Presentation on theme: "Patient Centered Health Management® 1 Pressure from Increases in Cost, Pricing Implications, and Launch Considerations Craig Kephart, President & CEO Centric."— Presentation transcript:
Patient Centered Health Management® 1 Pressure from Increases in Cost, Pricing Implications, and Launch Considerations Craig Kephart, President & CEO Centric Health Resources, Inc. May 6, 2009
Patient Centered Health Management® 2 “…the PwC report recommends collaboration with non- drugmakers, particularly on disease management programs. Partnering with other companies on "holistic solutions" rather than "narrow treatments" is a more flexible and "value-enhancing" strategy than, say, mega- merging.” “Drugmakers are going to have to think of themselves more broadly: They can't be makers of drugs. They have to be health gurus, project managers, hospital partners... and so on.” “Outsource R&D…Outsource manufacturing. Outsource sales and marketing, even. Then forge some links with tech companies…and insurers, healthcare providers and benefits managers. Reinvent yourselves, pharma! Don't you know that's the latest trend?” News Source: Fierce Pharma, “Pharma: In 2020, it's not just drugs anymore,” April 30, 2009.
Patient Centered Health Management® 3 “We’re going to see a growth in outcomes guarantees for pharmaceuticals, and it’s very healthy.” - Robert Seidman, formerly Chief Pharmacy Officer for WellPoint. More News
Patient Centered Health Management® 4 Profile of a typical orphan drug Key Differences What Defines Success? Agenda
Patient Centered Health Management® 5 DRUG A Potential Market100,000 Number of Identified Patients5,000 REMSNo Storage Requirements2°C-25C° Route of AdministrationIV Infusion Cost$100,000/year Site of Administration60% home/40% Facility Frequency of AdministrationOngoing Nursing RequiredYes CompetitorsFew or None Value of Reimbursement Expertise High Priority to Managed CareLow Advocacy InfluenceHigh Financial Support NeedsHigh Profile of an Orphan Drug DRUG B 10,000 1,000 Yes None Oral $70,000/year Home Ongoing Side effect mgmt, lab draws None at this time High Low Some High DRUG C 1 1 Yes Possibly Any ? Anywhere Ongoing Possibly Unlikely High Low(?) Some High
Patient Centered Health Management® 6 Have to spread cost of service model and monitoring over fewer patients Focused sales force, specialists, CSLs, etc. need to ensure physician that patient has access to drug and that ongoing care is consistent Fewer patients means every patient is critical for sales – need to build high-touch compliance and loyalty program in order to keep patients on drug Greater demand for outcomes – P4P, value based benefit design. Health management is most effective when fully integrated with distribution Key Differences vs. Larger Drugs
Patient Centered Health Management® 7 Access Compliance Find New Patients MAXIMIZE SALES High-Touch Patient Services Exclusive Distribution REMS/Data LAUNCH DRUG Plan Ahead Build Contingency Plan Integrate with Distribution GET APPROVAL What Defines Success
Patient Centered Health Management® 8 Companies that are willing to put the right structure in place to monitor patients, collect data, and measure outcomes should find that the new regulatory model can work to their advantage. The fewer questions left open, the more thorough the planning and preparation, and the more narrowly defined the REMS plan, the simpler the FDA application process. Execution of this planning process can provide your organization with a competitive advantage over manufacturers who fail to build REMS requirements into their distribution. Get Approval
Patient Centered Health Management® 9 Manufacturer Intake Hub Typical Specialty Model MD/Hospital Patient Payers Wholesaler SP 2SP 3 Patient Assistance SP 1 Patient Typical Specialty Model Buy / Sell
Patient Centered Health Management® 10 Wholesaler Intake Hub Exclusive, Buy Sell MD/Hospital Patient Payers Manufacturer SP 2SP 3 Patient Assistance SP 1 Patient Exclusive Buy / Sell CENTRIC Mfr. Direct Direct MFR. Direct
Patient Centered Health Management® 11 3PL Manufacturer Specialty Pharmacy Hub Services / Reimbursement Nursing Disease / Health Management/REMS Comprehensive Model Centric simplifies distribution Ideal for small patient populations Fewer transactions, lower costs, higher level of service CHR
Patient Centered Health Management® 12 REMS Elements Safe Access Assure Safe Use Mandatory registry Documentation of patient monitoring Nurse training Technology to collect data lab results, patient health measures Assessments and Monitoring Health management Voluntary patient registry Assessments Therapy compliance and adherence Integrated systems with pharmacy dispensing data Enhance Communications Pharmacist education/counseling 24/7 Clinical support Training Nurse training, education, and clinical services
Patient Centered Health Management® 13 Access Compliance Finding New Patients Maximize Sales
Patient Centered Health Management® 14 Health Mgt & PHC (residing at CHR or Pt. Adv) Integrated Health Management & Distribution Manufacturer Payer PhysicianPatient Coordination, claims and reimbursement Rx Pharmacy and clinical services Consented Patient data Fee for service Sell drug, service fees if req’d Aggregated Data & Reporting Data
Patient Centered Health Management® 15 Buyer (Payer) Bargaining Power Characteristic Bargaining Power StrongWeak Product DemandHighLow Switching CostsLow High (not many alternatives) Patient Buyer DemandLowHigh Brand Importance to Patient Buyer LowHigh Products for ultra orphan therapies tend to cause weaker buyer (payer) bargaining power, thereby eliminating barriers to access. Source: Fadia T. Shaya, PhD, MPH, Associate Professor and Director, Center on Drugs and Policy, University of Maryland School of Pharmacy, CBI Strategic Pricing and Modeling Techniques to Demonstrate Product Value, April 6, 2009
