Pharmaceutical Product Development (PPD) has agreed to buy Evidera, a Maryland-based company that provides evidence-based solutions for the healthcare industry, as demand rises for research that shows the effectiveness and value of new medicines in real-world settings.
The deal, which is expected to close in the third quarter, will strengthen PPD’s capabilities in the later stages of clinical trials and in the post-drug approval phase. The private-equity-backed CRO aims to create an industry-leading set of late-stage solutions that include phase IIIb/IV studies, real-world evidence generation, health economics and outcomes research (HEOR) and market access strategy and support.
“There is a growing need for biopharma companies to generate a better understanding and stronger evidence of how their products perform outside of the limitations of registration-focused clinical trials,” said David Simmons, chairman and CEO of PPD. “These data are necessary to secure favorable access and reimbursement.”
Evidera will become a wholly owned subsidiary of PPD and serve as the late-stage business unit of the company. Evidera provides health information and research services that demonstrate evidence of product value for life sciences companies and inform healthcare decision-making processes. PPD’s global scale and partnerships with sponsor companies can allow Evidera to expand its global footprint and operational capabilities.
“Our biopharma clients are increasingly required to provide evidence of effectiveness in real-world settings to support product value throughout the life cycle and to justify continued access at the optimal price. To do this, it’s critical that evidence-based value demonstrations start early and be well-integrated into the clinical development process,” said Jon Williams, president and CEO of Evidera, who will continue to lead the company.
Real-world evidence has become an important part of drug development and commercialization in recent years as regulators, payers, health technology assessment (HTA) agencies and providers demand evidence of a product’s real-world clinical value and cost effectiveness, away from the homogeneous setting of a clinical trial, to inform decision-making processes. Additional information may be required, for example, on how specific drugs perform within different age groups, races and ethnicities, genders and disease severity. Regulatory authorities often require post-approval research to monitor a drug’s safety once it becomes widely prescribed.
“Patients don’t all respond the same. We need a lot more information than just knowing how the average patient responds,” said Nancy Dreyer, Ph.D., global chief of Scientific Affairs for Quintiles’ Real-World and Late Phase Research. “The subgroups can refer to entire continents. We are doing some work in diabetes, for example, where the pattern of diabetes in Asia is entirely different than in the U.S. and European Union.”
As a result of this need for a better understanding and stronger evidence of how products perform in real-world settings, Simmons said that R&D investments for real-world evidence are increasing. Global investment firm Jefferies has forecast a $6.8 billion post-approval outsourcing market for CROs, with growth in this area outpacing overall development spend.
“Our clients are looking for strategic partners who can deliver a comprehensive range of health economics, outcomes research and real-world evidence services,” said Simmons.
Other CROs also have built up their ability to generate real-world evidence and analytics services in recent months. In May, Quintiles announced a merger with IMS Holdings, a global information and technology services company, that proposes to combine the CRO’s clinical development expertise with IMS Holding’s large portfolio of real-world evidence solutions, which includes anonymous patient records, technology-enabled data collection and observational research experts. The deal is expected to close in the second half of the year. In January, Parexel formed a strategic alliance with Optum, which has a large clinical data set derived from electronic health records and claims data assets, in an effort to reduce costs associated with post-approval studies conducted to provide further evidence of a product’s safety or effectiveness. Last year, Icon acquired scientific communication and market access firm MediMedia Pharma Solutions.
Other large CROs also support groups or divisions that design and implement peri-approval and observational studies to collect real-world data that can demonstrate a product’s economic value.
Michael A. Martorelli, a director at Fairmount Partners who closely follows the pharmaceutical outsourcing space, said investors appreciate the opportunities for cost savings, balance sheet flexibility and other financial benefits. But he said many appear skeptical of the “potential for revenue synergies” since there’s a question of whether owning large amounts of data will give CROs a competitive advantage.
“Frankly, I’m just not sure how useful having access to real-world effectiveness data will be to CROs competing with each other for incremental business,” said Martorelli.
Collection and analysis of real-world evidence also can provide insights for designing more efficient clinical trials that take into account patient behaviors and can identify potential clinical trial volunteers in advance.
“We call them smarter studies. They are more efficient. Understanding whether your protocol is doable is critically important,” said Quintiles’ Dreyer. “These studies have faster startup because you know where to look for patients. It means faster time to completion, and it means fewer protocol modifications because you have a much better sense of the issues of interest, who the patients are and where they are being treated.”
Sponsor companies traditionally gather evidence for reimbursement during late-stage clinical trials, sometimes as late as phase IIIb. But as the healthcare climate has changed, many companies have begun to initiate the process during phase II trials in order to better understand the potential market for the product, where patients are being treated and current the cost of care. In addition, a growing number of phase III trials now include economic endpoints, along with clinical outcome measures, to show the cost-effectiveness of new products and prepare for payer approval processes in advance.
“Increasingly, we are seeing our clients begin developing their market access strategy and supporting data in early phase II. Given the increasing evidence demands by payers and HTAs, we think the earlier the better to develop and implement a value/market access strategy,” said Evidera’s Williams.
In the PPD acquisition, the global CRO will buy Evidera from private-equity firm Symphony Technology Group. The company will continue to operate its office locations in North America and Europe. The purchase price was not disclosed.
This article was reprinted from Volume 20, Issue 33, of CWWeekly, a leading clinical research industry newsletter providing expanded analysis on breaking news, study leads, trial results and more. Subscribe »