Preferences for OBA – Therapeutic Areas and Commercial Scenarios

It’s that time of year where we’re busy in the final quarter of the year. In 2018, we have witnessed a fundamental change in the concept of value, going far beyond pharmacological properties and clinical effects, to not only to include patient value, quality of life and patient management, but also to integrate systems and societal value dimensions more broadly.Where are we in our journey towards the new frontier in the ‘paying for value’ discussion in the US?

Our analysis of existing agreements shows a spread across several therapeutic areas. Consider the recent wave of US contract launches which includes products in:

■ Oncology, e.g., NSCLC (i.a. Genentech’s Avastin, AZ’s Iressa) or leukemia (Novartis’ Kymriah)
■ Immune/Inflammatory diseases, e.g., MS (i.a. Bayer’s Betaseron; EMD’s Repiff, Biogen’s Tecfidera),
■ Endocrine, e.g., diabetes (i.a. Merck’s Januvia & Janumet; Lilly’s Trulicity; Novo’s Victoza),
■ Cardiovascular, e.g., hypercholesterolemia, heart disease (i.a. Amgen’s Repatha, Novartis’s Entresto; Sanofi’s Praluent, Lilly’s Effient, AZ’s Brilinta)

The category of PCSK9 inhibitors is a good example for OBAs outside the specialty field – while not as highly priced on a per unit basis, new agents in this class are potentially applicable to much broader patient populations (even if not in first-line therapy), thus resulting in high total expenditure. Wholesale acquisition cost for both competing PCSK9 entrants, evolocumab (Amgen’s Repatha) and alirocumab (Sanofi/ Regeneron’s Praluent) are above $14,000/year. In 2015, ICER initially concluded that only a 67% discount would justify pricing noting that cost-effectiveness ratios for PCSK9 inhibitors far exceed commonly accepted thresholds and have limited clinical differentiation to justify the list price. If budget impact was considered, discounts would have to be even higher.29

Other more recent cost-effectiveness studies on Repatha all conclude that the product would not be cost effective at the current list price, albeit with significant differences in the ICER (cost per QALY gained), thus resulting in discount recommendations between 30%30-70%.31 One critical discrepancy in the assessments rest on whether a late survival benefit will or will not be reached. With a two-year follow up in the clinical trials (Fourier), it could not be shown but only assumed that prevention of nonfatal MI and strokes through the treatment will translate into a reduction of mortality over time. Without the mortality benefit in the model though, ratios obviously change dramatically. Many KOLs in the field of cardiology practice had celebrated the clinical benefit of the new agents for high-risk patients (specifically those with pre-existing ASCVD who don’t respond to statins and require additional lipid lowering therapy). But given budgetary concerns, US payers reacted with extreme caution and put significant access restrictions in place.

2016 claims data analyses in the drug class show initial rejection at rates of 88.4 % in commercial plans and 72.8% in Medicare.32 After a standard 14-day look forward, final approval stands at 27.2% (Commercial) and 38.7% (Medicare) of patients who were able to receive the products they had been prescribed. These levels may not be unheard of and correspond with payer dynamics post the launch of PDE4 and HCV drugs for instance, but they obviously pose a significant challenge for manufacturers’ objectives and patient access. Troublesome is the fact that the data shows no major difference in patient characteristics between those who were rejected and those who were approved, leading to the concern that utilization is not driven by clinical management and treatment objectives.2 33 In order to guarantee access to their product, Amgen began to aggressively negotiate a series of outcomes-based contracts for Repatha with key payers, including Harvard Pilgrim, Cigna, CVS Health, and Prime Therapeutics (Figure 15). According to those at the negotiating table, “Amgen put their money where their head is” and in return for guaranteeing the outcomes promised in the respective clinical trials, Repatha was granted improved formulary placement and some easing of utilization restrictions within participating plans. A valuable discussion considering payer concerns likely began here with an evidence- and data driven discussion of how such access would influence utilization cost, assuming the product performed in line with expectations.

The PCSK9 experience offers the exemplary case where an OBA is being considered as a commercial strategy to expand access after severe restrictions have reduced the treated population while payers receive a guarantee for improved patient outcomes and some degree of financial risk-relief. While actual financial performance results haven’t been published, recent simulations modelled after the Repatha OBA suggest that despite the exposed risk for manufacturers, improved patient access would result in a net increase in reimbursement (vs. not having an OBA) while payers would see improved effectiveness and still realize savings on the net medical cost per patient (over not having an OBA).36 Win-win agreements can be designed. Of course, assumptions matter a great deal: One, if not the, critical success factor during the negotiations is confidence in the projections around effectiveness, medical cost offsets and size of population receiving treatment under the deal. Principally agnostic to therapeutic indication, successful OBA strategies are thus product-specific and context-driven.

