Primary Competitive Intelligence in the Age of Specialty Pharmacy and Managed Care. Presented at: Date: Wednesday, September 26, 2018

Transcription

1 Primary Competitive Intelligence in the Age of Specialty Pharmacy and Managed Care Presented at: Date: Wednesday, September 26, 2018

2 HIA was founded in 2018 by two doctors of pharmacy who are highly experienced healthcare consultants Summary: Cofounder Biographies Rebekah Black Tim Ackerman Doctor of Pharmacy, Associate Clinical Professor of Pharmacy, certified vaccinator, compounding and managed care certification Cofounder HIA, concurrent clinical pharmacy practice in retail and compounding pharmacy 37 years healthcare experience Prior experience includes hospital pharmacy, clinical consulting, home infusion, long term care and sterile and non-sterile compounding Six years competitive intelligence and consulting experience with deep clinical knowledge across multiple therapy areas Doctor of Pharmacy, M.B.A., Member of the HIMSS* and AMCP* as well as AMCP managed care certification Cofounder HIA 39 years of healthcare experience Prior experience includes retail pharmacy district management, hospital and long-term care pharmacy, sales rep and product development 17 years competitive intelligence and consulting experience, including Group Director roles. Consulting Principal, and Global CNS and Managed Care Leads * HIMSS = Member of the Health Information and Management Systems Society; AMCP = Academy of Managed Care Pharmacy Team 1

3 Today we will focus on competitor managed care intelligence Healthcare Intelligence Services Discovery Preclinical Phase I Phase II Phase III Phase IV Competitor Pipeline and LCM Intelligence Business Intelligence Organizational Benchmarking Competitor Marketing Intelligence Competitor Managed Care Intelligence Wargaming/Scenario Planning Mature Brand and Generics Intelligence Services 2

4 Our case study will focus on a client with a new product seeking managed care primary competitive intelligence insights Client Product Competitor X Competitor Y Client Product Details Approval Date Phase III Development Status Phase III Efficacy Key Product Characteristics Oral small molecule Tolerability Role in Therapy Initially dosed in the hospital followed by six weeks of continued dosing post-discharge Safety Convenience Market Share Key: Low High Overview 3

5 Key environmental trends impacting the client and important focus areas with hypothetical output will be discussed Key Environmental Trends Manufacturer Communications With Payers PBM/MCO Rebates Value Based Agreements AMCP Dossier Insights Budget Impact Model Software Medicaid Rebating Group Purchasing Organizations (GPO s) 340B Contracting Competitor Patient and Prescription Journey Specialty Pharmacy Contracting Pharmacy Co-Pay Programs and Hub Support Wholesaler Contracting Managed Care Team Benchmarking Agenda 4

6 We are following several trends and topics of interest to the industry Accumulators Benefit design in which manufacturer copayment assistance no longer counts toward the patient deductible or out of pocket maximum Once the manufacturer copay maximum is reached the patient pays out of pocket shifting more cost to the patient which may affect adherence Rebating Pressure to eliminate rebates is mounting from Azar of HHS and some manufacturers Rebating is part of the gross-to-net conundrum or as Fein of Drug Channels Institute states the ever-growing pile of money between list and net price after rebates and other reductions. 340B Transparency Pricing program is growing at double digit rates while charitable care at benefitting hospitals has dropped by $8B Key Environmental Trends 5

7 June 2018 FDA guidance permits medical product firms to communicate to payers about unapproved products and uses Section III. C. Communications by Firms to Payors Regarding Unapproved Products and Unapproved Uses of Approved/Cleared Products Medical product firms may wish to provide certain types of information to payors (as that term, used to collectively refer to payors, formulary committees, and similar entities, is described in Q.A.2/A.A.2) regarding their unapproved products and regarding unapproved uses of their approved/cleared/licensed products. Such information may help payors plan and budget for future coverage and/or reimbursement decisions prior to FDA approval, clearance, or licensure of unapproved products and may also inform coverage and/or reimbursement decisions for new uses of approved/cleared/licensed products. Manufacturer Communications With Payers 6

