US Oncology Market Access: Issues & Trends …...Avastin Erbitux Perjeta Cyramza Imbruvica Ibrance...
Transcript of US Oncology Market Access: Issues & Trends …...Avastin Erbitux Perjeta Cyramza Imbruvica Ibrance...
US Oncology Market Access: Issues & Trends Impacting Reimbursement and Pricing
Confera Oncology Economics SummitFebruary 19, 2015
Lee Blansett
Disclaimer
The observations and insights contained in this presentation are the presenter’s and may not completely align with IMS Health’s point of view.
If you have comments, call me.
650-208-0745
Agenda
1. Oncology market trends
2. Pricing trends in the US
3. Bending the cost curve
4. Thoughts on pricing
3US Oncology Market Access
HCV, diabetes & oncology drove growth in 2014
The diabetes market is the fastest growing in the top 10
MAT Nov 2014 Sales ($MN) Share (%) Growth (%)
US Market 368,743 100.0 12.4
1 Oncology 32,020 8.7 15.5
2 Antidiabetes 31,356 8.5 30.0
3 Mental Health 23,289 6.3 -1.3
4 Respiratory 21,792 5.9 7.1
5 Autoimmune 21,726 5.9 23.0
6 Pain 20,307 5.5 8.3
7 HIV Antivirals 14,078 3.8 14.0
8 Lipid Regulators 13,747 3.7 1.5
9 Multiple Sclerosis 13,629 3.7 25.0
10 Antihypertensives 12,087 3.3 -3.6
Top 10 204,032 55.3 12.4
11 Viral Hepatitis Products 11,006 3.0 458.6
Source: IMS Health, National Sales Perspectives, Nov 2014
4US Oncology Market Access
Oncology share of corporation sales
Oncology products share of late stage pipeline (Phase II or later)
R&D investments in oncology remain disproportionately large
5
50%
40%
30%
10%
0
70
90%
40%35%30%25%20%15%10%5%0
100%
20%
60%
80%
70%
45
PFI
CELG
NVR + GSK
NVR
B-I
J&JLIL
SNY
TAK
ABBV AZ BAY
ROC
MRK
BMS
AMG
GSK
Onco R&D share vs. Onco sales share
Oncology Pipeline: Future Competitive Landscape (No. Products)
Source: IMS Health, MIDAS, MAT Dec 2013. Oncology (L1+L2&Revlimid&Xgeva&Proleukin). IMS Lifecycle R&D Focus 2014. Company Websites and Annual Reports as of beginning 2014. Celgene include Oncomed compounds
5US Oncology Market Access
Oncology is the largest area of focus in R&D, with nearly 2000 products in the pipeline
Number of active products in the pipeline to date = 6,234
6
Preclinical3,088
Phase I1,082
Phase II1,438
Phase III449
Pre-Reg/Registered
177
1,02633%
352 33%
369 26%
10223%
169%
Number and % of oncology products in phase
Total drugs in pipeline
Non biologics (small molecules) Biologics
Source: IMS Institute for Healthcare Informatics, Feb 2014
62%
38%
59%
41%
56%44%
62%
38%
63%
37%
US Oncology Market Access
PTS rises in cancers with well-characterized targets-as risk drops and competition piles in. Looks like CV in the 90s?
Evaluation of clinical trial failure in advanced (stage IIIb-IV) NSCLC drug development over the past 14 years
7
Source: Journal of Thoracic Oncology, 2014; 9 (2): 163
31
62
1113
32
17
0
10
20
30
40
50
60
70
NCSLC -Targeted therapy
All smallmolecules
All drugs NSCLC-Biomarker
All NSCLCAll Biologics
Development success
Development success (%)
US Oncology Market Access
Agenda
1. Oncology market trends
2. Pricing trends in the US
3. Bending the cost curve
4. Thoughts on pricing: Staying on the right side of history
8US Oncology Market Access
Are prices really higher?
