Clinical trials produce no shortage of data. Yet to insurance companies deciding whether to cover a new drug, it might not be enough. Or rather, it might not be the right data.
A clinical trial studies a carefully selected group of patients chosen to demonstrate drug safety and efficacy. But after a drug reaches the market, payers might see it doesn’t work for everyone or it doesn’t work as well as it did in trials. Payers want better information so they don’t end up covering a drug that doesn’t work. Meanwhile, a pharmaceutical company faces the prospect of falling short of the drug’s market potential after investing hundreds of millions of dollars and a decade or more in development, said John Doyle, vice president and managing director of the consulting practice at biopharmaceutical services company Quintiles.
“The pipeline of information behind that has to be a more robust data source, it can’t be limited to the phase 3 trial data that governs regulatory approval,” Doyle said. “We need more real world data to demonstrate clearly and validate what the expected risk-benefit profile is in the real world.”
The medicines patients take today were developed largely without insurance company input. But pharmaceutical companies will likely partner with payers to develop the medicines of tomorrow. Those are some of the findings of Quintiles’ annual New Health Report. The Durham-based company’s report this year is based on a survey of more than 1,350 healthcare stakeholders in the United States and the United Kingdom including industry executives, patients and investment professionals.
The 2012 Quintiles study aimed to identify risks in drug development and ways to mitigate those risks.
The biggest challenge facing drug companies was the standard regulatory obstacles, cited by 29 percent of biopharma executives surveyed. Lack of funding was listed by 20 percent while 19 percent named increased payer reluctance to cover new medications as their biggest challenge. Doyle cites as an example GlaxoSmithKline‘s (NYSE: GSK) new lupus drug Benlysta, which received regulatory approval last year to much fanfare. Sales so far have been lackluster. And so far this year, the drug has struck out with health agencies in the United Kingdom and Germany who declined to recommend the drug, saying that the drug is expensive and there’s not enough evidence to show that it offers a benefit over standard lupus therapy.
Right now, healthcare risk analysis is done largely by those who pay for it. In the United Kingdom and the United States respectively, 68 percent and 77 percent of respondents want the pharma industry to shoulder more risk, according to the Quintiles survey. Payers surveyed — 70 percent in the U.K. and 79 percent in the U.S. — expect more risk- and cost-sharing agreements between payers and pharmas in the next five years. “Pay for performance” contracts or risk are more prevalent in Europe but Doyle says they will find their place in the United States. He cites as an example the performance-based contract between Merck (NYSE:MRK) and Cigna (NYSE:CI) for diabetes drug Januvia that gives Cigna discounts on the drug depending on the drug’s performance and patient adherence to the product.
Going forward, expect payers to play a greater role in healthcare. Blue Cross Blue Shield North Carolina recently announced it would be working with SAS to use that software company’s analytics capabilities to develop personalized healthcare plans. But payers, whose involvement with pharma typically comes in the later stages of drug development, will be getting involved even earlier in the drug development process. The Quintiles report says that lack of payer involvement in drug development indicates that pharmas are not interacting with their customers, who are increasingly the payers rather than physicians and patients. Payers will be pressing for greater communication.
“If there’s uncertainty about their payer population vs. the study population, they want some of those questions answered before a product is launched,” Doyle said. “One way to do that is to partner earlier.”