Pharmacoeconomic Assessment through Market Approval and Beyond: Theory and Operations

Pharmacoeconomic assessment of a drug, medical device, or other healthcare product can take on many forms and occur at multiple points in the development cycle. Cost-effectiveness analysis, a major component of pharmacoeconomic assessment, has traditionally occurred in the later phases of product development—either as a piggy-back to a phase III or pivotal clinical trial, or peri-authorization.

1. Welcome

2. Agenda for Today’s Webinar 2 Physician Led | Therapeutically Focused Copyright© 2015 Overview of pharmacoeconomic (PE) assessment Data collection for P E assessment PE assessment at different phases Implementing data collection at different phases Collection of real w orld PE data Future considerations Q&A

3. Overview of PE Assessment

4. Why PE Assessment? 4 Need for product differentiation in competitive market Challenging reimbursement requirements Blend scientific and marketing objectives to help sponsors tell value story of their products Maximize potential return on investment Physician Led | Therapeutically Focused Copyright© 2015

5. Main Types of PE Assessment 5 Cost-minimization analysis Cost-effectiveness analysis Cost-utility analysis Cost-benefit analysis Budget impact modeling Physician Led | Therapeutically Focused Copyright© 2015

6. Cost-Minimization Analysis (CMA) 6 Compare costs of two or more drugs or therapies to determine least costly option Baseline costs will always include acquisition costs for drugs or therapies under consideration as well as costs of preparation and administration Additional costs considered depend on perspective of analysis Main benefit: cheaper and easier than cost-effectiveness analysis Main drawback: assumption that two drugs or therapies are used at equivalently effective doses Physician Led | Therapeutically Focused Copyright© 2015

7. Cost-Effectiveness Analysis (CEA) 7 More comprehensive than CMA in that it considers both costs and effectiveness of two or more drugs or therapies Costs measured in monetary units of interest (Eg, $, £, € ) Effectiveness generally measured using one or more clinical outcome Examples: Years of life saved H ospitalizations averted Complications prevented Physician Led | Therapeutically Focused Copyright© 2015

8. Incremental Cost-Effectiveness Ratio (ICER ) 8 ICER is main outcome of CEA ICER calculated as: ( ∆ Costs / ∆ Effectiveness ) Examples: Incremental cost per life year saved Incremental cost per hospitalization averted Incremental cost per complication prevented Physician Led | Therapeutically Focused Copyright© 2015

9. Willingness to Pay Threshold 9 ICER is then compared against one or more willingness-to-pay thresholds to determine if drug therapy of interest is cost-effective, cost-saving, or cost-neutral Can be plotted on cost-effectiveness plane Multiple comparisons can be conducted using cost-effectiveness acceptability curve (CEAC ) Physician Led | Therapeutically Focused Copyright© 2015

10. Cost-Effectiveness Plane 10 ∆ Costs ∆ Effectiveness Maximum Acceptable ICER Accept Reject Physician Led | Therapeutically Focused Copyright© 2015

11. Cost-Effectiveness Acceptability Curve 11 Probability Cost-Effective Threshold Cost-Effectiveness Ratio Physician Led | Therapeutically Focused Copyright© 2015

12. Cost-Utility Analysis (CUA) 12 CEA that accounts for quality of time gained or lost Quality of life (QOL) measured using utility Generally ranges from 0 (dead) to 1 (perfect QOL ) For some conditions (Eg, advanced ALS), negative utility has been considered Physician Led | Therapeutically Focused Copyright© 2015

13. Quality-Adjusted Life Years (QALY) 13 Most common ICER assessed in CUA is cost per QALY gained QOL increase of 0.5 to 0.75 for 4 years = 1 QALY gained Depending on condition or therapy, other timeframes can be used ( E g, month or day ) Physician Led | Therapeutically Focused Copyright© 2015

14. Cost-Benefit Analysis (CBA) 14 Differs from CEA in that effectiveness is also monetized Eg, year of life saved could be equated to year of productive value to society, measured as per capita GDP or average annual income Cost-benefit ratio calculated as : ( ∆ Costs / ∆ Monetized Value of Effectiveness ) Physician Led | Therapeutically Focused Copyright© 2015

15. Budget Impact Modeling (BIM) 15 CMA, CEA, CUA, and CBA often targeted toward broader audiences BIM generally designed for specific audiences, particularly third party payers Measures net cumulative treatment cost with drug or therapy of interest for specified number of patients in particular population Impact of particular drug or therapy is assessed as effect on cost per member per month (PMPM ) Physician Led | Therapeutically Focused Copyright© 2015

16. Perspective of PE Assessment 16 Who will pay for drug or therapy and who will benefit? Potential perspectives include: Healthcare provider Third party payer Patient/Caregiver Society Different perspectives warrant different considerations Physician Led | Therapeutically Focused Copyright© 2015

17. Time in Context of PE Assessment 17 Timeframe of disease (acute vs. chronic) and therapy will determine time horizon for PE assessment When in development cycle should PE assessment be initiated and how long should it continue? Contemporaneous with later Phase III is common but can consider earlier Phase III or Phase II Collection of real world PE data? Physician Led | Therapeutically Focused Copyright© 2015

