Posts Tagged HEOR & RWE Marketplace

Real-world evidence and value-based contracting – swipe left or swipe right?

As biopharma makes the shift toward a personalized healthcare system, it is also transitioning towards a pipeline full of innovative, high-cost therapies. We are moving to a value-based system, with two of the biggest ideas for this decade becoming more and more important: value-based contracting (VBC) and real-world evidence (RWE).

RWE and VBC are key parts of a new era in healthcare

RWE represents outcomes derived from a diverse patient population in a real-world environment. Data sources can include administrative claims, electronic health records (EHR), laboratory data, information and communication technologies (ICT), genomics, health app data, biometric devices and survey reports.

VBC uses RWE to allow both biopharma and health insurers to spread risk and make high cost therapies more available to patients. These arrangements aim to tie contracted drug prices and reimbursement rates more closely to clinical outcomes by collecting and analyzing RWE after a drug has been launched. Prices are linked to how a drug performs in the real world and an insurer will not pay the full cost of a drug that does not work as intended. Moreover, if a drug performs better than projected, the biopharma company may get a higher reimbursement rate.

RWE and VBC are becoming commonplace

Deloitte’s 2nd annual RWE Benchmarking Survey in 2018 found that 14 out of the 20 biopharma companies polled are currently engaged in VBC and 9 of these stated they are using RWE in contract design.1

In 2018, PhRMA reported that the list of publicly-announced VBCs had continued to grow over the last quarter from 39 to 43. In reality, this is a conservative estimate as many VBCs are not publicly announced.2 The U.S. government has shown interest in RWE as well. In December 2018, the FDA released its Framework for RWE3 which paves the way to use RWE to support the approval of a new indication for a pre-approved medicine and satisfy post-approval study requirements, as required by the 21st Century Cures Act of 2016.4 Key elements of the FDA RWE Framework include a broader consideration of RWE data sources, expansion of acceptable study designs (to include observational studies, pragmatic trials, hybrid designs, and RWE control arms), and the use of RWE to assess efficacy and effectiveness (beyond safety).

There are many ways to set up VBC arrangements

VBCs continue to emerge and evolve as payers and manufacturers gain experience in linking payments to measures of outcomes, utilization or spending. Most reviews categorize VBCs as outcomes-based or finance-based.5 RWE will play a pivotal role in outcomes-based VBCs, currently the most common type of arrangement.

Examples (outcomes based)

VBC is not limited to pharmaceuticals. Medical device manufacturers are also striking deals based on a product or service guarantee, or risk sharing. For example, Stryker, an orthopedics company, offered a guarantee to hospitals on the SurgiCount product to address retained surgical sponges, as well as $5 million in product liability indemnification.6

Rising to the risks and challenges of RWE and VBC

RWE and VBC bring risks and challenges for both biopharma and payers.

  1. Defining populations and outcomes
    1. It is necessary to collaborate with hospitals, providers, and professional societies to define inclusion and exclusion criteria and gain buy-in
  1. Collecting, linking and analyzing the necessary healthcare data
    1. It may be difficult to collect and link data from different sources
    2. Data may be protected by law or be costly
  1. Estimating causality between product and outcome
    1. There may be externalities that affect causality like compliance and provider error
  1. Measuring outcomes
    1. Infrastructure may be in place or it may have to be built
  1. Lack of clear financial incentives to participate in value-based contracts when financial risk may be associated with poor patient outcomes or underperforming products
  1. Trust among payers, providers and manufacturers needs to be created and maintained
  1. RWE data may be heterogeneous, incomplete, lack use agreements, run afoul of privacy regulations, lack data standards, and lack unique patient identifiers
  1. There is a lack of data scientists and outsourcing companies to process and work on RWE data to keep up with the fast growth of the industry
  1. Regulatory and legal barriers
    1. Even with the updates of the 21st Century Cures Act, it is still unclear how RWE usage will be integrated into the FDAMA 114 Act, which regulates the use of information for promotional activities by biopharma and has been the start of law suits about improper use of data for promotion
    2. Anti-kickback statutes in the Center for Medicare & Medicaid Services (CMS) complicate the ability of biopharma to enter into value-based contracts because they may be viewed as inducing providers to prescribe certain medications– additional safe harbor laws could be created by Congress and CMS to prevent this7 (kickbacks are currently being addressed by Health &Human Services Secretary Alex Azar)
    3. Medicare’s “best price” policy requiring that biopharma offer a price equal to the best commercially available discount price is a challenge in value-based contracting8

The RWE and VBC challenge: is there a way to help?

Procuring RWE in support of VBC is vital, complex, and multi-dimensional so it is imperative to find solutions that speed up the delivery of data and address the unique challenges of RWE. Several options are below.

1. Simulations of VBCs using RWE to reduce uncertainty

Optum and Merck are collaborating on a multi-year project using RWE to co-develop and test advanced predictive models that will reduce clinical and financial uncertainty for VBCs.10 This would reduce risk on both the pharmaceutical and payer side entering into VBC agreements, would could increase the uptake of these types of contracts.

According to Curt Medeiros, president of Optum Life Sciences, “this collaboration offers an opportunity to leverage our collective strengths to increase knowledge about the design and implementation of outcomes-based contracts in the U.S. health system.” The companies plan to share their findings. Seeing success in this kind of system could inspire other companies to follow suit.

