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nick.merryfield@stisali.com – Cell +447939556001
• Omar Ali
Outcomes Based, Innovative Contracting (OBIC)
Examples, Key Learnings & Development Process
omar.ali@aol.com – Cell +447961317806
Introduction
o Omar Ali - NICE 9 years & former payer for NHS Surrey & Sussex
- PhD in risk share & innovative outcomes based contracting
o Nick Merryfield - Managing Partner, Stisali Limited
- Omar’s assistant for the workshop
o Stisali, highly specialized OBIC practice:
• Create & deploy Global, U.S. & EMM OBICs
• Est. by payers from mature managed markets - personal experience in OBICs
• Jointly engineered The Advanced OBIC Development process - PhD
• Significant aspect is payer psychology
“When you eliminate the impossible,
whatever remains, however improbable,
is possible”
Workshop objectives
Practical not theoretical
The Why, When, Who, What & How of OBIC construction?
Approach:
o Real-life OBIC case studies from mature managed markets
o What worked, what didn’t & why?
o U.S. OBIC development process overview & get your hands dirty time
o Group discussion
1 word on Brexit
The Why, When & Who of OBICs?
Why? - Offensive
o New to a busy market
o No major differentiator
o Reinvigorate poor sales
o Eliminate competition
Why? - Defensive
o Competition arriving
o ICER too high
o No access
o Counter competitor OBIC
When?:
o Reactive
o Pro-active
o One in the pocket
Who?:
o Commercial
o IDNs
o Plans
o PBMs
What works, what doesn’t & why?
Case studies
Case study 1 – Pazopanib - UK
Drivers:
o Late to market
o Other drugs rejected by NICE
o Head-to-head trial data 2 yrs out
o Need to do something different
Scheme:
o 2 part scheme:
o Stage 1 = simple 12.5% discount to match incumbent
o Stage 2 = discount based on clinical trial data in 2 years time
o If positive, Payer pays list price
o If inferior, Payer receives rebate on all patients plus future discount
Case study 1 – Pazopanib - UK
Barriers:
o Payer would reject without head-to-head trial
data - needed data
o How to track supply through homecare?
o Contracts not to breach legislation
o How to track patients over time of H-t-H trial?
Attributes:
o Ability to sell drug now, based on future trial data
o Simple scheme to monitor outcomes
o NICE arbitrated on success of clinical trial
o Payer driven contract
o Easy ability to contractually scale
o Additional discount was in confidence
o No "bank" interest charged
o Few patients / high cost drug
Did it work?
Case study 2 – Avastin varied neoplasms - Germany
Drivers:
o Financial constraints
o Perceived unclear efficacy for Avastin in certain neoplasms
o Avastin’s high price
Scheme:
o Manufacturer pay back cost of drug if cancer progressed in 3-5 months
o If >10g Avastin prescribed in 12 months, manufacturer pays for additional cost over 10g
o Money back to hospital not payer
Case study 2 – Avastin varied neoplasms - Germany
Barriers:
o Payers were circumnavigated
o Largest payer called the contract unlawful
o Negative press release from Drug Commission
of the German Medical Association
o Data protection issues raised on patient record
systems
o Many hospitals reluctant as legal nature of
contract unclear
Attributes:
o Manufacturer generated a legal decision that
hospitals can claim special rebates
o Manufacturer held a press conference
o Payer promised an evaluation of the contract at
period of time in the future - never happened
o Manufacturer designed which patient groups to
include
o Manufacturer designed what success looked like
o Form contract agreed via third party, paid for by
manufacturer
o No maximum cap on patient numbers
o Pharma drove this scheme and the payer did not
change it
Did it work?
Payer circumnavigated
Pharma. led 100%
PR disaster
Case study 3 – Cimzia - UK
Drivers:
o 5th RA market
o No clinical or cost advantage
o No physician brand/class loyalty
o Biologics reserved for late in clinical pathway
o Limited clinical indications - RA
Scheme:
o 1st 3 months of prescribing free
o On 4th dose payments starts - indicates treatment is working
o To incentivize physicians to use Cimzia, Payers allowed use of Cimzia earlier in the patient pathway
15
Case study 3 – Cimzia - England
Barriers:
o Physicians did not want to switch to new meds
o How to track supply through homecare
o Clinical pathway & formulary required changing
o Uncertainty on manufacturer continuing scheme
o Payers could not push change on Drs
o Difficult disease to measure success
o Company did not know Drs
o Low company sales resource
Attributes:
o Simple scheme to monitor outcomes
o Payers defined what positive response looked like
o True risk share
o NNT = 1
o Pre-authorization via clinical software but simple
o NICE did BIM on extra cost v savings
o Payer sold scheme to other payers
o Drs could pull out at anytime
o Payer checked & changed contract
o Easy ability to contractually scale
o Quite a loose contract compared to others
o Didn't mandate Drs use the drug - used incentive
o Clinical pathway changed
o Few patients / high cost drug
Did it work?