Apart from a few obvious exceptions, there is no simple checklist for which products should qualify. In our experience, OBAs generally make sense where significant budget impact (high cost/ high prevalence) is associated with uncertainty on the value from a payer perspective. Products subject to some kind of formulary management tend to be better candidates since there is an outright incentive to accept a new risk equation on the part of the manufacturer.

Apart from a few obvious exceptions, there is no simple checklist for which products should qualify. In our experience, OBAs generally make sense where significant budget impact (high cost/ high prevalence) is associated with uncertainty on the value from a payer perspective. Products subject to some kind of formulary management tend to be better candidates since there is an outright incentive to accept a new risk equation on the part of the manufacturer.

References

29 https://icer-review.org/wp-content/uploads/2017/06/ICER_ PCSK9_NEU_091117.pdf
30 Fonarow, G. C., et al. (2017). Cost-effectiveness of Evolocumab Therapy for Reducing Cardiovascular Events in Patients With Atherosclerotic Cardiovascular Disease. JAMA Cardiology, 2(10), 1069. doi:10.1001/jamacardio.2017.2762
31 Kazi, D. S., et al. (2017). Updated Cost-effectiveness Analysis of PCSK9 Inhibitors Based on the Results of the FOURIER Trial. Jama,318(8), 748. doi:10.1001/jama.2017.9924
32 Using SymphonyHealth Data (2017). PCSK9 Inhibitors Payer Dynamics. https://symphonyhealth.com/wp-content/uploads/2017/03/PCSK9-Inhibitors-Payer-Dynamics-Feb-2017.pdf
33 C.f. Navar AM, et al. Early challenges for PCSK9 inhibitor prescriptions and patients: rejections and rates unfilled. Presented at the 66th Scientific Session of the American College of Cardiology, Washington, DC. March 17-19, 2017.
Abstract 415-08.
34 Blom DJ, et al. A 52-week placebo-controlled trial of evolocumab in hyperlipidemia. N Engl J Med 2014; 370: 1809-19.
35 Sabatine MS, et al. Evolocumab and Clinical Outcomes in Patients with Cardiovascular Disease, N Engl J Med 2017;376:1713-1722
36 Brown, J. D. et al. (2018). Payer and Pharmaceutical Manufacturer Considerations for Outcomes-Based Agreements in the United States. Value in Health, 21(1), 33-40. doi:10.1016/j.jval.2017.07.009
37 PhRMA (2018). Report: Delivering Results for Patients: The Value of Value-Based Contracts. February 26, 2018

Meet Our Experts

Ulrich Neumann
Ulrich NeumannSr. Director & Head of US Value & Access
Ulrich Neumann is the Senior Commercial Director of Analytica Laser, a global research consultancy with offices in eight countries. In addition to client advisory in US-based market access, his responsibilities include corporate affairs, marketing, product development and customer-facing growth strategies across all of the company’s target markets. Analytica is part of Certara, the global leader in model-informed drug development with over 700 professionals in 20+ countries.

With a dual background in business management and public administration, Ulrich focuses his work as a pharmaceutical market access expert on reimbursement and pricing, as well as activities on the US political, legislative and regulatory landscape to assess policy drivers, enablers and challenges to market access. He has given conference keynotes and university seminars, published research in whitepapers and articles in the pharmaceutical press, as well as two books in the field of media and terrorism policy.

His business experience lies in defining product strategy, value messaging and brand development. The founder of several ventures, Ulrich has worked on go-to-market projects for close to 15 years and most recently ran the US division of a respected global provider of pharma market insights, b2b networking and conferences. Ulrich is a graduate of the London School of Economics (MSc), University of Southern California (MA), University Twente (BSc) and University of Muenster (BA). At USC, he held the Roger Silverstone Fellowship, the Annenberg School’s highest-sponsored grant, conducting quantitative and qualitative research on the economics of digital platform markets, competitive strategy as well as marketing and communications strategies. Active in the NY health tech community, Ulrich is a supporter of the open health data movement and member of ISPOR and DIA. He is a nominated Fellow of the Royal Society of Arts and Commerce since 2014.

