IMS Accesspoint - November 2010

Volume 1, Issue 1 NOVEMBER 2010

ACCESSPOINT IMS HEALTH ECONOMICS & OUTCOMES RESEARCH

Launch issue News, views and insights from leading experts in HEOR

Running the risk Managing risk/reward ratio under intense public scrutiny

Decisive period for pharma

2011 outlook highlights importance of HEOR

Optimizing market access in a decentralized environment

Mike Nelson on the many different payers with different PageOUTCOMES 1 - Issue many 1 needs in the U.S. Page 12

Jacco Keja on the John Tierce reports need for more on the new pressures specialized market fromRESEARCH expanding Page 1CER IMS HEALTH ECONOMICS AND OUTCOMES positions in Europe Page 32 Page 15

ACCESSPOINT IMS HEALTH ECONOMICS & OUTCOMES RESEARCH

News, views and insights from leading experts in HEOR

Outlook 2011 Murray Aitken looks at the priorities for pharma companies competing in a challenging landscape - and the implications for HEOR page 8

The transatlantic constant of change The complex dynamics and reforms impacting HEOR and market access in the U.S. and Europe page 12

The move to HTA in Central & Eastern Europe With a focus on Russia, Romania and Ukraine, we consider the growing need for evidence-based decision support in CEE page 18

Leap-frogging to value in the Asia Pacific The IMS Symposium at ISPOR Asia Pacific Conference considers potential to define a uniquely Asian model of healthcare delivery page 24

Optimizing access in a decentralized European market John Resnick explores contradictory trends of convergence and divergence in Europe page 28

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“These are challenging, exciting and also potentially very rewarding times in the healthcare arena”

WELCOME

CONTENTS NEWS SECTION

Welcome to the launch issue of ACCESSPOINT, our twice-yearly update of news, views and insights from IMS Health Economics and Outcomes Research - a new opportunity to learn about our latest developments, meet members of our global team of experts, and find a stimulating perspective on the key trends and changes that are reshaping the pharmaceutical landscape.

2

Informing decisions in key therapy areas

3

Brogan brings new capabilities in Canada

5

Counting the cost in Central & Eastern Europe

6

IMS CORE Diabetes Model rises to challenge

These are challenging, exciting and also potentially very rewarding times in the healthcare arena. We see decision makers continuing to wrestle with the need to balance cost and demand for new innovations, payers everywhere strengthening their efforts to limit further growth in expenditure, and much closer scrutiny of pharmaceutical products raising the risks for drug development. At the same time, we see new dynamic markets rising to the fore in Eastern Europe and the Asia Pacific, ripe with potential for healthcare improvement, already struggling to manage escalating costs, but opening up significant opportunities to participate in their continued expansion.

8

As we look ahead through 2011, with reforms playing out in major markets and manufacturers intensifying their focus on demonstrating the value of their medicines, one thing is clear: rigorous, robust health economics and outcomes research will be essential to ensuring that all key stakeholders are equipped with the relevant, real-world evidence they need to meet the challenges, priorities and new opportunities for growth.

28 MARKET ACCESS Optimizing access in decentralized Europe

IMS draws on the experience and knowledge of more than 300 specialists in pricing, market access and health economics and outcomes research to enable more effective decision making based on the best available information and analytical approaches. We hope you find our insights in this first issue of ACCESSPOINT informative and helpful in providing some pointers to the way ahead.

PROJECT FOCUS

Finally, I would like to thank our guest contributor, Murray Aitken, Senior VP, at IMS for his insightful market outlook for 2011 (page 8), and take this opportunity to introduce our two new HEOR Regional Leaders, Dr Michael Nelson in the U.S. and Dr Jacco Keja in Europe, who bring a wealth of industry and consulting expertise to lead our teams on both sides of the Atlantic and offer their take on the critical trends in their region (page 12).

INSIGHTS OUTLOOK AND TRENDS 2011 Positioning for future market share

12 REGIONAL REVIEW Tides of change in U.S. and Europe 18 EMERGING MARKETS: Central & Eastern Europe (CEE) 19 Moves to HTA 23 Regional experts 25 IMS ISPOR SYMPOSIUM Challenges and opportunities in Asia Pacific

32 RISK EVALUATION Shifting risk/reward ratio 36 OBSERVATIONAL RESEARCH Growing role in value demonstrations 40 INFLUENZA Informing the interests of public health 42 DIABETES Demonstrating cost-effectiveness in China IMS OVERVIEW 44 IMS HEOR 45 Office locations 46 Our senior experts 52 IMS LifelinkTM: Longitudinal patient data AccessPoint is published twice yearly by the Health Economics and Outcomes Research team of IMS Health.

ISSUE 1. PUBLISHED NOVEMBER 2010.

Gordon Carey VICE PRESIDENT, GLOBAL LEADER PRICING & MARKET ACCESS PRACTICE, IMS HEALTH GCarey@imshealth.com

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IMS HEALTH® 7 Harewood Avenue, London NW1 6JB, UK Tel: +44 (0)20 3075 4800 • HEORInfo@uk.imshealth.com • www.imshealth.com ©2010 IMS Health Incorporated or its affiliates.

All Rights Reserved.

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NEWS | PUBLICATIONS IMS HEOR has experience in all key therapy areas with a bibliography of more than 2000 publications.

Informing decision making 50

We have published nearly 200 papers every year 40

in the last decade employing, a wide range

30

of health economic analyses

20 10 0

r s y y e e h t rs rs y y y es es gy gy gy gy gy lar de as lic nc ric lth og alt de de et lo lo lo lo as og og og te lan cu ol ea lia ise or or lad h Po iat ol ol ol ro ra to to se co ab He sp as i s s t t p m H d n n D a a h B i i n l v n i a S s D e Di p m D O m P al m al io cr rm ha mu lD alt en Tra ry ive Ne Co eu al ics nt rd ht do De He let ca ct Im to He om Rh Ca tin gi om Me En ke ra ra Op s W i s o n e l e o t lo o sp Ov in Ec ur cu Re ro us Ne lth st M a a G He

These are some examples of our recent publications in selected therapy classes.

CARDIOVASCULAR DISEASE

CARDIOVASCULAR DISEASE

DERMATOLOGY

DIABETES

Relation of the first hypertension-associated event with medication compliance and persistence in naive hypertensive patients after initiating monotherapy

The cost and effectiveness of adherence-improving interventions for antihypertensive and lipid-lowering drugs

A retrospective cohort study of the impact of biologic therapy initiation on medical resource use and costs in patients with moderate to severe psoriasis

A meta-analysis of placebocontrolled clinical trials assessing the efficacy and safety of incretin-based medications in patients with type 2 diabetes

Br J Dermatol, 2010; 163(4):807-16

Pharmacology, 2010; 86(1):44-57

Fonia A, Jackson K, LeReun C, et al.

Fakhoury WKH, LeReun C, Wright D

Int J Clin Pharmacol Ther, 2010; 48(3):S173-183

Int J Clin Pract, 2010; 64(2):169-81

Mathes J, Kostev K, Gabriel A, et al.

Chapman RH, Ferrufino CP, Kowal S, et al.

DIABETES, ONCOLOGY

HEMATOLOGY

MENTAL HEALTH

NEUROLOGY

Cancer incidence for insulindependent diabetics in Germany: An analysis of the publication of Hemkens et al. based on the STROBE criteria (in German)

Treatment cost of hemophilia patients with inhibitors in the National Health System in Morocco

Mental health care reforms in Europe: Rehabilitation and social inclusion of people with mental illness in Russia

Atomoxetine's effect on societal costs in Sweden

Espérance Méd, 2010; 17:101-7

Perfusion, 2010; 23:4-10

El Khorassani M, Hadjkhalifa H,

By Z, et al.

Psychiatr Serv, 2010; 61(3): 222-24

Fuchs S, Fricke F-U, Pirk O

J Attention Disorder, 2010; 13(6): 618-28 Myrén KJ, Thernlund G, Nylén A, et al.

Jenkins R, McDaid D, Nikiforov A, et al.

ONCOLOGY

ONCOLOGY

TRANSPLANT

UROLOGY

Cost-effectiveness analysis of pemetrexed versus docetaxel in the second-line treatment of non-small cell lung cancer in Spain: Results for the nonsquamous histology population

Pegfilgrastim vs filgrastim in primary prophylaxis of febrile neutropenia in patients with breast cancer after chemotherapy: A cost-effectiveness analysis for Germany (in German)

Cost-effectiveness of immunosuppressive regimens in renal transplant recipients in Germany: A model approach

Mirror questionnaire.

Satisfaction value in ostomized patients with the health care and dispositive

Eur J Health Economics, 2010; 11(1):15-25

Revista Rol de Enfermeria 2010; 33(5): 328-337

BMC Cancer, 2010; 10(1):26 E-pub

Deutsche Med Woch, 2010; 135(9): 385-9

Juergensen JS, Arns W, Haß B

Arias Alvarez M, FernandezGarcía M.A., Gonzalez-Buenadicha AM, et al.

Asukai Y, Valladares A, Camps C, et al.

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Sehouli J, Goertz A, Steinle T, et al.

IMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

CANADA | NEWS IMS has one of the largest international HEOR expert teams in the market.

We now add new core competencies in Canada.

Brogan union brings new capabilities in Canada IMS has established a strong platform to support the growing need for real-world evidence of the clinical and economic value of medical technologies. Further strengthening our capabilities in key markets, in July 2010 we merged our Canadian operations with Brogan Inc., a pioneering healthcare market research and consulting firm, based in Ottawa.

The move has brought together Brogan’s core offerings in drug claims analysis, market access, health economic analysis, and strategic pricing in Canada, with IMS’ global medical and pharmaceutical information assets, analytics and consulting capabilities. For our clients, this brings access to real-world, evidence-based pharmacoeconomic analyses in Canada supported by the largest drugs claims database in the country to fulfill critical requirements for drug submissions, develop effective pricing and market access strategies for expedited formulary listing, and demonstrate the effectiveness and efficiency of drugs in real-life clinical practice.

It is a pleasure to welcome our Brogan colleagues on board!

LONG HISTORY OF PIONEERING EXCELLENCE Brogan Inc. has provided government and private sector clients in Canada with research and consulting services for more than 20 years and is recognized for the depth, quality and the objectivity of its analyses. The company's team of economists, researchers and clinical professionals have spearheaded the development of budget impact analysis (BIA) modeling, which is now an essential requirement of provincial formularies.

A pioneer of drug claims analysis, Brogan was among the first companies to amalgamate data from multiple insurers to provide valuable insights into pharmaceutical utilization behavior in Canada. This has since evolved into the largest drug claims database in the country, providing services to governments, payers, and a broad cross-section of pharmaceutical companies.

IMS BROGAN: FROM HEALTH ECONOMICS TO PRICING CONSULTING IMS Brogan services span health economics, market, patient and policy analysis and pricing and regulatory consulting. We harness costeffectiveness and cost-benefit modeling, longitudinal data reports, physician-level data reports, market access data and provincial and private drug plan data to deliver comprehensive economic analyses at all stages of the product lifecycle. Our extensive price regulatory consulting capabilities include price and risk management analysis, pricing strategies for new patented drugs, compliance monitoring and forecasting, submissions and data filing and training sessions on the operation and regulation of the federal drug price review agency, the Patented Medicine Prices Review Board (PMPRB).

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Delivering real-world, evidence-based pharmacoeconomic analyses supported by the largest drug claims database in Canada Meet the IMS Brogan team leaders See overleaf...

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NEWS | CANADA

...continued from previous page

IMS Brogan team leaders

The talented IMS Brogan team of expert researchers and consultants is headed by Joan McCormick (Price Regulation Consulting) and Nevzeta Bosnic (Economic Consulting).

JOAN McCORMICK, MBA Joan McCormick is Principal Consultant, Price Regulation Consulting at IMS Brogan, with particular expertise in the strategic pricing of new pharmaceutical technologies.

In her role as head of the Price Regulation Consulting Team she has supported many major pharmaceutical companies with the preparation of pricing submissions to the Patented Medicine Prices Review Board (PMPRB), gaining extensive insights into the operation of the Canadian pharmaceutical market. Joan holds a Bachelors degree in Life Sciences from Queen’s University in Kingston and an MBA from the University of Ottawa. Email: JMcCormick@ca.imsbrogan.com NEVZETA BOSNIC, BA Nev Bosnic is Director, Economic Consulting at IMS Brogan with responsibility for managing the company’s team of expert health economists in meeting the broad spectrum of client needs in the Canadian pharmaceutical market. She has extensive knowledge of public and private drug plans across Canada and in-depth expertise on the drug reimbursement process. Over the course of more than nine years with the company, Nevzeta has led many strategic consulting, policy and data analyses for pharmaceutical clients, government and academic institutions across the country. She holds a Bachelors degree in Business Economics from the School of Economics and Business at the University of Sarajevo. Email: NBosnic@ca.imsbrogan.com •

IMS BROGAN SERVICES SPAN HEALTH ECONOMICS, MARKET, PATIENT AND POLICY ANALYSIS AND PRICING AND REGULATORY CONSULTING. HEALTH ECONOMICS MARKET ANALYSIS STRATEGIC CONSULTING LONGITUDINAL PATIENT ANALYSIS POLICY ANALYSIS DRUG UTILIZATION FORECASTS PRICING, REGULATORY CONSULTING

Shared goal Page 4

Price Evaluation; Budget Impact Analysis Market Assessment; Payer Segmentation Pricing and Market Access Drug Utilization Analysis Impact of policy and regulatory changes Drug forecasts; Cost driver analysis Advice on rules and submissions to PMPRB

In CEE markets, a growing need for evidence-based decision support is opening up new opportunities for health economics and outcomes research - see page 18.

IMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

PROJECTS | NEWS HEOR is becoming increasingly important in the emerging markets of CEE including the Czech Republic, Hungary, Poland and Russia.

Counting the cost in Central and Eastern Europe (CEE) IMS HEOR experts in CEE markets employ a wide range of research methodologies, including costeffectiveness, cost utility and budget impact modeling and prospective observational techniques, to support customer needs in markets throughout the CEE region in a range of therapy areas.

A cross-section of our recently completed or ongoing studies is shown below.

Country BULGARIA

Disease Area

Project Type

NEUROLOGICAL DISORDERS Patient-reported outcomes

CZECH REPUBLIC

Cost-effectiveness, cost utility, budget impact: NCE Cost utility and budget impact: NCE Value for money: Novel therapy Cost-effectiveness: New pediatric vaccine, extended coverage INFECTIOUS DISEASE NEUROLOGICAL DISORDERS Patient-reported outcomes Budget impact: NCE ONCOLOGY Cost-effectiveness: Novel therapy, expanded indication

ESTONIA

CARDIOVASCULAR

CARDIOVASCULAR DIABETES

Cost-effectiveness, cost utility, budget impact: NCE

CARDIOVASCULAR CNS DIABETES HUNGARY

Cost-effectiveness, cost utility, budget impact: NCE Cost-effectiveness, budget impact: Established product, new indication, psychiatry Cost minimization, budget impact: NCE launch Value for money: Novel therapy, market access INFECTIOUS DISEASE Cost-effectiveness: New pediatric vaccine, extended coverage NEUROLOGICAL DISORDERS Patient-reported outcomes ONCOLOGY Budget impact: NCE Cost-effectiveness: Novel therapy, expanded indication

LITHUANIA ONCOLOGY

Cost-effectiveness: Novel therapy, expanded indication

CARDIOVASCULAR

POLAND

Cost-effectiveness, cost utility, budget impact: NCE Real-world costs and outcomes: NCE, first in class, patients at risk of hospital complications CNS Value for money, reimbursement support: Established product, new indication, psychiatry DIABETES Cost-effectiveness: Adaption, translation, reporting application in Poland Value for money: Novel therapy Indirect comparison, economic analysis, budget impact: New therapy, reimbursement INFECTIOUS DISEASE Cost-effectiveness: New pediatric vaccine, extended coverage ONCOLOGY Budget impact: NCE NEUROLOGICAL DISORDERS Patient-reported outcomes

ROMANIA

DIABETES Cost-effectiveness, budget impact: NCE launch NEUROLOGICAL DISORDERS Patient-reported outcomes DIABETES

RUSSIA ONCOLOGY SLOVAKIA

Value for money: Novel therapy Cost of illness: Diabetes Economic analysis: NCE launch, hematological malignancy

CARDIOVASCULAR Cost-effectiveness, cost utility, budget impact: NCE INFECTIOUS DISEASE Cost-effectiveness: New pediatric vaccine, extended coverage NEUROLOGICAL DISORDERS Patient-reported outcomes

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NEWS | IMS CORE DIABETES MODEL The IMS CORE Diabetes Model leads the field in diabetes modeling with insights that have been key in market access decisions worldwide.

IMS CORE Diabetes Model rises to the Mount Hood Challenge The IMS CORE Diabetes Model is able to estimate the long-term clinical and economic outcomes of different therapeutic interventions for both Type 1 and Type 2 diabetes.

As part of our ongoing commitment to its continued development and external validity, we recently put it to the test at the Mount Hood Five Challenge in Malmo.

The results are yet to be published but have already triggered initiatives for further advances in the model.

The authors David Grant is Senior Principal at IMS HEOR and can be contacted at DGrant@uk.imshealth.com Adam Lloyd is Senior Principal, IMS HEOR and can be contacted at ALloyd@uk.imshealth.com

IMS CORE Diabetes Model See our Project Focus on diabetes on page 42

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Diabetes is among the world’s most prevalent, debilitating and costly chronic diseases. New breakthroughs in prevention and treatment have the potential to stem its progression, but are already challenging limited healthcare resources. With research yielding the promise of further advances in diabetes care, the need to understand the clinical and economic consequences of alternative approaches has never been greater.

IMS Health Economics and Outcomes Research has extensive experience in demonstrating clinical and economic value in medicine. Computer simulation modeling has a key role to play in this process, particularly in a chronic disease like diabetes, with many complications that develop over time. The IMS CORE Diabetes Model is widely recognized as the leading all-round model of diabetes available. It has been accepted by healthcare decision makers across the world as a validated tool which brings valuable insights into the long-term outcomes, costs, and cost-effectiveness of innovative interventions for diabetes.

EASE OF ACCESS Available via the internet, the IMS CORE Diabetes Model is a software utility which simulates clinical outcomes and costs for cohorts of diabetes patients. It is one of the very few models covering patients with either Type 1 or Type 2 diabetes mellitus. The software has been designed for ease of use so that non-specialists can evaluate the effects of different patient characteristics and changing costs on cohorts of diabetes patients over a range of short- and long-term time horizons.

MULTIPLE FUNCTIONS The IMS CORE Diabetes Model allows users to compare a range of treatments, or sequences of treatments, by controlling input parameters relating to: • Patient demographics (age, race, sex) • Baseline risk factors and complications • Change in physiological values due to treatment (e.g. reduction in HbA1c, BP, lipids and BMI) • Treatment costs • Morbidity and mortality risk • Costs of complications (e.g. MI, stroke) • Costs of other medication and lab tests • Disease progression • Relative risks for complications • Timing of switching treatments The model assesses clinical and cost outcomes for a range of therapies, allows users to undertake detailed cost-effectiveness analyses, and produces outputs which can be customized to provide the level of detail appropriate to decision maker needs.

IMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

IMS CORE DIABETES MODEL | NEWS

PUTTING IT TO THE TEST: THE MOUNT HOOD FIVE CHALLENGE The Mount Hood Challenges were first introduced in 2000 as an opportunity for researchers to discuss, compare and crossvalidate the performance and structure of economic models of diabetes1.

Continuing in that vein, the Mount Hood Five Challenge was held in Sweden in September 2010. In addressing the economic modeling of diabetes and its complications, the emphasis was once again on comparing model projections to real-world or clinical trial outcomes2. Within the context of the “challenge” environment, these meetings offer an important forum for explaining and discussing potential differences between models, and are key to identifying areas of future development for advancing the field3.

This year, eight different modeling groups participated in the challenge, which consisted of two separate elements: In the first, participants were asked to replicate three recent clinical studies in order to validate their respective models. This was

The Mount Hood Challenges offer an important forum for comparing and cross-validating economic models of diabetes achieved using published information on trial cohort baseline characteristics and effects of the intervention on intermediate risk factors to model long-term clinical outcomes, costs and cost-effectiveness. The second element focused on the way that diabetes simulation models capture and represent uncertainty around their projected outcomes.

The results from Mount Hood have yet to be published and must remain under wraps until then. What we can say at this time is that our move to take part in this respected challenge reflected our confidence in the IMS CORE Diabetes Model and we were not disappointed in its performance. We are sure that it will continue to remain at the forefront of economic analysis and decision making in this area as the leading diabetes economic model available.

CONTINUING TO DEVELOP THE IMS CORE DIABETES MODEL IMS is committed to continuing investment in the IMS CORE Diabetes Model to ensure that it remains as comprehensive, reliable, up-to-date and efficient as possible. We are delighted to share the details of three new initiatives we have established during 2010:

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1. EXPERT PANEL: We have recently instituted an expert panel of five leading specialists in diabetes management, epidemiology and economic modeling. The panel will advise on validation and structural refinements to the model as well as the inclusion of new research and clinical findings as they become available. As a group they will meet on an ongoing basis to review new results and plans for further development. The panel members are: • Dr Jonathan Brown: Chair of the International Diabetes Federation Task Force on Diabetes Health Economics; formerly Senior Investigator at the Center for Health Research, Kaiser Permanente (KP) Northwest in Portland, Oregon, USA • Professor Nick Freemantle: Professor of Clinical Epidemiology and Biostatistics, University of Birmingham, UK • Professor Bill Herman: Director Michigan Diabetes Research Center, University of Michigan, USA • Professor Andrew Palmer: Professor of Health Economics and Associated Research, Menzies Research Institute, University of Tasmania, Australia • Dr Stéphane Roze Senior Consultant, HEVA, Lyon, France 2. USER FORUM: Open to subscribers to the IMS CORE Diabetes Model, our recently launched “User Forum” provides an informal platform for open discussion with our software developers and expert panel, around issues of common interest to users. Our first meeting was held on 20 September in Stockholm, the day after the Mount Hood meeting. Most of our current license holders attended to meet our experts, learn about some recent technical changes and provide feedback on additional facilities for the model – most of which focused on user-friendliness of the tool and applicability earlier in the product lifecycle.

3. UPGRADED HARDWARE PLATFORM: We have made a substantial investment in state-of-the-art computer hardware which will provide improved efficiency, reliability and performance. The new platform is hosted in an external data center which allows us to provide the very highest levels of security and reliability.

Going forward, we are planning a full and detailed re-validation of the IMS CORE Diabetes Model against published clinical data, and a program to continuously review and refresh inputs to ensure that it continues to reflect the very latest literature and research findings worldwide. • 1 Brown JB, Palmer AJ, Bisgaard P, et al. The Mt. Hood Challenge: Crosstesting Two Diabetes Simulation Models. Diabetes Res Clin Pract. 2000; 50(Suppl 3):S57–S64 2 Economics, Modeling and Diabetes: The Mount Hood Five Challenge, Malmo, Sweden, 18-19 September 2010.

3 Palmer AJ, Computer Modeling of Diabetes and its Complications.

Diabetes Care, 2007; 30(6):1638-46

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INSIGHTS | 2011 TRENDS

As we look ahead through 2011, it is timely to consider the prospects for the global pharmaceutical market, both in quantitative and qualitative terms, the priorities for companies competing in this landscape and the implications for those who are focused on health economics and outcomes research.

The author Murray Aitken, MBA, Senior VP, Healthcare Insight, IMS Health.

MAitken@imshealth.com

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IMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

2011 TRENDS | INSIGHTS

Outlook for 2011 PROSPECTS, PRIORITIES AND KEY IMPLICATIONS FOR HEALTH ECONOMICS AND OUTCOMES RESEARCH For countries with publicly funded healthcare, this is being implemented in the context of efforts to restore fiscal balance. In Spain and Canada, we are seeing substantial reductions in the pricing of generics and in the case of Canada, the elimination of pharmacy rebates; in Germany new brands are being subject to new price negotiation requirements; and Turkey and Greece have implemented significant across-the-board price cuts for branded products. And in the U.S., too, private sector employers and health plans are stepping up their use of pre-authorizations, and increasing the incentives for patients to request lower cost options, all in an effort to limit the rise in drug costs.

2011 will be another important year to watch in the global pharmaceutical market Peak years of patent expiries: We are moving into the two biggest years of expiries in 2011 and 2012 as measured by the current value of products that are subject to loss of exclusivity. In 2011, products with more than $30bn of sales are expected to face generic competition in major markets, including, in the U.S., iconic brands such as Lipitor®, Plavix®, and Zyprexa®. But while the patents are due to expire in 2011, the full impact will not be felt until 2012 due to the timing of the expiries and the number of generic competitors. So, in fact, the impact of patent expiries will not be significantly different than in 2010, though it will remain a major constraint in the marketplace.

FIGURE 1: GLOBAL PHARMA MARKET EXPECTED TO EXCEED $880 BN IN 2011 WITH GROWTH OF 5-7% Global sales and growth 2001-2011 12.1% 9.1% 9.1% 7.7% 7.3% 7.2% 6.9% 5.8% 7.1% 4-6% 5-7% 15%

1000

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750

Sales US $Bn

CONTINUED CONSTRAINTS However, while these factors help to support growth in 2011, the constraints from patent expiries and payer actions to limit growth in drug spending are greater than ever.

Budgetary control: We are seeing both public and private payers around the world pursue a wave of budgetary control mechanisms that target drug spending.

