India's new clinical trial rules establish an accelerated pathway for new drug approvals, but affordability remains… https://t.co/uhVXDZGLfr
Our burgeoning understanding of payer perspectives on relative effectiveness
We've been reading, with interest, a new report just released by the UK Office of Health Economics (OHE) in partnership with the US Center for Medical Technology Policy (CMTP) on payer perspective over comparative and relative effectiveness. The study joins together with other research in this area to reinforce our understanding of this fast-evolving topic.
Indeed, looking at this and other studies, it seems that payers across markets are generally unanimous in their desire to see head-to-head, active-comparator, randomized controlled trials in the context of relative effectiveness assessment (REA). However, REA at the time-point of initial P&R decision-making is usually constrained by lack of real-world data on the added therapeutic value of a medicine in routine clinical practice. Where this evidence is lacking, there are market-specific differences in terms of how payers would like to see manufacturers address the gap. In a number of countries, including Australia and the UK, key payers have a history of relying on modelling processes which translate underlying clinical data into estimates of cost-effectiveness (e.g. application to country-specific populations and healthcare systems, extrapolation over longer time horizons, transformation of endpoints, etc.). This has significant bearing on payer REA requirements, particularly with regard to preferred endpoints, as consideration of quality-adjusted life years (QALYs) in the context of cost-utility analysis may be routine.
The US market for comparative effectiveness research is interesting given the fragmented nature of the payer landscape. When we conducted our own in-depth study into payer REA evidence requirements across 8 of the major markets, we found a real spectrum in terms of US payer REA capabilities. While some integrated healthcare systems and large entities such as UnitedHealthcare with an active research enterprise are known to possess such capabilities, certain small and focused managed-care organisations also possess the ability to analyse integrated medical and pharmacy information for their membership base. This leaves the majority of mid-size payers keen to reap the rewards of REA, but still by and large limited in the infrastructure and expertise to implement it effectively.
WellPoint, rebranded as Anthem, became the first health benefits company in the US to publish guidelines on the use of REA in formulary decision making in May 2010. The organisation adopted what it calls an Outcomes Based Formulary, based on three decision criteria: effectiveness, efficacy, and safety. While clinical effectiveness data is preferred over efficacy, company guidelines indicate that both efficacy and effectiveness data should ideally be used to make formulary decisions. Research has indicated that, in the recent past, an estimated 90% of the evidence considered by WellPoint was still based on randomized controlled trials. However, around half of WellPoint reviews were thought to include some sort of REA, with an average of two to three categories of drugs selected each quarter for review. The predominant use of REA is likely to involve ongoing formulary management drawing on analysis of claims data, so that formulary positioning will become more fluid in line with emerging real-world outcomes.
As identified in the OHE/CMTP paper, advances in electronic health records and information technology are expected to facilitate more widespread REA traction in the medium-term. What will also be interesting in this context is whether we eventually come to see greater uptake of risk-sharing agreements in the US context. When I conducted research for the US chapter of our report, few payers saw risk-sharing agreements as a significant opportunity for dealing with uncertainty in formulary decision making. I recall one pharmacy operations manager who commented that his organisation had only one such agreement in place, and that while he would definitely be willing to enter more of the same, he found it difficult to find companies willing to negotiate them.
We believe that this type of research is timely and continues to be of importance for the pharmaceutical industry. In recent years, REA has made increasing headway into pricing and reimbursement decision-making across a significant number of the major markets. REA increasingly poses a hurdle for pharmaceutical market access, requiring that manufacturers consider whether it will be necessary to factor comparative clinical data into development plans in order to meet their P&R objectives in each market. Of course, market-specific differences in payer preferences and methodological frameworks add to the complexity. There is a clear incentive for manufacturers to segment markets by REA evidence requirements, so as to ensure that market access strategies are on point and as cost effective as possible.
Cameron Lockwood is a life sciences analyst for IHS
Posted 25 August 2015
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