9
Source: Product PI; Pre-2014 products priced at launch ASP adjusted for inflation; 2014/2015 priced at WAC as listed in PriceRx 2/15/15: wastage not included
Cost
per
Patient
or
Year
Monthly and Total Patient Costs at Launch 2004/5 vs. 2014/2015Selected Brands
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
0 2,000 4,000 6,000 8,000 10,000 12,000 14,000
Cost per Month
Keytruda
Abraxane
EloxatinErbituxAvastin
Perjeta
Cyramza
Imbruvica
Ibrance
Opdivo
US Oncology Market Access
English assessments suggest that newer agents are, on average, providing higher non-$ value than older brands
2.5
3
3
4.5
5
5
5.5
6
6
6
7
8
8
8
0 2 4 6 8 10
Iclusig
Stivarga
Imbruvica
Adcetris
Xofigo
Erivedge
Bosulif
Xalkori
Zydelig
Pomalyst
Xtandi
Perjeta
Kadcyla
Gazyva
Recent Launches
1
1
2
3
3
3
3
4
7
7
8
0 2 4 6 8 10
Jevtana
Halaven
Treanda
Inlyta
Avastin
Afinitor
Tykerb
Arzerra
Velcade
Erbitux
Revilimid
Mature Brands
US Oncology Market Access10
Average: 5.5 Average: 3.8
Source: NHS England Cancer Drug Fund, highest scoring indication with a published assessment
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
0 5 10
Abraxane
Perjeta
English Cancer Drug Fund Score
Erbitux
Avastin
Value is maintained as higher prices are offset by improved survival and reduced toxicities
11
Source: Product PI; Pre-2014 products priced at launch ASP; 2014/2015 priced at WAC as listed in PriceRx 2/15/15
Price and Value2004/5 vs. 2014/2015
Selected Brands at first launch
Cost
per
Patient
or
Year
US Oncology Market Access
Combinations of targeted agents and immunotherapieswill improved outcomes but can double treatment costs
2010
Avastin+Alimta
Bendamustine
+Rituxan
2012-2014
Revlimid+Velcade
Herceptin+Perjeta
Tafinlar+Mekinist
2015-2020
Gilotrif+Sprycel
Gilotrif+Erbitux
Zelboraf+cobimetinib
Yervoy+Opdivo
Yervoy+MPDL3280A
Keytruda+?
Opdivo+?
MPDL3280A +
IMS Round Table Oncology 201412
Will “20” be the “New 10?”Example Combination Regimens in Use and in Pipeline
Source: IMS CG secondary research
EU5 to US ex-manufacturer price ratio varies, but U.S. and EU are clearly diverging
13
EU Launch Prices Compared to US Launch PricesPublic Prices for Selected Products, 2005-2013
Note that US price increases post launch exacerbate downward trend of comparison
Source: IMS MIDASUS Oncology Market Access
# C
ancer
com
pounds
# N
on c
ancer
com
pounds
National reimbursement status of newly-approved drugs
0
2
4
6
8
10
56%
44%
89%
11%
100%100%100%100%
56%
44%
67%
33%
22%
22%
56%
100%
44%
56%
Non reimbursedNon-launched/Non-marketing approved Reimbursed
0
5
10
15
20 5%
79%
100%
37%
100%
16%
21%
79%
47%
95%
21%
95%
5%
95%
5%
95%
5%100%
84%
16%
*
*In Sweden, reimbursement at the county level was considered, as national level reimbursement decisions are not made for hospital drugs. Considerations for other markets are found in figure 22
Worse yet: Countries using a QALY-based reimbursement approach do not provide access to all cancer drugs
CPQ countries Non CPQ countries
14US Oncology Market Access
Physicians’ and other stakeholders’ awareness of cancer care costs are rising; Price elasticity of demand is emerging
“The Price of Drugs for Chronic Myeloid Leukemia (CML); A Reflection of the Unsustainable Prices of Cancer Drugs” By Hagop Kantarjian and other experts in CML• High prices of cancer drugs,
particularly tyrosine kinaseinhibitors for the treatment of CML, are inhibiting treatment access for patients
“The Cost of Cancer Drugs” Lesley Stahl interviewing prominent oncologists• Costs of both new drugs
(ex. Zaltrap) and popular old drugs (ex. Gleevec) are exorbitant. Pharmaceutical companies keep prices high by tactics such as reimbursing doctors and, because Medicaid cannot negotiate prices by law, these tactics work
“Unpronounceable Drugs, Incomprehensible Prices”By Peter Bach• Cancer drug prices keep rising.
