.0pt;"><o:p></o:p></span></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-61692889148420063922015-01-07T06:39:00.000-08:002015-01-08T06:22:11.061-08:00<h2>
<b><span style="font-size: x-large;">Biosimilars: A Time
of Reckoning Has Arrived </span></b></h2>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0pt;">
<span style="font-family: "Times New Roman",serif;"><br /></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0pt;">
<span style="font-family: "Times New Roman",serif;">Stanton R.
Mehr, President, SM Health Communications LLC<o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0pt;">
<a href="mailto:stan.mehr@smhealthcom.com"><span style="font-family: "Times New Roman",serif;">stan.mehr@smhealthcom.com</span></a><span style="font-family: "Times New Roman",serif;"><o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0pt;">
<a href="http://www.smhealthcom.com/"><span style="font-family: "Times New Roman",serif;">www.smhealthcom.com</span></a><span style="font-family: "Times New Roman",serif;"><o:p></o:p></span></div>
<div class="MsoNormal">
</div>
<div class="Draft" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="MsoNormal">
On Wednesday January 8<sup>th</sup>, 2015, a Food and Drug
Administration Advisory Committee unanimously recommended that the first agent to gain
biosimilar status through the 351(k) pathway be approved. This has been a very
long, slow road to reach a point that Europeans passed more than 7 years ago.
Finally, however, the FDA is preparing to approve Sandoz’s version of
filgrastim (brand name, Zarzio), and perhaps for all of the indications of Amgen’s
innovator product, Neupogen. The FDA’s final decision is expected to be
announced in March. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
This move may finally open the door to other 351(k)
applications and decisions, not only for filgrastim biosimilars but for epoetin,
infliximab, adalimumab, and a number of other long-marketed biologics. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
In announcing the decision, the health care community at
large hopes that the FDA will finally go public with other associated and
long-awaited determinations, which will have implications for biosimilar
utilization, coding, and reimbursement. <o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
Biosimilar naming conventions, indication extrapolation, and
interchangeability designations are eagerly anticipated by the U.S. payer
market. Market research tells us a great deal about how health plans, insurers,
and pharmacy benefit managers will react to the potential choices each of these
nuances present. Payers believe that FDA decision making in each area will significantly
affect not only how quickly biosimilars are accepted onto drug formularies but
how soon competitive forces may rise to lower biologic prices. For example, if the
FDA judges a biosimilar to not be interchangeable with the innovator product, and
also limits its approval to one indication rather than all four, this may force
the manufacturer to offer large discounts to gain market access. In this
situation, manufacturers trying to retain their marketshare may decide to similarly
cut prices or add to rebates, to coax payers to prefer their biologic. This may
compel payers to move from 4-tier formularies to 5-tier structures (i.e., from
one specialty tier to preferred and nonpreferred specialty tiers).<o:p></o:p></div>
<br />
<div class="MsoNormal">
The initial answers are finally right around the corner. We
are all awaiting that green light. One thing is known: whichever way the FDA
decides to go, we have a pretty good idea which way the payers will turn. </div>
<div class="MsoNormal">
<o:p></o:p></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #666666; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">SM Health Communications provides writing, consulting, and
innovative market research services for the payer markets. Its proprietary
P&T Insight™ virtual P&T Committee program is the leading mock P&T
Committee product in the field. We’ve participated in many market research
projects involving biosimilar development and launch, from the point of view of
the biosimilar and the innovator drug manufacturer. For more information,
please visit </span></i><a href="http://www.smhealthcom.com/"><i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #888888; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">www.smhealthcom.com</span></i></a><i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #666666; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;"> or
contact Stanton R. Mehr, President, at stan.mehr@smhealthcom.com.</span></i><span style="color: #666666; font-family: "Trebuchet MS",sans-serif; font-size: 8.0pt;"><o:p></o:p></span></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-24864518013230554962014-07-23T05:25:00.000-07:002014-07-23T05:25:24.660-07:00How Videostreaming Can Affect a Mock P&T Committee Meeting<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">Stanton R.
