	Contributors of Pricing and Reimbursement Risk in Oncology

 Most manufacturers examine the competitive landscape from both a clinical and a market access perspective when designing clinical trials to optimize a product’s commercial potential. A thorough understanding of efficacy and safety benchmarks within the current and future clinical landscape is absolutely necessary to assess a product’s potential to benefit patients. As the product progresses through clinical development, standard pricing and value research with a “set” target product profile will usually be undertaken. However, in the urgency to speed the drug to market, thoroughly integrating value and market access considerations into a product’s clinical program design is often neglected. To truly convey a product’s commercial potential, careful consideration and planning must be given to payers’ value measures. Having an evidence package at launch that satisfies payers’ value criteria will increase the likelihood that payers will reimburse the drug at a desirable price and enable patient access to innovative treatments.

The number of agents in development for the treatment of cancer is double what it was 10 years ago. Simultaneously, agents are moving through development at an ever increasing pace. The availability of targeted therapies and now the dawn of immunotherapies have altered treatment pathways in multiple tumor types, and this is highly likely to continue for the next few years. Survival benchmarks are reaching points that were once thought unattainable and products are often more tolerable. More products are becoming available for patients harboring specific biomarkers, creating subpopulations within tumor types. This creates vast improvements in outcomes for patients and raises important issues. Growing competition within specific indications is allowing payers to manage oncology more thoroughly. But how will payers manage the different agents, indications, and costs? Clearly, companies have to be even more mindful of the commercial hurdles that lie beyond regulatory approval.

		Figure 1. Use of Differential Tiering in Multiple Myeloma

		*Based on primary benefit design formulary.

 Pharmspectice; Pharmspective Policy View. http://pharmspective.com/

The importance of examining these questions in the context of a product’s clinical development plan can be clearly illustrated by pricing and reimbursement in Europe, where payers from different countries often have unique perspectives and data needs to take into consideration. Kadcyla® (trastuzumab emtansine, Genentech/Roche), which received European Medicines Agency (EMA) approval in December 2013, is an example of this. In France, the Commission de la Transparence (CT) assessment of Kadcyla had few criticisms of its trial. Determining that the correct active comparator was used in the trial, the product received a very positive Improvement of Medical Benefit assessment (amélioration du service médical rendu, or ASMR) rating (II), representing a “substantial improvement in actual benefit.” In contrast, in Germany, the Gemeinsame Bundesausschuss (G-BA) considered three different comparators. Because the clinical trial was designed to address a comparison with Tyverb® (lapatinib, Novartis) plus capecitabine, two of the three comparisons resulted in a designation of Kadcyla as offering “no additional benefit.”

Meanwhile, in comparison with Tyverb plus capecitabine, G-BA offered only a “hint of significant benefit,” predominantly due to the use of a progression-free survival endpoint based on imaging alone and no symptom data.

 In turn, Kadcyla’s price in Germany was discounted about 20%, and a 160 mg vial is almost €300 less than in France and the lowest in the 5EU.

Even in the United States, payer management beyond a prior authorization for a labeled indication is growing. For example, in the increasingly crowded market of multiple myeloma, around one-third of community oncologists reported an increase in payers asking them to change their prescribing for Revlimid® (lenalidomide, Celgene), Velcade® (bortezomib, Millennium/Takeda) and Pomalyst® (pomalidomide, Celgene), in particular.

 Reasons for these requests varied, but step edits and pathways are certainly evidence of increased payer management of this category. In addition, a sample of plans operating on the national, regional and state levels indicates that differential tiering is also being leveraged to manage products differentially. In fact, around one-third of patients across payer types are being affected by this type of management, and smaller plans operating within a region and in a single state are the most likely to manage in this way 

	Incorporating Payer Risk in Clinical Trial Design and Commercial Planning

In addition, payers may leverage pathways that may exclude products with less-than-compelling value propositions. For instance, UnitedHealthcare/ Anthem’s AIM Cancer Care Quality Program currently excludes Pfizer’s Ibrance® (palbociclib), which received accelerated approval based on its Phase II PALOMA-1 trial.

