Drug manufacturers seek payer feedback

March 6, 2013

Plans are offering input to manufacturers during drug development process.

By Mari Edlin

PARTNERING IN HEALTHCARE seems to be the prevailing wind while achieving access, cost effectiveness and high quality remains the aim of the industry. It is evident in accountable care organizations, in hospitals buying up physician groups and in large pharmaceutical companies acquiring smaller ones.

Now a unique alliance is evolving between pharmaceutical companies and insurers, helping manufacturers guide drug development based on input and data from health plans. 

U.S. payers want more involvement in every stage of the drug development process, according to Quintiles, a biopharmaceutical services company based in Research Triangle Park, N.C. Its 2012 report indicates more than 70% of survey respondents-U.S. and U.K. payers and biopharma executives-believe that pre-competitive collaborations among biopharmaceutical companies would lead to more innovative and effective therapies. Only 31% of U.S. payers, however, claim to participate in phase 3 testing. 

“In the last five years, meeting the needs of health plans has become front and center as we focus on the unsustainability of healthcare, and see a shift from volume to value,” says Jack Bailey, senior vice president, policy, payers and vaccines for GlaxoSmithKline (GSK), also in Research Triangle Park, N.C. “We have to deliver products of value to customers who are paying for drugs in addition to developing drugs based on clinical and safety regulations. Pharma needs rewiring, a new process that allows payers to provide feedback early on that could ensure trials are designed with payers in mind, and help us achieve a ‘reimbursable file.’” 

Bailey outlines three payer priorities GSK factors into the development of its pipeline:

  • Develop a relevant comparison between drugs, when possible, not just against a placebo.

  • Create a meaningful clinical endpoint to assess a drug’s performance. “That is the most compelling to payers in determining a drug’s coverage on formulary,” Bailey says.

  • Identify an appropriate target population for a drug to confirm its effectiveness.

It’s not just a question of research and development but also commercialization of a drug product. 

“There is a definite wall between the two, but integration of strategies is necessary. If we are unsure that we can provide sufficient clinical evidence and support reimbursement, we may have to redesign a drug,” Bailey says.

He says GSK even goes so far as to listen to payers to determine if developing a specific drug makes sense. As an example, in 2009 GSK stopped its development of remogliflozin, an SGLT2 inhibitor for treating type 2 diabetes, when it was in phase 2 testing, based on feedback from payers and the company’s assessment of the competitive environment.

Growing phenomenon

Brian Solow, MD, chief medical officer, OptumRx, a pharmacy benefits manager (PBM) headquartered in Irvine, Calif., agrees that health plan involvement in drug development is a relatively new phenomenon. 

“As a PBM, we could only offer input after a drug was already developed and gone to market,” he says, “but in the last five years, there has been a shift. Now pharma is coming to us to obtain input at phase 2 or phase 3.”

He says communication is not based so much on needs-manufacturers typically know what payers want-but rather on what a manufacturer can do to make its drugs more attractive so that PBMs will recommend those drugs for plan formularies.

“We can’t afford to cover every drug, so we are looking at how a manufacturer can use real world data and add value making it worth our while to put a specific drug on our formulary,” Dr. Solow says. 

Using real world evidence

Edmund J. Pezalla, MD, national medical director, pharmacy policy and strategy for Aetna, sees a change in the way drug manufacturers are cooperating with payers. 

“Most marketing input occurs right before approval and is tied to reimbursement considerations,” he says. “But now companies are backing up to phase 3 and asking us what we would like to know about a drug, while providing outcomes and endpoints, a drug’s effect on quality of life and results using a control rather than a placebo.”

He says they are listening to Aetna’s opinions about whether a drug should be covered under the pharmacy or medical side, how the drug could potentially perform in the marketplace and where the drug might fall on formulary in conjunction with current therapies. Manufacturers are not, however, asking health plans whether they should develop a certain drug, he says.

Like his colleagues, Dr. Pezalla says that real world evidence and data are key to relationships between payers and pharma. Most of Aetna’s available data, he says, is administrative and claims information rather than clinical. Nonetheless, he anticipates that the insurer will be able to provide additional information through the use of electronic medical records, enhanced relationships with providers and through participation in accountable care organizations.