The industry says this reflects the rising costs of drug development and business risks. However, drugs entering mature, educated markets with fewer requisite clinical trials are higher priced that the standard of care, indicating that this is not the case
“Cancer’s Next Frontier: Addressing High and Increasing Costs” By Elena Elkin and Peter Bach• Accounting for inflation, cancer
treatment costs have over doubled in the past two decades and about a quarter of insured patients reporting spending all or most of their savings on treatment
“The Just Price of Cancer Drugs and the Growing Cost of Cancer Care: Oncologists Need to Be Part of the Solution” By David G. Pfister• Even though new oncology drugs
often have modest or no improve-ment over standard of care overall survival, they are consistently high priced
“In Cancer Care, Cost Matters” By Drs. Peter Bach, Leonard Stahl, and Robert Wittes• Doctors at Memorial Sloan-
Kettering hospital defend denying coverage to Zaltrap based upon the fact that it confers little to no advantage over Avastin and is almost twice the price. They urge other cancer centers and research hospitals to take action against highly priced drugs
Forbes
15US Oncology Market Access
Historical Context: Stakeholders have been identifying price as an issue for at least a decade
ASCO and the Academics
Leonard Salzpublicly criticizes Erbitux price
2004 2011 20142009 2012 2013
ExternalActivities
ASCOActivities
Pfister’s JCO article
Bach/Salz NYT Op Ed Piece on
Zaltrap
Kantarjianpublishes Blood
article
ASCO’s 2011 Top Five
• 2013 Top 5• Draft Guidelines
on Endpoints
Payment reformproposal
ASCO and Industry
Meet
Value Task Force
16US Oncology Market Access
Conclusions
� Prices, net of inflation and possibly clinical value, continue to rise in the U.S.
� Launch prices are commonly between $10,000/month and $13,000/month for monotherapies
� Combination therapies, e.g. Taf-Mek, are pushing toward a $20,000/month level
� Price increases continue unabated…essentially all oral and IV brands raised prices in 2013 and 2014
� While increasing prices are controversial, new products arguably deliver better clinical and QoL outcomes, somewhat mitigating the price impacts
� Popular and professional media discussions of prices raise awareness, a necessary precursor to changes in behavior.
US Oncology Market Access17
Agenda
1. Oncology market trends
2. Pricing trends in the US
3. Bending the cost curvea. IDNsb. Alternate payment approachesc. Out of pocket costsd. Biosimilars
4. Thoughts on pricing: Staying on the right side of history
18US Oncology Market Access
-15%
-10%
-5%
0%
5%
10%
15%
IDNs drive share in other therapeutic areas; expect interest to rise as oncology options proliferate
-15%
-10%
-5%
0%
5%
10%
15%
Nation Boston Chicago
LA
Miami
Philadelphia
IDNs reduced launch brand volume for Tradjenta by 10%
Volume increase
IDNs reduce Januvia volume today by 8%
Nation
Boston Chicago
LA Miami Philadelphia
Volume increase
IDNs reduced launch brand volume for Pradaxa by 12%
-15%
-10%
-5%
0%
5%
10%
15%
Nation Boston Chicago LA Miami Philadelphia
Volume increase
Jan 30th, 201519
IDN Impact on Product Volumes in Six Cities
Alternative payment models are rolling out at an increasing rate as payers and providers seek solutions
20
Providence Regional Cancer Partnership
Hill PhysiciansOncology drugs included in bundle
MemorialCareMed Foundation & SHARP HealthPartial capitation
Monarch Healthcare100% global capitiation
United Healthcare + MD Anderson Cancer CtrHead and neck cancer bundled payment pilot
Texas Oncology & Aetna ACO
Florida Blue & Moffitt Cancer CtrOncology ACO
Miami-Dade Accountable Oncology Program
Cancer Centers of North FL????
