Pharmaceutical and device manufacturers are constantly seeking new ways to better communicate the value of their products. Phase IV studies have been the typical means to confirm clinical safety and efficacy, and to understand what happens in “real-world” settings. But, according to F. Randy Vogenberg, Ph.D., senior VP, national practice leader, at Aon Consulting’s Life Sciences Practice, Phase IV research does have limitations. “This is where clinical effectiveness resource management (CERM) can help,” Dr. Vogenberg says. “The data resulting from CERM can help key stakeholders — providers, manufacturers, employers, state, federal payers, etc. — better control the overall cost of healthcare. The implications for manufacturers, employers, and the ultimate consumer can be significant.” This is why Dr. Vogenberg believes it is time to change the paradigm. “In many cases, Phase IV research does not completely address the concerns and issues of payers,” he says. “What often is missing is information that has value and relevance for individual stakeholders in today’s healthcare marketplace — especially as it relates to total cost of care.” The Research World of Today Many studies are often one-dimensional and frequently do not help stakeholders, for example payers, make decisions based on the total cost of care of a particular drug therapy or device. For example, a typical Phase IV research study may highlight the clinical efficacy of a drug. Payers often take the data, compare them with projected costs, and use this information to support their decision-making process. Nevertheless, he says, often the cost and clinical efficacy data are not further analyzed to identify the findings relevant in the real world of healthcare today. “For example, a Phase IV study cannot indicate how a specific drug might affect both clinical and financial outcomes, resulting in lower overall costs, or show how a drug choice can influence various operational areas of a hospital, such as nursing and support staff,” Dr. Vogenberg says. Pharmaceutical manufacturers need to fully understand the type of information that is important to key stakeholders who use or pay for their products. Addressing the total costs of care is the best way to demonstrate this value to their customers. Enhancing Pharmacoeconomic Research Phase IV research generally assesses healthcare interventions from a clinical, economic, and humanistic view. CERM enhances Phase IV research by helping to support opportunities for meaningful clinical practice changes, based on the total cost of care for individual prescription drugs or medical devices, and by providing insights on demographically analyzed outcomes, complications, and other relevant information, for example, length of stay in a hospital. “This information helps organizations better compare the costs and benefits of various therapies,” he says. “CERM can be conducted in a wide range of settings, including hospitals, medical groups, MCOs, and self-funded employers.” How CERM Works CERM uses an organization’s existing data, clinical resources and costs, as well as data from similar institutions. It incorporates an actuarial analysis into clinical-resource assessments to identify areas for improvement in pharmacological therapies. CERM assesses an organization’s current approach to therapy and establishes benchmarks for evaluating those processes for change measurement and for comparing costs and outcomes of newer therapies. It is very specific to the organization because CERM uses existing and readily available medical and financial data from sources, such as a hospital’s own Medicare cost report and administrative databases, a MCO’s pharmacy and medical claims, or a medical group’s patient records. This information is combined with billing and clinical data and other sources, such as the pharmacy information system, and is complemented by interviews with key internal stakeholders, such as nurses, physicians, and pharmacists in a hospital setting. When combined, the data and insights from interviews allow for the real-world comparison of pharmaceutical products or medical devices and the development of a plan for implementing focused change. Analysis is Key The key to the process is the validated analysis phase. Through sophisticated data analysis — ideally conducted by an integrated team of clinicians, statisticians, and actuaries — the findings provided by CERM can be dissected and analyzed to provide a wide range of information that reveals significant insights into the key findings or clinical practice trends of interest to decision-makers. Implications for Various Stakeholders Hospitals: A recent multiyear study examining the total cost of thrombosis management programs at several hospitals nationwide is an excellent example. The study served as an important source of information on the clinical and financial efficacy of the pharmaceutical manufacturer’s product. It showed savings of more than $17 million over a period of about two years at 15 hospitals. CERM showed participating hospitals how they could better meet financial goals by working with their physicians to update prescribing decisions for certain types of patients. (See table on previous page for a financial breakdown.) CERM helped highlight the value of one drug over another in terms of improving outcomes, adherence to guidelines, and cost savings. As a result, the participating hospitals were in a position to work with their physicians to change prescribing behaviors. To date, the projected annual savings at participating hospitals is about $745,000 per hospital, or $1,186 per case, if half of the patients receiving the older drug were shifted to the newer drug where it made both positive clinical and financial sense to do so; a complete shift would not be clinically appropriate. As a result of CERM, hospitals will be better able to manage costs and highlight their adherence to recognized industry guidelines, which can be beneficial in meeting JCAHO and other accreditation or risk-management standards. Employers: Fortune 500 firms, as well as emerging purchasing coalitions, are playing more of a key role in drug acquisition strategies. Employers often make benefit decisions based on a program’s ability to influence employee productivity and health insurance cost. If a pharmaceutical manufacturer can show how its therapeutic agent can positively affect those areas, it could then make a more robust argument for that prescription drug to secure a preferred status on a formulary. Health Plans/PBMs: Current clinical studies often do not provide the level of