Pharma Exec Blog | The Business of Pharmaceuticals

Physicians in ACOs Dare Pharma to Step up Its Game

By Clark Herman | Published: April 15, 2013

Pharma, according to physicians currently embedded within Accountable Care Organizations (ACOs), is not living up to its potential. A survey conducted by Oliver Wyman has most of its 200 respondents saying the industry could play a more active role with value-based healthcare providers in helping to deliver better care at a lower cost, but it does not and probably won’t, by most expectations. Read More »

Posted in Strategy, healthcare | Tagged Accountable Care Organization, ACOs, commercial health, physicians, quality of care | Leave a comment

England's Cancer Drug Fund: An Acid Test for Value Based Pricing

By Guest Blogger | Published: April 12, 2013

By Leela Barham.

England’s Cancer Drugs Fund (CDF) could be in its final financial year, after running in full since April 2011. The fund covers the cost of cancer treatments either when NICE has said ‘no’, or hasn’t yet come to a view. Companies can’t circumvent NICE though; if a company was invited to submit to NICE and refused, it’ll be refused CDF funding for its product too. The CDF is supposed to be a ‘bridge’ to Value-Based Pricing (VBP), due to be implemented in January 2014.

Why was a fund needed??The Fund was driven by a heady mix of a desire by the Conservatives to grab votes in the last General Election in 2010, strong political lobbying and perceived weaknesses in how England makes it’s decisions on which products to recommend for use. The latter really means that many expensive but potentially beneficial products were simply not being recommended by NICE. Stats illustrate this with NICE saying no in more than a third of recommendations in 87 technology appraisals of cancer medicines since the year 2000. But that also hides the distinction between ‘recommended’ and ‘optimized’; where optimized means restricted to use in specified circumstances, so not all of the remaining two thirds are recommended to all patients. Such stats are important; so too are the processes that lead to recommendations being made. The concerns are many, but for cancer centre on:

• Whether tools like the EQ 5D actually pick up on what matters for those with cancer?• How people in real life trade quality and length of life versus how economic models assume they do?• Whose values count, patients, or the public or even some combination

What did the fund buy??Up to December 2011 the fund made around 10,000 treatments available to patients, covering 34 products. Commentators now suggest that it’s now over 28,000 patients who have benefitted.

Too much £??The Fund is small though, starting with £50 million and now £200million a year. It amounts to very little when compared with the £5.1 billion spend on cancer by the NHS in 2010/11. Worryingly though, there are reports that not all the money was actually spent last year. It’s not clear if that’s because there isn’t unmet need or if everyone was just overly cautious and didn’t want to bust the budget.

Move to a national approach?Change is abound in the English NHS as a result of the Health and Social Act (2012) and the CDF has not escaped reform either. The fund is now the responsibility of NHS England, the new national agency tasked with spending some £20billion and overseeing the Clinical Commissioning Groups who will spend the rest of the over £100billion NHS budget. There’s a single approach to making decisions, and there’s a single list of products that will be funded. That’s quite a change from the regional approach taken up to now, with 10 funds previously in operation across England. That may be good for some; it’s less likely that there will be a different view depending on where a patient lives. That may also be bad for others; if a companies drug doesn’t get on the national list, it has no hope to get on a list anywhere else.

And the list is more restrictive now; 28 products versus the 34 reported available under the regional approach. There is some scope for variation from the list though, with clinicians able to ask for funding for treatments for individuals with rare cancers. Decisions on whether or not to fund these will rest with 4 panels spread across England, but they’ll have to use the same process.

Will VBP fix the problems that led to the fund in the first place??The answer at the moment is that no-one really knows. The details of VBP are not yet known, and maybe not even worked out. The uncertainty that this creates is leading to widespread concerns, and headlines and concerning stats like:

Cancer Drugs Fund: Patients to Lose Out….6,427 patients every year could be denied access to the medicines

Drugs fund axe ‘will hit 16,000 cancer patients’ as experts claim access to medication will be worst in Europe

One thing is for certain though; the success or otherwise of VBP will be measured in access to cancer medicines.

Leela Barham is an economic consultant. She can be contacted via her site or at leels@btinternet.com

By Leela Barham.