BCBS MI Oncology Pathways Program
Priority HealthOMH initiatives
CareFirst Blue Cross Clinical Pathways Project
Legend: Fee for service plus Bundled payments Capitation
North Shore LIJGlobal cap in self-insured lives
US Oncology Market Access
Alternate Payment Models Nationwide
Three general models
• Incentives in the form of incentive payments in addition to normal fees
• Little/no downside risk to providerFee for Service Plus
• Budget for given time period, disease and course of treatment
• Drugs may or may not be included in payment
Bundles
• Fixed monthly payment per life, not patient
• May or may not include institutional and drugs
• Increasingly will include IDN-sponsored insurance products
Capitation
US Oncology Market Access21
About half of plans expect to have pathway programs in place by the end of 2015
Fee for service plus Bundled payments Capitation
Growth in oncology pathway programs (N= 91 plans, 124M lives)
Sources: J Oncol Pract “Payers Working Collaboratively”
No plans to implement in next 12-24 months
32%
Have implemented oncology pathways
Plan to implement in next 12 months
29%
36%
22%
32%
49%
% of plans % of lives
22US Oncology Market Access
Current pathway programs vary in the types of cancers and the types of therapy to which they are applicable
Sources: Becker’s Hospital Review, Innovent Oncology, Humana
Sample pathway programs
Plan Pathway program
National
• Offers monthly payments of $350 per patient treated in compliance to pathways
y• Pathway for chemotherapy, supportive care therapies
applicable to commercial and Medicare Advantage lives in select states
• Aetna and USON tested cost effectiveness of Innovent’s Level 1 NSCLC pathway and found 35% cost savings
Regional
XX• BCBS Michigan and CareFirst are among several
regional payers that have adopted P4 oncology pathway programs (and evolved beyond)
Fee for service plus Bundled payments Capitation
23US Oncology Market Access
Pathways can reduce variation and MD choice
• Via manages academic, hospital & community based cancer centers containing > 1,100 medical, radiation, & surgical oncology providers
• Represents ~$3b in annual drug spend with 70-95% pathway compliance
40+ VIA Oncology Pathways
24
Ovarian
CML
Lymphomas
Uterine
MDS
Myeloma
Lymphomas
Cervical
Uterine
Vaginal
Vulvar
Bladder
Breast
Colon/Rectal
Esophageal
Gastric
Head & Neck
Lung
Melanoma
Pancreatic
Prostate
Renal
Testicular
Anal
Bone Mets
Brain Mets
10 Brain
Breast
Esophageal
Head & Neck
Lung
Non-neoplastic
Multiple Myeloma
Pancreatic
Prostate
Rectal
Sarcoma
Seminoma
Skin
Thyroid
Breast
Head & Neck
Pancreatic
Medical Oncology
Radiation Oncology
Surgical Oncology
Solid Tumors
Gynaecologic malignancies
Malignant Hematologic disorders
US Oncology Market Access
Ten OMHs currently have NCQA recognition, while a few payer pilot OMHs are being tested
Sources: AJMC “Lessons from OMH collaborative”; Oncology Times “NCQA Plans Patient-Centered Oncology Demonstration; Modern Healthcare “At Home with the Specialist”; NCQA Quality Profiles
Oncology Medical Homes
Program Size Result
Practices
4 practices, 9 physicians
• Reduction in ER visits by 68%• Reduction in hospital admissions by 51%• First non-primary care to earn NCQA
recognition as a PCMH
9,552 patients from 7 cancercenters
• Reduction of hospitalization from 25 to 18 days per 1,000 patients
• Received $19.8M grant from CMS to expand model to FL, GA, MN, NH, OH, TX
Payers
6 practices, 60 physicians
• Physicians paid a management fee and savings from reduced hospitalizations
• Reduction in ER visits by 65%• Reduction in hospital admissions by 43%
20-25 oncology practices (pilot)
• Aetna will launch pilot OMH on Jan. 1, 2015, focusing on patients with breast, colon, lung cancer
Fee for service plus Bundled payments Capitation
25US Oncology Market Access
ASCO has also proposed a bundled payment approach for oncology care for Medicare patients
Sources: J Onc Pract “Changing Physician Incentives”; United Health; Forbes
ASCO’s Consolidated Payments for Oncology Care
ASCO released a proposal for a new physician payment approach for Medicare cancer services on May 2014
Practices will receive 5 types of bundled payments
Fee for service plus Bundled payments Capitation
New Patient Payment
• Initial payment for each new patient, which will be much larger than current payments for initial office visits
Treatment Month Payment
• Monthly payments during the time the patient is treated; payments will be higher for more complexes cases
Active Monitoring Month Payment
• Payments post-treatment during times when the practice is still monitoring for recurrences or progression
Transition of Treatment Payment
• Payments if disease has progressed or recurred
Clinical Trial Payment
• Additional monthly payments for each patient participating in a clinical trial
1
2
3
4
5
26US Oncology Market Access
60%40%20%0%
80%
60%
40%
20%
0%
100%80%20%0%
80%
60%
100%
40%
20%
0%
80%60%40%
Patient cost sharing is effective at restricting access but is indiscriminate, has highest impact in Medicare/Exchanges
Low co-pay, low abandonment
% of TRX >$150
Commercial
Oral Oncolytic New Patient Abandonment Rate at High Co-Pays
New
Sta
rt A
bandonm
ent
Rate
% of TRX >$150
Part D
Low co-pay, low abandonment
New
Sta
rt A
bandonm
ent
Rate
High co-pay, high
abandonment
High co-pay, high
abandonment
27US Oncology Market Access
Biosimilars’ Impact: As prices for GCSF have dropped, utilization has grown even in price sensitive countries
0
10
20
30
40
50
60
70
80
90
100
110
-50 -45 -40 -35 -30 -25 -20 -15 -10 -5 0
ItalyGermany France
Price Change
UK
Sweden
Spain
Utilization C
hange
GCSF Utilization Rises as Price Declines (2006-2013)
Source: IMS Institute , “Assessing biosimilar uptake and competition in European markets”, October 2014
28US Oncology Market Access
Lower prices encourage increasing utilization and raise total spend as biosimilars with similar clinical value enter
Source: IMS Institute , “Assessing biosimilar uptake and competition in European markets,“ October 2014
G-CSF Total Spend% Change 2006-2013
-0.2
0.0
0.2
0.4
0.6
0.8
1.0
1.2
SwedenGermany
49%
France
22%
UKSpainItaly
-18%
36%6%
98%
29US Oncology Market Access
Agenda
1. Oncology market trends
2. Pricing trends in the US
3. Bending the curve
4. Thoughts on pricing
30US Oncology Market Access
Life Cycle Pricing: How do you price for multiple indications?