Isha Bangia
Isha BangiaUS Access Specialist
Isha brings a combination of clinical and strategic experience to Analytica. She holds a PharmD from Rutgers University and an MBA from Johns Hopkins. Her background as a pharmacist provides clinical perspective into retail and hospital settings where she has been involved in market access and clinical care at the provider level. Her managed care expertise includes work at Hunterdon Medical Center, Bayshore Community Hospital, Princeton Houser Psychiatry, Hackensack University Medical Center, Bayonne Medical Center. Isha has also participated in P&T committee meetings for formulary decisions. Prior to joining Analytica, Isha was a consultant at Prescient Healthcare Group, focused on competitive landscaping and go-to-market strategies. She has past experience from Zitter Health Insights where her work focused on payer primary and secondary market research to better understand market access barriers (e.g. step therapies and prior authorizations) for manufacturers. She has worked across multiple therapeutic areas including oncology, biosimilars, diabetes, vaccines and rare diseases.

Roman Casciano
Roman CascianoGeneral Manager of Analytica Laser & SVP, Market Access, HEOR and Real-world Evidence, Certara
Roman Casciano is the General Manager of Analytica Laser, leading Certara’s Market Access, HEOR and Real-world Evidence Group in the capacity of Senior Vice President. Based in New York City, Roman’s role comprises the executive management of all strategic and scientific teams across the company’s eight offices and three divisions. Roman continues to actively participate in client engagements as a market access strategist, ensuring that customers can leverage all of the benefits of our multidisciplinary team and integrated offer.

Roman was one of the founding members of the Analytica Group in 1997 and remained with the company for over 14 years, serving in various capacities during his tenure ultimately serving as President from 2008 onwards. Prior to joining Analytica, Roman worked for 4 years as an environmental engineering consultant with HDR Engineering Inc. in White Plains, NY. Roman went on to participate in the founding of the Analytica Group in 1997, initially serving as Director of Operations and subsequently serving as General Manager for the German subsidiary from 2004-2006. After returning to the US from his tenure as General Manager in the German subsidiary and prior to taking on his role as President of Analytica, Roman worked for 2 years in Analytica’s previous parent company, Accentia Biopharmaceuticals as the Sr Vice President and head of the NY-based product development team with full responsibility for the conduct of its two on-going phase III clinical programs.

As an applied health economist and market access strategist, Roman has personally led hundreds of engagements in the international market access and HEOR context related to product value demonstration and has deep experience in the management of multidisciplinary teams of scientific and strategic consultants across continents. Roman’s experience ranges from analytical activities such as economic modelling and database studies, to strategic activities such as developing product pricing and market access plans and communicating evidence internally and externally for our customers. Roman has experience across the product lifecycle, including assessment of early phase assets, licensing due diligence, and go/no-go decision-making support, as well as launch planning and commercialization activities.

Roman received both a Bachelor of Science degree in Mechanical and Aerospace Engineering and a Master of Engineering Degree in Mechanical Engineering and Engineering Decision Making from Cornell University.

Lee Stern
Lee Stern Global Vice President, Business Development
Lee Stern is a Vice President at ANALYTICA LASER, formerly Senior Vice President of Analytica International. In this role, she is responsible for all health economic and market access engagements for global clients. She also oversees the full operations of the New York office. Lee is a strategic and actionable leader managing highly qualified and scientifically robust cross-functional and geographically disparate teams.

Her expertise in solving client issues via action-oriented deliverables is a strong asset in the context of a cost conscious payer environment. She has extensive experience in global market access and launching products in competitive landscapes. As a strong operations leader, Lee is able to deploy a team of specialized scientists to ensure timely, relevant and scientifically robust deliverables for her clients. Her 10+ years of experience in the industry enables her to draw upon a vast repertoire of project deliverables to produce solutions for complex study designs and market access issues. For example, she has coordinated multiple local country submissions for major oncology products, managed international payer research in diabetes, and published numerous retrospective data analyses, models and literature review studies in peer-reviewed journals.

Prior to joining ANALYTICA LASER, Lee served as the primary nutritionist in a large physician practice, closely affiliated with NYU Langone Medical Center where she has maintained close ties.

Lee received her Bachelor of Arts degree in Neuroscience at The University of Pennsylvania. She also completed her Masters in Clinical Nutrition at New York University School of Education.

Contact Us

2018-12-06T15:14:19+01:00