2. Direct partnerships

Another potential solution is direct partnerships between players in the healthcare field.

Pharmaceutical giant Amgen is currently partnering with pharmacy benefit manager Magellan Rx Management and Texas-based health care system Baylor Scott & White Health (BSWH).11 This allows them to work collaboratively and move beyond a purely transactional model for a cooperation-based approach to problem solving in VBP.

Delivery organizations like Magellan and pharmaceutical companies like Amgen bring the opportunity to develop RWE to feed into these types of approaches to VBP.

In Andrew Masica’s, Chief Clinical Effectiveness Officer of BSWH, words, “I think there is a real opportunity for organizations to use their own data and work with industry partners to help answer [many] types of questions.”

3. A marketplace to connect researchers and suppliers

Another option is more efficient collaboration, using a resource such as the HEOR & RWE Marketplace for researchers and suppliers of RWE services, offered by HealthEconomics.Com and Scientist.Com. HealthEconomics.Com and Scientist.Com are two trusted life science brands who have partnered to connect researchers and suppliers in HEOR, RWE and related areas with the aim to facilitate research, overcome challenges, trim costs and bolster market access.9

As Deloitte’s 2nd annual RWE Benchmarking Survey said, “hiring experts to build and implement advanced systems … can help existing talent derive insights from structured and unstructured disparate RWD [real-world data] sources. But attracting this talent could prove difficult, given the current market demand for data scientists.”1The HEOR & RWE Marketplace is a way for biopharma companies to source that talent and a way for consulting and data companies to offer their services and products so that these value-based deals based on RWE can be implemented and assessed more quickly and efficiently.

Conclusion

VBC and RWE may not be the easy way forward for biopharma or for payers. But this path has the potential to contain costs and allow for the development of more personalized medicines that facilitates better outcomes. RWE holds the promise of collecting and utilizing the vast amount of available data to gain meaningful insight. Regardless, now we must focus on the challenge of how to structure VBC contracts that fairly share risk, how to source robust data and how to use resources like direct partnerships, VBC simulations and the HEOR & RWE Marketplace to drive faster insights.

Works Cited

  1. 2018 RWE benchmark survey. Deloitte Insights Available at: https://www2.deloitte.com/insights/us/en/industry/life-sciences/2018-real-world-evidence-benchmarking.html.
  2. Drozd, M. Number of value-based contracts continues to rise. PhRMA (2018). Available at: https://catalyst.phrma.org/number-of-value-based-contracts-continues-to-rise.
  3. FDA. Framework for FDA’s Real-World Evidence Program. (2018). Available at: https://www.fda.gov/downloads/ScienceResearch/SpecialTopics/RealWorldEvidence/UCM627769.pdf.
  4. 114th Congress. 21st Century Cures Act, Public Law No: 114-255. (2015).
  5. Policy, M. C. for H. Developing a Path to Value-Based Payment for Medical Products. Duke University (2017). Available at: https://healthpolicy.duke.edu/sites/default/files/atoms/files/value_based_payment_background_paper_-_october_2017_final.pdf.
  6. Parmar, A. Here’s four types of value-based contracting with providers that companies can pursue. MedCity News (2018). Available at: https://medcitynews.com/2018/09/heres-four-types-of-value-based-contracting-with-providers-that-companies-can-pursue/?rf=1.
  7. Hayes, T. Current Impediments to Value- Based Pricing for Prescription Drugs. AAF (2017). Available at: https://www.americanactionforum.org/print/?url=https://www.americanactionforum.org/research/current-impediments-value-based-pricing-prescription-drugs/.
  8. Comer, B. Pharmaceutical value-based contracting: Collaboration is key. PwC (2018). Available at: https://www.pwc.com/us/en/industries/health-industries/library/pharmaceutical-value-based-contracting-collaboration-is-key.html.
  9. 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.
  10. Optum and Merck Collaborate to Advance Value-Based Contracting of Pharmaceuticals. UnitedHealth Group (2017). Available at: https://www.unitedhealthgroup.com/newsroom/2017/0525optumlearninglab.html.
  11. Value-Based Partnerships: Engaging in Value-Driven Innovative Collaborations. The American Journal of Managed Care (2018). Available at: https://ajmc.s3.amazonaws.com/_media/_pdf/AJMC_A818_06_2018_VBP_Whitepaper(1).pdf.
  12. Staton, T. Lilly’s Trulicity joins pay-for-performance trend with Harvard Pilgrim deal. Fierce Pharma (2016). Available at: https://www.fiercepharma.com/pharma/lilly-s-trulicity-joins-pay-for-performance-trend-harvard-pilgrim-deal.
  13. Staton, T. Novartis defies naysayers with newfangled pay-for-performance deals on Entresto. Fierce Pharma (2016). Available at: https://www.fiercepharma.com/sales-and-marketing/novartis-defies-naysayers-newfangled-pay-for-performance-deals-on-entresto.
  14. Teichert, E. Harvard Pilgrim Scores Discounts on Novartis, Lilly Drugs. Modern Healthcare (2016). Available at: https://www.modernhealthcare.com/article/20160628/NEWS/160629889.

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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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