Comparative Effectiveness: Implications for the Pharmaceutical Sector Health Policy Audioconference February 23, 2009 Dr Marc Berger Vice-President, Global Health Outcomes Eli Lilly and Company

It Comes Down to Basics Payers want value for money… Pharmaceutical sector wants money for value! Comparative effectiveness research is necessary but not sufficient to promote these objectives. 1/17/2019 File name/location Company Confidential Copyright © 2000 Eli Lilly and Company

The Pharmaceutical Sector can respond by linking Health Outcomes to Product Development Strategies Develop drugs that deliver better patient outcomes that are valued by payers and providers Better patient outcomes means embracing Comparative Effectiveness. New treatments will need to be superior to currently available therapy in some dimension of value important to payers, providers, and patients. Valued by payers and providers means that better outcomes must translate into obtaining good pricing, reimbursement, and access; and more rapid uptake – but are the goalposts continuing to move? Delivery: The pharmaceutical sector will need to choose either to provide the opportunities for improvements in patient outcomes or to share / take on responsibility for realizing patient outcomes 1/17/2019 File name/location Company Confidential Copyright © 2000 Eli Lilly and Company

Delivering Outcomes Adoption + Use  Outcomes Early Adopters Late Standard of Care? Time # of Adopters Increase in Clinical Trial Process Outcomes Endpoint Outcomes Consensus Guideline Performance Measure Reimbursement & Coverage Quality Improvement Adoption Evidence of relative value over Standards of Care EBM / HTA Analyses Guidelines / Recommendations Patient Access Reimbursement and Formulary Design Physician Rx Writing Use Patient Compliance & Adherence 1/17/2019 File name/location Company Confidential Copyright © 2000 Eli Lilly and Company

How are the goalposts set (Formulary Committee Staff, for assessing value? Economic Information Framing Key Questions Rigor Required Evidence Review and Synthesis (Formulary Committee Staff, EPCs, DERP, Academic Analysts) Evidence-Based Decision Making (Formulary Committee of PBM, Private Payer, States, NICE, etc.) Budget Constraints Studies 1 2 Equity Evidence Review +/- HECON Models Precedent Acceptability 3 Values & Preferences Decisions Teutsch S, Berger M, Evidence Synthesis and Evidence-based Decision Making: Related But Distinct Processes. Medical Decision Making Sep-Oct 2005, pp. 487-489. 1/17/2019 File name/location Company Confidential Copyright © 2000 Eli Lilly and Company

ISSUE: What constitutes adequate evidence? Harbour, R. et al. BMJ 2001;323:334-336 1/17/2019 File name/location Company Confidential Copyright © 2000 Eli Lilly and Company

ISSUE: Evidence Evaluation is an evolving discipline Country Who Evaluates Stakeholder Input Transparency Timeline Flexible Appeals Scope Study Data Australia - PBAC Pharma + Acad Low but increasing Moderate <120 days Yes Rx $/QALY RCTs Canada - CDR Low <180 days No Germany - IQWiG Post Launch Efficiency Frontier  Scotland - SMC CEA Sweden Adequate RCTs/ OBS UK - NICE Acad + Pharma Med/ Rx $/QALY  US - AHRQ EPCs NA Med/Rx Comp Eff Systematic Review *Processes in Australia and Germany have undergone recent reforms that are not yet well tested (Australia) or implemented (Germany). Australia has instituted an independent review option rather than an appeals process. None of these agencies meet the full criteria of Accountability for Reasonableness. 1/17/2019 File name/location Company Confidential Copyright © 2000 Eli Lilly and Company

Issue: Medicine is evolving toward Tailored Therapeutics Therapeutic Area Effectiveness Rate (%) 25% + Benefit - Risk ─ Benefit + Risk Spear et al. TRENDS in Molecular Medicine Vol. 7 No. 5 May 2001 1/17/2019 File name/location Company Confidential Copyright © 2000 Eli Lilly and Company

ISSUE: Data Quality and Quantity Who is responsible for generating the evidence? Who is responsible for synthesizing the evidence? IOM EBM Roundtable Pharma Sector Statement: Shared public-private responsibility Requires collaboration of all stakeholders Requires establishment of methodological and evidence standards What types of studies are necessary/sufficient for different decisions? What are good research practices for observational studies? Requires the development of standards/best practices for communicating evidence to consumers and patients 1/17/2019 File name/location Company Confidential Copyright © 2000 Eli Lilly and Company

Comparative Effectiveness Legislation The mission of any entity conducting CE research should focus on improving the science and practice of medicine in a way that does not impede access to care and diminish patient outcomes for the sake of cost. The scope of CE research should be broad including evaluations of benefit design. The scope of CE research must extend beyond analyses comparing pharmaceutical treatments. To enhance its credibility, CER requires an environment and processes that are transparent and inclusive of all stakeholders. Conducting CER in multiple settings will promote new, valid, and reliable methodologies and a broad body of research. Studies limited to comparing drug therapies cannot be expected to solve all the health care cost and quality issues in the U.S. health care system. Because drugs comprise approximately 11% of overall health care spending, the potential payoff for health care reform is greater by also studying other areas of health care, including health delivery systems, benefit designs, and procedures. 1/17/2019 File name/location Company Confidential Copyright © 2000 Eli Lilly and Company