10%

500 5%

250 0

$395 $431

$497

$556

$601 $646

$715

$781

$840 $880 $812 -$850 -$890

2002

2003

2004

2005

2006

2007

2008

2009

2001

Growth

Total world

2010 (f)

Growth const US $Bn

At the aggregate level, IMS is forecasting growth of 5-7% in 2011 for the global pharmaceutical market, taking the total market value to about $880 to $890 billion (Figures 1 and 2). This growth rate will be about one percentage point higher than our expectation for 2010. While this might be seen as a rebound, the underlying constraints to growth in the developed markets are stronger than ever, particularly the effect of new payer moves to limit drug spending that we are seeing in some of the key European markets, as well as the anticipated impact of major drugs losing patent protection and for the first time facing generic competition.

Growth in 2011 will be helped by three key factors: 1. First, in the U.S. we are forecasting 3-5% growth in 2011, up slightly from the 3-4% we are expecting for 2010. This is mainly due to some factors causing low growth in 2010 which we are not expecting to be repeated in 2011. Specifically, the early end to the flu season last winter, the impact of the severe weather in February which decreased the number of doctor visits and prescription volume, and the earlier than expected entry of generic competition for a few major drugs. Whilst we see a slight improvement in the U.S. in 2011, growth will remain in the historically low range of less than 5%.

2. Second, in Japan where price cuts are applied every two years, 2011 is a non-price cut year, which helps growth in the second largest market rise from 1-2% in 2010, to 5-7% in 2011.

3. The third facilitator of growth in 2011 is stronger contribution from emerging markets and especially the 17 countries we classify as “pharmerging”. Their collective growth will be 15-17% in 2011, up from about 14% in 2010, helped by recovering economies and the continued strength of China as an expanding market. We are forecasting 25% growth in China in 2011, and it will enter the year as the world’s third largest market after the U.S. and Japan.

0%

2011 (f)

Source: IMS Health, Market Prognosis, Sept 2010

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INSIGHTS | 2011 TRENDS ...continued from previous page

NEW INNOVATION Finally, let me touch on some of the innovative products we expect to enter the market in 2011.We see significant

The health economics and outcomes research discipline will be critical to ensuring that drugs are well positioned to capture a fair share of the market expansion in 2011 new breakthroughs on the horizon in several areas, including stroke prevention, melanoma, multiple sclerosis, breast cancer and hepatitis C. In each of these areas, we expect new products that provide patients and their physicians with new treatment options, and represent a new understanding about the course of these diseases and the way they can be tackled. In total, we expect 30 to 35 new chemical or biological entities to be launched globally in 2011, five of which have the potential to reach blockbuster status – defined as peak sales in excess of $1bn. These new products are significant for their science and patient value; but we do not expect them to provide market growth beyond that which we have seen in the past three years, which is at historically low levels.

In summary, 2011 will be another important year to watch in the global pharmaceutical market: the introduction of exciting new products, the impact of new efforts to control drug budgets, the loss of exclusivity in major markets for some iconic brands, and the further rise in the importance of pharmerging markets. It will also be a year where the details of a number of healthcare reform initiatives that will impact the longer term market – in the United States and elsewhere – will be hammered out and clarified.

INDUSTRY PRIORITIES For pharmaceutical manufacturers operating in this market environment, 2011 will be dynamic and exciting as they sharpen their focus across three priority areas: 1. First, the business strategy they are pursuing, in particular their approach to innovation – and decisions about balancing internal research with external partnering, and the number of which therapeutic areas to invest in; the business sectors they compete in – and whether to acquire, maintain or divest generics, consumer health, animal health, vaccines or diagnostics divisions; and the geographic Page 10

IMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

2011 TRENDS | INSIGHTS Outlook for 2011 balance of their operations – in particular how much focus to place on the pharmerging markets.

2. The second and related focus area for each company in 2011 will be honing the commercial model to ensure that it is optimized towards the market characteristics of each major country market and the company’s product portfolio. The appropriate focus and approach towards payers, prescribers, and patients will be further tailored to reflect the realities of each distinct market’s dynamics and for each therapeutic area.

3. Finally, manufacturers will need to redouble their efforts to showcase the value their medicines bring to the healthcare system. This includes developing credible evidence of the clinical value based on outcomes, the necessary support to demonstrate the health economics of a particular drug relative to available alternatives, and the communication of this value to relevant stakeholders. Health economics and outcomes researchers have a primary role to play in supporting this priority area for 2011. For existing marketed products, they will help to reinforce and strengthen the value positioning of drugs, especially as many alternative treatments are now available in lower cost generic form. For

products nearing launch, the value proposition must be powerful and pertinent to the relevant stakeholders.

KEY ROLE FOR HEALTH ECONOMICS AND OUTCOMES RESEARCH As 2011 brings further implementation of the Sentinel Initiative in the U.S., Risk Evaluation and Mitigation Strategies become routine, and observational trials are more extensively undertaken, the explosion of nonproprietary clinical information will bring new potential for benefits – as well as risks – to be identified and better understood. The health economics and outcomes research (HEOR) function will be central to ensuring that companies are prepared for this and proactively pursuing the opportunities it will provide.

As the global market for pharmaceuticals expands by about $50 billion in 2011, manufacturers will be wrestling with their priorities and in many cases anticipating the imminent peak years of patent expiry.

HEOR will be a critical component of making sure that drugs are well positioned to capture a fair share of the market expansion in 2011, and supporting company efforts to be well placed for innovation-led growth in the second half of this decade. •

FIGURE 2: 2011 SALES AND GROWTH IN GLOBAL REGIONS

Top 5 Europe Size: U.S.$135-145bn Growth: 1-3%

U.S. Size: U.S.$320-330bn Growth: 3-5%

Japan Size: U.S. $96-100bn Growth: 5-7%

“Pharmerging” Markets Size: U.S.$170-180bn Growth: 15-17%

GLOBAL GL LOBAL M MAR MARKET RKET 201 2011 11 SIZE: SIIZE: $880 $880-890BN 0-8 890BN GR GROWTH: ROWTH: 5-7 5-7% 7%

China Brazil Russia India Mexico Turkey

Venezuela Poland Argentina Thailand Romania Indonesia

S. Africa Egypt Ukraine Pakistan Vietnam

Rest of World Size: U.S. $145-155bn Growth: 3-5% Source: IMS Health, Market Prognosis, Sept 2010

NOTE: IMS forecasts are based on the latest release of IMS Market Prognosis™, the leading annual industry indicator of market dynamics and therapy performance. The forecasts take account of key issues impacting the pharmaceutical and healthcare industries. Additional factors that may affect overall growth include major safety events resulting in product withdrawal or prescribing restrictions; shifts in regulatory approval standards from their current levels; the application of sudden cuts to drug spending levels; public health crises; and a deterioration in economic conditions. Growth is measured in constant dollars to avoid the influence of currency exchange rates; sales are calculated at the ex-manufacturer level. Market size forecasts are expressed in current dollars, but exclude off-invoice discounts and rebates that are part of prevailing practices in certain major markets.

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INSIGHTS | U.S. & EUROPE

The interviewees Mike Nelson, PHARM D Dr. Michael Nelson is Regional Leader, Americas, Health Economics and Outcomes Research at IMS Health in the U.S. MNelson@us.imshealth.com

Jacco Keja, PHD Dr Jacco Keja is Regional Leader, EMEA, Health Economics and Outcomes Research, at IMS Health in the UK JKeja@nl.imshealth.com

The transatlantic constant of change As complex dynamics and healthcare reforms bring change through the key developed markets, we ask our new regional leaders in the U.S. and Europe for their take on the trends, implications and overall outlook for HTAs, HEOR and market access.

U.S. INTERVIEW WITH MIKE NELSON Q: What do you see as the main challenges for market access in the U.S.?

Mike Nelson: I think that because there are so many diverse payers in the U.S. market with so many different needs and levels of understanding about the methods and approaches to cost-effectiveness analysis, one of the key challenges for the industry is in defining what decision makers are looking for and generating information that helps them to make well-informed decisions.We are seeing a disconnect between the level of science that we as researchers employ in health economics and outcomes research (HEOR) and the application of that information to decision making. A good example in the U.S. is that the market struggles with using cost per QALY – decision makers don’t really know how to factor that in or how it helps them understand the relative value of a product in their system. I think also, in general, the emphasis of decision makers on randomized controlled trials (RCTs) as the gold standard for quality information undervalues the real-world observational research that can inform decision making, particularly in terms of cost and utilization.

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Q: Is there a need then, to facilitate a better understanding of HEOR? MN: Certainly, one pathway is helping payers better understand the information, but I think both sides need to move towards a common center: researchers need to make their methods more transparent and applicable to the decisions that payers have to make, and payers have to do their best to understand the methods that are employed by researchers in doing cost-effectiveness analysis. It may be that the former is more important because the endpoints we are using and the way we present data are not uniformly meeting decision makers threshold for reliable evidence – as evidenced by discussions at the recent International Meeting of ISPOR. There is still a level of distrust regarding information that comes from the industry and yet the industry does its best to employ the most rigorous methods available to generate the information that it puts in front of payers. Researchers need to appreciate that despite their best efforts to generate robust, high-quality research it is still in many ways under-appreciated by decision makers.

Q: What are the implications of healthcare reform in the U.S.?

MN: I think it will lead to an increase in the impact of HEOR. The shift in coverage decision making from acquisition cost to overall value will accelerate an appreciation that economic value is about more than just the cost of the pharmaceutical. In the private sector and commercial health plans where coverage decisions have largely integrated pharmaceutical cost into their decision making, decisions will start to be based more on overall product value – not just safety, efficacy, and unit price but a broader appreciation of its overall impact on health outcomes. And in the public sector, which traditionally has not emphasized cost in its decision making, slowly, but inevitably, cost and cost-effectiveness will have to be incorporated into understanding the overall value of the product.There is still some political resistance and fear about what that means for access to care. Patients in the U.S. have been used to fairly open access, so there is concern about decisions being made on cost alone and fear that it will lead to ‘rationing’ based on cost – particularly among people who have potentially life-threatening and chronic severe conditions requiring expensive new technology.

Q: Why is comparative effectiveness research (CER) so key to reform?

MN: There is a general understanding that healthcare costs in the U.S. are continuing to rise and that new AccessPoint - Issue 1

technology is helping to push cost in that direction, but no one knows whether we are really getting good value for the money we are spending on healthcare. We constantly see news about the cost of healthcare in the U.S. relative to other countries, but when we look at the quality of care according to information in the press there is a general perspective that we are spending a lot on healthcare but ranking much lower than other countries in terms of overall quality. There is also a general appreciation that we can’t continue to spend more and more of our overall resources on healthcare without understanding what the return is on that investment.

Q: What is the goal of CER? MN: The goal of CER is to provide information on the relative “effectiveness” of healthcare technology through the analysis of safety, efficacy, and real-world outcomes data.

CER is intended to improve the quality of care, but at the end of the day it is really about achieving better quality with an appreciation that resources are finite. Costeffectiveness research analyzes cost and quality together.

Q: IS CER simply ‘more of the same’ for HEOR researchers?

MN: Well, certainly, CER is not unfamiliar to HEOR researchers. Cost-effectiveness researchers have for years in my view conducted CER, the only difference being that cost is part of the basis for comparison, whereas with CER the emphasis seems to be more on the quality of outcomes as the primary endpoint.To my mind, they are very similar and cost-effectiveness is a form of CER which emphasizes or brings cost into the overall value assessment.

Q: Will there be a need for guidelines in conducting CER? MN: In order for the science to be accepted, guidelines are probably appropriate. As an example, guidelines for conducting good clinical research are well understood.

Since RCTs generally don’t capture all the information needed for CER, we will have to include other forms of observational research to get the best view of the effectiveness of technology. To improve the reliability and validity of this research, there should be some guidance and recommendations on the best way to conduct each type of research. This is not because I think there is a lot of inappropriate research being done but more because the users of that information need to be comfortable that there are standards being followed and that the research they are reviewing has a high level of quality and methodological rigor.

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Q: Do these developments imply changes for the industry?

MN: I believe so, yes. The overall research focus will continue to be concentrated on clinical development and getting the products through regulatory approval. Where there is room for growth is thinking beyond the regulatory goal to the market access hurdle and what information and research needs to be done throughout the lifecycle of the product to support that.There has no doubt been a general trend in the industry to consider the market access hurdle earlier and earlier in the lifecycle, but I think there is room for earlier generation of evidence that supports the comparative effectiveness and cost-effectiveness analyses.To do that, there needs to be investment and rethinking of the amount of resources that are deployed to those kinds of research earlier in the lifecycle.

Q: Are regulators starting to look beyond randomized controlled trials?

MN: I’m not sure that regulators are quite there yet the FDA hasn’t started to make cost part of its requirements for approval in the U.S. Payers, though, are certainly thinking about this and how to best integrate that kind of information. The emphasis is more on getting both the regulatory and market access approval and planning for that in parallel.This is an increasing part of what we do at IMS – supporting companies both on the market access side but also being strategic about the way we think about programs and research studies that need to be done and when they need to be done in order to optimally time the information with when the decisions are being made.

