Payers to pharma: Here’s what we’re missing in hep C drugs
When Sovaldi hit the market, the surge in utilization was unprecedented, according to Schafer. “Coupled with the high-cost of a course of therapy, payers saw significant impact on their spend,” he says. “Payers rely on accurate forecasting of spend to set premiums and be competitive and the HCV surge devastated many of those projections. Since then payers have been cautious in HCV by contracting aggressively and implementing prior authorization criteria that was more strict than label in certain cases. Newer entrants by players like Merck have sought to address cost concerns by coming in with significantly lower prices but the relative high cost of therapy combined with high prevalence of HCV means payers are staying on guard.”
The HCV pipeline is rich and continues to produce new products as well with some being pangenotypic (drugs that work against every genotype), according to Schafer. “More competition creates more opportunity for payers to lower cost. While contracts help to offset pricing pressures, managing the budget remains challenging when looking at the total HCV population,” he says. “However, treating broader patient populations has benefit to payers as well through reduced end-stage liver complications and lower risk of HCV being spread to other individuals.”
The survey results showed that payers are satisfied with the clinical efficacy of the current leading agents.
“The concerns around taking multiple agents with poor tolerability were removed by the newest therapies,” Schafer says. “Now that payers have single agents that can cure disease in a short duration, they are looking for pharma to fill gaps not addressed by current agents. Additionally, payers are even more focused on cost as the cure rates between therapies are so similar.”
The survey also showed provider acceptance of a different preferred product was important to 40% of payer respondents, indicating that provider opinion is important.
“This is an interesting finding as providers have come to understand and accept the preferred product placement and utilization management strategies deployed in the HCV space,” Schafer says. “However, their acceptance of the strategy still weighs heavily with payers. Balancing the financial needs of the payer with the prescribing preferences of providers and the tactics of the pharma sales teams will continue to be a dynamic process.”
Eighty-four percent of payers in the survey were interested in an outcomes or risk-based agreement. However, outcomes contracts are tricky and require two important components: a defined outcome and the ability to track the outcome, according to Schafer.
“For HCV, the first is simple, whether the patient achieved a cure. The second is more complicated,” he says. “Payers will be able to see in their claims data that a patient was treated but generally won’t be able to see if the patient is cured. However, integrated delivery systems with a payer component may be able to execute such an agreement due to the connection between the in house payer and the health system holding the patient lab data.”
For payers without a health system connection, outcomes contracts based on patient adherence or completing the entire course of therapy may be more realistic than a contract based on cure rates, he says.
“Payers seeking to execute an outcomes based agreement should first review their own capabilities to determine what is reasonable but also look for partnerships, including with a specialty pharmacy, to see if these partnerships expand the payer’s options for an outcomes based agreement,” Schafer says.