 Even though Ibrance nearly doubled progression- free survival in hormone receptor-positive breast cancer, the pathway may be waiting for more mature overall survival data to support the product’s additional value commensurate with its cost of nearly $10,000 more per month than its comparator, letrozole.

Given the rising clinical and market access hurdles companies are facing, adequate preparation for a product’s launch from a payer risk perspective should evolve beyond the standard groundwork discussed at the outset. Kantar Health has found that manufacturers can proactively identify blind spots and address pricing and reimbursement risks to speed access to therapy.

This involves examining current treatment patterns, future competition, pricing and reimbursement analogues, as well as the general market access environment on a country-specific basis. In addition, identifying likely performance in the context of market access-specific considerations (e.g., price, quality of life, epidemiology; 

and partnering with multiple stakeholders within the manufacturer (e.g., regulatory, clinical, ex-US operating companies) early in the lifecycle of a new product will help discover market-specific needs and hurdles.

		Figure 2. Identifying a Product’s Evidence and Value Gaps Allows Manufacturers to Better Prepare for Payer Objections

Pharmspectice; Pharmspective Policy View. http://pharmspective.com/

This kind of analysis can guide a clinical development team’s thinking about how to generate the evidence needed to secure favorable outcomes beyond regulatory approval and drive a wide variety of activities and decisions about a brand. Examples of potential work streams associated with this analysis include supplemental data gathering, re-forecasting, decisions about indication sequencing, “go/no-go” business development and licensing decisions, and trial design considerations like the target patient population, comparators, and endpoints. These considerations will help speed and smooth the road to market access and ensure that patients in all geographies will have access to the best available therapies.

			Kantar Health. Oncology Market Access — EU 2015. Speed to Market Access Special Report.

			Kantar Health. Oncology Market Access — US 2015. Oncologist Survey.

			Anthem. Cancer Care Quality Program: Treatment Pathways. Accessed 28 October 2015. Available at https://anthem.aimoncology.com/pdf/pathways/Cancer_Pathways_Clinical_Detail.pdf Meadow Green is a Consultant in the Oncology Commercial Strategies team at Kantar Health, and Madelyn Hanson, Ph.D. is an Associate Consultant in the Clinical and Scientific Assessment team at Kantar Health.

Articles

Having an evidence package at launch that
satisfies payersâ€™ value criteria will increase the likelihood that payers will
reimburse the drug at a desirable price and enable patient access to innovative
treatments.

Value and Market Access Considerations Often Missing From Trial Design

The healthcare market has been consolidating in recent years with practice mergers, hospital partnerships, and acquisitions or affiliations with primary care and specialist practices. Large health systems have diversified services and revenues and begun managing risk as accountable care organizations (ACOs)—sometimes even offering their own health plans.

The formation of an integrated delivery network (IDN) can be vertical (usually involving hospitals acquiring or affiliating with a large physician group or forming an HMO) or horizontal (mergers, partnerships and affiliations between multiple providers). Much of this consolidation and IDN formation is happening quietly and steadily, but the increasing corporatization of the US market and the trend from community to hospital outpatient care delivery is on the radar of payers and pharmaceutical manufacturers alike.

These trends raise a few key concerns. Payers are concerned that acquisition of practices (especially oncology practices) by hospitals inflates costs of services because the hospital “outpatient setting” is associated with higher reimbursement rates and facility fees than the community setting,

without necessarily offering improvements in quality or efficiencies. Manufacturers note that this dynamic contributes to the increasing number of entities and sites eligible to receive 340B discounted drugs,

 which in turn takes a toll on manufacturer revenues. Another concern is that IDNs are influencing physician behavior and drug selection.

