Cardinal Health Specialty Solutions

2017 Oncology Insights Views on Reimbursement, Access and Data from Specialty Physicians Nationwide

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On behalf of our team at Cardinal Health Specialty Solutions, it is my pleasure to share Oncology Insights, the first in a series of research-based reports designed to deliver perspectives on key issues for specialty care providers, biopharma companies and other healthcare stakeholders.

Oncology care has never been more complex. Issues such as the transition to value-based reimbursement and the increased demand for provable outcomes have created both challenges and opportunities for those working to advance cancer care. Gaining a deeper understanding of how providers view these issues is key to developing better solutions.

Oncology Insights is based on results from three Cardinal Health Summits conducted earlier this year. Each summit brought together more than 170 oncologists from across the United States, from a diverse mix of community and hospital-based practices, to explore topics critical to their practices. Research was conducted via audience-response polling.

This report aggregates the data from all three summits to provide a snapshot of oncologists’ views on three topics:

• The transition to value-based care under the Medicare Access and CHIP Reauthorization Act (MACRA)

• The emerging role of real-world evidence and patient-reported outcomes in treatment decisions

• The importance of patient support services and the role of pharmaceutical companies in offering them

As a leading provider of solutions to the specialty care industry, understanding the changing landscape and the views of specialty providers is a critical priority for Cardinal Health. We hope you find the research findings from these summits, and the perspectives from our experts, as valuable as we do.

We look forward to sharing future research and continuing to contribute to the industry conversation.

Sincerely,

Joe DePintoPresident, Cardinal Health Specialty Solutions

Joe DePintoA message from the President

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Are Physicians Ready for Value- based Care?

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MACRA

When the first Medicare Access and CHIP Reauthorization Act (MACRA) performance period went into effect on January 1, 2017, it represented a major milestone in the transition to value-based care.

Designed to reward quality rather than quantity of care, MACRA transforms the payment model used by more than 600,000 clinicians caring for more than 55 million Medicare patients nationwide.

By moving providers from fee-for-services reimbursement to a fee-for-value model, MACRA implementation presents a variety of challenges for practices of all types, including greater financial uncertainty and added administrative responsibilities. The act imposes tight timelines for implementation, with rewards and penalties assessed in early 2019 based on performance in 2017. Those providers who underperform based on the reported data could see a significant decrease in their annual earnings. In response, the American Medical Association, the American Society of Clinical Oncologists and other groups have launched education campaigns to help providers prepare.

To better understand MACRA readiness among various oncology practices, participants in the 2017 summits were asked about their compliance strategies – and their views on how the law will impact quality and cost of patient care.

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While MACRA was enacted into law in 2015 and is being implemented, 87 percent of surveyed community oncologists have little confidence that MACRA will lead to better patient outcomes. Whereas it is not entirely clear why this lack of confidence exists, several factors should be considered. Many oncologists view increased administrative duties and reporting mandated by MACRA as a distraction from direct clinical care. In addition, many oncologists question the link between lowering cost and improving outcomes. Penalties imposed on some practices might drive oncologists away from direct patient care or lead to consolidations, both of which might have questionable impact on patient outcomes. Finally, oncologists fear that emphasis on cost might affect innovation, which in turn could affect patient outcomes adversely.

In regard to whether MACRA will lower the cost of care, there are numerous reasons oncologists may be skeptical. First, oncology care is complex, and total cost of care is affected by drug prices, hospitalizations, ER visits and requirements for long-term therapy. Oncologists recognize that addressing reimbursement for Medicare patients is unlikely to fully resolve this complex, expensive process. Also, there is a fear that MACRA might drive some oncologists away from clinical care, and having fewer providers might eventually add to healthcare expenditures. Finally, MACRA does not precisely address complex survivorship issues, and how these issues might lead to expensive tests and management directed to counter long-term complications from anti-cancer therapies.

Collectively, this research highlights the apprehension oncologists have about MACRA. Strategically, it is critical to provide a proper educational platform and administrative support to oncologists to assure delivery of exceptional care. Frequent updates from CMS and governmental agencies are needed, as well as long-term measurement of the program, to ease anxieties and better under-stand the impact of MACRA on outcomes, costs and value.

