Posts Tagged real world evidence

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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Key Elements of a Real-World Evidence Generation Plan: Integration of Product Support Activities

Shelby Corman
Shelby Corman
Pharmerit International

Real-world evidence is a key component of value demonstration for pharmaceuticals, diagnostic agents, and medical devices throughout the product lifecycle. Planning for real-world evidence needs early in the pre-launch period can allow for seamless integration of health economics and outcomes research to support product value and market access.

  1. Start with the “aspirational” product value story and work backwards

It is necessary to plan your real-world evidence generation strategy early in the product development process, so that the correct and most impactful data can be collected and analyzed to support the product’s value story. A set of aspirational value messages can help guide evidence generation strategies, including those for real-world evidence. A literature-based “match and gap” analysis can be used to determine whether aspirational messages are supported by existing literature, and then evidence generation strategies can be tailored to fill key data gaps.

Choosing the appropriate study design and planning for the time required to execute are important. Secondary data sources (such as administrative claims data) are readily accessible, and analyses can be completed in 3 to 6 months, but essential elements such as disease staging and severity are often missing. Primary data collection is often required to obtain data elements for stratification of patients, such as biomarker results or rationale for treatment decisions. Retrospective chart reviews can generate results in 6 to 12 months and can be combined with a patient-reported outcome (PRO) survey in a hybrid design to provide a snapshot of quality of life or patient preference. Prospective study designs usually take 12 months or longer to generate results but create opportunities to collect longitudinal quality of life or other health outcomes data.

  1. Establish the disease burden

Demonstrating the clinical, economic, and humanistic burden of a disease is a key need early in the development process and sets the stage to inform stakeholders regarding the potential value of a product. For rare diseases, this can mean raising awareness of the disease, estimating incidence and prevalence, and characterizing the population with the disease. Data for more common illnesses may be available but out of date. Estimating the economic burden of disease is especially important to a payer audience, in order to justify resources required to adopt new technologies.

Real-world evidence on the epidemiology and burden of disease should be communicated in peer-reviewed publications, incorporated into global and payer dossiers, and used to populate economic models. An accurate estimate of disease incidence and prevalence is crucial to understand the budget impact of the adoption of new technologies.

  1. Identify current treatment patterns and unmetneeds

Understanding the current standard of care for the target patient population and, by extension, the unmet patient needs expected at the time of launch, is essential for an informed market access strategy. Retrospective studies to identify current market share are required to populate budget impact models and can be used to drive the selection of comparators for cost-effectiveness models.

Further exploration of patient characteristics and clinical outcomes associated with current treatments can support a value narrative centering on unmet needs. For example, real-world evidence of early treatment discontinuation due to adverse events with existing therapies can support value messages for products with improved adverse event profiles. Such a finding could also highlight the need for the integration of qualitative research or patient-reported outcomes assessments in your real-world evidence generation strategy to further characterize the burden of adverse events on patients.

  1. Determine the key economic drivers

A solid economic value story is crucial to reimbursement in some countries and plays a supporting role in others. As such, data needs for economic models are a key consideration for real-world evidence generation plans.

The scope of real-world evidence needed depends on the complexity of the disease process and its treatment, and in turn the complexity of the model. Real-world studies can be used to quantify the cost of treatment success or failure, stratify medical costs by disease severity, and identify the incremental cost of adverse events.

Early economic models, typically designed and executed during phase II development, can be powerful tools for ensuring a solid evidence base for subsequent payer-facing models. Gaps in data required to populate cost-effectiveness and budget impact models, such as treatment pathways and healthcare resource utilization, can be identified early and addressed using real-world studies.

  1. Support clinical effectiveness

From a product development perspective, the role of real-world studies has historically been limited to the post-marketing setting, in which they have been used to fulfill post-marketing commitments, confirm safety and effectiveness in a broader patient population than that studied in clinical trials, and assess comparative effectiveness of treatments. These studies are important components of an evolving value proposition for a product, which can be communicated to decision-makers in the form of publications and incorporation into value dossiers.

In the United States, the 21st Century Cures Act has the potential to significantly reshape how real-world evidence is used in the development of new health technologies. The Cures Act, signed in December 2016, gives the Food and Drug Administration (FDA) two years to develop a framework for using real-world evidence. Guidance has been developed for medical devices, noting that real-world data could be used for purposes such as generating hypotheses to be tested in prospective studies, as a historical or concurrent control group, and as evidence to support biomarker validity, among others. Similar guidance is in develop for drugs and biologics.

Conclusions

Real-world evidence can support product value directly, by raising awareness of the disease burden and unmet needs, and indirectly, by providing inputs for economic models and identifying opportunities for additional qualitative or patient-centric research. Understanding the role of real-world evidence in the overall product value strategy and coming up with a solid plan early in the product development process can help justify the need for resources to conduct these studies in the face of competing priorities.

Contact Pharmerit for more information on Real-World Evidence.

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