Mehr, President, SM Health Communications LLC<o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<a href="mailto:stan.mehr@smhealthcom.com"><span style="font-family: "Times New Roman","serif";">stan.mehr@smhealthcom.com</span></a><span style="font-family: "Times New Roman","serif";"><o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<a href="http://www.smhealthcom.com/"><span style="font-family: "Times New Roman","serif";">www.smhealthcom.com</span></a><span style="font-family: "Times New Roman","serif";"><o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="Draft" style="text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">We’re
often asked when we conduct our mock P&T Committee meeting (P&T
Insight™) whether we can videostream the session to the sponsor’s site. This is
not difficult to do, technologically speaking. Since we are already recording
the meeting for an audio and video file transfer to DVD, most of the equipment
is already in place. However, we strongly recommend that a one-way,
noninteractive videostream is the best choice. <o:p></o:p></span></div>
<div class="Draft" style="text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";"><br /></span></div>
<div class="Draft" style="text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">The
mock P&T Committee faculty members know they are being videotaped, and that
at some point in time, the result of their efforts will be viewed by a client.
Yet, the need for blinding of the sponsor is essential to guard against bias in
the Committee’s decisions, which can render the result unreliable and not
applicable to other health plans or systems. The effect of bias can go both
ways. Individual mock P&T Committee members may have had negative
interactions with a drug maker in their own past experience, and it may color
their decision. On the other hand, they may have extremely good relationships
with an account manager from the sponsor, and may subconsciously want to give
that person’s drug a favorable decision.<o:p></o:p></span></div>
<div class="Draft" style="text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";"><br /></span></div>
<div class="Draft" style="text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">When
a videostream is requested (regardless of the number of locations to stream is
sent to over an encrypted line), we make sure that there is no interaction
between the viewers and the Committee members during the meeting. If a sponsor
wishes to ask questions after the completion of the meeting, we collect them
via a separate communication line, and our staff presents the questions to the P&T
Insight™ Committee members. <o:p></o:p></span></div>
<div class="Draft" style="text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";"><br /></span></div>
<div class="Draft" style="text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">Why
take these precautions? If sponsors interact with the participants, the level
of bias rises to that of an advisory board, which is not what the sponsor has
paid for or desires. The feeling that the sponsor is “looking over their
shoulder” can be palpable, and the discussions cannot be reliably adjusted for
this effect—directly impacting the decisions made by the mock P&T Committee
(encouraging them to approve or reject a new product). <o:p></o:p></span></div>
<div class="Draft" style="text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";"><br /></span></div>
<div class="Draft" style="text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">Furthermore,
direct participation and interaction with the sponsor can have implications for
the Sunshine Act reporting. This can prevent some of our best consultants from
participating in the P&T Insight™ process. <o:p></o:p></span></div>
<div class="Draft" style="text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";"><br /></span></div>
<div class="Draft" style="text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">When
asking for a videostream for the mock P&T Committee, consider the need to
limit bias in the project. The product team will be happy you did. <o:p></o:p></span></div>
<div class="Draft" style="text-indent: 0in;">
<br /></div>
<br />
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #666666; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">SM Health Communications provides writing, consulting, and
innovative market research services for the payer markets. Its proprietary
P&T Insight™ virtual P&T Committee program is the leading mock P&T
Committee product in the field. We’ve participated in many market research
projects involving biosimilar development and launch, from the point of view of
the biosimilar and the innovator drug manufacturer. For more information,
please visit </span></i><a href="http://www.smhealthcom.com/"><i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #888888; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">www.smhealthcom.com</span></i></a><i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #666666; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;"> or
contact Stanton R. Mehr, President, at stan.mehr@smhealthcom.com.</span></i><span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;"><o:p></o:p></span></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-10516866705081497592014-06-18T05:27:00.000-07:002014-06-18T05:27:27.639-07:00Biosimilars Looming on the Horizon: How Will Payers React?<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">Stanton R.