Chadi Nabhan, MD, MBA, FACP

Many participating oncologists said they are unsure how to manage changes needed to comply with MACRA.To prepare for MACRA, practices must implement new reporting procedures that may require technology upgrades and additional staff. Many practices report that they either have adequate resources or have invested in technology and staff essential to MACRA compliance. Yet nearly one-third of respondents said they are uncertain how they will manage the transition. For instance, 44 percent of oncologists report not knowing what MACRA Pick Your Pace option they’ll participate in 2017.

OUR VIEWPOINT

Chief Medical Officer, Cardinal Health Specialty Solutions

MACRA

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Which of the following best describes the strategy of your practice for managing the necessary changes needed to comply with MACRA?

We believe we currently have the resources and staffing needed to manage this change, and we are not making any significant changes. 10%We have invested in technology and staffing to ensure we have the resources needed for quality reporting. 36%We are planning to invest in technology and staffing to ensure we have the resources needed for quality reporting. 11%Our practice is seeking a merger with a larger entity. 16%We are unsure of how we will manage our strategy at this time. 27%

N=190

Most participating oncologists lack confidence that MACRA will help improve patient outcomes and total cost of care. MACRA is intended to promote quality care, at a lower cost, by providing

reimbursement based on outcomes rather than the traditional fee-for-service model. Yet the vast majority of participating oncologists are skeptical that these goals will be attainable.

ABOUT 1 IN 6 ONCOLOGISTS

said their practice is seeking a merger as a strategy for managing MACRA compliance.

ABOUT 25% of participating oncologists said the

ability to maintain comparable financial performance is their biggest concern

about meeting MACRA requirements.

MACRA

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How confident are you that MACRA will help improve total cost of care in the long-term?

Very confident 2%Moderately confident 2%Somewhat confident 10%Not very confident 40%Not at all confident 46%

N=144

How confident are you that MACRA will help improve patient outcomes in the long-term?

Very confident 1%Moderately confident 3%Somewhat confident 9%Not very confident 35%Not at all confident 52%

N=202

87% OF PARTICIPATINGONCOLOGISTSare either “not very confident” or “not at all confident” MACRA will improve

patient outcomes.

86% OF PARTICIPATINGONCOLOGISTS

lack confidence that it will lower the cost of care.

and

MACRA

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MACRA

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Real-World Evidence and Patient-ReportedOutcomes

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REAL-WORLD EVIDENCE

As they consider the best treatments for patients, clinicians are beginning to recognize that randomized clinical trial data provides only limited insight into the safety and efficacy of treatments because most clinical trial participants are younger, healthier and less diverse than patients they see in practice.

Both regulators and providers are increasingly seeking to understand how drugs are being used in real-world settings by tapping into data from medical claims, electronic medical records and patient registries. There is also growing focus on the value of patient-reported outcomes (PRO), which can provide insight into qualitative factors such as treatment satisfaction, quality of life, and medication adherence.

An increased interest in real-world evidence (RWE) is also being driven by the recent 21st Century Cures Act, which requires that the FDA meet an accelerated timeline for developing a regulatory framework that incorporates RWE for drug and device applications. Recently, the FDA also released guidance on how PRO data should be collected and used in clinical trials to complement traditional measures of efficacy and safety. The FDA now acknowledges that RWE meeting certain criteria can be used to support some regulatory decisions, and that PRO evidence can, and should, be used in product labeling.

To better understand attitudes and trends, we asked participating oncologists to share their views on how they are using RWE in evaluating treatment options.

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With the promulgation of the 21st Century Cures Act and the release of guidance on the use of PRO evidence in product labeling claims, evidence-based decision making is likely to evolve to a point where efficacy and safety data are no longer considered in isolation from other outcomes data. The magnitude of this evolution will be dependent upon how this evidence is consumed, considered and acted upon by providers and patients. Already tools such as the NCCN Evidence Blocks and ASCO’s Value Framework are available to help clinicians synthesize these data and foster communication with patients in the hope of improving patient-centered care and treatment outcomes.

As we’ve seen in the research from our summits, 72 percent say real-world evidence is important when making treatment decisions, but their consumption of the data is still at a low level. Many providers admit to being unsure of the value of RWE due to doubts about the accuracy of the data and the rigor used to collect it. Despite their increased interest in RWE and PRO, clinical trial data remains their most trusted source of information.