8 The FDA does not intend to object to such communications provided they are unbiased, factual, accurate, and non-misleading A.C.1. When the following types of information about unapproved products (as defined in this guidance) or unapproved uses of approved/cleared/licensed products provided by firms to payors are unbiased, factual, accurate, and non-misleading, and are presented with information discussed in Q.C.2/A.C.2, FDA does not intend to object under 21 CFR 312.7(a) or 21 CFR 812.7(a) to such communications, nor to use such communications as evidence of a new intended use. FDA also does not intend to enforce any applicable post-marketing submission requirements for these materials Product information (e.g., drug class, device description and features) Information about the indication(s) sought, such as information from the clinical study protocol(s) about endpoint(s) being studied and the patient population under investigation (e.g., number of subjects enrolled, subject enrollment criteria, subject demographics) Anticipated timeline for possible FDA approval/clearance/licensure of the product or of the new use. Product pricing information. Patient utilization projections (e.g., epidemiological data projection on incidence and prevalence). Product-related programs or services (e.g., patient support programs) Factual presentations of results from studies, including clinical studies of drugs or devices or bench tests that describe device performance (i.e., no characterizations or conclusions should be made regarding the safety or effectiveness of the unapproved product or the unapproved use). Manufacturer Communications With Payers 7

9 Competitor X and Y both offer exclusive and parity contracts, but competitor X offers a 1% base enhancement off their leading brand for access Rebates Price Protection 25% 12% 20% 20% 10% 10% 15% 15% 8% 8% 10% 10% 10% 6% 5% 4% 0% Competitor X 1% Competitor Y Exclusive Parity Base Enhancements 0% 2% 0% Competitor X Competitor Y *1% base enhancement on competitor X s lead product A in return for access on product B PBM/MCO Rebates 8

10 A successful value-based agreement depends on a number of factors and there are positive examples in the public domain Necessary data collection and analysis Measurable outcomes tied to product use Target population easily identified in claims Administrative burden is reasonable Successful VBA Agreement Factors Target drug has high budget impact Timeline for collection and analysis is reasonable Committed partners Real World Examples Value-Based Agreements 9

11 Evidence in the AMCP dossier format is used by HCDMs to determine coverage, formulary placement and reimbursement for drugs, tests and devices What is it? What s in it? Why it important? A comprehensive document which provides a framework to advise drug manufacturers regarding important health care decision maker (HCDM) evidence requirements as it relates to evaluating new technologies for formulary consideration Table of Contents Executive Summary Recommendations Key Questions/Issues: Efficacy Comparative Effectiveness Safety Value Proposition Cost-effective Patient Subgroups Clinical Evidence Tables Background Disease Background Pharmacotherapy Product Background Methodology Authorship References Clinical trial and patient reported outcomes allowed under PDUFA VI can be better designed HEOR messaging and story can be rapidly advanced AMCP Dossier Insights 10 Adapted from AMCP Dossier Format v4

12 What is it? Understanding competitor budget impact model software content is critical for driving a new product s HEOR messaging A budget impact analysis program assesses the financial consequences of switching between a scenario 1 where the new intervention company Y does not exist and scenario 2 with the new intervention What s in it? Why is it important? A budget impact model (BIM) may be structured according to the following three modules: A population module, which estimates the size of the target population A market share module, which estimates the number of patients on each selected treatment An economic module, which estimates the proportion of patients by treatment regimen, the cost of each regimen and the total cost BIM s typically allow for data input for a specific plan The BIM is a critical tool used to make the health economic case for adding a product to a plan s formulary The base case within the BIM is typically the health economic analysis found in the product s AMCP dossier Budget Impact Model Software 11

13 In this example output, the addition of new product competitor Y resulted in a 3.33% per member per month reduction in costs $8.00 $7.00 $6.00 $5.00 $4.00 $3.00 $2.00 $1.00 $0.00 Per Member Per Month (PMPM) Year 1 Year 2 Year 3 Competitor Y Competitor X Budget Impact Model Software 12

14 BIMs are often sortable on a number of populations. In this example the number of overall patients is steady, but competitor Y usage increases Number of Patients Year 1 Year 2 Year 3 Competitor Y Competitor X Budget Impact Model Software 13

15 Medicaid participation requires rebates no less than 23.1% of AMP and supplemental rebates may be needed to gain preferred drug access State Fee-for-Service (FFS) Medicaid Managed Medicaid Managed by State Commercial Plans Minimum Centers for Medicare and Medicaid Services (CMS) Rebate CMS Rebate Retention Supplemental Rebates for Preferred Drug Status Size of supplemental rebates 23.1% of Average manufacturer price (AMP) Yes-Retained by state with a portion sent to the Federal government Retained by the state Much less than commercial insurance 23.1% of AMP No-Fully returned to the state with a portion sent to the Federal government Retained by the managed care organization Much less than commercial insurance Medicaid Rebating 14