Q: What are the challenges in sourcing real-world data?

MN: We have some of the same challenges in the U.S. as in Europe but the one area where we have some advantage is that there are large retrospective databases which can be accessed for certain types of research, particularly in the analysis of overall burden of disease, treatment patterns across multiple regions of the country and looking at where there are opportunities for quality improvement in terms of outcomes related to those therapies. Ultimately, once a product hits the market, these databases enable direct comparisons of how products are being used as well as their outcomes. All of that can be done in the context of retrospective claims databases, electronic medical records, and other data collection methods tied to those two things. But there is a limit to Page 14

the endpoints these databases include which is why robust, prospective observational research is also critically important.The challenges in the U.S. and Europe in those kinds of data collection methods are more similar.

Transparency is really important and that is an area where we need to do a better job Q: Why is real-world, observational research so important?

MN: The real-world data that is available provides a picture of what really happens outside the context of a very structured and controlled clinical trial and that is what effectiveness is really all about and how it differs from “efficacy”, which is ultimately what an RCT is designed to measure and compare between two different interventions. Observational methods, including databases, give you an opportunity to see what happens outside the view of an RCT, ‘out in the wild’ where patients and physicians behave in real practice.

Databases give us some insight into what is happening without having to design and implement a very expensive and long-term randomized controlled clinical trial.

Prospective observational studies provide the opportunity to collect data which form part of what defines overall product value but which only the patient or physician provider may have. Examples of endpoints that require a prospective observational study include: quality of life, patient satisfaction or qualitative outcomes such as symptom management, like pain control - anything that ultimately drives the value of the treatment but which is often difficult to measure in claims or retrospective databases. Another good example would be measuring both hyper- and hypoglycemic events in diabetes which can be problematic for patients who are trying to tightly control blood glucose.To some extent those things can be measured in claims or retrospective databases if they warrant a doctor visit, but if the patient is able to selfmanage through guidance or by managing their diet, those things can’t be captured in retrospective data but still impact the overall quality of that patient’s outcome on a particular therapy. Sometimes the only way you can capture that is through a prospective observational method. At the end of the day, the patient is the ultimate

IMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

EUROPE | INSIGHTS Europe INTERVIEW WITH JACCO KEJA customer of healthcare and we should be incorporating their perspective in our understanding of the value of the product and therefore patient-reported outcomes are a really important component of comparative effectiveness.

Q: How can HEOR best support decision making in the post-reform era?

MN: If you look at the types of difficult decisions that now are coming more into the limelight, they are the same as those that HEOR researchers have been struggling with for the last 20 years or more, so this is not a new challenge without any science behind it. The methods that have been developed and used over many years as part of the evolution of HEOR research are really the tools that will help decision making in the postreform years.There is still resistance to the economic part of this in the U.S. in particular because of concerns that decisions will be based only on cost and not overall value, which incorporates both quality and cost. Thus, a challenge with HEOR is to overcome the fear of overemphasizing the cost part of the value equation in decision making. What we can do to move that along is help people understand that it’s not just about quality or cost – but the marriage of the two, and that the methods we have developed over the last 20 plus years really are the science in bringing those two things together.

Q: Is HEOR becoming overly complex?

MN: Well, without doubt, the sophistication of today’s analyses is far greater than it was 20 years ago. However, the level of understanding of those methods by the people using them in applied decision making hasn’t necessarily tracked evenly with that. If we look at economic modeling, the methods are very sophisticated and advanced but that’s not necessarily a good thing because sometimes their complexity makes it difficult for strategic and business decision makers to take that information and utilize it without skepticism about how it was generated.Transparency is really important and that is an area where we need to do a better job – helping decision makers understand that the methods we are using are more advanced, but have been validated and are transparent so that they can decide whether these are the best methods to analyze that particular data. If we don’t appreciate that the information we are generating has to be relevant and usable to the decision makers then we are really not achieving our goal of conducting good research. •

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Q: What are the key challenges for pharma and market access in Europe?

Jacco Keja: I think we are seeing three major trends in the region: The first has to do with an intensification of international collaboration in HTAs. In the past, negotiations and HTAs were mainly conducted at the regional level. Today, not only are national payers becoming far more adept at these assessments but we are also seeing networks of HTA agencies, such as EUnetHTA and INAHTA, gathering strength. There is a growing need for the industry to deeply understand this process and to monitor, pre-empt and manage HTA at these levels.

The second trend is increasing regionalization. Whereas historically, pricing and reimbursement was either relatively free or primarily driven by one or two national players, in the last few years we have seen a big push towards regionalization – first in Spain and Italy, more recently in the UK with stronger primary care and GP commissioning groups and now in France where regional power is also intensifying. Companies are used to dealing with national payers and with relationships at the very local level. Now, they need to start looking at how well they are organized to operate in what is increasingly a businessto-business driven market where the ability to negotiate as a business-to-business partner is becoming imperative.

Finally, in the EMEA region we also are moving closer to a world where free pricing and the traditional UK/Germany launch sequence is probably going to be history in the next year. We have seen with the deterioration of the English pound that already for most companies the UK is not as attractive a market any more from an international pricing reference point of view.

And Germany is essentially giving up its free pricing. So, again, companies have to completely rethink their consolidated European launch.

Q: What are the business imperatives for the industry?

JK: All these factors need to be dealt with from a pricing point of view, but they cannot be disentangled from HTA and health economics and outcomes research because yet another continued trend is that P&R is being achieved on the basis of a commitment by pharma to deliver what they promise up front. This means that all kinds of payfor-performance deals have to be organized by the industry and payers. Companies get their price and reimbursement after a process of lengthy negotiation but there is always some kind of commitment to deliver on Page 15

INSIGHTS | EUROPE ...continued from previous page certain performance indicators. To prepare for that discussion they are going to need firstly an understanding of HTA and the skills around that, and secondly, realworld data capabilities – throughout the product lifecycle - for portfolio management, patient segmentation, P&R, economic modeling and post-launch commitment.

Q: How is HTA evolving in the region?

JK: Historically, HTA was a very local affair. Now it is reaching a new level of sophistication, with agencies collaborating strongly together, asking for more information and becoming far more protocolized in their approaches. HTA is becoming just as important as regulatory approval in Europe and the industry really has to take this very seriously. Without being sufficiently well prepared for it, companies will set themselves up for failure during P&R negotiations – the two go hand in hand and this is a really important aspect of doing business these days. The fact that these agencies work together means there is also a need to understand who relates to whom.

One of the complications with HTA is what do you define as HTA? Some of the assessors are quite clear and have well described powers like NICE, but if you take a wider definition of HTA, many bodies that conduct these assessments that have an impact on likelihood to prescribe such as UK Primary Care Trusts – in spite of the fact that NICE gives clear guidance they decide on particular implementation themselves.Then again, whole countries have very fragmented approaches to HTA and that also needs co-ordination and management.

Q: What is driving this trend in HTA? JK: To some extent it is driven by certain forces in the market who feel that at HTA level we might find ourselves facing a similar situation as we did 10-15 years ago in regulatory, where every nation had its own decision making body, and by going through one united application we could reap the benefits of efficiency and clarity and consistency at the European level. However, there is the basic difference that regulatory very strongly depends on RCTs which means the size and internal validity of studies are quite important. HTA is all about expectations and understanding what happens in the day-to-day clinical setting and is implicitly much more affected by the EU subsidiarity principle. In other words, real-world data are important and will continue to be driven by local and regional healthcare practices. I expect these practices are and will be for the foreseeable future still quite dissimilar between the different countries. Care is being implemented based on individual needs, so it is extremely Page 16

important to understand that. At the moment, HTA is on the middle ground where consistency and methodology and certain parts of it are more coordinated amongst the bodies - that is what is happening here right now and what companies should understand.

Q: How significant is the new Drug Reimbursement Law (AMNOG) in Germany?

JK: There are two main aspects to AMNOG: on the one hand when the law is implemented early in 2011, Germany as a free price country for innovative drugs will cease to exist. Although the fiction of a free price exists for at least 12 months, in the following years sick funds will only pay for the drug if a discount contract with all statutory health insurances is in place. This in itself is a dramatic change. Even more significant is that once the law is in force, companies will be required to negotiate discounts on a new product’s price on the basis of its expected additional benefit, supported by a detailed “value dossier” called benefit dossier by the German law.

We will also see IQWiG becoming more formally involved in the P&R process in making a judgment as to whether a product is indeed more beneficial. The value the product brings to the market is a key element here, so for the first time considerations on additional benefit become quite important in the German market.

Companies will have to be prepared for these negotiations and understand in detail what will happen with their product in real-life and understand the efficiencies and inefficiencies in the German healthcare system. This comes back again to the need and ability to obtain or generate real-world data and insights.

Q: What do these changes mean for HEOR in the industry?

JK: Well, if you think about products entering Phase III, companies should start thinking more deeply than ever before about which patient populations benefit from their new technology and this includes having a much better and deeper understanding of co-morbidities and patient segmentation, which are really important considerations now because they need to design their endpoint strategies and outcomes research accordingly.

Historically, and to some extent driven by regulatory needs, the focus was very much on developing a product for as wide a population as possible for obvious reasons to maximize potential. Now we see a great deal of pushback by payers at that level, and if the industry doesn’t find the right patient segments then payers will do that for them. This is a very important aspect of portfolio IMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

EUROPE | INSIGHTS

management to really understand the ideal patient for the product. Alongside that, companies need to understand what current products are doing in real life so that HEOR goes hand in hand with doing patient registry analyses or other methodologies to drive that insight.

If we consider pre-launch and international coordination of HTA, cost-effectiveness analysis is becoming more important than ever before. Typically in the past, companies would develop their economic model then mostly go local for model adaptations which the affiliates would drive relatively independently. Now they can’t do that because of HTA collaboration and also because of the need, for example in rare diseases, to get sufficient power in the data sources, so international coordination of HEOR is quite important.

Finally, post-launch there is the commitment to deliver actual data on how a product performs in the market – again this needs competencies at the level of outcomes research so setting up prospective observational studies, for example, or linking up to existing registries to pull the data in order to maintain the P&R agreed upon at the regional level. There is a much stronger need for international resources than ever before and for companies to manage their IP throughout the lifecycle.

Q: Why is there so much emphasis on real-world data?

JK: At all levels, it is to prove a company’s claims for innovation. This burden is being clearly put back on pharma and very simply that is why real-world data so important. Much of the projection of that just cannot be pulled out of the clinical regulatory studies. For example, compliance is a very important aspect of many new innovations and should be very relevant to payers, but is rather difficult to collect from protocolized studies. And with the market becoming much more of a business-tobusiness environment with pay-for-performance contracts, the paying partners of pharma want proof of effectiveness and safety in real life. This is an extremely important aspect of the business nowadays and quite a drastic change from the past which was much more about extrapolation based on regulatory studies. Now there is a need to go back to the payers, one, two or three years post-launch with the data.

Q: What are the challenges in collecting real-world data?

JK: One problem we have with real-world data is the lack of guidelines on how to do it. Everyone knows how clinical trials have to be conducted, but there are two issues for real-world data: one is the fact that clinical trials AccessPoint - Issue 1

have been developed to get rid of all the confounding factors and now it seems we are interested in finding out about all those confounders, which can be difficult. The other is that collecting data for prospective observational studies can be time consuming and expensive and in Europe in particular, one of the biggest challenges is in finding the data. You need to have people who are very familiar with healthcare systems at the local level with the experience and expertise to find the right sources of information. This is a big challenge for the industry to navigate through the real-world data sources.

Q: What are the implications for outcomes research?

JK: Many markets are now becoming mature and new products are having to fight for a position and the only way they can do that is to get into more specialized positions in the market, for example, by not only addressing the main disease but also its co-morbidities.

The other element is understanding that the data needs of increasingly powerful payers are concerned with knowing what a product is doing in real life, and that insight can only be obtained by doing observational studies. Patient empowerment is also an important aspect. Yet another inroad into real world data is getting a better understanding of patients and addressing patient needs so patient reported outcomes become more important. If you put all of this together, you will understand that your typical protocolized clinical trial will not answer all the questions of other stakeholders who have become much more important in the market.

Q: How is HEOR evolving in emerging markets?

JK: The typical cycle for emerging markets is that their economies are expanding quite dramatically, there is a population of people with the means to pay for healthcare, new higher priced technologies come onto the landscape and when these markets evolve even further and start to encounter the same sorts of issues that developed countries have experienced in the past.We see countries like Korea, for example, trying to learn from the success and failures of say Western European markets.

So the emerging countries are following a much more expedited process of adoption of HTA and HEOR which cuts short of our learning curve there. We see a similar pattern in their willingness to adopt biogenerics far more quickly than has been the case in Europe and the U.S. •

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INSIGHTS | EMERGING MARKETS: CEE

The emerging pharmaceutical markets of Central and Eastern Europe have their own unique characteristics but share the goal of improving access to healthcare against a backdrop of rising costs. With a lens on Russia, Romania and Ukraine, each at very different stages of evolution, we consider how important changes and a growing need for evidence-based decision support are opening up new opportunities for health economics and outcomes research.