Mehr, President, SM Health Communications LLC<o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";"><a href="mailto:stan.mehr@smhealthcom.com">stan.mehr@smhealthcom.com</a><o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";"><a href="http://www.smhealthcom.com/">www.smhealthcom.com</a><o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt;">
<br /></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">The
Food and Drug Administration has been working on this for years, and the
expectation is that they will get it right. Particularly since the European
Medicines Agency has had a pathway for the approval of biosimilar products
since 2007 and has used it successfully to introduce structurally similar biologic
products to compete with expensive brands like Neupogen®, Remicade®, and
others. When the first biosimilars are approved through the 351(k) pathway in
the US, payers will be ready. Market research shows that payers will be itching
to review these agents for formulary inclusion, and manufacturers of innovator or
“reference” products will need to be on their toes if they want to remain in
the game.<o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";"><br /></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">One defensive stance of manufacturers
is that the biosimilars may not be approved for the full list of indications
that was earned by the innovator product. Manufacturers shouldn’t kid themselves—if
the price advantage is sufficient, the payers will be willing to either not
restrict the biosimilar’s prescribing by indication or they will be ready to
review prior authorization requests on a case-by-case basis.<o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";"><br /></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">Another line of defensive thinking
is that the biosimilar may not have the same safety profile as the innovator
product. That may be true, but payers will be ready and willing to act upon FDA
approval, relying on both the FDA’s judgment and any European experience to
help them gauge the risk. And if there are separate safety issues, these may
not show up for years—putting the innovator product’s position at risk right at
biosimilar launch. <o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";"><br /></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">Payers are looking to biosimilars as
a long-awaited opportunity to pare some of the costs of biologic therapy. They
know the utilization of biologics continues to rocket upwards, and payers
understand that their overall pharmaceutical costs will continue to rise
(especially on those covered under the medical benefit). As a result, they are
moving more biologics under the pharmacy benefit for reimbursement or for
management, so they can at least employ more pharmacy tools that have proven
successful in the past. In other words, biosimilars and their innovator
products will be defined principally by cost, contracting, and net cost. <o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";"><br /></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: "Times New Roman","serif";">Does this mean that aggressive contracting
can save the day for the innovator products? Maybe, but don’t count on it.
Payers will want parity in net costs, and they’ll want price guarantees to
protect themselves against inevitable price increases. And this won’t prevent
biosimilar manufacturers from taking aggressive pricing action to counter this
strategy.</span></div>
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<span style="font-family: 'Times New Roman', serif; text-indent: 0in;"><br /></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<span style="font-family: 'Times New Roman', serif; text-indent: 0in;">Make no mistake. When it comes to
biosimilars, the payers are in the driver’s seat, and they can’t wait to hit
the road.</span></div>
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<br /></div>
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<b><span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;">Questions:</span></b><span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;"><o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;">1.
Does your organization have a plan for addressing biosimilar launches in the
rheumatoid arthritis, Crohn’s disease, growth hormone, or oncology space? <o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;">2.
Do you know how payers will view your innovator product and how they will approach
your contract towards biosimilar launch? <o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;">3.