Until recently, RWE was primarily a tool of payers to evaluate the comparative effectiveness or economic impact in cost-benefit analysis for a new therapy. Today, RWE is trickling into the oncology and hematology canon because of the limitations of clinical trial data. For the trickle to become a waterfall that will drive better evidence-based decision making, the healthcare industry will have to:

• Standardize appropriate and understandable analytic tools and methodologies for collecting RWE

• Agree on the limitations of these data and where they can be used in the treatment paradigm

• Foster the development of a research community and methods for participation that do not detract from patient care

While these changes may not be moving as quickly as some in the industry would prefer, at Cardinal Health we expect RWE will gradually be adopted by providers and will ultimately help improve outcomes for patients.

Jonathan Kish, PhD, MPH

While data from clinical trials remains the primary information source for making treatment decisions, participating oncologists indicated a strong interest in RWE and PRO.Asked to rate several information sources, participants preferred data on efficacy and safety from clinical trials by a significant margin. However, most participants said RWE and PRO are important to their treatment decisions.

OUR VIEWPOINT

Director, Health Economics and Outcomes Research, Cardinal Health Specialty Solutions

REAL-WORLD EVIDENCE

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When making treatmentdecisions, how important is PRO data?

Very important 39%Moderately important 37%Somewhat important 16%Not very important 7%Not at all important 1%

N=158

When making treatment decisions, how important is health economicsdata from real-world studies?

Very important 36%Moderately important 36%Somewhat important 20%Not very important 7%Not at all important 1%

N=171

76% OF PARTICIPATINGONCOLOGISTS

said PRO is important to treatment decisions.

Efficacy data from clinical trials 76%Safety data from clinical trials 10%Comparative effectiveness studies using real-world evidence 9%Patient-reported outcomes 2%Health economics data from real-world studies 3%

When making treatment decisions, what is the most important information source?

N=176

REAL-WORLD EVIDENCE

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Most participating oncologists agree that RWE is necessary to inform clinical decisions due to limitations of clinical trials.

As noted previously, participating oncologists said efficacy and safety data from clinical trials is the most important source of data. But clinical trials have limitations. For instance, less than 3 percent of adult cancer patients participate in clinical trials. Compared to average cancer patients, participants in clinical trials tend to be younger, healthier and less diverse. These factors help explain why 73 percent of participating oncologists said they “strongly agree” or “somewhat agree” that RWE is essential to treatment decisions.

What is your level of agreement with the following statement?

RWE (such as outcomes and adverse-event data from medical claims) is necessary to inform treatment decisions due to the limitations of clinical trials.

Strongly agree 30%Somewhat agree 43%Neither agree or disagree 20%Somewhat disagree 4%Strongly disagree 3%

N=178

ABOUT 67% of oncologists say they have not

participated in PRO studies.

ABOUT 76% of oncologists say they have not

participated in RWE.

REAL-WORLD EVIDENCE

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REAL-WORLD EVIDENCE

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The Role of Patient Support Services in Driving Improved Outcomes

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PATIENT SUPPORT

As specialty care becomes more complex and treatment moves out of the acute setting and into outpatient clinics and patients’ homes, patients are taking a more active role in managing their diseases.

Today, many cancer patients and their caregivers are responsible for administering complicated treatment regimens and managing side effects with little supervision from their healthcare provider. As a result, patient support programs, which can include a wide range of services such as financial assistance, counseling, education, telephone support, in-home visits, and help with adherence to medication, are becoming a critical component of the patient journey.

To gain more insights on the role of patient support services, participating oncologists explored a variety of key issues. How do they view the importance of support services? Which services do patients need most? What is the role of pharmaceutical manufacturers in the delivery of support services?

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Today, more than 2,500 prescription medicines in the U.S. have patient services programs, with particular focus on chronic and complex diseases. Yet our summit research shows that only 8 percent of surveyed oncologists view these programs as available, effective and easy to use. The physicians may feel this way for several reasons: lack of awareness of the existence of these programs, lack of information on how to access these programs, or poor experience with these programs in the past.

Traditionally, pharmaceutical companies have funded patient support programs, which range from financial assistance to reimbursement services to adherence programs, to remove barriers to patient care. While some physician practices may prefer to complete benefits investigations, prior authorizations, and appeals using internal staff and resources, others may not be aware that patient support programs can manage the administration of these tasks on behalf of the patient. To improve utilization of these services, pharmaceutical companies should more actively promote them through their sales teams, their medical science liaison teams and in their direct-to-consumer marketing.