These concerns are not without merit: a similar wave of consolidation in the 1980s and 1990s resulted in the formation of some particularly sophisticated systems such as Geisinger and Kaiser Permanente that are often associated with highly centralized decision making, lack of representative access and limitations on drug selection. With the availability of better healthcare information technology to link providers, computerized physician order entry, and clinical pathways in oncology, implementation of draconian limitations on prescribing based on costs and contracting is easier than ever. The consolidation of oncology practices through affiliation or acquisition

 raises the question of whether this will significantly change the way decisions are made about oncology care.

Kantar Health explored the dynamics of the impact of IDN care delivery on physician autonomy and drug decision making in a 2014 survey with 80 IDN oncologists. We found that many IDNs have the ability to influence drug selection through outpatient formularies, electronic medical records, and physician order sets that restrict the treatments that can be prescribed 

		Figure 1. Impact of Integrated Delivery Networks (IDN) on Prescribed Treatments

		Percentage Among Total IDN Oncologists (n = 80)

Kantar Health data also show that some IDNs may incentivize physicians based on oncology performance, and treatment pathways--which reorganize care around evidence-based medicine and coordinated treatment--are significantly more common in oncology practices and centers that are part of IDNs than in the community setting.

 In addition, since IDNs often participate in ACOs, this reimbursement structure may further prompt more cost-conscious physician behavior, even in oncology. About one-third of IDN oncologists participating in an ACO in Kantar Health’s 2014 survey stated this reimbursement arrangement had caused them to be more careful in selecting cost-effective treatments.

Although many IDNs have the capability to heavily influence oncology decision making, it would be a mistake to conclude that oncology care delivery is universally more regimented and proscriptive in any IDN setting. IDNs often hesitate to take a heavy hand with oncologists, and caveats help oncologists to maintain autonomy over their drug choices 

		Figure 2. Pushes and Pulls on Oncologist Autonomy in the IDN Setting

Although most IDNs may refrain from denying oncologists flexibility in decision making, it is possible that the minority may become the majority in the future. For now, variation in cancer care delivery and decision making within IDNs makes it difficult to generalize about these increasingly important stakeholders. Still, Kantar Health has found that meaningful characterizations can be made based on analyses of the IDN delivery structure (eg, payer ownership, degree of integration, site of care), which can help manufacturers support a meaningful, strategic approach to allocating resources and engaging with IDNs.

More time will be needed to see if the tone of the health system and cancer center relationship changes significantly as the consolidation process continues. It is likely that health system executives may opportunistically explore ways to nudge physicians to meet new goals; after all, oncology practices are likely to have been acquired for profitability and to better manage patients across the care continuum, including their associated costs and risk. At least until health executives start changing priorities, what my doctor told me about his practice is likely to hold true in oncology: “Nothing is going to change.”

		Community Oncology Alliance and Milliman. Comparing episode of cancer care costs in different settings: an actuarial analysis of patients receiving chemotherapy. August 2013. http://www.communityoncology.org/ UserFiles/Milliman_SiteCostofCancerStudy_2013.pdf

		The Biotechnology Industry Organization (BIO), the Community Oncology Alliance (COA), the National Community Pharmacists Association (NCPA), National Patient Advocate Foundation (NPAF), the Pharmaceutical Care Management Association (PCMA) and the Pharmaceutical Research and Manufacturers of America (PhRMA). The 340B Drug Discount program: review and analysis. Winter 2013. https://www.bio.org/sites/default/ files/340B%20White%20Paper%20FINAL.pdf

		Community Oncology Alliance. Community oncology practice impact report: the changing landscape of cancer care. June 2013. http://www.communityoncology.org/pdfs/Community%20Oncology%20Practice%20 Impact%20Report%206-24-13F.pdf

		Kantar Health. Oncology market access US. August 2014. oncologymarketaccess.com

The healthcare market has been consolidating in recent years with practice mergers, hospital partnerships, and acquisitions or affiliations with primary care and specialist practices. 

Meadow Green

Articles

Value and Market Access Considerations Often Missing From Trial Design

Doctors May Lose Care Control to Integrated Delivery Networks