What steps can you take to meet the challenges posed by biosimilars? <o:p></o:p></span></div>
<div class="Draft" style="margin-bottom: 0.0001pt; text-indent: 0in;">
<br /></div>
<br />
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #666666; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">SM Health Communications provides writing, consulting, and
innovative market research services for the payer markets. Its proprietary
P&T Insight™ virtual P&T Committee program is the leading mock P&T
Committee product in the field. We’ve participated in many market research
projects involving biosimilar development and launch, from the point of view of
the biosimilar and the innovator drug manufacturer. For more information,
please visit </span></i><a href="http://www.smhealthcom.com/"><i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #888888; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">www.smhealthcom.com</span></i></a><i><span style="background-attachment: initial; background-clip: initial; background-image: initial; background-origin: initial; background-position: initial; background-repeat: initial; background-size: initial; color: #666666; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;"> or
contact Stanton R. Mehr, President, at stan.mehr@smhealthcom.com.</span></i><span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;"><o:p></o:p></span></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-69026401225365084902014-04-17T07:55:00.002-07:002014-04-17T07:55:46.252-07:00Demonstrating Specialty Pharmaceutical Value and an Opportunity to Meet the Challenge<div class="MsoNormal">
By Stanton R. Mehr</div>
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President, SM Health Communications</div>
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stan.mehr@smhealthcom.com</div>
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www.smhealthcom.com</div>
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<br /></div>
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The extent of the problem is considerable. Even those
tracking it for many years are alarmed at its size and how fast it’s growing.
In 2012, only 1-2% of patients used specialty pharmaceuticals, yet they
accounted for 28% of total pharmacy expenditures. By the year 2019 or 2020,
specialty pharmaceuticals will account for one half of all pharmacy costs. This
will be fueled by their high costs and the magnitude of the drug pipeline,
pushing new drug launches every year. To add to the cost nightmare for payers,
most of the specialty drugs require regular monitoring and lab testing. </div>
<div class="MsoNormal">
I used the
term <i>cost nightmare </i>because it really
is. But not just for payers. For patients and providers as well. Payers
acknowledge that for many disorders, like rheumatoid arthritis and cancer, the
specialty pharmaceuticals represent some of the most effective medications
available. However, costs for these products are so radically higher than for
traditional drugs, that they feel obligated to apply crude utilization
management tools, like prior authorization and step therapies, to try to
restrain inappropriate use. The problem is, in doing so, they are viewed by
patients as preventing access to necessary treatments for serious disorders,
even if that is not the case. Furthermore, they cannot cost shift much more
than is already being done. </div>
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How much can patients afford to pay?
Is 20% of a therapy that costs $2,500 each month reasonable? Jan Berger, MD,
JD, a well-respected editor and former medical executive, said it best: “How
many times will a patient write that $500 check? Maybe for the first month.
Possibly for the second month. I’d don’t see it happening in the third month.” </div>
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And providers are not immune to
challenges associated with specialty drugs. The average oncology office spends
hours each day working through the insurance bureaucracy of precertification,
prior authorization, and step therapy call backs. They are pressured to
relinquish their buy-and-bill revenue stream (if one remains) and are heeding
the call of consolidation with other like-minded physicians or selling their
practice to hospital systems. </div>
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As of March 31, 2014, 7 million
newly insured Americans have entered the health system, and according to
Express Scripts, the early returns show that a greater proportion than expected
are utilizing specialty drugs. The system cannot sustain these costs for very
long. </div>
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All of these stakeholders are
turning to the manufacturers. The spotlight on them has brightened recently
because of the attention paid to outsized prices for the medications they are
introducing. Gliead’s oral hepatitis C medication, at a retail price of $84,000
per course of treatment, or $1,000 a pill, helped set the fuse. Assuming that
over the course of time, Sovaldi is found to actually save money by avoiding
other treatments like liver transplant, there is still no explanation of how
patients will afford the co-insurance upfront. For the patient and provider,
the least cost-effective medication is the one that is never taken. That may
not be the case for the payer.</div>
<div class="MsoNormal" style="text-indent: .5in;">
In any case, the burden of proof
will be on the manufacturer to demonstrate value (not incremental value but
real, significant value for the money paid). For the manufacturer of specialty
drugs, that generally means one of two approaches: (1) Finding a subgroup of
patients in whom real, or at least optimal, improvement is seen, which implies
