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Benchmarking Survey: Can we reduce procurement time in HEOR & RWE?

As healthcare moves towards an increased focus on outcomes and value, health economics & outcomes research (HEOR) and real-world evidence (RWE) are being used to guide value-based decisions, improve outcomes, reduce costs, and achieve market access. This move toward new ways of defining value has led to growth in the number and complexity of HEOR and RWE initiatives as well as increased diversity in the types of stakeholders involved in them.

Outsourcing of HEOR & RWE is increasing

As a result of expansion in HEOR/RWE initiatives, many companies are outsourcing to keep up. A 2017 survey conducted by ISR Reports found that companies outsource an average of 75% of their HEOR work, a trend driven by limited internal resources, lack of time, and the need to foster great credibility by using trusted third-party partners.1

To better understand the challenges and opportunities in the procurement and contracting of HEOR/RWE projects, HealthEconomics.Com and Scientist.com conducted an online survey of researchers and suppliers in HEOR, RWE and related areas with over 150 respondents. The HEOR and RWE Sourcing and Procurement Challenges and Opportunities Benchmarking Survey represented a wide variety of companies including biopharma/medical device (35%), research consultancies including CROs (37%), private payers/pharmacy benefit management companies (5%), and academia (7%). Forty percent of respondents were from large organizations with 1,000 or more employees. About one-third (31%) categorized themselves as a buyer of services, 38% were a supplier, and 25% were both a buyer and a supplier. 


Consistent with the ISR survey1, the HealthEconomics.Com and Scientist.com benchmarking survey showed that three-fourths (71%) of respondents outsource one-half or more of their work.

Contracting time is a challenge in HEOR & RWE procurement

One of the most serious stumbling blocks identified was long contracting times.

More than one-half (55%) of HEOR/RWE professionals found that average contracting time exceeded 2 months and 10% found that it exceeded 6 months.

Consequences of long contracting time

Long contracting times delay insights, impede market access, hinder decision-making by providers and payers, and may result in increased costs of drug development and commercialization. Ultimately, this leads to delays in how quickly an intervention gets to the patient. As one Medical Affairs professional from a consulting company put it: “[Procurement] takes a very long time, making [study] results less meaningful”.

Need for standardization

Many respondents grappled with overly complex administrative and legal processes during the HEOR/RWE sourcing and procurement process. Eighty percent of respondents (both buyers and suppliers) agreed that buyer requirements are not standardized. This finding was echoed by an editorial in Clinical Leader, stating, “HEOR procurement can be intricate due to the lack of standardized requirements and regulations.”2 This results in a longer period in the negotiation and set up phase of contracting before the actual work can even begin.

While both suppliers and buyers identified a more standardized and expedited contracting process as a major need, there were key differences in how their comments approached the issue.

Suppliers focused on problems with buyer processes with 8 out of 10 agreeing that it is difficult to navigate through the buyer’s procurement process. Seventy percent agreed that buyer compliance requirements hinder successful contracting.

Buyers focused on the time spent working with their own internal procurement team. A Director of Outcomes Research from a pharmaceutical company said that, “…timelines certainly are [affected] when having to jump through hoops to demonstrate why one supplier is needed over another”. Indeed, over 60% agreed that it is challenging to compare suppliers for a project.

A solution that simplifies administrative and legal requirements while allowing buyers to easily differentiate suppliers is clearly needed.

A marketplace solution for sourcing challenges

Scientist.Com, the world’s leader in scientific services marketplaces connecting buyers and suppliers, found that an online marketplace approach improved contracting time and saved money. As shown in the figure below, the online marketplace resulted in a first proposal within 7 days of a highly complex request, provided for easy comparison of 5 different suppliers, and resulted in a realized cost savings of >$20,000. Applying this approach to HEOR and RWE could result in a similarly expedited contracting process and the potential for cost savings.

Figure: Impact of Online Marketplace on Supplier Response Time and Costs
[source: Scientist.Com data on file]

HealthEconomics.Com and Scientist.com have partnered together to launch the HEOR & RWE Marketplace, an online solution that accelerates the sourcing and procurement process for researchers and suppliers of HEOR, RWE and market access services.3 By streamlining the process for buyers and sellers, the HEOR & RWE Marketplace will deliver reduced time to contract, quicker time to insight, and faster market access, while saving costs.

