Pricing and Reimbursement Trends in the US: Impact of Comparative Effectiveness Research and Cost-Effectiveness Analysis

• Publication date: January 2012

Public healthcare costs are rising. Governments need to get them under control. In Europe, that means the systematic use of health technology assessments (HTA) and reference pricing. The US, on the other hand, focuses on comparative effectiveness research (CER) to identify drugs that maximise clinical efficacy, minimise clinical harm and are more in tune with individual needs. Vastly different sol...

Public healthcare costs are rising. Governments need to get them under control. In Europe, that means the systematic use of health technology assessments (HTA) and reference pricing. The US, on the other hand, focuses on comparative effectiveness research (CER) to identify drugs that maximise clinical efficacy, minimise clinical harm and are more in tune with individual needs. Vastly different solutions—but are they working?






Report Overview
In Pricing and Reimbursement Trends in the US: Impact of Comparative Effectiveness Research and Cost-Effectiveness Analysis, FirstWord Dossier lays bare the US model by defining comparative effectiveness research and exploring its limitations with regards to drug trials. The report expertly examines direct versus indirect cost effectiveness analysis, the role of key government institutions and managed care organisations and the impact such research is having on blockbuster drugs. Based on au courant research, expert interviews and several compelling case studies, the report takes a critical look at US policy decisions and trends and offers a clear, uncluttered view of the US drug reimbursement system.




Key Report Features
Wide-ranging analysis of US drug and reimbursement policies and how they differ from European models
Review of the use of CER in the US, with particular attention to Medicaid and Medicare
Up-to-date insight into the role of branded biologics and biosimilars in the US market
Insight into cost-containing managed care tools
Examination of the benefits and drawbacks of head-to-head trials and combination therapy
Analysis of future CER proposals and their implications






Key Benefits
Expert insight from ten industry voices on the effect of CER and CEA on the US system of drug reimbursement
In-depth examination of pertinent policy decisions and trends in the US pharmaceutical industry, explaining the utilisation of CER and direct versus indirect CEA
Multiple case studies and comprehensive references to key literature

Key Questions Asked
How does the US now control prescription drugs costs and what roles do reimbursement and pricing play?
How are US and European models similar and how do they differ?
How do branded pharmaceutical cost considerations influence reimbursement decisions and policy at the federal level in the US, as government costs outpace government revenue?
What are the implications of these trends for pharma and how will it respond?


Who Would Benefit From This Report?
Global health economists
Global HTA directors
Managed care/market directors
Pricing and reimbursement managers
Marketing, brand and sales managers
Business development executives
Regulatory and government affairs professionals


Key quotes
“Where is the risk/benefit quantitative standardised analysis that goes hand-in-hand with the CER analysis? It should never just be about avoiding a safety event in the absence of having a discussion of what is the married benefit. What's the right ratio we're looking for, not just the lack of a serious adverse event or the production of a clinically beneficial event? I think it's both.”
–John Doyle, Senior Vice-President and Practice Lead, Managed Markets at Quintiles

“There’s a paradox of lots of CER data collected, but the companies don't know what to do with it. But they are getting better at finding the right data sources and understanding how to analyse it. There is going to be a tipping point, I believe, when the very purpose of comparative effectiveness will become clear.”
–Samuel Wagner, head of Health Economics, Oncology, for Bristol-Myers Squibb

“There are more similarities than differences, in terms of the US and Europe, regarding most of the key issues. Accordingly, it is time for cooperation between the industry, HTAs and payers. The adversarial tones that we can read about currently, do not lead to a good place - for anyone.”
–Alicia Granados, Senior Director Global HTA Strategy at Genzyme


Expert Views
Leela Barham, MSc, Independent Health Economist
Marc Botteman, Managing Partner, PharMerit
John Doyle, DPH, Senior Vice President and Practice Lead Managed Markets, Quintiles
William Gerth, MBA, Principal, WC Gerth & Associates
Alicia Granados, MD, Senior Director Global HTA Strategy, GMA Genzyme
Larry Gorkin, PhD, President, Gorkin & Cheddar Consulting
Rob Nauman, Principal, BioPharma Advisors
Samuel Wager, PhD, Executive Director, Bristol-Myers Squibb
Jeff Waite, Pharmapricing.org
Leslie Williams, MBA, President and CEO, ImmusanT

