Pricing and Reimbursement in Oncology

Payers want pharma to address the challenges they face

Specialised cancer therapies such as checkpoint inhibitors have significantly improved outcomes for patients—but for payers they represent a growing pricing and reimbursement (P&R) challenge, especially as triple and quadruple oncology therapy becomes more commonplace. To achieve formulary position and the widest possible prescribing, pharma needs payers positively on board, so what practical steps can developers take to get payer support for their oncology product's pricing and reimbursement ambitions?

Understanding the pressures and touchpoints that resonate with payers is critical. That is why, in February 2020, we interviewed 8 experienced US and European payers in Pricing and Reimbursement in Oncology: Payer Views to reveal their attitudes and needs and the practical steps pharma can take to address their concerns.

Payers explore key questions such as...

• Why are payers cautious about progression-free survival as a clinical endpoint and what clinically meaningful metrics could be used for P&R assessment?
• What real-world evidence is valuable to payers when making P&R decisions and what comprises a trusted source of such data?
• In what circumstances do payers see value-based contracting having a place in oncology?
• Companion diagnostics can play a critical role in identifying responsive patients: should payers carry the cost of their use?
• Are drug price controls the way forward in the US to tackle the growing cost burden of oncology medicines?
• What are the key challenges that payers face when funding costly one-time treatments, such as CAR-T cell therapies?

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What payers say...

"When I look at economic value, I'm going to look at, is this product tax-offset in a hospitalisation or an ER visit? If you're telling me it's $100,000 a year for a drug and I'm offsetting or reducing the total cost of care, then I would say yes. But, we don't see that data. Is it justifiable for me to say a manufacturer can charge $250,000 for their oncology products because it's a cellular carcinoma that's a very rare condition? I don't know. As a payer, I'm not sure what I'm getting in return. It's justifiable if they're showing me that I'm reducing total cost of care [and] we don't get that kind of evidence from the manufacturers. "
US Payer 2

"I think we all want to see real world data, but many times I think, depending on who's publishing and if we know that it's published by a pharmaceutical company, it's looked at with a bit of a jaundiced eye. Of course, we're not expecting to see anything negative if it was published and supported by a manufacturer. So, I think a lot of real-world data is interesting, but lacks credibility. One of the things I always suggest to pharma is, maybe leverage an academic centre, a credible institution and integrate it. [For example] if something was published by Kaiser, it could still be sponsored by pharma, but it would lend so much more credibility if it was actually done through a very credible source and allow that source to publish on behalf of pharma. Real-world data is always powerful, but often it lacks credibility because of the potential bias."
US Payer 3

I don't think every payer has the time or the resources to really get involved with clinical trial design, nor is that really their expertise. But I do think that manufacturers could engage with payers in forums to understand what's important, and what might be a differentiator as they consider development of those trials. And then I think it's extremely important, instead of waiting until the drug is on the market, to come at least a few months prior to launch to start talking about the product and the disease state, and really get that contracting strategy nailed down. I've seen them come in and present what the study is and what they're looking at. Then they ask for feedback. For example, what do you think about this? What else would you want to see for post-marketing surveillance for future trials? But not for those initial pivotal trials."
US Payer 5

What to expect

• An examination of 10 key issues that impact payer P&R decision making
• 28 targeted questions to US and European payers
• Their responses, which provided 94 insights supported by 103 directly quoted comments

Expert contributors

Experts contributing to this report have been screened to ensure they:

• Have at least three years of experience as a drug-budget manager, P&R expert or health economics expert
• Are aware of the current and evolving issues in the P&R of oncology drugs
• Direct responsibility for P&R negotiations for oncology drugs
• Are a primary decision maker, key influencer or voting/contributing member on a P&R committee or a drug and therapeutics committee with direct involvement in reimbursement policy for oncology drugs

Contributors include

To ensure full and frank disclosure of opinion some of the contributors have remained anonymous.

• David Levy has worked for the UK National Health Service for some 20 years and is currently the Regional Medical Director for the Midlands and the East. His previous roles include the Medical Director of United Lincolnshire Hospitals Trust, the President of the British Columbia Cancer Agency, an academic healthcare organisation and posts with the Department of Health, York and Humber SHA and Sheffield Teaching Hospitals, the latter as a consultant neuro-oncologist, managing complex patients and their families.
• US Payer 1 has worked for a pharmacy benefit manager and, as a Pharmacy Director, worked directly with managed care health plans. The payer consulted with them and advised on their formularies, clinical programmes and utilisation management, with the aim of ensuring appropriate utilisation and maximising the use of generics to reduce the cost of pharmaceuticals, while focused on improving their members' health.
• US Payer 2 is a Pharmacy Director for a regional payer that covers commercial and Medicare lives. He runs a Pharmacy and Therapeutics (P&T) committee and is directly involved in formulary and coverage decisions for oncology products.
• US Payer 3 is a Medical Director who chairs a medical policy committee that provides the criteria for high-cost drugs, medical devices, laboratory procedures and imaging; as well as being part of both a drug review committee and an oncology strategy committee that has input from thought leaders in the oncology area. Discussions cover topics such as new drugs in the pipeline, clinical trial results, drugs that have recently been launched on the market, and how the treatment landscape is changing.
• US Payer 4 is a Physician Executive with 20 years of experience in value-based population health models in a high-quality provider-sponsored health plan.
• US Payer 5 is a Vice President of Clinical Strategy and Pharmacy and has held various executive leadership roles in specialty pharmacy. Experience includes oversight for pricing, industry and trade relations, client service, and service innovation, as well as additions of new services and performance measures.
• German Payer 1 is Head of Drug Reimbursement for a public healthcare corporation.
• German Payer 2 has been a member of a board of directors in Baden-Württemberg, with responsibilities for drugs, medical products and therapeutic appliances.

Why choose FirstWord ExpertViews?

FirstWord's ExpertViews reports reveal the real world insights of knowledgeable experts to analyse in detail key commercial and market trends that pharma management need to understand if they are to effectively respond to critical developments. These highly-focussed reports:

• Are based on primary research with experts whose knowledge and current experience is proven
• Present clear insights and actionable intelligence
• Include only the latest primary research and findings—we don't recycle content or pad out reports with content from secondary sources

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