biomarker identification and patient testing and (2) proving that the downstream
benefits of the specialty product exceed its costs. As we’ve already discussed,
the downstream benefits need to be astounding to convince payers. For example,
if Sovaldi cost $8,000 for a course of treatment, <i>no one</i> would question its value in therapy and perhaps even when it
should be used. Even at that price, some patients may balk at a $1,600
out-of-pocket price tag. </div>
<div class="MsoNormal" style="text-indent: .5in;">
However, manufacturers need to pay
for clinical trial development and consider the number of patients who may
benefit from a specialty drug (and calculate a tidy profit for the
shareholders). The question of patient affordability will eventually enter into
the equation, because it certainly is not yet present. Yet, physicians in
several specialties are acknowledging that the question of affordability has
entered the doctor’s office, and with a drug formulary, this can dictate which
treatments are prescribed. </div>
<div class="MsoNormal" style="text-indent: .5in;">
The manufacturers have avoided
another approach that helps payers cope with the large price tag of specialty
products: Outcomes- or risk-based contracting. This “putting your money where
your mouth is” approach attacks the challenge head on. If the drug works, based
on contractually agreed upon markers of improvement, the manufacturer is paid
full price (and perhaps can justify a <i>higher</i>
price than originally considered attainable). If the drug does not achieve this
outcome, it is free of charge. There might be some middle ground as well,
depending on the disorder treated (e.g., partial payment for a degree of
function or improvement). Agreeing on outcomes measures, the amount of
administrative work needed by payers to measure outcomes, and the ability to
employ better therapy decision making models are the devilish details that must
be mentioned. </div>
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For the payer, this is value. For the manufacturer, it enforces a focus on the right patient for their specialty agent. For the health system, it helps control an unsustainable cost trend.</div>
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<br /></div>
<div class="MsoNormal" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 11.1pt;">
<b><span style="font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">Questions:</span></b><span style="font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;"><o:p></o:p></span></div>
<div class="MsoNormal" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 11.1pt;">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">1. How do you define a specialty medication? What are its characteristics?<o:p></o:p></span></div>
<div class="MsoNormal" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 11.1pt;">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">2. Do you believe we're approaching a reckoning, where the cost of these agents will be unsustainable?<o:p></o:p></span></div>
<div class="MsoNormal" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 11.1pt;">
<span style="font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">3. How does your organization try to ensure the value it receives from a hepatitis C drug like Sovaldi?<br /><div style="text-indent: 0px;">
<i style="background-color: transparent; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 11.1pt; text-indent: 0.5in;"><span style="font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;"><br /></span></i></div>
<div style="text-indent: 0px;">
<i style="background-color: transparent; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 11.1pt; text-indent: 0.5in;"><span style="font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">SM Health Communications provides writing, consulting, and innovative market research services for the payer markets. Its proprietary P&T Insight™ virtual P&T Committee program is the leading mock P&T Committee product in the field. For more information, please visit </span></i><a href="http://www.smhealthcom.com/" style="background-color: transparent; color: #888888; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 11.1pt; text-decoration: none; text-indent: 0.5in;"><i><span style="font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">www.smhealthcom.com</span></i></a><i style="background-color: transparent; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 11.1pt; text-indent: 0.5in;"><span style="font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;"> or contact Stanton R. Mehr, President, at stan.mehr@smhealthcom.com.</span></i><span style="background-color: transparent; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 11.1pt; text-indent: 0.5in;"> </span></div>
</span></div>
<br />Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-53390176543023806692014-03-18T06:04:00.000-07:002014-03-18T06:09:02.854-07:00Social Context and Payer Market Research<div class="MsoNormal">
Stanton R. Mehr, President, SM Health Communications
LLC</div>
<div class="MsoNormal">
<a href="mailto:stan.mehr@smhealthcom.com">stan.mehr@smhealthcom.com</a></div>
<div class="MsoNormal">
<a href="http://www.smhealthcom.com/">www.smhealthcom.com</a></div>
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<br /></div>
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Market research organizations, which I’ll call MROs, try
very hard to evolve their craft according to current trends and the shifting
tides of popular technology. Traditional in-depth telephone interviews are
highly effective and, armed with a honed set of screening questions, can be the
best method of meeting the sponsor’s objectives. Effective? Yes. Sexy? No way.