Strong physician& patient narrative
Increased access
Payer driven – P2P sales
The Advanced OBIC Development Process
The Advanced OBIC Development process
OBIC – Innovative, outcomes based contracting; Orange = after main development, internal
OBIC
development:
X2 fully developed contract themes per indicationcontracts per indication
Key legal & reg
Science hits the math
8-12 weeks 12 weeks 12 weeks
Research & analysis
4
PROVIDER POSITION
PHARMA NEEDS
PATIENT JOURNEY
PAYER PYSCHOLOGY
By Drug, Indication,
CompetitionRegion or
Local Market
CultureLocal regulatory
Hands on time – Concept Modelling Phase
Scenario:
o Want to get you involved in a small part of the process to develop an OBIC
o Developed a fictitious work through
Exercise:
o In pairs or as a table review Worksheet 1
o List of example key drivers distilled from research phase relevant to fictitious oncology therapy area
o Our Payers have placed their importance on each driver
o You must now place your importance on each driver i.e. how important is this driver in an OBIC to you?
o To help, a standard industry response is in the left column – simply mark your differences
o 5 mins
o Go round the room to see where differences are
Concept modelling – mapping drivers & hooks
5
Example characteristics, drivers and hooks derived from the research & analysis process; each with relative importance to payer & pharma.
Payer & provider psychology for drug, indication, class & local market established.
Key:
= High importance
= Variable importance
= Low importance
TBC = Presently unknown value, to be confirmed
EXAMPLE OBIC CHARACTERISTICS, DRIVERS & HOOKSLEVEL OF IMPORTANCE
TOPHARMA
CLIENT PAYER
General:
Administration Simple & easycontract set up
Low cost
Driver TBC
Driver TBC
Driver TBC
Clinical Improved clinical outcomes
Driver TBC
Persistence/AdherencePatient adherence improved
Driver
AccessFormulary exclusivity for suitable indications
Driver TBC
Driver TBC
Driver TBC
Driver TBC
FinancialProvides a competitive financial discount
Total cost of care reduced
Driver TBC
Financial risk taken by both other party
Driver TBC
Driver TBC
Driver TBC
Driver TBC
Driver TBC
Other:Driver TBC
Driver TBC
Driver TBC
Driver TBC
Drug & Therapy
Specific:
Outcome measuresOverall Survival (OS)
Driver TBC
Driver TBC
Driver TBC
Maintenance Not to impact a patient’s QOL
Driver TBC
TestingUniversal bimarker testing
Driver TBC
DurationDoesn’t drain funds at end of life
Other Increases payer education on total utilization cost of disease
Driver TBC
Concept modelling
structure
Common Value ExamplesSimple contract; Low admin costs; Common Value #2, Common Value #3, etc.
Smaller household quarrels (negotiation variables)
• Payer guarantees adherence• Gain formulary exclusivity• Improved Tier position• Negotiable 4• Negotiable 5• Etc.
ACHIEVE OBIC BENEFITS FOR BOTH PARTIES
Pharm
a C
SI E
xam
ple
s
Paye
r CSI E
xam
ple
s
CSIs =
Critica
l Succe
ss Impera
tives
How OBIC levers & the narrative tie into the
Brand
Concept modelling - OBIC levers
7
Creation of six to ten potential OBIC levers to:
1. homogenize common areas
2. bridge major CSI differences
3. provide a platform to negotiate variables
Narrative creation included at this stage
For illustrative purpose only – example of a simple OBIC lever
OBIC development overview
Access for X at fixed YFor indication yWith Z number of coursesFor Q outcomes guaranteed
Access for patients in XOutcomes – guarantee forRebate for Z
Product X OBIC Contract 1 Title
Product X OBIC Contract 2 Title 2
1
8
Contract Objectives Summary
The Advanced OBIC Development process
OBIC – Innovative, outcomes based contracting; Orange = after main development, internal
OBIC
development:
X2 fully developed contract themes per indicationcontracts per indication
Key legal & reg
Science hits the math
8-12 weeks 12 weeks 12 weeks
Group discussion
Question – show of hands:
1. Reactive
2. Pro-active
3. Prepare one for the pocket now?
4. Do nothing?
Thoughts on taking the journey?
Workshop objectives
Address the practical Why, When, Who, What & How of OBIC construction?
Approach:
o Real-life OBIC case studies from mature managed markets
o What worked, what didn’t & why?
o OBIC development process showcase & practical application
o Group discussion
1 word on Brexit
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