16 Formulating institutional drug strategy requires an understanding of competitor GPO access, rebating, and level of commitment contracts Group purchasing organizations (GPO s) are entities that help healthcare providers realize savings and efficiencies by aggregating purchasing volume and use that leverage to negotiate discounts with manufacturers, distributors and other vendors Discounts for access on prescription pharmaceuticals range from 0% for novel new chemical entities to X% (known by HIA, but undisclosed) for 505(b) (2) formulations Companies must decide to participate in GPO contracts or negotiate separate contracts with each customer Level of commitment agreements are market basket contracts administered by the GPO that provide additional rebates in exchange for increases in market share beyond a prespecified baseline Top 5 Group Purchasing Organizations Rank GPO Member Hospital Beds 1 Vizient 579,439 2 Premier Inc 350,358 3 Intalere 273,129 4 Cardinal Health 212,099 5 McKesson Pharmaceutical 197,223 *Definitive Healthcare August 2016 Group Purchasing Organizations 15

17 New entrants must assess competitor and generic 340B pricing to understand brand competitiveness What is it? What s in it? Why it important? Program requires pharmaceutical manufacturers to provide front-end discounts on covered outpatient drugs purchased by specified government-supported facilities, called covered entities, that serve the nation s most vulnerable patient populations 340B Contracting Discounts on all eligible covered outpatient drugs Discounts are calculated off the Average Manufacturer Price (AMP) AMP Unit Rebate Amount (pack size) = 340B ceiling price Where Unit Rebate Amount (URA) is: 23.1% for branded products 13% for generic products 17.1% for clotting factors 17.1% for exclusively pediatric products While the 340B discount program represented only about 1% of the total U.S. drug market at $6.1B in 2015, a significant portion of the discount (1.9B) was due to inflationary penalty. This penalty is enforced against drug manufacturers for raising the price of drugs higher than the rate of inflation or voluntarily providing a discount lower than the 340B price Data from HRSA reveals 340B sales in 2017 were $19.3B and now accounts for ~6% of the total U.S. market 16

18 Several flexible criteria are used to classify products for pharmacy distribution and companies must decide which path to take Specialty High cost above CMS threshold of $8,040/year Product is not self administered Specialist initiated Requires: special handling, unique or narrow distribution Requires: patient monitoring, counseling or REMS Specialty Lite Hybrid Moderate cost Patient therapy management May require: special handling, storage or distribution May treat orphan, uncommon or rare disease Utilization management Traditional Lower cost Oral therapy Primary care provider No special handling required Little/no patient monitoring Requires reimbursement assistance May treat complex and noncomplex diseases Traditional insurance billing requirements Competitor Patient and Prescription Journey 17 Adapted from Long D AMCP Annual Meeting 2018; Gleeson G Asembia Summit 2018

19 Competitor X negotiates data agreements to gather information on Competitor Y and any new entrants through a direct purchase of data Types of Reports Frequency- Compensation Monthly report ($X) One-time historical report ($3X) Total fees not to exceed ($14X) Specialty Pharmacy Contracting Market Basket Definition and Products Product Market Basket Disease State A Disease State A Products means all strengths and sizes, for all NDC codes, of competitor Y, and any other prescription pharmaceutical product used for the treatment of Disease State A This is to include any prescription pharmaceutical product used for the treatment of Disease State A, or new NDCs of existing Disease State A Products, which are approved by the FDA during the term of the agreement 18

20 Competitor X s direct purchase of data agreement will capture data on Competitor Y and the client s product from launch Number Information Collected Format Number Information Collected Format 1 Unique patient ID Blind alpha-numeric 2 Age Year of birth 3 Sex M/F 4 ICD9 Code Text 5 Secondary ICD9 Code Text 6 Secondary ICD9 Code Text 7 ICD10 Code Text 8 Secondary ICD10 Code Text 9 Payer Name Text 10 NDC Number Text 11 Fill Date DD/MM/YYYY 12 Units Dispensed Number 13 Unit of Measure Text 14 Days Supply Number of Days 15 Refill Number Text 16 Prescriber First Name Text 17 Prescriber Last Name Text 18 Prescriber Type Text 19 Prescriber City Text 20 Prescriber State Text 21 Prescriber Zip Code Text 22 Drug Name Text Specialty Pharmacy Contracting 19