In addition, our research showed 48 percent of the physicians surveyed indicated that significant improvement is needed to increase the value delivered by these programs. This perceived need for improvement may reflect a lack of communication between the provider and the program. For example, if offering a compliance program with clinical staff, the biopharma company sponsoring the program should share back relevant information with the physician office. Electronic communication and automation of key parts of the patient service program process (such as enrollment) will also improve ease-of-use perceptions.

It is encouraging to see that 86 percent of participating oncologists believe patient support programs can help improve patient outcomes. Clearly, the industry has work to do to build greater awareness of existing programs and to demonstrate their individual value. Greater communication and collaboration between providers and biopharma companies will be key to optimizing program success.

Jennifer Fillman

Participating oncologists said financial assistance is the primary need for patients, but services such as education and adherence support are viewed as critical to treatment outcomes.Given the high cost of many specialty medicine treatments, it comes as no surprise that oncologists view financial assistance, primarily delivered by pharmaceutical companies, as the most important support service. At the same time, oncologists agree that education and adherence programs are effective in improving outcomes.

OUR VIEWPOINT

Vice President, General Manager, Cardinal Health Specialty Solutions

PATIENT SUPPORT

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What is your level of agreement with the following statement?

Patient support services such as education and adherence programs (including brochures, videos, or reminder call programs) can help improve outcomes for patients managing chronic diseases.

Strongly agree 44%Somewhat agree 42%Neither agree nor disagree 9%Somewhat disagree 4%Strongly disagree 1%

N=167

86% OF PARTICIPATINGONCOLOGISTS

say they “strongly agree” or “somewhat agree” that education and adherenceprograms can help improve outcomes for patients managing chronic diseases.

PATIENT SUPPORT

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Participating oncologists believe pharmaceutical manufacturers need to play a larger role in patient support programs, and that existing programs could be improved.Pharmaceutical companies are offering a variety of programs that help patients stay on track with treatment plans. Participating oncologists expressed high expectations for pharma companies: more than 86 percent of participants said companies should play a larger role in financial support programs.

Regarding pharmaceutical manufacturers’ role in delivering access and assistance programs to help patients manage financial barriers to treatment, which response best aligns with your belief?

Such programs are essential, fairly common, easy to use and effective. 14% Such programs are essential, fairly common, but highly variable in regard to ease-of-use and effectiveness. 44%Such programs are essential, easy to use and effective, but not as common as I would like. 11%Such programs as currently available could be significantly improved to increase their value. 31%

N=160

Regarding pharmaceutical manufacturers’ role in delivering education and adherence programs to help achieve better outcomes, which response best aligns with your belief?

Such programs are essential, fairly common, easy to use and effective. 8%Such programs are essential, fairly common, but highly variable in regard to ease-of-use and effectiveness. 30%Such programs are essential, easy to use and effective, but not as common as I would like. 14%Such programs, as currently available, could be significantly improved to increase their value. 48%

N=164

PATIENT SUPPORT

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ONLY 8% OF PARTICIPATINGONCOLOGISTS

said education and adherence programs offered by pharmaceutical manufacturers are readily available, easy to use and effective.

PATIENT SUPPORT

Contributors

MACRA Chadi Nabhan, MD, MBA, FACPChief Medical OfficerCardinal Health Specialty Solutions

Real-World EvidenceJonathan Kish, PhD, MPHDirector, Health Economics and Outcomes ResearchCardinal Health Specialty Solutions

Patient Access & Support Jennifer Fillman Vice President, General Manager Cardinal Health Specialty Solutions

Want to learn more?Let’s explore how we can help.888.438.2673specialtysolutions@cardinalhealth.com

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© 2017 Cardinal Health. All Rights Reserved. CARDINAL HEALTH, the Cardinal Health LOGO and Essential to care are trademarks or registered trademarks of Cardinal Health. All other marks are the property of their respective owners. Lit. No. 1SS17-687668 (06/2017)

Methodology

The research was fielded at three live summit events, hosted by Cardinal Health Specialty Solutions, in February, March and April 2017, using audience response system technology. More than 170 oncologists from a mix of community and hospital-based practices participated in the research.

About Cardinal Health Specialty Solutions

Cardinal Health Specialty Solutions creates opportunity for specialty pharmaceutical manufacturers and providers. Our dynamic team of problem solvers understands the complexities of specialty healthcare, and we draw on our deep expertise to help ensure patients get the therapies they need, when they need them. From supporting manufacturers on the path to successful product approval, commercialization and optimization to delivering the products providers need with the efficiencies they want, we use our experience and expertise to help our customers achieve success and improve specialty care.