Surveys enhanced by Web distribution and on-line responses (think Survey Monkey<sup>®</sup>)
still are commonly used and extremely cost effective. But this doesn’t tap into
the nature of today’s popular media. </div>
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<br /></div>
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Recently there have been concerning revelations about the
data being collected on browsers like Google and sites like Facebook to create
a profile of the viewer, with an eye towards customizing the advertising they
see. The collection of data for external uses, such as that publicized on the
March 10th broadcast of CBS’s <i>60 Minutes,
</i>may finally tamp down the fires of social media market research. Much of
this market research is based around singular data points (e.g., a person
“liking” a particular service, or posting about their experience at a
particular resort or hotel). These data
points can help profile the person and, if large and consistent enough in their
personal network, a group. This is the essence of social media. It can be very
useful in marketing health care products to specific consumers, like proton
pump inhibitors to those searching for information on acid reflux. </div>
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<br /></div>
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If you join a special interest group on the Web, such as a
patient-support group for (fill in just about any disorder), you can bet the
pharmaceutical companies and their market researchers are crawling over the
site, collecting information about what you like, what you don’t, and every bit
of demographic data they can extract from your participation. These folks are
self-selected for this specific interest, and obtaining market research on
these like-minded group members can be a very effective endeavor., If the MRO
formulates and conducts the research well, it collects not only singular data
points from singular individuals, but also data and <i>social context</i> to the market research results. That’s what
old-style, one-way mirror focus groups have always sought to achieve.</div>
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<br /></div>
<div class="MsoNormal">
Let’s take this consumer-based approach and apply it to
health executives. If there were on-line community sites in which health plan
executives (payers) joined voluntarily and where they discussed frequently a
range of topics in conversational style, this community engagement might just put
a market research project into overdrive. The group think, coupled with
individual responses, on qualitative topics may yield fascinating insights and
do it in a very cost-effective environment. </div>
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<br /></div>
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The resulting lengthy discussion, filled with nuance,
agreement, disagreement, and insight, can be a challenge for most. The trick is
the ability to tease out the social context as well as the top-line responses
so as to yield more informed payer market research, but using “sexy” social
media so many clients crave today. </div>
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<br /></div>
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<b><span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;">Questions:</span></b><span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;"><o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;">1.
Does your MRO have a vehicle for payer interest groups to freely discuss
matters of importance to them? <o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;">2.
Can the MRO use this type of social media to report the social context in which
responses are made? <o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;">3.
What is your greatest challenge in meeting social media-related research
requests by your executives?<o:p></o:p></span></div>
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<br /></div>
<br />
<div class="MsoNormal" style="background: white; line-height: 11.1pt;">
<i><span style="background-position: initial initial; background-repeat: initial initial; color: #666666; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">SM Health Communications provides writing, consulting, and
innovative market research services for the payer markets. Its proprietary
P&T Insight™ virtual P&T Committee program is the leading mock P&T