21 Competitor Y is using a fee-for-service based specialty pharmacy contract for product delivery, patient counseling, and other services Service Fee-For Service Baseline Details Ship Product To Patient Enroll Patients Enter Data/Process Orders/ Weekly Reports Insurance Eligibility and Benefits Investigation Standard Alternative Coverage Searches: PAP, Co-Pay Assistance Coordination Patient Clinical Education Tracking Orders Courtesy Call: 1 Week Post-Fill Product Replacement Product Returns Include Patient Education in Mailings Description Pass Through fees to manufacturer Specialty Pharmacy Contracting Variable Fee-For Service Components Pharmacy will notify prescriber Notify Prescriber of Rx Fill when a script is filled Track Lot Number and Expiration Expiration Date Management and Refill Date in database and contact patient and offer refill/replacement SP to provide order processing fee PAP: Back end activities and shipment fee (pass thru or average shipment cost) Prior Authorization Fees (per PA initiated) $30.00 Commercial Product Management $30.00 total; $15.00 from the patient Specialty Pharmacy Compensation Competitor Y sells product to specialty pharmacies at WAC minus a 5% monthly inventory management fee An additional 2% prompt pay discount is offered Data Agreement Requirements Weekly reporting Monthly reconciliation Product ordered, product dispensed, inventory on hand, variance in inventory 20

22 This specialty pharmacy contract focuses on stocking availability and is another option for a company with a new product entrant Base rebate of 5% of WAC Additional rebate provided and is calculated as follows; The difference between the Product Acquisition Cost and the cumulative dollar amount reimbursed to Pharmacy from the Payer (excluding dispensing fee but inclusive of proceeds from co-pay assistance I voucher programs) multiplied by number of units dispensed plus 3%. The maximum rebate cannot exceed the difference between the Product Acquisition cost and 50% of WAC Product Acquisition Cost Total Reimbursement ($3,000/100 Units) Limit (50% of WAC/PAC) Example $40.00 $30.00 $20.00 Rebate per Unit $20.00 Times Quantity Dispensed Payable Additional Rebate 100 Units $2,000 Specialty Pharmacy Contracting 21

23 Comparison of competitor strategies, innovations and emerging trends can help address accessibility and affordability Affordability programs including financial assistance, co-pay and voucher How do leading companies help patients deal with doughnut hole/high deductible plans; accumulators Potential ways to pass through rebates to patients Reimbursement support Benefit investigation and verification Prior authorization assistance Appeal process support Interim product support HUB operations Breaking down competitor programs to their most basic elements enables comparisons across multiple variables $30 $20 $10 Rx Co-Pay $0 Competitor X Competitor Y Pharmacy Co-Pay Programs and Hub Support 22

24 The impact of wholesaler agreements must also be weighed into grossto-net analyses Inventory Management Agreements Used to prevent bulk orders (e.g. June 30 th and December 31 st ) Wholesaler typically cannot buy more than 125% of prior month s purchase Percent rebate provided in exchange for contract adherence Prompt Pay Discounts Offered by the manufacturer in return for the wholesaler paying promptly Example 2% net 30 days Free Product Manufacturer offers the wholesaler free product in return for quantity purchases Can also be offered to pharmacies *Does not include co-pay assistance programs, hub services, and other fee-for-service agreements Wholesaler Contracting 23

25 Knowing the size and structure of competitor X s managed care team helps a new entrant design their own managed care force U.S. Managed Markets VP, Managed Markets Strategic Accounts 22 Total Sr. Director, Strategic Accounts 1 Directors, Strategic Accounts 3 Director, Strategic Accounts (21 reports) Sr. Director, National Accounts (6 Reports) VP, Business Operations and Contract Compliance (25 Reports) Sr. Director, Payer Strategy & Marketing (30 Reports) Account Managers 18 Director, Strategic Accounts (6 Reports) National Account Manager Director, Payer Strategy & Marketing, (5 Reports)) National Accounts 7 Total Sr. Director National Accounts 1 Director, Strategic Accounts (6 Reports) National Account Manager Director, Payer Strategy & Marketing (5 Reports) National Account Managers 6 Business Operations & Contract Compliance 26 Total Director, Strategic Accounts (6 Reports) National Account Manager Director, Payer Strategy & Marketing (5 Reports) Payer Strategy and Marketing 31 Total National Account Manager Director, Payer Strategy & Marketing (5 Reports) Sr. Director, Payer Strategy & Marketing 1 Directors, Payer Strategy and Marketing 5 National Account Manager Director, Payer Strategy & Marketing (5 Reports) Key Account Managers 25 Grand Total 86 Total National Account Manager Managed Care Team Benchmarking 24

