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  • Debiopharm Group 2014

    ISPOR 19th International Meeting

    May 31st June 4th 2014, MontralInternational Society for Pharmacoeconomics and Outcomes Research

    Pascale Boyer Barresi, CFABusiness Analysis, BD&L

    September 2014

  • 2 Debiopharm Group 201417.04.2015Debiopharm International SA confidential2

    Topics

    Pharmaceutical Pricing Risk Sharing & Performance-Based Agreements Use of Big Data & Healthcare Analytics Changing the Drug Development Paradigm European HTA Collaboration Health Economics in the Context of Personalized Medicine Valuing Targeted Therapies Market Access Modelization Value-based Pricing across Indications

  • 3 Debiopharm Group 201417.04.2015Debiopharm International SA confidential3

    Pharmaceutical Pricing

  • 4 Debiopharm Group 201417.04.2015Debiopharm International SA confidential4

    Pharmaceutical Pricing

    Research Process

    Pricing Choices Premium: class (re)-definition = higher than current competition =

    unique & superior value proposition; sufficiently higher to benoticeable

    Parity: similar to current competition (tactically slightly higher or lower)

    Penetration: discount = within reach of current competition, sufficiently lower to be noticeable OR low-ball = far lower thancompetition, implying a value shift (generics)

    Preclinical -36 months -24 months -12 months Launch Post Launch

    Secondary research: establish ranges, hypotheses and monitor the market

    Qualitative research: narrow range, understanddynamics of decision making and fine tune

    Quantitative research: specify the role and importance of price, enumerate trade-offs

  • 5 Debiopharm Group 201417.04.2015Debiopharm International SA confidential5

    Pharmaceutical Pricing

    What type of price? Public price (for cash payers) Negotiated price (reimbursed price) Hospital price Ex-factory price (without discounts) Net selling price (ExFact with discounts)

    Adjust your mindset and perspective to who you are talking to.Ex: for sales forecasts, you will use the net selling price. For pharmacoeconomic analysis, you will use the reimbursed price.

    Pricing terminology is very often country specific. Price has to beunderstood properly between affiliate and headquarters.

    Where we stand to forecastour revenue base

  • 6 Debiopharm Group 201417.04.2015Debiopharm International SA confidential6

    Pharmaceutical Pricing

    Focus

    The best use of pharmacoeconomics is to determine the value of medications in use. This will help you define where you will generatemost of the value.

    Pharmacoeconomics should: Drive clinical research protocols Describe important aspects of the market Inform and guide pricing Help customers comprehend value and use products efficiently &

    effectively.

    Player Will focus on:Clinicians Clinical effectsPayers Cost (total budget) & HTA Patients Out of pocket cost & effectsPharma Science

  • 7 Debiopharm Group 201417.04.2015Debiopharm International SA confidential7

    Pharmaceutical Pricing

    Drivers in determining price vary based on the disease state and therapy offered

    Public Policy Environment

    CompetitiveEnvironment

    ReimbursementEnvironment

    Patient & Disease

    Characteristics

    Decision Making

    Value

    Product Strategy

    CompanyNeeds & Abilities

    Price

  • 8 Debiopharm Group 201417.04.2015Debiopharm International SA confidential8

    Pharmaceutical Pricing

    Valuation and pricing activities

    EarlyDevelopmentFinancial model of disorder(s)

    Identification of leverage points & critical successfactors

    Preclinical& Phase I Identification of differentialvalue, initial pricingestimates, scenarii & analysis

    Phase II & IIIMeasurementin trials (endpoints, comparators,)

    Develop & refine pricingscenarii

    Pre-launchRefine and test pricelevels, scenarii & value proposition

    Final pricingstrategy (list & tactical) decisions

    LaunchCommuni-cation of value

    Post-launchOngoingpricemanage-ment

  • 9 Debiopharm Group 201417.04.2015Debiopharm International SA confidential9

    Pharmaceutical Pricing

    Pricing and reimbursement are linked together. Decisions are based on perceived value. Value perceptions are based on both qualitative and quantitative

    factors. Decision making processes are influenced by the context.

    Key questions: Who decides about the price of a pharmaceutical product? How?