Committee product in the field. For more information, please visit </span></i><a href="http://www.smhealthcom.com/"><i><span style="background-position: initial initial; background-repeat: initial initial; color: #888888; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;">www.smhealthcom.com</span></i></a><i><span style="background-position: initial initial; background-repeat: initial initial; color: #666666; font-family: 'Trebuchet MS', sans-serif; font-size: 8pt;"> or contact Stanton R. Mehr, President, at
stan.mehr@smhealthcom.com.</span></i><span style="color: #666666; font-family: "Trebuchet MS","sans-serif"; font-size: 8.0pt;"><o:p></o:p></span></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0tag:blogger.com,1999:blog-8169225161453879784.post-27151504192933098242014-01-19T07:35:00.001-08:002014-01-19T07:35:24.175-08:00Decision Making on Specialty Pharmaceuticals: P&T Committee, Technology Assessment Committee, or Something New?<div class="MsoNormal" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 18.479999542236328px;">
<st1:place w:st="on"><st1:city w:st="on"><b><i>Stanton</i></b></st1:city></st1:place><b><i> R. Mehr, President, SM Health Communications LLC</i></b></div>
<div class="MsoNormal" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 18.479999542236328px;">
<b><i><a href="mailto:stan.mehr@smhealthcom.com" style="color: #888888; text-decoration: none;">stan.mehr@smhealthcom.com</a><o:p></o:p></i></b></div>
<div class="MsoNormal" style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 18.479999542236328px;">
<b><i><a href="http://www.smhealthcom.com/" style="color: #888888; text-decoration: none;">www.smhealthcom.com</a></i></b></div>
<div class="MsoNormal">
<br /></div>
<div class="MsoNormal">
We
have all seen the trend data. The situation is likely to become more
complicated, not less so, in the coming years. The annual report by CVS
Caremark anticipated that by 2015, specialty drugs will account for 27% of the
prescription spend, and that annual growth in the spend can be as high as 22%
for 2013, matching the figures for the past few years.<sup>1</sup> The data
from Express Scripts shows that although the trend for the major traditional
product categories was only 0.1% in 2011, the trend for the specialty
pharmaceutical category (e.g., anti-inflammatories, multiple sclerosis, cancer,
HIV, etc.) was 17.1%.<sup>2</sup> Ample evidence now exists that the specialty
pharmacy utilization and cost growth will continue in the healthy double-digit
range, for at least the next few years. It will be fueled not only by the large
number of specialty products in the later stages of clinical development, but
other factors as well, including slowly evolving expertise (and commitment) by
payers to control access to these products.</div>
<div class="MsoNormal" style="mso-layout-grid-align: none; text-autospace: none; text-indent: .5in;">
<span style="text-indent: 0.5in;">A few years ago, I worked on an annual publication
sponsored by Bristol-Myers Squibb.</span><sup style="text-indent: 0.5in;">3</sup><span style="text-indent: 0.5in;"> Similar to other trend reports,
we surveyed payers (including corporate employers) to determine how they were
reacting to several trends in the industry. We asked them about how they
managed specialty pharmaceuticals (in 2008) and what changes they intended to
make in 2009 and beyond. Back in 2008, 40% of those surveyed indicated that
they already shifted any injectable/infused agents from the medical to the
pharmacy benefit, and an additional 16% planned to do so in 2009. At that time,
51% said that by 2008, they had already assigned injectable agents to specialty
pharmacy management and an additional 14% said they would do so in 2009.</span><sup style="text-indent: 0.5in;">3</sup><span style="text-indent: 0.5in;">
It is clear that many health plans and insurers have turned to pharmacy benefit
management to manage the growth of the specialty pharmacy category. However,
many of these injectable/infusible products would traditionally be part of the
medical, not pharmacy, benefit. In some large plans, drugs covered by the
medical benefit are evaluated by a dedicated technology assessment committee
(or rely on other independent resources, such as private consultants or a
national technology assessment body, like Blue Cross and Blue Shield’s). If
pharmacy coverage decisions are made by the Pharmacy & Therapeutics
(P&T) Committee, does this mean that this body is the </span><i style="text-indent: 0.5in;">de facto</i><span style="text-indent: 0.5in;"> tech assessment committee in most plans? This seemed to be
the case in the last decade, particularly when it came to certain devices and
diagnostics.</span><sup style="text-indent: 0.5in;">4 </sup><span style="text-indent: 0.5in;">Or will technology assessment committees, when
available, decide on pharmacy benefit coverage for these specialty
