Pharmaceutical companies and insurers are still figuring out how they’ll work with each other, but a clear majority of both camps surveyed in Quintiles‘ annual New Health Report expect that there will be more collaborations in the future.
The survey included more than 1,350 healthcare stakeholders ranging from healthcare payers, executives, patients and investors in the US and the UK. Majorities of respondents said that risk-sharing arrangements and collaborations will get new drugs to market faster and lead to more innovative and effective new drugs.
The 2012 Quintiles study aimed to identify risks in drug development and ways to mitigate those risks. More collaboration could help both pharma companies and payers make more informed choices about what drugs to develop and to pay for. John Doyle, vice president and managing director of the consulting practice at the Durham, North Carolina biopharmaceutical services company, said that there is a disconnect between data collected in clinical trials and the data that payers need to make reimbursement decisions. Right now, most of the data available to them is clinical trial data that might not match up with what they’re seeing in patients.
“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,” said “We need more real world data to demonstrate clearly and validate what the expected risk-benefit profile is in the real world.”
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.”
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