Managed Care Industry in the United States

Executive Summary
Introduction
US share of global branded pharmaceuticals sales
> Diminishing impact of US: Revenue for branded biologics
> Tumour Necrosis Factor-Alpha (TNF-a) Inhibitors
Use of CER in the US
> Medicare
> Medicaid
> The Food and Drug Administration (FDA)
> The FDA?s response to GSK?s Avandia in type 2 diabetes
> New criteria for the approval of biosimilars
> Managed care tools to restrain utilization and costs
> The Managed Care Formulary
> Prior Authorization
> Open-label naturalistic studies: Focus on Medco?s study of Plavix and Effient
> Impact of the managed care tools
> Disease indications that mitigate the impact of managed care
> Oncology drugs
> Amgen?s Xgeva
> Roche?s Avastin
> Orphan drugs and the lack of alternative treatments
> Atypical antipsychotic agents via the Medicaid connection
> Governmental agencies practicing CEA indirectly: Case studies
> Age-related macular degeneration: Avastin versus Lucentis
> Erbitux in advanced/metastatic colorectal cancer
> FDA delays ?me-too? with a Novel Mechanism of Action
> Pros and cons of conducting head-to-head clinical trials
> The combination therapy compromise
> Implications of combination therapy on branded drug costs
> Fixed-combination drugs
> Future considerations
> Contentious CER proposals
> Cooperative CER Proposals
> Potential renaissance in drug development
> Implications of the renaissance in drug development
References
Acknowledgements
Appendix 1
> Use of CER by international governmental agencies
> Health Technology Assessment: The UK?s NICE
> Reference pricing
> Risk-sharing strategies
> Risk sharing in the US

Health Insurance in United States

United States Government Health Expenditure Through Social Security Funds, Us$bn

• $ 250
• Industry data
• January 2013

Yearly, From 1996 To 2010
By Business Monitor International
Source: World Health Organization (WHO), BMI

• Industries : Managed Care
• Countries : United States

United States Government Health Expenditure Through Social Security Funds, Usdbn

• $ 250
• Industry data
• January 2013

Yearly, From 1996 To 2010
By Business Monitor International
Source: World Health Organization (WHO), BMI

• Industries : Managed Care
• Countries : United States

United States Private Health Insurance Expenditure, Us$bn

• $ 250
• Industry data
• January 2013

Yearly, From 1996 To 2010
By Business Monitor International
Source: World Health Organization (WHO), BMI

• Industries : Managed Care
• Countries : United States

United States Private Health Insurance Expenditure, Usdbn

• $ 250
• Industry data
• January 2013

Yearly, From 1996 To 2010
By Business Monitor International
Source: World Health Organization (WHO), BMI

• Industries : Managed Care
• Countries : United States

Managed Care in United States

United States Pharmaceutical Sales, % Of Health Expenditure

• $ 250
• Industry data
• January 2013

Yearly, From 2002 To 2021
By Business Monitor International
Source: IMS Health, Pharmaceutical Research and Manufacturers of America (PhRMA), Food and Drug Administrati

• Industries : Managed Care
• Countries : United States

United States Health Expenditure Per Capita, Purchasing Power Parity (ppp), Us$

• $ 250
• Industry data
• January 2013

Yearly, From 1996 To 2009
By Business Monitor International
Source: World Health Organization (WHO), BMI

• Industries : Managed Care
• Countries : United States

United States Health Expenditure, Us$bn

• $ 250
• Industry data
• January 2013

Yearly, From 1996 To 2021
By Business Monitor International
Source: World Health Organization (WHO), BMI

• Industries : Managed Care
• Countries : United States

United States Health Expenditure, Us$bn, % Chg Y-o-y

• $ 250
• Industry data
• January 2013

Yearly, From 1997 To 2021
By Business Monitor International
Source: World Health Organization (WHO), BMI

• Industries : Managed Care
• Countries : United States

United States Health Expenditure, Usdbn

• $ 250
• Industry data
• January 2013

Yearly, From 1996 To 2021
By Business Monitor International
Source: World Health Organization (WHO), BMI

• Industries : Managed Care
• Countries : United States