The authors Yevgeniy Samyshkin, MSC is Engagement Manager HEOR; Paula T存ele, MD, MPH, MSC is Consultant HEOR; and Wioletta Kotowa, MD is Senior Consultant HEOR, all at IMS Health.

YSamyshkin@uk.imshealth.com PTele@uk.imshealth.com WKotowa@de.imshealth.com

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Moves to HTA in Central & Eastern Europe RUSSIAN FEDERATION: INVESTING IN HEALTH In Russia, investment in healthcare is considered a longterm national priority as a means of reducing mortality rates and increasing life expectancy. A program of measures for the next ten years has recently been outlined in the Concept of Healthcare Development 2020.

Vast market, complex system Before examining these measures in more detail, it is important to bear in mind the vast and expanding scale of the Russian healthcare market. Government health expenditures per capita reached US$590 in 2010 compared to around US$360 in 2005 (at exchange rate).

And their continued growth is anticipated: estimates from the Federal Ministry of Health and Social Development suggest rates of US$1,400 in 2017 climbing to US$1,800 by 2020 (Figure 1).

Healthcare in the Russian Federation is a complex multitier system, combining federal and regional programs financed through a mixture of general tax, mandatory health insurance contributions, voluntary insurance, and formal and informal contributions from private patients.

The financing and organization of the nation’s healthcare service mirrors the tiered government administration and budgetary system at the federal, regional and municipal levels. Federal financing tends to support tertiary service development, and provision of high-cost treatments and diagnostic procedures through financing of federal facilities and targeted programs.

To date, the major single systemic change in the Russian healthcare system has been the establishment of the Mandatory Health Insurance (MHI) system in 1993, with federal funding of health services to allow more flexible resource allocation mechanisms. Its creation has enabled the government to experiment with such key concepts as the purchaser-provider split; contracting of private insurance companies to administer health insurance reimbursement; the increasing use of healthcare information for planning and management purposes; and ultimately moving away from the budgeting of healthcare providers to volumebased contracting of services. Federally, priority is given to the development of high-tech services, with investment in regional tertiary service centers to strengthen such areas as cardiac surgery, endocrinology, prosthetic medicine, neurosurgery, transplantation, and reproductive medicine.

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Over the last decade, the federal government has implemented and tested a range of programs and national projects to improve the healthcare system and increase patient access to essential pharmaceuticals. Among the most well-known is the DLO (2005), a supplemental out-patient pharmaceutical benefits program designed to increase access to pharmaceuticals for defined population groups and provide high-cost drugs for rare diseases and for use in transplantation medicine.

New initiatives More recently, a new system of Mandatory Pharmaceutical Insurance has been under discussion in Russia. First conceptualized in 2008 by the Federal Mandatory Health Insurance Fund, this was originally intended for implementation in 2010. However, these plans have now been postponed, pending government attempts to regulate the market and develop mechanisms to ensure sustainability of the pharmaceutical insurance package.

System-level changes to continue A number of system-level changes can be expected in Russia in the coming years including: • Greater move towards a single-channel health financing system with MHI as the single payer.

• Transformation of the pharmaceutical landscape led by stronger emphasis on cost-containment and the use of pharmacoeconomics in reimbursement decisions.

Provision for universal pharmaceutical insurance is also on the healthcare agenda.

• Specific regulatory and economic measures to curb further cost growth and maximize health improvement, focusing on pricing policies, the greater use of guidelines, the introduction of patient copayments and controls to ensure appropriate prescribing by doctors.

The main vehicle for these changes would be the MHI system. Given the scale of the Russian economy and the complexity of its socio-economic environment, the government has a major challenge ahead in terms of implementation but one that brings the promise of continued improvements in healthcare delivery. Certainly, advances in modern technologies, coupled with the developments in Russia’s healthcare system over the last decade, are increasing awareness of the role of Page 19

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pharmacoeconomics and outcomes studies in supporting decisions on the impact and rational use of health innovations in the country.

FIGURE 1: PROJECTED HEALTHCARE EXPENDITURE PER CAPITA IN RUSSIA Healthcare expenditures per capita 2010-2020

$2,000

USD per capita

Russian government health expenditures per capita reached US$590 in 2010 compared to around US$360 in 2005 (at exchange rate) and their continued growth is anticipated.

$1,000

Pharmaceuticals

$1,600

National project health Federal health facilities

$1,400

Regional and municipal health budgets

$1,200

Mandatory health insurance

$1,000 $800 $600 $400 $200 $0 2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Source: Ministry of Health and Social Development 2009-10

ROMANIA: REACHING OUT TO HEALTH ECONOMICS After a promising period of economic growth following its integration into the EU in 2007, Romania has felt the impact of the global financial crisis more keenly than most countries in the last two years. Ever shrinking budgets have seen government strategies progressively more focused on managing costs, significantly impacting the price of medicines and intensifying the pressure on market access. Successive governments have now tried nearly every type of cost-containment measure that has ever been introduced elsewhere in Europe.

In April 2009, Romania’s status as the lowest priced pharmaceutical market in Europe was consolidated by the introduction of international reference pricing rules. Currently, therapeutic reference pricing applies to products reimbursed at 50% and 90% but this is due to be extended to products proposed for 100% reimbursement. The budget for fully reimbursable products in the national program for chronic diseases has come under particular scrutiny in recent months, resulting in methods for cost/volume agreements and stricter reimbursement criteria from October 2010. Medicines in this list account for a significant share of the pharmaceutical market, with many higher price products included. This measure will be accompanied by the introduction of therapy guidelines.

The positive reimbursement list is the main means of controlling prescribing in Romania, with clear stipulations on the reimbursement level and conditions of use for each drug. Product inclusion will continue to be the primary driver of prescribing in the country and as such is a critical goal for manufacturers launching new pharmaceutical technologies.

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EMERGING MARKETS: CEE | INSIGHTS Moves to HTA in Central & Eastern Europe New role for HTA Although evidence-based, economic evaluations of new therapies are now widely used for reimbursement decisions across Europe, in Romania a national HTA initiative has only recently been introduced - despite a long-recognized need for one. Under a Government Ordinance in March 2008, primarily as a move towards harmonization under EU pharmaceutical policy, health economics data was made pre-requisite for drugs introduced on the reimbursement lists.

Notwithstanding this important advance, it remains unclear how these data will be used given the absence of Romanian guidelines on conducting pharmacoeconomic analyses. Thus far, the decision making process has been based mainly on studies undertaken in Western Europe, overlooking critical issues in the transferability of health economics results from one country to another and the consequences of such a practice.

Lack of data a key challenge More recently, under the pressure of the current government regulations, pharmaceutical companies have come to appreciate the importance of determining and demonstrating the value of their products specifically in the Romanian market, using Romanian data, understanding that a key requirement in showing costeffectiveness and ‘value for money’ is to address countryspecific willingness-to-pay.

However, lack of transparency in the market is an issue, and there is growing recognition that the biggest challenge for health economics and outcomes research is finding the necessary data. In-depth, on-the-ground knowledge, the ability to retrieve relevant cost, clinical and epidemiological information across therapy areas, and appropriately validate the results with local experts will be key to the successful development of rigorous and relevant value propositions in Romania.

UKRAINE: HARD HIT BUT RECOVERING Also hard hit by the global financial crisis, the Ukraine economy is now showing signs of recovery, with GDP increasing by 4% in 2010 according to official statistics1.

However, healthcare remains severely under-funded, with expenditure accounting for less than 4% of GDP – widely accepted to be inadequate. Patients are responsible for more than a third of total healthcare spend, but private healthcare remains out of financial reach for most of the population.

The potential for some form of public health insurance AccessPoint - Issue 1

system in Ukraine has been discussed and explored for a number of years. Various proposals have been drafted but to date these have proved too cost-prohibitive to implement. More recently, under the new government, the issue of healthcare reform has taken on greater importance and first steps have been taken with the introduction of municipal sickness funds in a number of regions in Ukraine. These have yet to reach the capital but are indicative of some progress being made.

As patients bear the brunt of total healthcare costs in Ukraine, via out-of-pocket payments, purchasing power in the country remains extremely low.There is no system of national price regulation for pharmaceuticals, the main control being maximum retail surcharges for pharmaceuticals and medical devices. However, these cover only 16% of all products registered.

Strong emphasis on generic medicines Not surprisingly, given the lack of a reimbursement system and high level of patient out-of-pocket pay for medicines, 80% of the Ukraine pharmaceutical market consists of generic products.The reliance on inexpensive drugs and branded generics supports a strong local pharmaceutical industry, which produces just under half of all medicines sold in the country. The emphasis is on cardiovascular medicines, analgesics, vitamins, drugs for respiratory disease and blood system disorders, gastrointestinal medicines, and antibiotics.

Acknowledged deficiencies Problems with the availability of medical services and medicines in Ukraine have recently become more pronounced. The state is unable to provide sufficient resources for guaranteeing accessible, quality treatment, there are acknowledged inefficiencies in the existing public health system, and a fall in indicators of health coupled with an adverse demographic situation clearly point to the need for major change. The fact that the state should better control medical services is widely accepted2.

The search for additional sources of financing of public health services has been discussed in the context of a potential tax to be added to the price of medicines. Equally, the introduction of obligatory medical insurance in Ukraine would enable the provision of healthcare services across the population while providing the state with an essential stream of revenue for compensation of treatment costs. It would also allow some control to be exercised over the efficiency and expediency of medical prescribing.Those who are in favor of introducing obligatory social medical insurance, hope that the increased financial resources would Page 21

INSIGHTS || EMERGING ANALYSIS EMERGING MARKETS: MARKETS CEE ...continued from previous page

be efficiently used under the control of the state.

Trialing drug reimbursement As a first step towards transitioning from state purchases of medicines to a compensation system for out-patient drugs in Ukraine, a pilot project was planned by the Public service of the Ministry of Health in 2009, focusing on the reimbursement of insulin for diabetes patients. However, the Public service was disbanded and all works were subsequently suspended. Nevertheless, the experience of this pilot project could prove useful in the future for the development of a reimbursement system covering all groups of vitally important medicines3.

By drawing on the experience of Western Europe, Ukraine can and should construct as soon as possible an effective model of public health services based on the Law of Obligatory Social Medical Insurance and its provision of free medical care to all citizens. Adoption of such a law would be a significant turning point for reform of the system, paving the way for the funding of medical services and introduction of HTA in the country.

Moves towards HTA Although the term Health Technology Assessment (HTA) is still new to Ukraine, there has been growing interest in this type of evaluation and its role in pricing and reimbursement. Indeed, HTA has been the subject of several national and international conferences and forums in the country over the last few years4.

Attended by senior figures, including members of Ukraine’s Ministry of Health, these signal growing recognition of the importance of HTA and an eagerness to learn more about the pricing and reimbursement models existing in different European countries.

Particular emphasis has been placed on the independence of HTA institutions, empowering them with advisory or regulating functions with delegation of the right of decision making. This principle of independence and objectivity in the system is currently broken in Ukraine: the Official committee is part of the State pharmacological center of the Ministry of Health, the body responsible for the State registration of medicines, giving rise to problems around the maintenance of official management.

Despite recognition that evaluating health technologies is absolutely necessary for rational use of limited resources in Ukraine, there is also professional realization that HTA will require considerable additional resources and this is likely to be a key issue for its implementation going forward5. • 1 http://www.kmu.gov.ua/control/uk/publish/article?art_id=243697161&cat_id=24 3311332 2 http://tristar.com.ua/1/art/obiazatelnoe_strahovanie__lekarstvo_dlia_meditsiny_13 978.html 3 http://www.expert.ua/articles/16/0/6215/ 4 http://www.apteka.ua/article/43962; http://ipr.adcontext.net/10/09/24/61055; 5 http://tristar.com.ua/1/art/ukraine_nujen_zakon_ob_obiazatelnom_sotsialnom_me ditsinskom_strahovanii_14052.html.

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IMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

| PEOPLE EMERGING EMERGING MARKETS: MARKETS CEE | EXPERTISE

Understanding CEE markets INTRODUCING IMS SPECIALISTS WITH LOCAL EXPERTISE IN THE CEE REGION Lusine Breitscheidel, MD, MPH Lusine Breitscheidel is a Senior Consultant, Health Economics and Outcomes Research at IMS Health, focusing on pharmacoeconomics and pharmacoepidemiology. With more than 12 years experience in epidemiology and over five years in HEOR she has worked on many national and international projects addressing healthcare issues in the EU, as well as South Caucasus, the Republics of Armenia, Georgia and Azerbaijan, and Russia. Lusine holds an MD from the University of Munich and an MPH from the State University of New York.