The HEOR & RWE Marketplace

Powered by two trusted life science brands

The HEOR & RWE Marketplace is comprised of a global network of suppliers with access to a host of data sources, and placing an order is simple:

  • Researcher places a request
  • The details of the request are sent to several qualified suppliers
  • Researcher receives responses within days
  • An experienced Research ConciergeTM team quickly narrows the pool of eligible suppliers
  • Researcher receives proposals to compare
  • Researcher selects the best one for the particular study
  • Researcher receives requested services upon internal approval and completed PO

As HEOR and RWE are increasingly required by payers and providers, outsourcing and procurement are critically important to the research process of evidence development. It is imperative that administrative, sourcing, and legal hurdles do not prevent much needed interventions from reaching patients. Solutions like a marketplace approach should be fully evaluated in terms of their ability to simplify procurement, reduce time to contract, deliver quicker time to insight and facilitate faster market access, while saving costs.


References:

  1. ISR Reports. Benchmarking the Pharma Industry’s HEOR Function. (2017). Available at: https://www.isrreports.com/wp-content/uploads/woocommerce_uploads/2017/09/2017-Benchmarking-the-Pharma-Industrys-HEOR-Function-2nd-Edition-Enterprise.pdf.
  2. Parikh, H. An Overview Of Offshoring HEOR. Clinical Leader (2015). Available at: https://www.clinicalleader.com/doc/an-overview-of-offshoring-heor-0001.
  3. HealthEconomics.Com, Scientist.Com Partner on RWE/HEOR Initiative. HealthEconomics.Com (2018). Available at: https://www.healtheconomics.com/industry-news/healtheconomics-com-scientist-com-partner-on-rwe-heor-initiative.

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CVS Caremark’s foray into cost-effectiveness analysis raises questions about the future of prescription medicines in America

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Americans spend more on prescription drugs than anyone else in the world. In a move to address this, CVS Caremark announced in August that it would allow self-funded insurers to exclude from their plan any drug launched at a price greater than $100,000 per QALY (quality adjusted life year).1

A bold move in the shift to value-based reimbursement

CVS advertises its program as incentivizing pharmaceutical companies to lower launch prices, pointing to QALYs approaching the $300,000 to $500,000 range, a stark contrast to thresholds on medicine pricing in Europe ranging from $10,000 to $50,000/QALY. The policy will use analyses from the non-profit Institute for Clinical and Economic Review (ICER) but excludes FDA-defined “breakthrough” therapies.1

A controversial announcement

Robert Dubois, MD, PhD, Chief Science Officer of the National Pharmaceutical Council (NPC), criticized the move as being “too much too soon” with the potential to “hamper patients’ access to needed medications”. He points to the many limitations of the QALY and endorses a wider value assessment framework that considers factors like the importance of high cost medicines for inadequately treated illnesses as well as secondary values like increased economic productivity of patients. Some of these are in line with considerations by European organisations like the National Institute for Health and Care Excellence (NICE). He goes further to criticize the threshold of $100,000 per QALY as arbitrary, preferring the approach of tying formulary tiers and co-payments to cost-effectiveness to make a broader set of medicines available.2

CVS executives hit back, pointing out that the steady increase in launch prices has contributed to the rise in cost per QALY.3 By emphasizing their policy’s potential to push pharmaceutical companies to lower prices, they shift the focus from problems with the cost per QALY approach to the pharmaceutical industry’s role in rising prices.

In Bloomberg, Biopharma Opinion Columnist Max Nisen writes that CVS’s plan lets pharmaceutical companies off too easy, citing the fact that the FDA’s breakthrough designation has been applied to over 50 drugs over the past few years, commonly some of the highest priced on the market.4

Even patient groups have gotten involved, with over 90 advocacy groups writing an opposition letter to CVS stating that the new policy “…discriminates against the chronically ill, the elderly and people with disabilities, using algorithms that calculate their lives as ‘worth less’ “.5 QALY’s are often deemed less valuable as a cost-effectiveness tool for the elderly because of their insensitivity to health status improvements and shorter life expectancy compared with non-elderly.

