1. 1 Evaluating & Applying What Works Best Leaders’ Project Policy Forum Kathy Buto, VP Health Policy April 24, 2008

2. 2 Comparative Effectiveness Benefits -Help establish value of treatments -Help physicians and patients make better decisions - Promotes higher quality, value-based care -Way for developers of products to differentiate truly innovative products - Research investment will focus on finding higher value treatments if include incentives (like streamlined approvals, higher reimbursement)

3. 3 Comparative Effectiveness Concerns and implications -Expectations the CE is “silver bullet” -Won’t address major drivers of costs -Population-based decisions trumping individual patient needs(cost/QALY metric) -Consider alternatives to treat condition not just drug to drug, device to device -Could be used as a “fourth hurdle” -For devices, role and training of operator/surgeon, procedure volume, ease of use, shorter lifecycle must be considered -Can be misleading (CATIE study) -If costs, should be costs/savings over time not input costs

4. 4 Comparative Effectiveness Best way to go about it: -Undertake trust-building among stakeholders -Public-private entity or “enterprise” -Transparent processes, findings, limitations, ways to disseminate -Begin with conditions where wide variation in treatment patterns, high burden of illness -Acknowledge the role of population-based studies but build in consideration of individual patient variation -Consider incentives to create “clamoring” for CE -Focus on comparative clinical value not costs

5. 5 Risk Sharing – the Velcade Case “Bortezomib monotherapy, in its licensed indication, is not recommended for the treatment of patients with multiple myeloma……. …….the Committee concluded that bortezomib monotherapy for the treatment of relapsed multiple myeloma is clinically effective compared with HDD, but that it has not been shown to be cost effective.” Final NICE Recommendation, October 2006

6. 6 Risk Sharing – Velcade Case Only licensed drug for multiple myeloma, available in Scotland, Wales, N. Ireland Clinically effective but did not meet cost effectiveness threshold – uncertainty about patients who would benefit Patient and media response, characterized as a “death sentence” Company appealed but prior to Velcade, only 1 appeal had succeeded in overturning guidance Company proposed “risk sharing” to reduce uncertainty

7. 7 Risk Sharing – Velcade Case Agreement NHS funds treatment at first relapse in patients who achieve a complete or partial response during first 4 cycles of treatment (serum M protein test) Patients who fail to respond discontinue Velcade Complete rebate or free stock direct to hospital units for patients with less than a partial response Interim bridging to provide access ahead of new evidence – not a permanent reimbursement

8. 8 Other Risk Sharing Agreements Performance agreements – restenosis rates, anti-psychotic compliance Guaranteed Savings – utilization rates “Coverage with evidence development” – U.S.

9. 9 Drug Safety Monitoring Evaluate benefit-risk profiles continuously, with important information gained in real world use Pre-approval, knowledge based on thousands of patients in controlled clinical setting In study with 3000 patients, one can identify adverse reactions that occur at a rate of 1 in 100 patients Not possible to identify an adverse reaction that occurs in fewer than 1 in 1000 patients In post-approval, rely on post-marketing reports, additional research, including epidemiological studies and targeted trials Good risk management requires cooperation between regulatory agencies and the company and timely communication of benefit-risk information to health professionals and patients.

10. 10 Drug Safety Monitoring Under FDA Amendments, FDA will have ability to develop partnerships with public and private payers and academia to increase access to data on drug safety Companies will play an important role in assessing the data in partnership with FDA Question of whether these data can provide information to help improve targeting of appropriate patients, improve understanding of effectiveness as well as safety