Dr. Pezalla points out that pharma faces two major hurdles-meeting regulation standards for the FDA and getting a product to market.

“You can’t do the latter if no market exists,” he says. “It no longer works to just be guided by science, but you also need to assess how drugs are used, their quality, cost, effectiveness and safety.”

Taking the right steps

John J. Doyle, senior vice president and managing director, global market access and commercialization for Quintiles, says pharmaceutical companies must engage payers to develop a value story, optimal price and reimburseability. 

He believes that communication should start as early as phase 1 and 2 of clinical trials. 

“Payers want to know how decisions to develop a certain drug are made. To be successful, drug companies must look at the pharmaceutical landscape-what is already on the market and how they can fill gaps-consider reimbursement issues and determine how the drug can help patients,” Doyle says.

The next steps are describing the drug profile (clinical, safety, efficacy and humanistic benefits); weighing potentially higher costs against value propositions (fewer side effects, a decrease in hospital and office visits, fewer hospital readmissions); and testing new products against the competition and standards of care.

“Once the data set is available, manufacturers should determine the level of evidence payers require to move the needle toward a favorable decision,” Doyle says. “Payers want to know how a drug performs beyond a randomized control trial; they need a drug to demonstrate its value in a population specific to their membership and provide real world evidence that validates trial findings-more outcome metrics than the FDA requires.”

Manufacturers welcome input

In their development of drugs, manufacturers Merck and Pfizer are among those that incorporate input from payers on which drugs will be most beneficial to patients. 

Donald Yin, associate vice president and head of global health outcomes at Merck, headquartered in Whitehouse Station, N.J., says that his company continuously works with payers, among other stakeholders, to identify the most critical unmet needs and incorporate this input into its internal decisions. 

“Merck believes that the effectiveness of medicines produced, their appropriate use and their contribution to better health outcomes depend on strengthening the science behind medicines that reach the market and better aligning patient, provider and payer decisions with that science,” Yin says.

To deliver meaningful therapies, New York City-based Pfizer engages with payers and other external stakeholders in the development process to consistently evaluate how best to optimize its early and late-stage portfolio to ensure its medicines bring value and benefit to patients. 

The company says it leverages data and insight at every stage of the drug development process to enhance the probability of commercialization of a drug. 

Utilizing real world evidence and forging strategic partnerships are “critical to shaping a differentiated pipeline” across therapeutic areas, according to the company. New drug products, just like any product that is purchased and consumed, must meet a variety of market needs.

FDA drug approvals have averaged about 23 per year over the past decade, but last year, 39 novel medicines were approved. Since 2004, manufacturers have included more data in the development process-particularly safety data.  MHE

Sizing up the market for new drug therapies 

Developing and launching drugs that are both needed in the market and effective for patients remains the ultimate challenge for manufacturers. Bowel disorder treatments are one example. Despite availability of many therapies, there is still an unmet need among patients. 

Research from global consultants Frost & Sullivan looked at the U.S. markets for prescription pharmaceuticals for inflammatory bowel disease (IBD) and irritable bowel syndrome (IBS). The IBS (moderate to severe patients) market is a much larger patient pool, approximately 10 times the size of the IBD patient population, yet remains largely untapped, according to the analysis.

“This is a highly active market with a pipeline bursting with potential new therapies. The sheer size of the addressable patient population is driving market growth,” says Frost & Sullivan Life Sciences Senior Industry Analyst Debbie Toscano.

IBD (Crohn’s disease and ulcerative colitis) is a serious progressive inflammatory disease, for which the main unmet need is more effective therapies with better outcomes with regard to slowing disease progression and maintaining remission. Poor adherence to medication is also a significant issue with standard therapies. 

“Be on the lookout for therapies that can demonstrate improved patient compliance, as this is a major barrier to optimal outcomes in the real world,” Toscano says.  “Many available treatments are not so patient-friendly, due to high pill burden, side effects, or injectable administration. Drugs only work when patients take them.”

-Tracey Walker