Lyudmila (Mila) Gorokhovich, MSC Lyudmila Gorokhovich is an Analyst, Health Economics and Outcomes Research, at IMS Health, with expertise in cost-effectiveness evaluations and comparative health system data analysis. She has worked with public healthcare payers to help determine best practice in health system performance, financing and reform, and developed analyses to support healthcare customers with commissioning decisions. A native of Ukraine, Mila holds a Masters in International Health Policy and Health Economics from London School of Economics and a degree in Economics and Human Rights from Columbia University.

Wioletta Kotowa, MD Wioletta Kotowa is a Senior Consultant, Health Economics and Outcomes Research at IMS Health, with responsibility for developing value dossiers, HTAs and health economic evaluations. Formerly a physician, lecturer and researcher at the Medical University in Charkow, Ukraine, she brings extensive expertise across a range of medical indications, pharmaceuticals and medical devices as well as industry experience in Phase IV studies. Wioletta holds an MD from the Medical High School (now Medical University) of Charkow, Ukraine.

Yevgeniy Samyshkin, MSC Yevgeniy Samyshkin is an Engagement Manager, Health Economics and Outcomes Research at IMS Health focusing on pharmacoeconomic modeling and reimbursement submissions. He has worked in Central Asia, designing and implementing national reimbursement systems for hospitals, and as an independent consultant in health policy and financing for the World Bank, Asian Development Bank, WHO and USAID. Yevgeniy holds an MSc in Health Management and Economics from Imperial College Business School, London and a first degree in Science from Tomsk University, Russia.

Margarita Shlaen, MPH Margarita Shlaen is a Consultant, Health Economics and Outcomes Research at IMS Health, with expertise in public health, data management, statistical analysis of health economics studies and evaluation of epidemiological data. Her experience includes the management and evaluation of population-based prophylactic and vaccination programs in St. Petersburg, Russia. Margarita holds a Masters in Public Health from the Ludwig-Maximilian University, Munich and a Science degree from St. Petersburg University School of Epidemiology & Public Health, Russia.

Paula T存ele, MD, MPH, MSC Paula is a Consultant, Health Economics and Outcomes Research at IMS Health. Formerly with the European Medicines Agency, she has in-depth knowledge of healthcare systems in CEE, gained in roles as Assistant Professor in Public Health at the Carol Davila University of Medicine in Bucharest, an adviser for the Romanian National Health Insurance Fund, and a health economics specialist at Solvay in Romania. Paula holds an MD from the University of Medicine in Bucharest, an MSc in Health Policy, Economics and Management from Maastricht University and a Health Outcomes Research Diploma from the Vienna School of Clinical Research.

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INSIGHTS| IMS SYMPOSIUM

Leap-frogging to evidence-based value in the Asia Pacific An IMS Symposium at the ISPOR 4th Asia Pacific Conference considered lessons, models and innovative solutions to facilitate market access in Asia.

The speakers Abdulkadir Keskinaslan, MD, MBA, MPH is Market Pricing Director for Asia Pacific Region, Novartis Pharma AG Annie Chicoye, PHD is Development VP, Health Management Institute, ESSEC SantĂŠ Business School France-Singapore Mandy Chui, MBA is Regional Practice Leader, Pricing & Market Access, Asia Pacific, IMS Health MChui@cn.imshealth.com Jonothan Tierce, CPHIL is Global Manager and Center of Excellence Leader, Global Health Economics and Outcomes Research at IMS Health.

JTierce@us.imshealth.com

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The emerging markets of the Asia Pacific present both challenge and potential for healthcare improvement, as well as the deployment of innovative medical technologies. Growing quickly and changing fast, their drive to extend basic healthcare coverage to large underserved populations must be balanced against the need to manage escalating costs, achieve quality improvements across all patient segments and accommodate spurring innovation in medical technologies. In determining the best approach to these issues and achieving greater value from the money they spend on healthcare, there is a chance for these markets to gain ground from the lessons of Europe in managing the adoption of advances in care and controlling further cost growth. At the same time, as local and multinational manufacturers look to engage decision makers in these markets, there are also opportunities for new business models and innovative solutions to facilitate the move towards more cost-effective, value-driven care.

STRONG GROWTH, BUT TESTING TIMES With a rapidly ageing population, growing middle class, and significant shifts in the pattern of disease that will see chronic conditions at the forefront of medical need by 2030, the emerging markets of Asia present significant opportunities for healthcare growth and expansion. For governments, however, this simply heightens the dilemma of poor healthcare infrastructure, low accessibility to quality treatment, rising demand for innovative products, and limited funding for the healthcare needs of an expanding population. How to strike the balance between broadening access, adopting new technologies and encouraging further (high-priced) innovation is now a defining challenge in these markets.

Against this background there are already signs of major change and development, including ambitious programs for healthcare reform and the establishment of new health insurance programs – China alone is investing 125 billion dollars in the next three years to broaden the access of medicine with a commitment to expand health insurance coverage to 90% of its population by 2011.

Most of the emerging Asia Pacific markets have already IMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

IMS SYMPOSIUM | INSIGHTS

begun imposing various kinds of cost-containment measures, including sweeping price cuts (e.g. Philippines, Korea), the use of DRGs and compulsory licensing (e.g.

Thailand), international reference pricing (e.g. Korea, Taiwan), patient co-payments (e.g. Philippines, China, Thailand) and greater encouragement of generic substitution (e.g. Korea, Thailand, China) – all primarily with a focus on short-term control of drug expenditure (Figure 1).

Some countries, such as the reimbursed markets of Korea and Taiwan, have now begun to take a longer-term view of cost-containment, with the adoption of some form of Health Technology Assessment (HTA) as a way of Measures

China

Thailand

Philippines

Korea

Taiwan

Price cut International reference pricing Patient co-payment Generic substitution Hospital budget capping Selective reimbursement Prescription restrictions HTA Low

High

FIGURE 1: VARIOUS COST CONTAINMENT MEASURES ARE EMERGING IN ASIA PACIFIC MARKETS

optimally utilizing their healthcare resources and at the same time provide more channels for providing innovative product access into the market. Elsewhere, in the semi-reimbursed markets (e.g.China, Thailand) or those dominated by out-of-pocket payment (e.g.Philippines, Indonesia), they are still learning about this system and it has not yet been put into practice.There is clearly conceptual acceptance of HTA as a way to look at cost-effectiveness, and an increased willingness to pursue this approach, but shortage of talent and the right resources is currently a major barrier. This lack of real ability to take the critical next step reflects not only a dearth of pre-requisite skills, but also, importantly, a paucity of data – both local, clinical and cost-effectiveness – and overcoming this will be key to the adoption of HTA in formal review processes in these markets.

OPPORTUNITIES TO LEARN FROM EUROPE As governments in Asia struggle to find the balance between access to medicine and rewarding innovation, we can see in the drug/new technology management systems

AccessPoint - Issue 1

of France, the UK and Germany, some key lessons that may help in determining the best approach in the emerging markets of the Asia-Pacific. These European regulators have been creative with cost-containment tools and support for national industry (Figure 2), but the results have not always been in line with expectations. Their experience shows that HTA had to be progressively integrated into these measures to improve the efficiencies of health expenditure regulations.

Price Control: France In France, prices for reimbursable drugs have been fixed by the government since 1948, but for more than three decades this proved insufficient to control expenditures or sufficiently reward true innovation: few drugs were selected for reimbursement; volumes were high to compensate low prices; price competition was nonexistent; and there was consequently no sensitivity to the costs of drugs. The result was double-digit growth in pharmaceutical expenditures over a number of years.

Efficiency made its way into the system in 1980, when relative clinical effectiveness was adapted and became the anchor for fixing the price of new medications. Even then, it took almost 20 years to improve volume control in collaboration with the pharmaceutical industry. In the meantime, additional measures were required to improve the rationality of prescriptions – including fixed pharma budgets and generic substitution. Finally, growth in expenditure has fallen - from 7% in 2000 to 2.8% in 2009 - enabling access to innovative drugs with a relatively short delay at international prices, because innovation is truly well-selected.

Profit Control: UK The UK system was built around the principle of profit control via the Pharmaceutical Price Regulation Scheme (PPRS) adopted in 1957. Although not primarily Patient co-payments International reference pricing Therapy pricing

Generic prescriptions

Generic substitutions by pharmacists

…and HTA had to be introduced into the picture

Promotional limitations Prescription budgets

HTA Profit controls Price controls Industry (R&D production, exports)

Prescription guidelines Relative clinical effectiveness Costeffectiveness

Selective reimbursement Risk-sharing agreements

FIGURE 2: GOVERNMENTS IN EUROPE HAVE BEEN CREATIVE WITH APPROACHES TO COST CONTROL

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INSIGHTS| IMS SYMPOSIUM

designed to control prices, but rather to promote a strong and profitable pharma industry, in practice the system exists at a global level to control the return on capital employed (ROC). The result has been a productive UK pharmaceutical industry in terms of global NCEs developed, but one with a very low share of the global market. Indeed, the Office of Fair Trading famously criticized the PPRS for failing to foster value-for-money decisions, particularly in relation to across-the-board price cuts that were not in relation to value.This has since been integrated to some extent into the new PPRS and it is value-based pricing which is the ground for risksharing agreements or rebates to the NHS. It was the failure of the PPRS to make the best use of the limited resources allocated to the NHS which ultimately led to the establishment of NICE (National Institute for Health and Clinical Excellence) in 1999, as a guiding body to ensure equal access, promote innovation and achieve the best use of resources, independently of the PPRS. Would a PPRS be relevant in Asia Pacific countries?

While there may be a connection between the regulation of pharmaceutical expenditures and the attractiveness of a country in terms of pharma investments, the example of the UK is worthy of a cautious note: If HTA is not carefully introduced, it may convey aggressive pricing and restrict access to care – an issue which has proved to have serious consequences in the UK market, as witnessed by the outcry following restrictions on access to oncology drugs.

Capped Budgets and Reference Pricing: Germany The German government has also been keen to promote free pricing and a strong pharmaceutical industry but faced with the need to contain escalating costs introduced two innovations: Firstly, limited budgets for prescribing, with penalties for exceeding targets. In practice, this policy had painful repercussions, encouraging referrals from office-based practices to hospitals to avoid the costs for prescriptions.

The lessons to be learned here are that prescribing budgets have to be very carefully managed. More importantly, is the need to negotiate with physicians and impose good clinical practices before limiting budgets in order not to harm the quality of care. And defining good clinical or medical practice relies, of course, largely on HTA. A second innovation from Germany is therapeutic pricing, where prices for reimbursed drugs remain free, but products with the same ingredient or therapeutic effect are clustered together and a unique tariff set for reimbursement. Should a company not align the price, Page 26

the patient must pay the difference; and if alternatives are available, doctors are encouraged to prescribe them. The result is that companies invariably do align their prices to the tariff, otherwise running the risk of losing market share very quickly.

While this is thus a very rapid and effective tool for reducing prices, it does have drawbacks: Not all drugs can be clustered; litigations can arise if the comparable therapeutic effect is not grounded on a solid health technology process; and it does mean that companies tend to charge more for non-clustered products to compensate for lower prices on referenced products.

KEY TAKEAWAYS Experience in Europe has shown that cost-containment measures must address the whole picture and not only prices or profit. Dialogue between the industry and decision makers is a key to finding solutions that go beyond strict, short-term price control. HTA has to be introduced in the decision process, not only to select pharmaceuticals for reimbursement or eventually medical devices, but also to support the rational behavior of all the stakeholders. And while the role of HTA in the decision making process may vary from one country to another, all stakeholders must be clear that it has to be based on appropriate expertise and data.

NEW MODELS OF ENGAGEMENT Against this background of change and challenge in the increasingly cost-sensitive landscape of the Asia Pacific, companies looking to engage with local decision makers are already taking innovative approaches to the market, that have them partnering with other stakeholders, such as payers, governments and providers, to offer key medical technologies while accepting some of the cost risk. Some examples of the contracting and patient access schemes that are emerging in these markets are discussed below.

APPROACHES TO CONTRACTING The growing difficulty of obtaining reimbursement for high-priced innovative drugs in the Asia Pacific has seen more companies willing to enter into programs built around the concept of value-based pricing, based on the principle of risk-sharing to improve a product’s costeffectiveness. They are a way of facilitating equitable access to effective care and enabling HTA bodies to recommend treatments that they would otherwise deem not cost-effective.

These innovative approaches to contracting, which include consideration of pricing, can be financial-based, involving a price/volume agreement; outcomes-based, involving some form of money-back guarantee; or riskIMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

IMS SYMPOSIUM | INSIGHTS

based, with reimbursement linked to value and level of risk. Risk-based pricing models are extensively used in Australia where patient segments or indications are placed into different risk segments.

Certain sub-categories of financial models involve capped pricing at the patient or population level. In self-pay markets, there are also examples at the willingness-to-pay or affordability level, whereby companies provide incremental discount based on patient compliance. These may involve such elements as an upfront discount, additional services, free diagnostic tests, etc. In the affordability model, there are examples of where companies try to address the ability to pay and charge accordingly.