Posted in Europe, Global, Guest Blog, Op-Ed, pricing | Tagged cancer drug fund, England, NHS, NICE, UK, value-based pricing | Leave a comment

"Series A Crunch"? Some Suggestions

By Guest Blogger | Published: April 11, 2013

Recently, there has been an uptick in newsflow around the “series A crunch”/ “the valley of death” in regards to financing. Because of who we are (a firm that connects investors with private equity investments); we at Poliwogg see a lot of the “crunched” and “valley-dwellers.” We have some good news. The good news is that we are seeing increased interest on the part of accredited investors who have not invested in private companies before and who are now more open to the idea in light of lackluster returns in other asset classes. Aggregating this group of investors allows for investments in the range that are too large for a traditional “friends and family” round but are too small for traditional institutional investors where the crunch is most pronounced. The caveat is that companies need to be ready to meet the demands of this new crop of investors. Probably, what will be required will be more stringent than what companies have been asked for in the past. On the plus side in exchange for more requirements, these investors are often more patient and more passionate (especially in the disease categories) than traditional investors.

A few observations about what we are seeing (we view mostly healthcare companies):

• Asset prices seem fairer than they have been in a while especially when compared to the prices of similar assets in the public market; spurring investor interest.

• There do seem to be a large number of companies that raised seed rounds (sometimes in substantial sizes) from friends and family. That said given the lack of arms-length transactions the supporting documentation ( e.g. possessing an accountant and law firm, audited financials) often seems a bit lacking in our view and can make a more institutional looking round challenging if not impossible. More disclosure is always better.

• Too many business plan that look like a Rube Goldberg contraption. A simple business plan is easier to diligence and also easier to explain to investors. That is not to say that a complex business can’t work it’s just that we have to deal with the realities of the market and the market prefers simple but elegant solutions to business problems.

• Managements don’t always understand their target market well enough to explain the value proposition. In general this is a more common oversight with digital health companies than with biotherapeutics companies. We always like to point out to our technology friends, that healthcare is different than technology despite all of us wishing the two were similar. Often times this gets glossed over by entrepreneurs. But, investors especially those familiar with the sector, tend to pushback when the rules of the healthcare road are broached.

• Generally, biotherapeutics companies who have had the support of foundations or the NIH have had to explain their position in a treatment pathway in some detail so they have an understanding of the market. Biotherapeutics, however, are not completely off the understanding-the-market hook as they need to be realistic about trial design and time to data when explaining their value proposition to investors. Contrary to belief of some entrepreneurs, investors with an interest in the development space often have more realistic expectations that companies might believe. As biotherapeutics tend to need larger tranches of investments, identifying cohorts of interest becomes that much more important for them in order to expand the pool of eligible investors.

What seems to work best (defined as the ability to get funded) is the ability to be transparent and to work with investors as partners as opposed to looking at them as a source of capital. We live in a very risk-averse time owing much to the well-publicized market issues over the fast few years. Anything companies can do to articulate the risks (the return side is well known) of their enterprise will lead, ironically, to greater comfort (in our judgment) on the part of investors and make completing a financing easier. We think there is great interest on the part of investors looking to make investments in private companies serving needs they (accredited investors) know and care about. So the stars may actually align and capital will find investments it seeks, in size and time frame it requires.

Editorial Advisory Board member Les Funtleyder expands on his comments to the 2013 Pharm Exec Dealmakers Roundtable with some advice on how early stage companies can build their best case to accredited investors — get all your ducks in a row at once with good documentation and make foolproof trial design and implementation the center of your pitch.

Posted in Guest Blog, Strategy | Tagged funding, Series A, Series A crunch, Strategy | Leave a comment

"Sunshine" Just the Tip of the Iceberg: Pharma and Full Disclosure

By Jill Wechsler | Published: April 10, 2013

“Sunshine” Just the Tip of the Iceberg: Full Disclosure for Pharma:??There seems no end to demands for data on clinical research, conflicts of interest, company payments, and drug prices, writes Jill Wechsler.

Although recent legislation and regulations have greatly expanded the range of information that pharmaceutical companies have to unveil to the public, there’s an escalating demand for even more transparency.