26 Environmental trends could eliminate rebates yet new FDA guidance allows manufacturers to communicate with payers about unapproved products or uses Key Insights for New Entrants Key Insights for Established Brands Key Environmental Trends Manufacturer/ Payer Communications PBM/MCO Contracting Value Based Agreements Elimination of rebates may level the playing field placing a new entrant on more equal footing with established brands Manufacturer/payer communications can occur before approval Manufacturers with products in development should formulate and initiate their managed care strategy much earlier Effective pricing, gross-to-net analyses, and contracting strategy cannot be developed without primary CI input Seven criteria drive success of value-based agreements and could be considered when these are met Established brands with larger market share will be negatively impacted should rebates disappear Conduct primary CI monitoring in the managed care space to monitor for early competitor messaging Develop blunting strategies early Current contracting favors the incumbent due to rebates based on market share Restrictive contracts such as one of and step through limit new entrants There are a number of hurdles for the success of value-based agreements Many payers don t want to deal with them and simply prefer more rebates upfront Conclusions 25

27 Thus, companies introducing new products must initiate managed care strategies earlier than in the past Key Insights for New Entrants Key Insights for Established Brands AMCP Dossier Insights Budget Impact Model Insights Medicaid Rebating Clinical trials and patient reported outcomes allowed under PDUFA VI can be better designed HEOR messaging and story can be rapidly advanced Understanding competitor budget impact software and modeling will help a new entrant create a better value proposition Minimum rebate to participate is 23.1% There is interplay between Medicaid rebating and 340B pricing Understanding competitor HEOR messaging is critical for pricing and contracting strategy Budget impact software is an effective tool for achieving formulary status, but can be met with suspicion because it is made by the manufacturer Updates may be needed to adjust for new entrants Weigh use of supplemental rebates to achieve preferred drug status GPO Contracting GPO contracting enables access to multiple hospital systems instead of individual customer contracting Identify if level of commitment contracts are in use Conclusions With access established weigh use of level of commitment contracts to blunt new entrant uptake 26

28 Established brands must blunt new entrants and optimize their managed care strategy as their product progresses through its life cycle Key Insights for New Entrants Key Insights for Established Brands 340B Contracting Competitor Patient and Prescription Journey CI Specialty Pharmacy Contracting Prescription Drug Co-Pay Programs and Hub Service CI 340B is a small yet rapidly growing market segment New entrants with hospital based products must understand competitor 340B pricing and weigh program participation By understanding competitor patient and prescription journeys a company can better formulate their own patient segmentation and distribution strategy Fee-for-service specialty pharmacy agreements for product delivery and patient counseling exist Stocking agreements can help a new brand s uptake Mapping competitor programs enables newcomers to better design their own programs Established brands must also recognize the growth in 340B New entrants may choose traditional, specialty hybrid, or specialty distribution Primary CI in advance of approval will help with blunting uptake of a new entrant Understanding other established brands incentives to specialty pharmacies helps drive more effective hub and distribution strategies Established brands can use specialty pharmacy data agreements to collect prescriber data including those for new entrants Established brands must track new entrants to ensure they remain competitive Conclusions 27

29 Whether a new entrant or established brand, continued monitoring of the managed care environment is needed to maintain success Key Insights for New Entrants Key Insights for Established Brands Wholesaler Contracting Managed Care Organizational Benchmarking Inventory management agreements and prompt pay discounts can bite into grossto-net of new entrants Free drug offers can enhance uptake Understanding the size, structure, product weighting, and targets for competitor teams helps a new entrant with their own managed care team development Inventory management agreements balance out large orders placed prior to price increases Prompt pay discounts ensure timely payments Understanding the size, structure, product weighting, and targets for new entrants helps blunt new product uptake Conclusions 28

30 Please do not hesitate to contact us to learn more about how we can support you Rebekah Black Cofounder Tim Ackerman Cofounder Contact 29