Patient Centered Health Management® 16 LOWHIGH Distribution and Patient Outcomes Continuum No Program Multiple Programs, Multiple Providers Multiple SP providers with Integrate Hub Patient Registry, and Health Management Integrated Distribution & Health Management Compliance Adherence Persistency Patient retention Patient satisfaction Self empowerment Clinical outcomes Maximum benefit of therapy
Patient Centered Health Management® 17 Health management tied to distribution allows for interventions at many levels DISTRIBUTION To maximize effectiveness, education must be the right information at the right time and delivered in a customized, personalized way EDUCATION Significant effort is placed into the design of the program prior to launch PROGRAM DESIGN Why the Integrated Plan Works EDUCATION IS NOT THE SAME AS A WELL-INTEGRATED PLAN…
Patient Centered Health Management® 19 Education
Patient Centered Health Management® 20 Distribution PHARMACIST NURSE REIMBURSEMENT PHC OPPORTUNITY FOR PATIENT INTERVENTIONS ON MANY LEVELS
Patient Centered Health Management® 21 Peer Health Coach $ Goals Individual Health Plan Quality of Life Compliance Goals Educate Capture Data Impact Outcomes
Patient Centered Health Management® 22 Why the Peer Health Coach Model Works Thus the development of PAGs…They want support, information, education.Patients are driven to interact with other patients.
Patient Centered Health Management® 23 Service Intensity Bonus Service Intensity and Loyal Customers Service intensity is about cost-effectively building relationships with customers. A company can’t offer more service than can be covered by the value of a customer's repeat business. The right level of service intensity is therefore a function of long-term product revenue and cost. Effective service intensity creates loyal customers. You can measure service intensity.
Patient Centered Health Management® 24 Service Intensity Types of Health Care Data There are many different kinds of health care data: Prescription Contact management information Doctor and nurse notes Billing records Electronic medical records Lab data—orders and results Medical and pharmacy claims Survey data—customer satisfaction and assessment data. As long as it can be tied to a customer, it becomes a vehicle for discovery—for learning and improving the customer experience.
Patient Centered Health Management® 25 Service Intensity Infusions from Facility to Home Patients that Centric assists in setting up home infusion services are 1/4 as likely to terminate as all other patients. The process is labor intensive— filled with paperwork and phone calls, but the long-term payoff is loyal customers.
Patient Centered Health Management® 26 Service Intensity Alternative Funding Sources Patients that Centric assists in finding alternative funding sources are also 1/4 as likely to terminate as all other patients. Because almost 1/3 of Centric patients have new or additional payors year to year, inability to pay in one year does not mean the same for future years.
Patient Centered Health Management® 27 Service Intensity Extra Attention to Patient Concerns Patients that Centric assists by finding answers to complicated questions are about 2/5 as likely to terminate as all other patients. The process is labor intensive—but customers appreciate and reward the company’s propensity to give them extra attention.
Patient Centered Health Management® 28 Service Intensity Infusions during Travel Patients that Centric assists in setting up infusion services during travel are 1/10 as likely to terminate as all other patients. By enabling patients to be less held back by their condition, the company becomes an integral part of their lives.
Patient Centered Health Management® 29 Compliance Patient Retention Patient Satisfaction 92.8% 95.8% 95% Time period measured: 2005 – 2007 Source: specialty pharmacy data Integrated Specialty Pharmacy Results Program opt-in rate 98% Over 2,350 patients enrolled in program…
Patient Centered Health Management® 30 Cost Management What are the costs of Distribution? Managing multiple vendors Risk of service breakdowns Inconsistent Service Counterfeiting or diversion REMS requirements Redundancy in data collection efforts Compliance and health management How to mitigate Compress distribution channel Integrate service model with distribution Include distribution and patient services in pricing
Patient Centered Health Management® 31 Pricing & Reimbursement Include Distribution and Patient Services in Pricing Include cost of distribution Include cost of REMS Factor in increased risk Consider impact of ASP Margin pressure from SPs will force more discounts from the manufacturer Discounts drive down ASP Direct distribution can mitigate this impact
Patient Centered Health Management® 32 Does your organization anticipate moving to ASP- based payments in the next 12-18 months? Yes No My organization has already started to move to ASP-based payments. n = 81 ASP Adoption Source: payer survey, reported August, 2008.
Patient Centered Health Management® 33 Payers are insourcing SP Manufacturers must change how they look at distribution AWP vs. ASP Pricing MFRSPPAYER ASPASP+6% The direct model addresses this issue with a Fee-for-Service approach SPs will look for margin on both fronts but will face challenges... No incentive to SP Margin loss to channel
Patient Centered Health Management® 34 Profile of a typical orphan drug …is changing includes oral medications, subsets of larger patient populations, and personalized medicine Key Differences Require high-touch patient services Higher demand for outcomes data and monitoring What Defines Success? Get Approval Launch Drug Maximize Sales Summary