The new “Sunshine” law — requiring drug and medical device companies to report virtually every penny they transfer to physicians and teaching hospitals, whether for conducting research, consulting, or providing free lunches — is just the tip of the iceberg. The theory is that disclosure of financial relationships between manufacturers and prescribers will shed light on medical treatment decisions — particularly for new, more costly medicines versus older, cheaper treatments.??There’s also a broader clamor for transparency in clinical trial activities and study results. After years of reluctance, most pharma companies now post information on active clinical trials on the federal clinicaltrials.gov website. Such listings inform patients of opportunities to enroll in research, and also provide a baseline of clinical studies subject to fuller disclosure of trial result summaries after product approval.??Now regulators and health advocates seek to expand disclosure to include findings on all clinical trials, even those for drugs that fail to gain market approval. Leading medical journals are working with European Union officials to promote the AllTrials effort to register and disclose results from all clinical trials around the world. Trial summaries are not enough; safety advocates and industry critics seek disclosure of patient level data and case report forms so that they can verify the sponsor’s research results and product claims.

This call for greater data transparency reflects charges that sponsors have hidden important safety information from regulators and the public. Pharma companies counter that full disclosure can raise patient privacy issues and lead to misinterpretation of findings by non-experts. Abbott’s pharma spin-off AbbVie has filed suit to prevent the European Medicines Agency from releasing patient-level clinical trial data, as has InterMune of California.

Yet, a number of pharma companies are adopting a full disclosure policy, some building on research disclosure requirements set in consent agreements negotiated with the Department of Justice and other federal and state enforcers.

In February, GlaxoSmithKline announced it would release patient-level data as part of a new “openness” policy. In addition to posting notices on new trials and result summaries, the company will make available clinical study reports for all medicines — approved and discontinued — after results are published.

Roche is taking a similar stance, partly in response to criticism over hiding clinical trial safety reports on its Tamiflu influenza treatment. Roche has formed an independent body to assess outside requests for patient data from trials supporting market applications and will make such information available after product approval in the United States and Europe.??Price transparency?An equally important goal of US transparency advocates is to reduce healthcare spending through competition generated by broader disclosure of prices for healthcare services and medical products. The new online “marketplaces” established by Obamacare for consumers to shop for health insurance will feature comparative information on plan premiums, co-pays, and benefits, along with drug formularies and pharmacy coverage policies, to help identify the best deal for an individual on coverage and costs.

Disclosure of information on drug coverage and costs has gained support from a steady supply of reports on pharma pricing issues from federal investigators. One analysis issued in February by the HHS Inspector General found millions in overpayments for drugs covered by Medicare Part B under the current average sales prices reimbursement formula. Another study criticized inadequate conflict-of-interest assessment for members of Medicare drug plan formulary committees, a factor that supposedly could bias committee judgment in drug selection decisions. The Government Accountability Office recently investigated and called for changes in how Medicare pays for drugs used in dialysis treatment.

Consumer advocates and pharma critics maintain that full disclosure of drug prices will lead to much lower costs for patients. Pharma companies counter that such transparency will only boost prices overall, especially for those customers that currently enjoy favorable rebates and discounts. Industry’s biggest fear is that some kind of national formulary will lead to reference pricing, higher rebates, and eventually drug price controls.??Social media exposure?Over the long run, though, much information on pharma research and prices will become public with the expansion of global search engines able to tap into millions of queries and postings on medical treatments and healthcare costs. A recent study by scientists at Microsoft Research, Stanford, and Columbia University, published in the Journal of the American Medical Informatics Association (March 6, 2013), found that Internet searches on drug use uncovered previously unrecognized adverse events. Here, queries from six million people in 2010 searching for information on antidepressant Paxil and cholesterol treatment Pravachol disclosed a greater incidence of high blood sugar in patients taking the two drugs.

It’s not hard to imagine similar analyses of consumer searches for lower drug prices, product safety reports, and complaints about pharma marketing and advertising from health professionals and the public.

The ultimate question is whether such disclosure enhances patient care — or adds to the complexities of innovative research.

Jill Wechsler is Pharm Exec’s Washington correspondent. She can be reached at?jwechsler@advanstar.com.

There seems no end to demands for data on clinical research, conflicts of interest, company payments, and drug prices.

Posted in Guest Blog, Op-Ed, Regulatory, Safety, Strategy, healthcare, pricing | Tagged drug safety, Obamacare, regulatory affairs, Sunshine Act, transparency | 1 Comment

The Pharma Marketer’s Guide to Medication Adherence

By Guest Blogger | Published: April 8, 2013

by Grant Corbett

Improving brand adherence rates requires pharma marketers to have access to two growing bodies of knowledge. These are: 1) carefully evaluated evidence for what can improve brand revenue, and 2) informed forecasts of trends. Read More »

Posted in Marketing | Tagged adherence | Leave a comment