    Manufacturers, health authorities, formal evaluation, contracting,

    Who decides about the listing and reimbursement? How?National and/or local health authorities, formal evaluation, contracting,

    Who decides about the utilization? How?Individual physicians, professional guidelines, national and/or local health authorities, evidence-based, patientspreferences,

    Who pays the price? How?Private payers, public payers, patients, insurance premiums, co-payments, fixedbudgets,

  • 10 Debiopharm Group 201417.04.2015Debiopharm International SA confidential10

    Pharmaceutical Pricing

    Pricing takesplace beforelaunch in somecountries and after launchin others.

  • 11 Debiopharm Group 201417.04.2015Debiopharm International SA confidential11

    Pharmaceutical Pricing

    Pricing Strategy Process

    Business StrategyPricing & ReimbursementStrategy

    Payer/Managed MarketsStrategy

    Build & Execute PlanIdentify options to explorePerform gap analysisEnsure alignment

    Model & Test StrategiesDesign & test programsEnsure real world evaluations

    Analyze & offer refinements

    ImplementationDecisionsStrategies & programsTactics & targetsMetrics for evaluationEducate for execution

    ImplementationExecute consumer communication

    Evaluate progress vs. metricsRefine strategies & tactics

  • 12 Debiopharm Group 201417.04.2015Debiopharm International SA confidential12

    Risk-Sharing & Performance-BasedAgreements

  • 13 Debiopharm Group 201417.04.2015Debiopharm International SA confidential13

    Performance-Based & Risk Sharing Agreements

    Pay for performance Old concept

  • 14 Debiopharm Group 201417.04.2015Debiopharm International SA confidential14

    Performance-Based & Risk Sharing Agreements

    Basics in health economics: Drugs are approved, launched & reimbursed under conditions of

    uncertainty affecting: Efficacy Effectiveness (real world) Risk Models (links between surrogate markers & long term

    outcomes) Cost effectiveness Budget impact (affordability)

    Gathering more evidence is costly

    BiologyImprovement in comorbiditiesGlucoseCholesterol

    ClinicalImproved clinicaloutcomesCardiovascularCerebrovascular

    EconomicsBetter healthoutcomesLength of lifeQuality of life

  • 15 Debiopharm Group 201417.04.2015Debiopharm International SA confidential15

    Performance-Based & Risk Sharing Agreements

    Key Characteristics of PBRSA:1. Program of data collection agreed between the payer and the

    manufacturer2. Data collection is starting right after the regulatory approval3. Pricing, reimbursement & revenue for the product are linked to

    the outcome of this data collection4. The goal of the data collection is to address uncertainty (efficacy

    in a specific population, efficacy in a broader population,)5. The distribution of risk is different between the payer and the

    manufacturer than the historical relationship Understanding the real outcomes could help predict long-term

    adoption and impact

  • 16 Debiopharm Group 201417.04.2015Debiopharm International SA confidential16

    Performance-Based & Risk Sharing Agreements

    Payer response to increasing cost pressures: Increasing patient co-payment Pre-use authorization Quantity and dose limitation Benefit restrictions Denial of coverage Performance-based & risk sharing agreements

  • 17 Debiopharm Group 201417.04.2015Debiopharm International SA confidential17

    Performance-Based & Risk Sharing Agreements

    What are the options of the payer?

    Payer options

    YesPayer adopts: no

    new evidencerequired

    NoPayer refuses to

    adopt

    Yes butPayer adopts with

    additional evidence(CED)

    Manufacturer has the option to

    reapply withmore

    evidence

    Use only in research

    CED (Coverage

    with Evidence Development)

    withrenegotiation.

    No pre-specified

    agreement

    CED linked to performance agreement

  • 18 Debiopharm Group 201417.04.2015Debiopharm International SA confidential18

    Performance-Based & Risk Sharing Agreements

    PBRSA Taxonomies several references but key dimensions

    Non-outcome based Outcome based

    Patient Level

    Utilization capitations Discounted treatment

    initiation Fixed cost per patient

    Price linked to per patient outcome

    Conditional treatmentcontinuation

    Money-back guaranteePopulation Level

    Market share Price-volume Expenditure/budget cap Price change/discount

    Only with research(coverage with evidencedevelopment) usingobservational study or RCT

    Only in research(patients only getaccess if they agree to participate in a study)

  • 19 Debiopharm Group 201417.04.2015Debiopharm International SA confidential19

    Performance-Based & Risk Sharing Agreements

    Practical difficulties: Transaction costs

    Development of processes Health personnel time to administer the scheme Limitation of current medical information systems to measure

    and track performance EMR are s

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