April 4, 2006

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April 4, 2006

• Reimbursement and Phase IV
• CRO Role In Clearing
• The Fourth Hurdle

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Objective

• Understand trends in payer use of Phase IV
  studies and registries
• Identify considerations for adapting Phase III
  and IV activities to accommodate those trends

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• U.S. reimbursement planning and problem solving
  since 1998
• Former owner SFA Exec VP, PAREXEL
• Payer research competitive analysis
• Strategic planning reimbursement forecasting
• Advocacy with major payers

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Tag Client Mix
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Current Assignment Include

• Sepsis
• PDT
• HIV/AIDS
• Personalized cancer immunotherapy

• Immune globulins
• Osteoporosis
• Genetic testing
• Bleeding disorders

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The Fourth Hurdle

• Proof of efficacy
• Acceptable safety
• GMP
• Reimbursement

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4x4 4th Hurdles Link to Phase IV

• U.S. payers routinely require outcomes research
  to support coverage of high cost technologies
• High cost On my radar per case or in total

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Link contd

• Tech developers are often reluctant to include in
  Phase III more than what is needed for FDA.
  Thats OK because
• Payers want to know how new tech affects real
  populations, not protocol-driven clinical trial
  subjects
• But Phase III design should anticipate Phase IV
  data collection

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Payers Want Practical Clinical Trials (PCTs)

• Evidence-based coverage policy will require PCTs
• E.g. ICD
• Study design is formulated to enable treatment
  decision making
• Distinguish from explanatory clinical trials
  designed to maximize the chance that a biological
  effect of a new tx will be revealed

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PCT Characteristics

• Compare clinically relevant interventions
• E.g. Enroll based on presenting symptoms rather
  than confirmed diagnosis
• Enroll a diverse population of study participants
• E.g. Elderly not excluded

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Characteristics contd

• Recruit from a variety of practice settings
• Collect data on a broad range of health outcomes
  beyond mortality and morbidity
• E.g. QoL, symptom severity, cost, patient
  satisfaction

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MCO Views on Outcomes Data

• Economic data Most persuasive
• Clinical data Sometimes useful
• Quality of life Interesting but seldom
  compelling

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Risks in Post Approval Trials

• Failure
• Pfizer funded trial comparing its calcium channel
  blocker Norvasc to other antihypertensives
• Generic diuretic (chlorthalidone) was shown to be
  superior in preventing certain cardiovascular
  outcomes

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Risks contd

• Credibility
• Payers assume study lacks scientific rigor

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Active Controlled Trials

• Payers want to know how the new tech compares to
  standard of care, not to absence of care
• Some manufacturers willing to risk active trials
  in Phase III because of payer, not FDA, pressure

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Amgen Oncology and Osteoporosis

• Head-to-head trials of AMG-706 and Avastin
• Comparative trials of denosumab against Fosamax
  and Zometa
• If not superior, wed rather know now than
  later.

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AHRQ Payer Registry Guide

• Agency for Healthcare Research and Quality is
  developing how to guide for payers who create
  patient registries as part of coverage with
  evidence development
• On contract to Outcome Sciences, Inc.

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Registry Guide contd

• National workshop to be scheduled date TBD
• Monitor at ahrq.gov

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Medicare Evolving to Be National Treatment Policy
Manager

• CMS process for evaluating new technology is
  rigorous and evidence based
• Adverse Medicare coverage policy decision is
  routinely followed by private payers
• Part D benefit and Coverage With Evidence
  Development (CED) are accelerating the evolution

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Part D

• More difficult for manufacturers to differentiate
  products via detailing
• Part D benefit design drives utilization toward
  generics, forcing undifferentiated products to
  lower net selling price

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Part D contd

• Part D Plan PT committees rely heavily on
  comparative effectiveness data
• Coverage decisions will likely migrate to Plans
  non-Medicare businesses

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Medicare CED

• Coverage with evidence development for FDA
  approved drugs, biologicals, devices
• CMS can require evidence collection, including
  Phase IV trials and patient registries, as a
  condition for Medicare coverage

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Features

• Will be used only where Medicare coverage would
  otherwise be denied as not reasonable or
  necessary
• Systematic, protocol-driven data collection
• No reimbursement for data collection

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Most Likely To Be Used For

• Drugs in new classes with novel mechanisms
• Treatments that may be ineffective or unsafe in
  some patient subgroups
• Off label uses

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Awaiting New Guidance Document

• CMS intends to issue revised guidance by summer
  2006
• Clarify Common Rule and IRB application to CED

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One Current Use of CED

• Expand coverage of Eloxitin, Camptosar, Erbitux
  and Avastin off label for colorectal cancer
• Patient must be enrolled in NCI sponsored trial
• Sufficient inference of benefit safeguards
  inherent in NCI sponsored trials

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ICDs Another Example of Evidence-Based Coverage
Policy

• Situation
• Trials of implantable cardioverter defibrillator
  (ICD) showed it to be effective in some patients
  but not in others
• High cost, large population, unsettled medical
  evidence resulted in adverse coverage policies

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ICD Coverage

• Response
• Manufacturer sponsored Phase IV trial Sudden
  Cardiac Death in Heart Failure Trial (SCD-HeFT)
• Medicare expanded coverage to include study
  population

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Outcome

• Trial provided evidence on survival benefit with
  simple, single lead ICD
• Medicare issued new national coverage
  determination

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How CRO Can Prepare Client for The Fourth Hurdle

• Design Phase III for beyond Phase III
• Conduct primary research to understand what
  important payer(s) want to see in that
  therapeutic class
• E.g. What metrics are relevant?
• PMPM
• Cost/savings
• Drug budget impact Overall budget impact

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How To Prepare contd

• Press to have Phase IV studies be at least as
  rigorous and credible as Phase III
• Identify new tools to address payer needs
• E.g. validated biomarkers

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Hypothetical Case

• New ADD/ADHD tx in development
• Will universally be 3rd tier
• Inherent safety concerns pediatric
  complicated by conflicting, government sponsored
  class findings
• Not life saving
• Many alternatives whose PMPM costs are well
  understood
• Competitor performance contracts in place

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Manufacturer Objective Begin Moving To Tier 2 In
Year 2

• How will drug move from 3rd to 2nd tier?
• Significant price concessions
• Outcomes research (OR)
• Which is the better choice for client? If OR,
  then need to identify
• Endpoints that are relevant to payers
• Tools to accelerate conclusions

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Example of Tool Validated Cognitive Biomarkers

• How can validated cognitive biomarkers
• Identify patients who are likely responders to
  this drug?
• Use response data to suggest cost effectiveness?
• Produce data that is credible to the payer?

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Summary

• U.S. payers, led by Medicare, now require
  post-marketing outcomes data to grant or continue
  coverage of new, high cost technologies
• Many pharma companies do not yet
• Recognize the extent of the trend
• Prepare adequately pre-launch
• Find out from payers what they really need to see

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Summary contd

• Significant opportunity exists for CROs to fill
  the knowledge gap by
• Determining payer data needs
• Perfecting clinical trial tools to address those
  needs (e.g. validated biomarkers)
• Helping clients understand that
• Market access does not end with FDA approval
• Phase III planning is essential to streamline the
  Phase IV work

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