Near-launch Oncology Pipeline Assets and Target Indications
Number of indications anticipated for leading oncologics in EU5*
*Leading oncologic products are defined as collectively accounting for 98% of sales within the ATC3: L1X (antineoplastics); IMS MIDAS Q4 2013
Source: IMS MIDAS
19 19
0
5
10
15
20
25
30
35
2014
6
2019
32 119
12
2 3 >3
Num
ber
of Pro
ducts
Number of Indications
Anticipated number of products with multi-indications by 2019
31
Single Indication Multiple Indications
US Oncology Market Access
Clinical value diverges widely. Why shouldn’t price vary?
-1
0.5
1
1
1
1
2
2
2
2.5
3
4
5
-2 0 2 4 6
Maint mCRC
2L Glioblastoma
3L mBC+vin
2L OV+ch
1L mCRC+triplet
1L mCRC+Ox
1L mCRC
2L OVR+ch
2L OVR+Gcar
3L P Glioma
TN mBC
3L+I P Glioma
1L CRV
English Cancer Drug Fund’s Avastin Value Scores by Indication
US Oncology Market Access32
Source: NHS Cancer Drug Fund Assessments
•Overall survival gains range from zero to 5.2 months
•QoL gains scored only in Triple Negative mBC, Ovarian, and Cervical cancers
•Toxicity universally seen as a negative
•Incremental cost per treatment range from £1,109 to £4,437
Score Drivers
Preserving value for manufacturers and payers may require indication-specific pricing
CRC
Breast
Prostate
Liver
NSCLC
RCC
50,000
Rela
tive Product Value
by T
um
our
Type
Bubble Size of Patient Population
Patients
Price HIGH: All low value use excluded
Price LOW: Erodes economic value to manufacturer
Rela
tive Product Value b
y T
um
our
Type
Patient Population (#)
Price for 10mg dosing and reduce revenue for 2mg indications by factor of 5
10mg2mg
“Simple” Issue of Multi- Indications: Pick 1 Price
“Complex” Issue of Dosing: Posology varies by indication
Price for 2mg dosing and make the cost of 10mg indications prohibitive or risk under-dosing
Dosing
Price at “Weighted average” of all indications
Triggers use in ‘high value’ indications
Lower cost alternatives considered
33US Oncology Market Access
Ask not what Oncology can do for you but ask what can you do for your stakeholders ...
Constructive engagement and compelling value stories are pivotal
� Recognise that U.S. payers are committed to slowing the rate of growth in cancer costs, and that providers are becoming payers
� All stakeholders want more clarity and precision re outcomes in three dimensions: �Cost versus benefit �Clinical outcomes�Quality of life, context of drug’s impact on patient’s life
� Communicating value is a deceptively simple process that many fail to grasp� Identify the appropriate patient for treatment�Demonstrate effectiveness through metrics with intrinsic importance
accepted by payers, physicians and patients�Plan early to collect exhaustive data on patient experience and costs during and following treatment....at very least, data adds context to OS/PFS
34US Oncology Market Access
Please contact us for more information
Lee BlansettSenior Principal,IMS Consulting Group
[email protected]+1 650-208-0745
35US Oncology Market Access