data and analysis necessary to influence the decision-making process for health plans, PBMs, and large employers, or pharmacy and therapeutics (P&T) committees. Some PBMs are moving to four-tier formularies, and some are even talking of having five-tier formularies, with the highest-tier drugs having the costliest copays and/or coinsurance. While clinical efficacy is the overriding factor influencing decisions, many pharmaceutical manufacturers say in terms of efficacy, certain drugs, particularly generics, provide similar outcomes. A CERM study could help a manufacturer demonstrate the value its product provides compared with other drugs or devices in terms of persistence, compliance, overall cost, or other factors. Manufacturers can use these data to make a business case to secure preferred status for a specific pharmaceutical agent or medical device. Medicare Part D: Medicare beneficiaries have unique needs and challenges, yet most research data do not highlight information that will be of interest to purchasers or payers of prescription drugs or devices for Medicare patients. For example, if a drug is self-injectable, can an elderly patient with poor mobility easily administer it? Do absorption and elimination rates impact outcomes measures? To answer these questions, pharmaceutical manufacturers may need research studies that address the specific needs and coverage concerns of Medicare-eligible patients. Since many popular drugs for seniors are already on the market, research using existing data can provide valuable and important information, such as a drug’s ability to control symptoms or to slow the progression of a disease, as well as its potential to limit healthcare costs. These outcomes-related findings will motivate sponsors and stakeholders in Medicare programs to take a more active role in drug use decision making. CERM Data — Selling Improved Productivity and/or Product Dr. Vogenberg says with so many marketplace stakeholders requiring a wide range of information to support their decision-making processes, providing the data needed can be complex. “It is understandable that pharmaceutical companies have had a difficult time positioning their products as little more than commodities, particularly when the products have similar efficacies,” he says. “Research frequently lacks the ability to illustrate the value a specific drug therapy or device can provide in terms of savings, productivity, employee/ member satisfaction, and other attributes that would motivate payers or plan sponsors.” While studies that help fully explain the value of a drug are important to any pharmaceutical agent or medical device, Dr. Vogenberg says they are particularly essential within the biotech industry. “For example, $1,000-per-dose medications may compete with oral agents that cost as little as 50 cents per tablet,” he says. “Such stories are often critical to communicating key messages regarding attributes and benefits.” Because many agents are so new, the biotech industry’s ability to tell its story in real-world outcomes is difficult. But CERM can help, Dr. Vogenberg says. CERM offers the ability to take existing claims data and run analyses on factors such as persistence, compliance, morbidity, quality of life, and so on, providing the data that payers need to make decisions about promising but high-cost drugs, especially as the data relate to reducing physician/office visits or reliance on other drugs and productivity. “Providing insights such as these — coupled with total cost of care/productivity — can help better support the case for the value of a high-cost biotech agent,” Dr. Vogenberg says. Building Partnerships through Research CERM provides manufacturers with the data necessary to better communicate the value of their products to key stakeholders. According to Dr. Vogenberg, this new approach provides an opportunity to partner with customers and establish a relationship beyond simply the marketing of products. Pharmaceutical manufacturers become the source of vital information that can help organizations to: • Improve their outcomes • Manage and lower costs • Improve productivity • Increase adherence to industry guidelines • Meet external and internal quality report card requirements • Design more effective pharmacy benefit programs. PharmaVOICE welcomes comments about this article. E-mail us at [email protected]. VIEW on CERM Driving Sales with Data F. Randy Vogenberg, Ph.D., Senior VP, National Practice Leader, at Aon Consulting’s Life Sciences Practice, Providence, r.I., discusses how clinical effectiveness resource management (CERM) can serve as an enhancement to existing pharmacoeconomic research programs to help ensure the industry better meets the needs of its stakeholders, patients, and its organizations. A new paradigm in pharmacoeconomic research Provides Pharma with Information to Help Key Stakeholders. Pharmaceutical manufacturers need to fully understand the type of information that is important to the key stakeholders who use or pay for their products. Summary Results All CEI-DRGs Discharges Savings Heparin Enoxaparin Total Annualized Per Case All Patients (excluding “unrelated surgery” and rehabilitation DRGs) 68,550 30,276 $17,050,667 $7,916,190 $563 Indicator Categories Hip replacement 410 2,485 $3,013,604 $1,399,139 $1,213 Knee replacement 302 2,226 ($1,239,906) ($575,657) ($557) Unstable angina 7,886 2,084 $1,740,753 $808,187 $835 DVT-PE 1,906 1,119 $613,399 $284,786 $548 Abdominal surgery 6,855 1,270 ($20,786) ($9,650) ($16) Medical at-risk 11,372 6,608 $6,360,198 $2,952,878 $962 Other Patient Categories Medical Cardiovascular 13,032 8,015 $4,081,720 $1,895,039 $509 Thoracic, Cardiac, and Vascular surgery 17,564 834 $469,381 $217,922 $563 Other Orthopedic 1,573 2,714 $448,138 $208,059 $165 Rheumatology 463 436 $113,474 $52,683 $260 Medical abdominal 2,391 1,107 $308,242 $143,109 $278 Respiratory 3,976 2,937 $654,132 $303,697 $223 Neurology 3,543 1,129 $464,783 $215,787 $412 Dermatology 1,097 728 $243,740 $113,162 $335 Notes: Savings based on a variable cost percentage of 50%; costs trended to 2004 dollars; and statistically significant CEI-DRGs identified using 2-tailed t-test of log-transformed total cost (trend and geographic adjustments applied). In many cases, Phase IV research does not completely address the concerns and issues of payers. What often is missing is information that has value and relevance for individual stakeholders in today’s healthcare marketplace — especially as it relates to total cost of care. October 2005 PharmaVOICE

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