In the wake of healthcare reform in the US analysts said biopharm will have to spend more time and effort convincing insurance companies and payers of a new drug’s value. However, some say pharma companies are still waiting too long to contact payers.
“Pharma companies don’t engage payers early enough”, Rob Epstein, the new president of UBC and former Medco executive, told Outsourcing-Pharma. In many cases companies contact payers after Phase III trials have begun but by this stage it is too late to easily influence trial design.
Consequently trials fail to generate data that could convince payers of the value of a new drug. For example, it might be useful if the Phase III trial has a comparator arm so payers can assess the drug’s effectiveness compared to existing treatments.
Similarly, end points designed to meet regulator’s needs could lack information wanted by payers. If a trial can show a drug lowers healthcare costs by, for example, reducing hospital visits, payers want to know. However, some studies fail to cover these details.
“The pharma industry spends billions annually on pharmacoeconomic and health outcome studies, producing results that payers find at best unhelpful and at worst highly suspect”, consulting firm Oliver Wyman wrote in a report.
Working towards an economic proof of concept, by assessing a drug’s impact on treatment costs, could be a better approach. The report cites Sanofi’s relationship with Medco and AstraZeneca’s work with WellPoint as examples of efforts to make clinical trial data more relevant to payers.
Compelling data
The field of personalised medicines creates further problems. Diagnostic companies developing genetic tests are failing to produce data that is compelling to payers, Epstein said. To give payers the information they need Epstein said diagnostic companies should run more clinical utility studies.
Buying UBC has helped. Payers covering more than 20m US citizens, close to one-third of Medco’s reach, are working with UBC on trial enrolment and this gets them involved earlier in development.
UBC has also benefited from the relationship. The 20m citizens represented by the payers cover all ethnicities, Epstein said, and this allows UBC to recruit more diverse trial participants than many studies. “There’s been a notable shift in the make-up of trial participants”, Epstein said.
Global goals
Acquiring UBC also strengthened Medco outside the US. Medco now has more contact with payers outside North America and Epstein said this is creating new opportunities for the traditionally US-focused business.
Epstein said Medco can be “impartial conveners”, bringing together payers from different countries, as well as biopharm companies and regulators. In doing so Medco can “bridge the gap” between these different areas of the biopharm industry, Epstein said.