us oncology market access: issues & trends …...avastin erbitux perjeta cyramza imbruvica...

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


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


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 (%)


Agenda



3. Bending the cost curve

4. Thoughts on pricing: Staying on the right side of history


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


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


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


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


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


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.


Agenda



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


-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


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


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


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)



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


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



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


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


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


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


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%


Agenda



3. Bending the curve

4. Thoughts on pricing


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


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


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


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


Please contact us for more information

Lee BlansettSenior Principal,IMS Consulting Group

[email protected]+1 650-208-0745


us oncology market access: issues & trends …...avastin erbitux perjeta cyramza imbruvica...

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