Examples in Asia Pacific Some recent approaches to innovative contracting and market access schemes in Asia are shown in Figure 3. In China, high-price products are identified for face-to-face negotiations; Patient Assistance Programs (PAPs) are possible but involve a significant price cut. In the Philippines and Indonesia, there are many differential price contracting programs in line with the development of insurance schemes. These cover partially the lowest income level of the population or some of the insurance schemes for governmental workers. Korea, Taiwan and partially Thailand are working on developing guidelines.

There are also many examples of PAPs in the Philippines,

China

• High price products are identified for a special face-to-face negotiation • So far PAPs are possible but punished with significant price cut

Korea

• Special agreement is doable; paying copayment, post reimbursement scope PAP • Guidelines under development

Hong Kong

• Discount for reimbursed drugs • Special agreements done for priority diseases or when there is a special funding available

Taiwan

Philippines

Indonesia

India

• Considering developing a review guideline with growing number of proposals • Discounting is effectively used • Special brand for DoH sales • Effective use of most self pay models like: loyalty cards, differential pricing

including the KAAGAPAY program from Novartis and the GIPAP affordability-based model, with third party assessment of patient ability to pay and provision of additional patient support.

Guiding criteria For countries struggling with the development of guidelines to determine whether a product is suitable for innovative contracting or risk-sharing deals, it is worth a closer look at the six very simple criteria adopted by the Pharmaceutical Benefits Advisory Committee (PCAB) in Australia: 1. Significance of disease 2. Degree of incremental benefit conferred 3. Unique characteristics compared to available alternatives 4. Effective price is consistent with price recommended as acceptably cost-effective 5. Significant financial benefit to payer 6. International reference to effective price SUMMARY Overall, we can see that the emerging countries of the Asia Pacific region present challenge along with the exceptional opportunity to participate in these markets.

Understanding their healthcare challenges is a prerequisite for being successful, but it also implies a role in helping to evolve the healthcare structures and systems that are needed to address the conflicting problem of broad market access to quality healthcare while managing the costs of providing that care. Governments and other healthcare decision makers can draw the lessons from the years of managing healthcare growth and costs in Europe, but perhaps can leap-frog more quickly to something beneficial to all stakeholders.

Manufacturers are already beginning to develop sometimes innovative partnering relationships with stakeholders in the region. As they evolve over the coming years, these relationships may help to define a uniquely Asia Pacific model of healthcare delivery. •

• Special brands for ASKES and JAMKESMAS • Differential pricing and discounts • Testing environment for almost all consumer pricing models: assistance programs, loyalty cards, insurance • Discounts to institutional business

Thailand

• Patient Assistance Programs - GIPAP • High price products are identified for a special reimbursement supplement

Australia

• Special pricing agreements is a growing trend for listing • Since 2008 details of the pricing agreements were not posted

FIGURE 3: TRENDS IN INNOVATIVE CONTRACTING AND PATIENT ACCESS PROGRAMS IN ASIA PACIFIC

AccessPoint - Issue 1

IMS Symposium, Opportunities and Challenges in the Emerging Markets of Asia: Implications for Pricing, Market Access and Health Economics and Outcomes Research, held during ISPOR 4th Asia Pacific Conference, Phuket, Thailand, 5-7 September 2010.

To request a copy of the full proceedings please email aboucsein@de.imshealth.com

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INSIGHTS | MARKET ACCESS

As decentralization of decision making continues to evolve across Europe, it is clear that while payers are developing more independent ways of working, there is also evidence of increased co-operation and converging management philosophies.

Pharmaceutical companies must understand and address these apparently contradictory trends, and tailor their organizational approaches and performance management tools accordingly.

The author Jon Resnick, MBA, is VP and Practice Leader, Pricing & Market Access at IMS Health.

JResnick@imshealth.com

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IMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

MARKET ACCESS | INSIGHTS

Optimizing market access in an increasingly decentralized landscape DIVERGENCE AND CONVERGENCE? In the evolving pricing and market access (P&MA) landscape in Europe, the seemingly opposing forces of divergence and convergence are starting to operate in tandem.

On the one hand, there are signs of diverging decision making through increased decentralization. Payers with previously similar approaches are developing more independent ways of working; at the same time, the universe of stakeholders is rapidly expanding. The UK, for example, in addition to NICE, now has 6-8 relatively active HTAs; in France, regional agencies (ARS) are already ‘operational’; and the influence of ‘quasi-HTAs’ is fast gaining ground in Spain and Italy.

On the other hand, there are signs of converging approaches: payers are no longer individuals working in isolation, but networks of competent bodies, sharing best practices and consolidating activities, as evidenced by:

• Merging of health insurance funds (Krankenkasse) in Germany • Inter-regional hospital product assessments by Grupo Genesis in Spain • UK Primary Care Trust (PCT) alliances for sub-regional access decision making • Centralized purchasing through price-sharing at the sub-national level, e.g.in Italy (inter-regional) and Spain (intra-regional) MANAGING THROUGH THE COMPLEXITY Although the industry has long been responding to the challenges of decentralization, the complexity and fragmentation of markets continue to defy successful P&MA execution. Understanding the best approach to managing the local complexity, while balancing the need for central control and local autonomy, is key.

Companies have been experimenting with a wide range of very different solutions. Despite these differences, a core set of elements is common across all approaches (Figure 1).

FIGURE 1: CORE APPROACHES TO MANAGING IN A DECENTRALIZED ENVIRONMENT • Clear direction for local affiliates Vision and strategy

Organization Six core elements of approaches to managing in a decentralized environment

• Alignment of organization to support payer-related activities • Risk of sub-optimizing P&MA in broader commercial reorganizations

Capabilities and resources

• Many organizations are increasing their P&MA resources • Customer-facing roles are using more strategic, relationship-minded skills

Processes and roles

Customer focus

Objectives and measurement Source: IMS Consulting

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• Some set high aspiration without articulating a strategy to achieve it

• HQ and affiliates are formalizing roles, trying to strike appropriate balance • Affiliates have prioritized payers but struggle with allocating resources based on priorities • Shared objectives and performance measures align the organization around payer goals • Market access key performance indicators can increase transparency of market-level activity for senior managers

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INSIGHTS | MARKET ACCESS ...continued from previous page

Companies must take time to understand the sub-national dynamics, allocating resources on the basis of prioritized stakeholders.

ITALY IN FOCUS To better understand the relative effectiveness of various company strategies, the Italian market is worthy of closer attention. Here, the rate and impact of change (Figure 2) have triggered a range of approaches, each yielding markedly different results. An IMS analysis of market access performance for new products launched across selected Italian regions from Jan 08-June 09, reveals several key insights: • Time to formulary access: Average time to regional formulary listing was around eight months from AIFA approval, although 20% of approved products were not included on any of the regional formularies. However, this finding masks significant differences across regions.

• Regional ability to manage market access: Differences in listing times reflect various regional and company issues in managing market access. Factors such as size, market potential, utilization management and willingness to engage manufacturers all play a role in a region’s ability to manage market access and budgets. All regions had substantially overspent their hospital budget (set nationally at 2.4% of total healthcare spending) – ranging from Calabria (132.5%) to Lazio (221.0%).

FIGURE 2: EUROPEAN DECENTRALIZATION COUNTRY DYNAMICS High/Medium

High/Low

Impact of Change

• ARS increasingly influential over time • Role and remit uncertain • Changes are taking time to come into effect

Medium/Medium

Medium/Low

High/High

• HTA proliferation increasing the regional access hurdle • Legislative changes empowering regions • Information sharing

• HTA proliferation but national level changes may supersede sub-national HTA • Consolidation of local (PCT) resources to create joined

Medium/High

Low/Medium

• Consolidation of the krankenkassen • Ever increasing appetite for aggressive contracting at the sub-national level

Low/High

• HTA proliferation increasing the regional access hurdle • Information sharing

Low/Low

Rate of Change

Managing and measuring market access Companies with the greatest alignment between market access goals and payer capabilities/potential are able to allocate resources most efficiently. However, there is little correlation between market access inputs (e.g.investment in resources and infrastructure) and outcomes (e.g.actual sales post-launch compared with pre-launch forecasts). In practice, some companies are significantly outspending their rivals without gaining quantifiable improvements in market access.

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IMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

MARKET ACCESS | INSIGHTS Optimizing market access Part of the issue concerns the assessment of performance – while most companies still use sales data as a key performance indicator (KPI) for access success, this fails to uncover drivers of under- or over-performance. For example, low uptake in a region may be the result of poor formulary listing.

Key takeaways from Italy Several learnings can be drawn from the Italian experience: • Vision and strategy: Successful companies leverage a good understanding of the regional system to prioritize/secure access through an integrated provider and payer strategy.

• Organization: Italian local affiliates use different organization models but this does not seem to differentiate performance. Affiliates appear to separate market access activities focused on national stakeholders from those focused at the sub-national level, without linking the sub-national market access unit to the business unit. These mini-silos decrease the ability to integrate pull-through efforts with access status.

• Capabilities and resources: Precise approaches vary by company portfolio and setting of care.

However, Italian affiliates usually identify 3-5 regional account managers and 8-15 key account managers at sub-regional level. The best performing companies deploy resources by the potential and opportunity/challenge trade-off of the regions and sub-regions.

• Processes, roles, and responsibilities: Italy experiences an unusually high level of market interventions from national, regional (and local) authorities. Successful companies have clear processes (including customer relationships) for gathering market intelligence, forecasting implications and reallocating resources.

• Customer focus: The relative importance of stakeholders depends on their decision making influence and impact on prescribing. A key distinction between formal and informal influence requires a deep understanding to leverage: • Successful companies target the most important stakeholders in regions with the most ability to influence prescriber usage, and allocate resources appropriately.

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• Several organizations over-invest in market access resources in some regions and may be spending unnecessarily in those where access is less important.

• Objectives and measurement: The exclusive use of sales-based KPIs to measure market access success makes it difficult to differentiate regional performance. The strategic use of market accessbased KPIs could help to capture company performance more accurately in the context of regional market characteristics (e.g., ease of entry, commercial opportunity) rather than against an absolute measure of sales: • At the product or portfolio level, appropriate metrics can include time to market, formulary penetration and extent of population covered.

• Companies should track their own performance against plan to assess success, and against competitors to ensure they have accurate expectations and are not at a competitive disadvantage.

BROADER IMPLICATIONS Although decentralized markets bring greater complexity, they also diversify the risk of single-body decision making.

Companies must take time to understand the sub-national dynamics, allocating resources on the basis of prioritized stakeholders. Market access KPIs, tailored to regional specifics, can then help to ensure that markets are optimizing the potential of those products. These concepts are not magic bullets, but they do separate out the high performers. •

“Companies have to completely rethink their consolidated European launch.”

READ OUR INTERVIEW ON REGIONAL TRENDS WITH JACCO KEJA

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INSIGHTS | RISK EVALUATION

Growing, intense and very public scrutiny of pharmaceutical products in the U.S. has fostered a high-pressure, higher-risk environment where development costs are rising and the probability of success has declined. The implications for pharma are considerable but with early, focused contingency planning, companies can prepare for the shifting risk/reward ratio.

The author Jonothan Tierce, CPHIL, is Global Manager and Center of Excellence Leader, Global Health Economics and Outcomes Research at IMS Health.

JTierce@us.imshealth.com

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RISK EVALUATION | INSIGHTS

The Shifting Risk/Reward Ratio of Drug Development THE IMPACT OF CER Viewed in this light, CER is one more step along a clearly defined path – but one over which manufacturers have very limited control. And therein lies part of its significance. Until recently, most available product information has been owned and released by manufacturers. In the future, in addition to requisite premarketed studies and some company-sponsored Phase IV and/or registry studies, the landscape will be increasingly populated by a new breed of transparent, multistakeholder, publicly-funded or health-plan sponsored studies, designed to provide safety and comparative effectiveness information about manufacturers’ products – all of which creates a landscape dominated by nonproprietary product information to which manufacturers will undoubtedly need to react.

Within the context of CER, it is possible to frame an approach for manufacturers in facing this element of the new environment: 1. In-line products: It will be several years before CER THE BROAD CONTEXT studies are conducted and disseminated on products The creation of the Patient Centered Outcomes Research already on the market. Until then, much information will Institute (PCORI), a non-profit, public-private partnership, be drawn from meta-analyses, since they are relatively to oversee CER has noticeably shifted the post-marketed environment. The instinctive reaction may be to assume easy to conduct. However, once CER is applied, there that CER will be used as a club against manufacturers, but will clearly be winners and losers. this becomes less of a concern when considered in the It could be predicted that products showing only limited broader context of the government’s focus on improved, incremental benefit relative to other branded and generic transparent safety and technology assessment. The U.S. is competitors will find it difficult to maintain formulary grappling with the self-same challenge as every other status and market share. The recent experience with the advanced society: How do you ensure universal access to Enhance study on Vytorin and simvastatin sponsored by quality healthcare while at the same time contain costs? Merck1 suggests that payers are willing to make decisions based on single studies that call into question the cost Thus far, the answer in the U.S. has been to: branded drug over a reasonably good • Increase the requirement for risk evaluation and justification for a 2,3 generic alternative . Equally, there is nothing to prevent mitigation strategies (REMS) products offering significant improvements in clinical • Apply more Black Box Warnings than ever before benefit from taking advantage of this additional • Deny or delay approval for NMEs and new opportunity to demonstrate value in the real-world setting. formulations more often 2. Late-stage products: Products in late-stage • Put vast amounts of post-marketing safety data in the development face the prospect of CER upon entering hands of the pharmacoepidemiological research the market. This is the chance for companies to get out community via the Sentinel Initiative ahead of payer and publicly-funded studies.

