Upload
vuongtruc
View
226
Download
0
Embed Size (px)
Citation preview
1
CONFIDENTIAL—NOT FOR FURTHER DISTRIBUTION
Value of Emerging Therapies:Industry Perspective on Valuing New Therapies
Laurel Todd
Vice President, Healthcare Policy & Research
2
Financing Biotechnology: Biotech Innovation is Expensive & Risky
• Developing new treatments and cures is challenging.
• Success is measured in years andbillions of dollars.
It takes more than 10 years and more than $2.6
billion to research and develop a new medicine.
Source: Tufts Center for the Study of Drug Development (CSDD)
3
Clinical Trials
1–2 years6-9 years
1 FDA
Approval
3-5 years
FDA
Review
100
1000s molecules
10 6 2 1
Discovery
Hypothesis
In vitro testing
In vivo testing
Source: BIO Industry Analysis, January 2016
Drug Development Timeline
Ph II Ph IIIPh I
10% probabilityof approval from
Phase I
4
Biotech Funding Sources
Preclinical Phase I Phase II Phase III Market
Angels, Incubators
Patient Groups/ Foundations
Family Offices
Venture Capital/Corporate VC $3.7 B
R&D Collaborations with Pharma/Biotech $3.5 B
Follow-On Offerings $2.7 B
IPOs $1.0 B
Average Total Annual Funding of
R&D-stage Companies*
Gov SBIR/BARDA $1.1 B**
* Average 2004-2014 for Emerging Therapeutic Companies**2014: SBIR = $677M, BARDA = $415M
5
Biopharmaceutical Research Continuum
Government FundingPDUFA (Company)
Government FundingAcademic/Private Funding
Investment CapitalPrivate Funding
Sources: BIO, 2015
Policy change
impacts entire
ecosystem
6
Significant Impact of Federal/State Prescription Drug Payment Policies
Source: Drug Channels Institute, 2015 (December 10), Source of Payment for Outpatient Prescription Drugs, 2014, available at: http://www.drugchannels.net/2015/12/five-fun-facts-newest-prescription-drug.html.
7
Value of Innovation
Innovator
Provider
Health SystemSociety
Patient
Payor
8
CER and Value Frameworks
9
BIO Principles on the Value of Biopharmaceuticals
10
BIO Policy Platform
BIO Supports Policies that Foster a Holistic Approach to Strengthening the Healthcare System by:
Ensuring Patient Access to Innovative Biopharmaceuticals
Nondiscrimination Cost Sharing
Network Adequacy
Transitioning Between Plans
Sustaining Biopharmaceutical Innovation
Communicating Value
Recognizing Value
Financing ValueFacilitating a Robust
Marketplace
11
Facilitating a Robust Marketplace: Aligning Incentives with Value
Value-based Insurance Design (VBID)
(e.g., lower cost-sharing for therapies that prevent
hospitalizations)
Value-based Arrangements
(VBAs)(e.g., payment based on
patient outcomes, and not necessarily payment-per-
unit). Alternative Payment
Models (APMs) (e.g., payments to providers based on the quality and cost
of the care they provide).
Payors
Patients
Providers
ManufacturersAPM
s
Alternative Financing
Models (AFMs)(e.g., annuity
mortgaging). AFMs can influence all
three of the other arrangement types (though primarily
VBAs).
12
The U.S.
Relatively rare in the U.S., recent VBAs (between manufacturers and commercial payers) have grabbed headlines.
There is no one-size-fits-all approach, even in these nascent efforts.
EUROPE
A 2014 study by the University of Washington estimated there were 209 VBA-type arrangements worldwide, with the vast majority in Europe (led by Sweden, Italy, and the UK).
In the U.K., VBA-type contracts between manufacturers and the National Health Service have existed since 2002 (first was w/MS drugs).
Significant concerns continue to be raised with regard to:
Setting appropriate patient health outcome targets,
The ability to track patient health outcomes, and
The ability of the NHS to collect any additional rebates owed.
Existing VBA Examples
CONFIDENTIAL—NOT FOR FURTHER DISTRIBUTION
13
Role of Value-Based Arrangements (VBAs)
Continued Innovation
Improved Outcomes
Mitigate risk
Improve Access
14
What was contemplated?
– Referencing pricing: One payment rate for drugs CMS considers therapeutically similar.
– “Indication-based pricing”: Setting payments rates based on clinical effectiveness on a given drug.
– Risk-sharing arrangements based on outcomes: Agreements with manufacturers linking payment with outcomes.
– Variation on VBID: Discounting or eliminating patient cost-sharing for certain high-value therapies.
CMS is interested, but still learning, about Value Based Arrangements
– Policy gaps
– Operational challenges
What Did we Learn from Medicare Part B Proposed Demo: Phase II
15
Potential Areas of Uncertainties
Areas of Potential Uncertainty (not comprehensive)
Federal Regulatory State Regulatory Other
Government Price Reporting
State insurance law Contracting Complexity
Anti-kickback Statute State fee-splitting laws Data Analytics
Off-LabelPromotion/Unsubstantiated
Claims
State corporate practice of medicine laws
Financial Accounting
Patient Privacy Tort liability risk Gross-to Net Impact
Areas of Current BIO Advocacy
CONFIDENTIAL—NOT FOR FURTHER DISTRIBUTION
16
Potential Areas of Uncertainties (CONT’D)
GOVERNMENT PRICE REPORTING CONSIDERATIONS
• NDC and J-Code reporting• Interaction with Medicaid Best Price• Average Sales Price interaction• Accounting for future pricing
adjustments
ANTI-KICKBACK STATUTE CONSIDERATIONS
Scrutiny under existing interpretation and guidance, paired with the lack of sufficient protection under existing safe harbors.
COMMUNICATIONS CONSIDERATIONS
Concerns with regard to manufacturer communication with payers about product information relevant to the development and implementation of a VBA (e.g., data outside of the “four corners” of the approved label; information on an experimental therapy).
CONFIDENTIAL—NOT FOR FURTHER DISTRIBUTION
17
Facilitating a Robust Marketplace: Aligning Incentives with Value
Value-based Insurance Design (VBID)
(e.g., lower cost-sharing for therapies that prevent
hospitalizations)
Value-based Arrangements
(VBAs)(e.g., payment based on
patient outcomes, and not necessarily payment-per-
unit). Alternative Payment
Models (APMs) (e.g., payments to providers based on the quality and cost
of the care they provide).
Payors
Patients
Providers
ManufacturersAPM
s
Alternative Financing
Models (AFMs)(e.g., annuity
mortgaging). AFMs can influence all
three of the other arrangement types (though primarily
VBAs).
18
Example Alternative Finance Models (AFMs)
Managing…
– Risk?
– Liquidity?
– Duration of effect?
Annuity Payments
Debt financing
Reinsurance/Fund Payments
19
Most relevant for curative therapies with significant short-term cost to the system and benefits realized over years.
To date, there has not been experimentation with AFMs among public or private payors on the broad scale. Considerations for payors include:
– Data availability
– Operational complexities
– Federal statutory and regulatory hurdles
Legislative vehicles related to ACA repeal and replace may provide an opportunity to address statutory and regulatory barriers to AFMs (many of which would also help to facilitate VBAs).
Several collaborations have been assembled to consider AFMs
Alternative Finance Models (AFMs)
Biotechnology Today
21