pharmaceuticals? The move to pharmacy benefit management of specialty products clouds
the discussion considerably.</span></div>
<div class="MsoNormal" style="mso-layout-grid-align: none; text-autospace: none; text-indent: .5in;">
It would also help if a universal definition of specialty
pharmaceuticals was well accepted, based on cost, distribution, storage, and/or
route of administration. I’m showing my age here, but I clearly recall when the
term specialty pharmaceuticals generally referred to blood products only, which
were almost universally covered through the medical benefit. Fast forward to
the 1999 introduction of TNF inhibitors and then similar other
office-administered and self-injectable products. By 2013, we’ve added oral
agents into the specialty mix. </div>
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Today, are payers equipped to determine whether a
specialty medication offers real value (or even a reasonable value
proposition)? And yet another critical question for payers: In light of recent
trends, should the coverage decision making body be removed from the shackles
of pharmacy or medical benefit classifications altogether? This infers that a
merged group of coverage decision makers, with a composition distinct from that
of a traditional P&T Committee or technology assessment committee, may
contribute further to the discussion. </div>
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Clearly,
the P&T Committee backbone of pharmacy decision making in managed care is
being tested. In recent years, the need for device (specifically drug-delivery
systems) and diagnostic coverage decisions is weighing it down. A new
evolutionary step may be needed to help payers meet the challenges of specialty
pharmacy products. </div>
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<br /></div>
<div class="MsoNormal">
<b> (Note: This blog was first published in January 2013 for the Health Payer Council [www.healthpayercouncil.com]).</b></div>
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<b><br /></b></div>
<div class="MsoNormal">
<b>REFERENCES<o:p></o:p></b></div>
<div class="MsoNormal">
1. <i>2011 Insights:
Changing Rules Changing Roles.</i> <st1:place w:st="on"><st1:city w:st="on">Scottsdale</st1:city>,
<st1:state w:st="on">AZ</st1:state></st1:place>, CVS Caremark, 2011. </div>
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2. <i>2011 Drug Trend
Report</i>. <st1:place w:st="on"><st1:city w:st="on">St. Louis</st1:city>, <st1:state w:st="on">MO</st1:state></st1:place>: Express Scripts, April 2012. </div>
<div class="MsoNormal">
3. <i>2009 Biotechnology
Monitor & Survey.</i> <st1:place w:st="on"><st1:city w:st="on">Princeton</st1:city>,
<st1:state w:st="on">NJ</st1:state></st1:place>: Bristol-Myers Squibb, March
2009. </div>
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4. Mehr SR: The evolutionary role of the pharmacy and
therapeutics committee in</div>
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technology assessment. <i>Manag
Care Interface</i> 2006;19(1):42-45.</div>
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<b>Questions: <o:p></o:p></b></div>
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1. Does your P&T Committee or Medical Technology
Assessment Committee decide whether to cover specialty pharmaceuticals? </div>
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2. If a unique body were assigned to making specialty
pharmacy coverage decisions, how would its composition differ from that of
today’s P&T Committee?</div>
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3. What is your greatest challenge (other than the cost
trend) in terms of managing the specialty category? </div>
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<br /></div>
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<i style="background-color: white; color: #666666; font-family: 'Trebuchet MS', Trebuchet, Verdana, sans-serif; font-size: 13px; line-height: 18.479999542236328px;">SM Health Communications provides writing, consulting, and market research services for the long-term care and payer markets. Its proprietary P&T Insight™ virtual P&T Committee program is the leading mock P&T Committee product in the field. For more information, please visit <a href="http://www.smhealthcom.com/" style="color: #888888; text-decoration: none;">www.smhealthcom.com</a> or contact <st1:city w:st="on"><st1:place w:st="on">Stanton</st1:place></st1:city> R. Mehr, President, at<st1:personname w:st="on">stan.mehr@smhealthcom.com</st1:personname>.</i></div>
Stanton Mehr, SM Health Communicationshttp://www.blogger.com/profile/02022894002527015973noreply@blogger.com0