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Becoming familiar with the principles of pharmacoeconomics

Monday, November 9, 2015

The Pulse on Global Trials by Matthew Howes

Accelerating the introduction of new therapies is a dynamic topic throughout the global healthcare community. The FDA and EMA have developed fast-track review-and-approval processes for novel agents in rare diseases. Advocacy organizations maintain media pressure on government and businesses to improve care of elderly and underserved populations. And healthcare companies are in merger frenzy as small biotech companies with breakthrough discoveries pop up before being acquired just as quickly by big pharma.

For all the urgency, however, one hurdle continues to beleaguer the process of getting new medicines to the patients who need them: coverage and reimbursement. The problem stems from a lack of available pharmacoeconomic data to accelerate reimbursement of new therapies at launch. And it’s a problem that many experts are looking to the clinical research industry to solve.

cww1944_pulseCurrently, the time between approval and reimbursement varies greatly by country, making it difficult to prioritize global market entries. In the U.S., the FDA approves products on a clinical basis, but doesn’t weigh in on reimbursement. Products are available immediately following FDA approval, and negotiations are conducted between pharma companies and payers.

But in the E.U., the EMA approves products on a clinical basis, and then each individual country evaluates for reimbursement. Each country varies with regard to timing of product availability following EMA approval. Countries evaluate a value dossier to determine cost-benefit. E.U. countries vary from being reimbursed immediately at launch to taking more than a year post-approval to achieve reimbursement. In some countries there are opportunities to launch immediately, with benefit assessment occurring later.

Today, pharma companies place countries in tiers based on opportunity to command high price, and on time to approval. Launch sequence is driven mainly by an expected reimbursement timeline. Countries such as Great Britain and Germany generally yield high prices and tend to follow their own internal metrics for pricing, while others like Poland yield lower prices and follow international price-referencing rules.

There is an opportunity to exert more influence, but it requires a shift in clinical trial measures, and the data being collected.

If the goal is to reduce and standardize the expected number of days from approval to reimbursement across countries, then generating the pharmacoeconomic evidence necessary to achieve that goal may fundamentally change not only the strategic objectives for research and development, but operational imperatives for how research is conducted.

The clinical trial process will need to be redefined to ensure that appropriate data are generated throughout the clinical trial process to support the overall pharmacoeconomic value of a new drug and meet a future demand for value-based medical practices.

Current standards of practice are based on principles of evidence-based medicine, which has limitations when it comes to real-world evaluation of value. By focusing on fundamental clinical evidence alone, the importance of an intervention may be overstated. For instance, a drug that prolongs life by three months—but worsens the patient’s quality of life with side effects like increased infection rates, vomiting and sensory impairment—is not necessarily providing value.

Conversely, evidence-based medicine can underestimate the value of an intervention. Modern treatments that are more targeted and more tolerable, may provide better overall value, even if there is no additional clinical survival benefit. Patients deserve the benefits of advanced science that yield more humane products than were available 30 or 40 years ago. In a global survey I conducted earlier this year, respondents indicated there are clear and unmet needs when it comes to value-based metrics, like conducting trials with real-world populations that may be older and in poor health, or who simply have more comorbidities than patients who are selected for trial participation.

As clinical research evolves toward value-based medicine, professionals in the industry will have to become familiar with the , including the selection of health policy-relevant comparators, analytical techniques, measurement of health gain by quality-adjusted life-years, and strategic pricing of pharmaceuticals.

It will require understanding of the comparative advantages and disadvantages of economic evaluation alongside clinical trials, naturalistic pharmacoeconomic studies, and economic modeling on the basis of prospectively collected clinical trial data. 


Matthew Howes is senior vice president of marketing innovation for PALIO, an inVentiv Health company. He can be reached via email at matthew.howes@inventivhealth.com.

This article was reprinted from CWWeekly, a leading clinical research industry newsletter providing expanded analysis on breaking news, study leads, trial results and more. Subscribe »

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