Posts Tagged patti peeples

Transforming legacy approaches to understanding drug costs: An Interview with HealthPlanView’s Nicole Espinoza

Dr. Patti Peeples, CEO of HealthEconomics.Com, sat down with Nicole Espinoza, Vice President of Knowledge Management at Pharmspective, a Healthcare Knowledge Management Company and the organization behind a new platform, HealthPlanView™, designed to address transparency around the true patient cost associated with pharmaceuticals. Disclaimer: This interview is paid for by Pharmspective and HealthPlanView™.

Dr. Peeples:  We are seeing an upsurge in companies developing approaches to understand drug pricing and access to treatment, catalyzed by the growth in specialty pharmaceuticals, expansion of step therapy, and imposition of strict utilization criteria at the health insurer level. What was the rationale behind the creation of HealthPlanView™ and what is your primary mission?

Ms. Espinoza:  The healthcare landscape has evolved significantly in the past few years, in part due to the explosion of specialty pharmaceuticals and other high cost drugs prescribed for chronic or life-threatening conditions. Our parent company, Pharmspective, works at the nexus of this healthcare ecosystem and uses digital app technology to create transparency around the evolving healthcare landscape and with a particular focus on the true cost of accessing and remaining on treatment.

Our latest innovation is HealthPlanView™, which – at its core – is a platform designed to dramatically increase transparency about the true cost burden assumed by patients and payers from treatment initiation through maintenance therapy.

Why is this important? We believe that formulary tier has become a poor proxy for the cost of treatment because of the complexity of insurer benefit designs and medical policy criteria.  As you note, health insurers have expanded their use of step edits and utilization management restrictions over the past few years. The intent of these types of benefit designs is to drive prescribing of lower cost (or cost-effective) therapy prior to allowing reimbursement for more expensive treatments.  HealthPlanView™ provides transparency around the true patient cost associated with each prescription to facilitate greater clarity to patients, payers, providers, and pharmaceutical manufacturers about the access and cost barriers that matter most.

Formulary tier has become a poor proxy for the cost of treatment because of the complexity of insurer benefit designs and medical policy criteria

Nicole Espinoza, HealthPlanView™

Dr. Peeples: How exactly does HealthPlanView™ provide cost transparency to these stakeholders?

Ms. Espinoza: We know that reimbursement of pharmaceuticals is incredibly confusing, complicated by the litany of insurer benefit designs that patients must choose from.  These benefit designs layer on deductions for pharmacy and medical costs, copays for prescription drugs and doctors’ visits, and exclusions for certain treatments.  By providing more granular understanding on these nuances in benefit designs, HealthPlanView™ can create a view of the differences in patient out-of-pocket costs that are unique to each patient, payer, and treatment.  In a nutshell, we increase transparency around all of the elements that impact the patient cost burden, something that has not been done before.

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Dr. Peeples: How has our industry managed this challenge of identifying true patient costs prior to this new tool? In other words, what have we been doing and what are the negative consequences associated with this lack of knowledge or lack of transparency?

Ms. Espinoza: For many years, legacy formulary tools have been focused on providing only formulary tier-level information as a proxy for cost and – in some cases – high-level utilization management data. We believe that distinctions such as “Preferred with a Step Edit” do not provide enough granularity to inform key decision makers’ understanding of how favorable or unfavorable access to a specific product is and the true impact of the cost burden associated with that product. 

Our goal is to 1) enhance understanding of drug utilization criteria such as specific diagnosis, testing, age, exclusion stipulations, and products prioritized for use prior to treatment initiation; 2) Create a level of transparency that can help users understand distinctions in these criteria across payers and between similar medications, and 3) provide specifics about the costs incurred as patients move from treatment initiation through maintenance therapy.

To put it another way, previous formulary tools have a blind spot in that they cannot bridge the gap between formulary placement and the likelihood that a patient will actually fill a prescription. Incorporating the details of a plan’s benefit design (which, of course, changes annually) has allowed us to create calculation algorithms in both Commercial insurance and Medicare to assess drug cost to the patient for each prescription filled across an entire year. By aggregating monthly out-of-pocket patient cost based on benefit design, enrollment, and policy data in our web-based platform, we are able to provide deeper insights.

At the manufacturer level, we understand that payer-facing departments, such as Managed Markets and Key Accounts strategy, need to be able to distinguish between access- and affordability-based nuances like deductibles, out-of-pocket maximums, and cost-sharing that are specific to each health plan. Without accounting for these nuances, patients that were once believed to have favorable access to a drug might realistically not be able to afford that medication and might ultimately not fill that prescription. This, of course, leads to poorer health outcomes and all of us – society, providers, payers, biopharma, and most importantly, patients themselves – have a goal to improve patient outcomes.

Those in Managed Markets and Key Accounts strategy need to be able to distinguish between access- and affordability-based nuances like deductibles, out-of-pocket maximums, and cost sharing that are specific to each health plan.

Nicole Espinoza, HealthPlanView™

In a nutshell, by providing greater transparency into true drug cost burden to patients and payers, HealthPlan View™ hopes to provide substantial context to inform understanding of the barriers to and decisions surrounding treatment choices.

Dr. Peeples: Benefit, formulary and product pricing is always changing. How does your insight tool keep up with these changes?

Ms. Espinoza: HealthPlanView™ is updated annually with Commercial and Medicare plan lists and benefit design details. Currently, the tool reflects 2019 data. On a quarterly basis, coinciding with P&T schedules, formulary data is updated. Additional updates are implemented if there are large M&A events or new product entries into a therapeutic area. Ad-hoc updates are available to any market basket requested by customers.

Dr. Peeples: What is your hope for how HealthPlanView™ will affect the business of healthcare, and specifically pharmaceuticals?

Ms. Espinoza: We believe that HealthPlanView™ will fundamentally transform pharmaceutical manufacturer contracting with payers by clearly distinguishing whether payers are easing access to treatment or simply acting as a conduit to patients with the financial resources to afford treatment.  We believe that this will alter the level of rebate incentives provided to a payer by considering the attractiveness of benefit designs offered by each insurer and the role that these designs play in the prescription volume being generated. The platform will also help customer-facing representatives and reimbursement support teams explain the challenges of benefit designs and the role of reimbursement support programs to providers.


For more information, visit https://healthplanview.com/. The company welcomes requests for a complementary demo.

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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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