18. Data Collection for PE Assessment

19. Clinical Data Prospective Retrospective Claims Data Standalone Link with clinical data: Carefully Consider Consent HIPAA Blinding Data Sources – Clinical and Claims 19 = Payer Trial Payer Trial Physician Led | Therapeutically Focused Copyright© 2015

20. Cost Data 20 Primary CMS 1450 ( UB04 Uniform Bill) CMS 1500 (Claim Form ) Secondary CPT (AMA’s Current Procedural Terminology), other codes mapped to costs from payers RED BOOK Published Reports Physician Led | Therapeutically Focused Copyright© 2015

21. Collecting and Integrating Data from Multiple Sources 21 Augment eCRF Additional form matching UB04/CMS 1500 Instruct site on finding UB04/CMS 1500 in other file Ask site to complete UB04/CMS 1500 from scratch Code collected data in-house using CPT, or other cost source Map MedDRA codes utilized as standard part of clinical trial to CPT, or other cost source Physician Led | Therapeutically Focused Copyright© 2015

22. PE Assessment at Different Phases

23. Drug Development Cycle 23 Physician Led | Therapeutically Focused Copyright© 2015

24. Different Phases to Consider 24 Phase II Earlier phase III Phase III piggyback s tudies Peri-authorization Post-authorization / R eal World Comparing and contrasting approaches for smaller/mid-size relative to larger sponsors Developing a plan that encompasses all relevant phases Physician Led | Therapeutically Focused Copyright© 2015

25. Implementing Data Collection at Different Phases

26. Best Practices for Changing the eCRF 26 Include all stakeholders in the decision Site feedback Statistical considerations Impact on regulatory submissions Plan and communicate cutover Design database to be flexible Dropdowns, normalized structure Off-line development and validation Cutover on weekend Physician Led | Therapeutically Focused Copyright© 2015

27. Collecting Real World PE Data

28. Why Real World PE Data? 28 Differentiation in costly yet lucrative landscape $2.6 billion to bring new drug to market (Tufts CCSD) Global sales (2014) for top 25 pharmaceutical companies were $548 billion (GlobalData) More robust data than literature-based models More relevant than earlier phase clinical data Timing a potential issue Prospective longer to conduct than ideal Retrospective later to collect than ideal True cost-effectiveness rather than cost-efficacy Physician Led | Therapeutically Focused Copyright© 2015

29. Are Payers the True Decision Makers? 29 Roles of FDA and payers, including Medicare and Medicaid, are constantly evolving Drug approval becoming “easier” (Forbes) 2008: 50% of new molecular entities (NMEs) approved by FDA 2014: 88% of NMEs approved US District Court ruling re: Amarin’s Vascepa ® Increased emphasis on generation and dissemination of evidence aimed at payers Real World Evidence/Outcomes liaisons at larger sponsors Physician Led | Therapeutically Focused Copyright© 2015

30. Real World vs. Earlier PE Assessment: Functional Considerations 30 Physician Led | Therapeutically Focused Copyright © 2015 Study Activity Real World Earlier Phase Study feasibility and document collection More likely remote More likely in-person Site qualification and initiation More likely remote More likely in-person Routine monitoring visits Less frequent Data-driven More frequent Involves a ssessment of protocol adherence Source data verification More targeted Broader Data review More centralized More dispersed Cost data sources Targeted c laims databases Various sources Effectiveness data sources Targeted EHR Various sources

31. Target Data for Hybrid EHR Sourcing 31 Research vs. Healthcare Labs Meds Physician Led | Therapeutically Focused Copyright© 2015

32. Recruitment and Retention Considerations 32 Well-integrated EDC, EHR, and ePRO will enhance retention of sites and patients Recruitment population for real world studies differs from population for RCTs Real world studies tend to be longer, which has a direct impact on site motivation and patient retention Gauging and developing site experience and motivation are essential in optimizing enrollment Physician Led | Therapeutically Focused Copyright© 2015

33. Site Training Considerations 33 Establishing study expectations from the outset is essential Sites and Investigators: How are patient records structured ? How find UB04, cost data? Capacity for integration with EDC? Research-naïve? Real world and/or PE research experience? Clinical trial experience? Physician Led | Therapeutically Focused Copyright© 2015

34. Regulatory and Safety Considerations 34 Regulatory requirements for non-interventional studies are evolving and dependent on locality or localities in which study conducted Emphasis on scientific credibility and data protection Good Pharmacoepidemiology Practice ( GPP) proposes minimum practices and procedures to ensure data quality , integrity, and adequate documentation Physician Led | Therapeutically Focused Copyright© 2015

35. Future Considerations

36. Future Considerations 36 PE assessment in earlier and later phases, including real world, are important supplements to clinical trials Development cycle does not end with approval 51% of sponsors think in-house and outsourced heath economics and outcomes research (HEOR) studies will increase significantly or moderately by 2018 (Industry Standard Research, 2014) Flexibility is essential Physician Led | Therapeutically Focused Copyright© 2015

37. Thank You Lee Walke Vice President e-Clinical  [email protected] Matthew J. Page, Ph.D., M.P.P. Epidemiologist [email protected]

38. Q&A