CVS’s policy raises questions about the fundamental meaning of value

In the context of the move towards value-based care in America, perhaps this was a logical next step. But what does it mean for healthcare going forward?

The use of the QALY and ICER’s involvement in the US healthcare system is not going away. ICER’s drug assessments have already been used by the New York Medicaid Program and Veterans Affairs in drug coverage decisions.6 7 Moves such as this have started to formalize ICER’s role in coverage decisions and may have the potential to shift the balance of power from pharma to a pricing arbiter. A key question is whether other pharmacy benefit managers will follow CVS’s lead, putting more pressure on pharmaceutical companies.

From a practical standpoint, are QALYs useful in real-world decision-making to payers in the United States? As healthcare consultancy Milliman points out, an analysis conducted using a list price and the “average” patient may not be applicable for payers that serve specific subpopulations and utilize discounts and rebates.8 However, a 2018 ICON plc survey of over 20 U.S. payers seems to show that payers do consider them useful with more than 75% of respondents saying they would use an ICER threshold as a basis to negotiate a rebate contract. 9

Are QALYs being used to look at the most valuable treatment in a given context or simply as a tool for reducing cost? Do cost-effectiveness thresholds capture what individual patients and providers value or are they a step too far into a one size fits all process, especially in an age of individualised medicine?

If we do accept limitations to the cost per QALY approach and move to a broader framework as suggested by NPC’s Dr. Robert Dubois, how will we calculate and weight aspects of value like societal benefits and inadequately treated illnesses?

These are some of the questions that we now need to ask as cost-effectiveness becomes a staple in conversations around medicine cost. There is no doubt that these issues will be at the forefront of policy and economic conversations about medicines in the coming months.

Let us know what you think by commenting on the blog. To stay up on news related to cost-effectiveness around the globe, subscribe to the HealthEconomics.Com weekly newsletters.


References

  1. CVS. Current and New Approaches to Making Drugs More Affordable. (2018). Available at: https://cvshealth.com/sites/default/files/cvs-health-current-and-new-approaches-to-making-drugs-more-affordable.pdf.
  2. Dubois, R. CVS To Restrict Patient Access Using Cost-Effectiveness: Too Much, Too Soon. Health Affairs (2018). Available at: https://www.healthaffairs.org/do/10.1377/hblog20180913.889578/full/.
  3. Brenna, T. & Surya, S. Why CVS Is Giving Plans A New Tool To Target High Launch Prices. Health Affairs (2018). Available at: https://www.healthaffairs.org/do/10.1377/hblog20180913.862850/full/.
  4. Nisen, M. CVS’s Drug-Price Plan Lets Pharma Off Too Easy. Bloomberg Opinion (2018). Available at: https://www.bloomberg.com/view/articles/2018-08-17/cvs-drug-price-plan-lets-pharma-off-too-easy.
  5. PIPC. Over 90 Advocacy Groups to CVS: Don’t Discriminate on Care. (2018). Available at: http://www.pipcpatients.org/resources/cvs-letter.
  6. Thomas, K. A Drug Costs $272,000 a Year. Not So Fast, Says New York State. New York Times (2018). Available at: https://www.nytimes.com/2018/06/24/health/drug-prices-orkambi-new-york.html.
  7. ICER. The Institute for Clinical and Economic Review to Collaborate With the Department of Veterans Affairs’ Pharmacy Benefits Management Services Office. (2017). Available at: https://icer-review.org/announcements/va-release/.
  8. PhRMA. New whitepaper identifies reasons why ICER’s cost-effectiveness analyses are not useful for payers. (2018). Available at: https://www.phrma.org/index.cfm?objectid=A08C8CE0-BAB6-11E8-AFE70050569A4B6C.
  9. White, N. What ICER Pricing Would Mean for US Drug Spend: A Preliminary Analysis. LinkedIn (2018). Available at: https://www.linkedin.com/pulse/what-icer-pricing-would-mean-us-drug-spend-analysis-nathan-white-cpc/.

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