What the Shift to Value Means for Pharmaceuticals

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The Shift to Value: What it Means for Pharmaceuticals

Medullan Webinar Series !


Benjamin Dean Business Strategy

Todd Greenwood, PhD, MPH Director, Digital Strategy


We’re Digital Health Experts. !

•  100% Healthcare since 2005•  Driven by User-Centered Strategy & Execution•  Geared for Client Collaboration•  Focused on Driving Outcomes


Today’s Discussion

1 Understanding Pharma and Biotech’s Shift to Value!

How Digital Enables RWE Collection & Drives Revenue!

What it takes to "Get Started!2 3


You’ll walk away with….

1 An understanding of the shift to value’s impact on the pharmaceutical and biotechnology industry Knowledge of the opportunities that digital presents and the accessible value they create Next steps to leverage digital opportunities and move towards a value-based proposition

2 3


Understanding the Shift to Value


US spends significantly more of GDP on Healthcare


Yet outcomes are worse

•  “Americans live shorter lives and experience more injuries and illnesses than people in other high-income countries” (Institutes of Medicine Report, 2013)

•  US health disadvantage can’t be attributed solely to racial and income disparity •  US fares poorer, on average, than other peer countries in:

-  Adverse birth outcomes -  Injuries and homicides -  STDs -  HIV/AIDS -  Drug-related mortality -  Obesity and diabetes -  Heart disease -  Chronic lung disease -  Disability


Biopharma needs to prove population impact

of costly new drugs

Source: “Rx Price Watch Report: Trends in Retail Prices of Generic Prescription Drugs Widely Used by Older Americans: 2006 to 2013,” AARP Public Policy Institute


Shift to Value: Address healthcare costs, quality of care and patient outcomes

Moving from Fee-For-Service (or volume-based pricing) to payments linked to performance against quality metrics

By 2020, 75% of commercial payments will be through value-based arrangements Health Care Transformation Task Force (coalition of payers, providers, patients, purchasers)


Different types of value-based arrangements

Payment Dependant on Desired Outcome

Larger Rebate in Absence of Outcome

Performance Against Competitors

Indication Specific Pricing

Payment based on:

Reduction in hospitalizations

Higher Rebate if:

Missed LDL goals and utilization

Rebate based on:

% A1C target vs. other GLP-1s

Higher price in lung based on:

Better survival rates vs.

pancreatic cancer

Aetna, Cigna, Harvard Health Heart failure

$5,475 per year

Cigna, Harvard Health

High Cholesterol $16,920 per year

Aetna, Cigna, Harvard Health

Type II Diabetes $8,967 per year

Express Scripts

Lung & Pancreatic Cancer $105,788 per year


Value-based contracts are still rare in the US

Underlying Reasons •  Fragmented U.S. healthcare system •  Plethora of EHR providers with some patient records still in paper! •  Inability to track patient adherence to drug regimen and drug effects on health •  Patient Privacy concerns

"The basic infrastructure of electronic medical records, let's call it 'real-world data', is going to have to increase so that we can easily track and monitor outcomes”

- Novartis CEO Joe Jimenez

http://www.fiercepharma.com/pharma/novartis-roche-ceos-see-performance-based-future-but-u-s-isn-t-ready-yet


High profile value based contracts

Year! Drugs! Condition! Pharma! Payer!

2009 Januvia and Janumet Type 2 Diabetes Merck & Co Cigna

2011 Rebif MS EMD Serono Cigna

2012 Rebif MS EMD Serono Prime Therapeutics

2015 Harvoni Hepatitis C Gilead / Catamaran Cigna

2015 Repatha Cardiovascular Amgen Harvard Pilgrim

2016 Praluent Cardiovascular Sanofi / Regeneron Cigna

2016 Repatha Cardiovascular Amgen Cigna

2016 Ernesto Heart Failure Novartis Cigna

2016 Ernesto Heart Failure Novartis Aetna

2016 Januvia and Janumet Type 2 Diabetes Merck & Co Aetna


Pharma & Payers are NOT aligned

Payers Want! •  Immediate cost containment •  Comparative data sets •  Real-world Evidence data (RWE)

Pharma Provides!

•  Standard adherence and patient experience programs

•  Data from randomized clinical trials against a placebo (RCT’s)

EY Progressions 2014: Navigating the payer landscape.


RCTs are insufficient for payers


Real World Evidence goes beyond claims data


How Digital Enables RWE & Drives Revenue

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The Digital Continuum

Increasing Complexity, Connectivity, Comprehensiveness, and Points of Engagement

App!•  Standalone product •  Discrete focus •  Limited enterprise support

and services •  Limited integration

Program!•  A first-class operation

around bringing the solution to market

•  Focused on continuous improvement of outcomes

•  Strategic asset of real world evidence for clinical studies and value-based leadership

Solution!•  The right combination of

technologies and ecosystem partners

•  Behavior changing interventions and content

•  Digital and non-digital (multi-channel) set of components


What digital offers

Developing medicine in better ways!–  Accelerated clinical trials –  Improved patient tracking –  Real world outcomes –  Learning health systems –  Clinical research as a care option –  Virtual trials

Developing better medicine!–  Personalized medicine (genomics,

proteomics, metabolomics) –  Companion digital therapeutics –  Adherence controls –  Inter-disciplinary therapies

Two sides of the same coin


Digital impacts early development to commercialization

Product Lifecycle!

Medical!R&D! Product Supply!

Comm. Launch!

•  Modeling / simulation

•  Genomics

•  RWE packaging

•  E-clinical Recruitment

•  Digital monitoring

•  Medical information

• AE Reporting and Social Listening

•  e-Safety

•  Smart factory with IoT

•  Digitized supply chain

•  Omni-channel

•  Post-marketing monitoring

• Patient marketing

• Digital therapeutic

Data Analytics, Storage and Security Treatment!

Customer pathway!

•  Fitness/Wellness Tracking

•  Genomics •  Social media •  Electronic health

records •  Remote monitoring •  Telemedicine •  Patient communities

Diagnosis!

Self-care!


RWE takes a robust platform

Steps to RWE Acquisition!

1. Generating patient-centered data 2. Compiling existing data from

disparate sources including Pharmacy POS, utilization claims, EHR claims and notes

3. Leveraging data for contracting and patient-centric purposes

NEHI: Real World Evidence: A New Era for Health Care Innovation


Monetization potential of digital technology for Pharma

Epidemiology Underlying a Drug Purchase

Prevalence!

Incidence!

Seeking Treatment!

Prescribed Drug !

Compliance!

Sales!


Monetization potential of digital technology for Pharma

Behavioral Goals:!•  Increase incidence through screening

•  Drive patients to seek treatment through education and campaigns

•  Influence Rx habits by educating and raising awareness of both patients and providers

•  Drive compliance through behavioral therapy

Prevalence!

Incidence!

Seeking Treatment!

Prescribed Drug !

Compliance!

Sales!


What it Takes toGet Started


1.  Measure the success and capability of your current workflow

2.  Seek and drive internal alignment

3.  Establish baseline of existing channels and tools

4.  Test a “Fail Fast, Succeed Faster” Mindset

5.  Anticipate needed investment for 2017 planning

How can you get started down this path?


Thank you

[email protected]

@medullan

[email protected]

@Ben_Dean

Benjamin Dean Todd Greenwood, PhD Director, Digital Strategy Business & Monetization

Strategist

What the Shift to Value Means for Pharmaceuticals

Healthcare

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