• Establish the PCORI to oversee CER priorities and By conducting their own CER evaluations, especially if funding allocation they follow the CER model of transparency and armsIn the U.S., most companies are by now familiar with trends in Risk Evaluation and Mitigation Strategies (REMS), the FDA’s Sentinel Initiative and the comparative effectiveness research (CER) provisions of the Patient Protection and Affordable Care Act. But perhaps not all have yet joined the dots to see the larger theme that is emerging or to appreciate exactly what this means for the clinical and commercial side of their business.

Effectively, the CER provision of the recently enacted U.S. healthcare reform bill, together with the FDA’s Sentinel Initiative and more aggressive approach to approval studies and post-approval monitoring, leave manufacturers with little to no control over the studies conducted and the results that are published on their products after Phase III. The very model for generating evidence on the safety and effectiveness of products is changing, which in turn is shifting the risk/reward ratio for product commercialization. All clinical development decisions should be reflecting this fact.

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INSIGHTS | RISK EVALUATION ...continued from previous page

length oversight, manufacturers can gain a comparative advantage.

Here, the old adage in retrospective studies should be remembered: real-world studies are messy studies. Because of the ‘noise’ in the real-world environment the typical finding in these head-to-head comparisons is non-significance. Certainly, our experience at IMS has shown that in the use of retrospective claims data in post-marketing studies comparing the effectiveness of two worthy competitors, it is very difficult to differentiate one from the other.

Developers and brand managers should start picturing their products in a post-marketing environment where someone else controls the comparative effectiveness and safety information that is made public.

Products with studies producing neutral or negative conclusions will present challenges that must be addressed in their marketing, contracting and pricing.

3. Early-stage products: For companies with products deep in the pipeline there is actually the opportunity to benefit from CER. If they have the foresight and resolve to abandon product concepts that are unlikely to differentiate themselves in postmarketed CER studies, they can concentrate on those advances that move the needle. Companies will disregard products that offer only incremental improvements over existing therapies; they will want to focus on guaranteed hits. This suggests the re-emergence of the blockbuster.

THE IMPACT OF THE SENTINEL INITIATIVE The Sentinel Initiative is set to transform the FDA’s ability to track the safety of marketed drugs, biologics, and medical devices.This new electronic program complements the agency’s current Adverse Event Reporting System (AERS) by testing the signals it generates and scanning the environment for additional, possibly weaker, AE signals. It will be game changing in the number of studies that will be conducted, the number of signals that will be generated, and in the transparency of the process.

Post-marketing surveillance is thus becoming a proactive search for weaker signals – a process that will likely generate many false positives to be validated/invalidated. The axiom in such research is that you rarely find what you are not looking for and invariably find what you are looking for. Since signs of adverse events, whether valid or false positives, may eventually be identified in the public arena, companies clearly need to be on the defensive and prepare for this possibility prior to launch.

HIGHER-SCRUTINY POST-LAUNCH ENVIRONMENT The clear trend is towards subjecting drugs to a new level of scrutiny on their health outcomes, beginning in Phase III and continuing post-marketing - a scrutiny fuelled by adequate central funding and governed by a transparent, public-private partnership model. Ultimately, this high-pressure, higher-risk

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RISK EVALUATION | INSIGHTS Risks and rewards environment will likely: • Reduce the number of drugs reaching the market • Lead to narrower indications • Strengthen safety labeling • Taint promotion, uptake, and access with safety concerns • Increase development costs and diminish probability of success

By conducting their own CER studies of late-stage products, manufacturers can gain a comparative advantage ENSURING SUCCESS To operate successfully in the face of economic comparisons to alternative technologies and safety studies that produce false-positive signals, companies should consider a number of preparatory actions:

4. Plan pre-launch for potential false-positive adverse event signals. This involves benchmarking and understanding class effects, re-examining dose-relative adverse effects, and having the staff and other resources to better understand and manage post-marketing safety concerns.

5. Manage expectations. Too often, companies cling to the results of an early forecasting model, even in the presence of new information about a product’s performance from a Phase III study or simulation models.

Instead, they should re-set expectations to reflect an altered view of reality.

6. For late-stage products, find clear differentiation.

Acceptance and adoption are just as important as measures of success as registration – perhaps more so. To succeed, trials must be designed to address pricing and stratification.

7. Contract aggressively for undifferentiated products.

If a product does not prove to be substantially different from another therapy, companies will need to be clever in their contracting strategy to encourage uptake.

1. Involve HEOR, pharmacoepidemiology and commercial teams in clinical development decisions.

Clinical, commercial, pharmacoeconomic and HEOR teams must work together, starting early in development, to consider relative value as a condition of go/no-go development decisions. This will involve simulating a product’s effectiveness, driving it to fail quickly, if indeed, it is going to fail.

CONCLUSION Changes in the model for developing post-marketed information spell changes in the risk-reward calculus for drug development. Faced with the prospect of CER and increasing levels of safety scrutiny downstream, companies must focus on stronger investment in early commercial risk planning. With the help of health economics and outcomes research and other 2. Apply the CER lens to development decisions. professionals, developers and brand managers should start Companies need to decide which products they are picturing their products in a post-marketing environment going to pursue based on either the results of their own where someone else controls the comparative Phase III head-to-head comparative study or their effectiveness and safety information that is made public. expectations of what will happen when someone else To the extent that they can achieve this, companies can undertakes the study after launch. This requires be positioned to make business decisions that benefit all. • simulation modeling, scenario testing and evaluation of different product profiles to assess the risks.

3. Design Phase III studies with competitive positioning in mind. Phase III studies should be structured to support the company’s primary goal: post-marketing approval. Some products may well lose their commercial attractiveness because they cannot be adequately differentiated in post-marketing, real-world CER studies.

Again, trial simulations can be a relatively inexpensive way of managing the possibilities.

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1

Kastelein JJP and the ENHANCE investigators. Simvastatin with or without ezetimibe in familial hypercholesterolemia. N Eng J Med, 2008, Apr 3; 358 (14): 1431-43. Epub 2008 Mar 30.

2 IMS research 3 There is, of course, controversy about whether Enhance was really a comparative effectiveness study and whether its treatment by Managed Care as a head-to-head comparison between a branded and a generic statin was appropriate. Nonetheless, it suggests that US private payers were willing to make decisions on the perception of such a study.

This is a slightly abridged version of the article that appeared in the July, 2010 issue of PM360.

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As reliance on conclusions from randomized trials gives way to a stronger focus on real-world effectiveness and impact, we consider the growing importance of observational research in providing the missing evidence base for more informed market access decision making.

The author Xavier Badia, MD, MPH, PHD Dr. Xavier Badia is Global Leader Observational Center of Excellence, Senior Principal HEOR at IMS Health in Spain.

XBadia@es.imshealth.com

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OBSERVATIONAL RESEARCH | INSIGHTS

From ideal to real THE GROWING GLOBAL NEED FOR OBSERVATIONAL RESEARCH

OBSERVATIONAL OR EXPERIMENTAL? Many scientists in the field of evidence-based medicine would argue that interventions, whether biological, social or financial, should be assessed according to the strict guidelines and principles of controlled research.

Experimental randomized controlled trials (RCTs) are considered the “gold standard” study methodology for assessing the effectiveness of therapeutic agents1.

However, the controlled environment of experimental design does not allow for the variability associated with routine clinical practice. Nor does it take into consideration the real-life health impact on treatment and care delivery. It has been claimed that for all their wellknown methodological strengths, RCTs cannot meet all our needs as patients, practitioners, managers, and policy makers. Moreover, there are situations where their use is finite, either because of problems derived from their inherent nature or from practical obstacles such as their limited external validity2.

One answer to all the shortcomings of RCTs is observational research (OR) – so called because we simply observe what happens under conditions of normal clinical practice3. Since OR reports only data from real life situations, there are no established interventions affecting the clinical course of a disease and its related outcomes. Used correctly, observational studies enable research on prevalence, incidence, associations, causes, and outcomes. In some cases, they are often the only realistic choice of research methodology, particularly where an experimental design would be impractical or unethical3.

Equally, there are times when observational methods, used with care and rigor, will add and indeed complement the evidence obtained from randomized controlled designs: 1. Large impact: Some interventions have an impact so large (e.g., over an extended duration of time as in HEP-C treatments’ impact on down-stream liver disease; across multiple settings (hospital, convalescent hospital, home care); family/caregiver impacts, etc.) that only observational data are sufficient to show it.

2. Detecting infrequent adverse outcomes: The detection of infrequent adverse outcomes would take much larger randomized controlled trials than are typically conducted. In these cases observational methods, such as post-marketing surveillance of medicines, are the only alternative.

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3. Assessing long-term outcomes: Observational data provide a realistic means of assessing the long-term outcome of interventions beyond the timescale of many trials4.

OBSERVATIONAL STUDIES AND MARKET ACCESS Increasing pressure on healthcare budgets and growing payer scrutiny of medical technologies in relation to potential funding have seen a rise in the demand for observational studies in recent years. They are not only more time-efficient, less costly and more representative of patients in everyday clinical care than RCTs, but also avoid the ethical issue of compromising treatment choice.

As such, they are able to provide critical, relevant, realworld information quickly on the expected economic and clinical impact of a new or existing therapy.

Providing support in five key areas Broadly, observational research can support the provision of information for clinicians and decision makers in five key areas (Figure 1). These include monitoring risk management plans required by regulatory bodies such as the European Medicines Agency and the U.S. Food and Drug Administration and performance agreements among payers and pharmaceutical industry. Increasingly, payers assess patient-reported outcomes as tools to measure the clinical efficacy and cost-effectiveness (i.e. cost per life years gained) of medication in the real-world setting. Observational studies, in their various designs, allow the development, validation, and use of such types of outcomes such as PROs5.

Drug utilization studies linked to MA Innovative agreements Risk-management plans Cost-effectiveness decisions Development and validation of PRO tools to measure patients’ health

FIGURE 1: OBSERVATIONAL RESEARCH PROVIDES SUPPORT IN FIVE KEY AREAS

From Phase III onwards For pharmaceutical manufacturers, the applications of OR are many and considerable, with relevance spanning Page 37

INSIGHTS | OBSERVATIONAL RESEARCH ...continued from previous page

products in Phase 3b, regulatory and post-launch6: not only do they enable a response to regulator and payer questions regarding the use of a drug or medical device in real-life situations – shedding light on such critical issues as resource utilization, health-related quality of life, satisfaction, adherence, persistence and preferences - the outcomes of OR also provide an evidence base for patient profiling, determining costs for patients with particular conditions, fine-tuning or changing product positioning, safety labeling, and updating physician messaging based on study analysis and findings. Figure 2 shows some of the different types of studies that can be used to address these objectives.

Objectives

Globally, the use of real-world data in demonstrating the value of medical technologies is increasingly relevant to reimbursement and market access decision making.

Phase 3 - Reg. phase: Preparing to gain market access

Launch Phases 3b

Observational studies

In-market phase: Sustaining market access

Pre-Reg

Reg

Post-Launch

Launch

In-Market

Epidemiology: Targeting and profiling Burden of disease; Use of resources Development, validation and application of PROs (satisfaction and Qol scales) Patient registry Drug utilization studies

FIGURE 2: OBJECTIVES AND OBSERVATIONAL STUDIES

THE RIGHT DESIGN Observational studies can either be prospective, retrospective, and/or cross-sectional in methodology – each of which has their own particular advantages and disadvantages.

PROSPECTIVE STUDIES: These follow up patients over time, watching

for outcomes – both clinical and cost-related - during the study period and relate these to other factors such as medication used.

Their main advantage is having a design which most resembles experimental studies, enabling comparison among different treatment arms. They are ethically safe, allow the timing and directionality of events to be established, and enable patient eligibility criteria and outcomes to be standardized7.

Conversely, it is important to bear in mind that with prospective study designs there is a greater likelihood of losing patients during the study period, which may affect the findings. They are also expensive and time consuming. Overall, however, particularly when it comes to evaluation of medication postlaunch, these studies often deliver scientifically-sound and valid evidence on clinical efficacy and cost-effectiveness of a product in the market.

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OBSERVATIONAL RESEARCH | INSIGHTS From ideal to real Prospective studies are the preferred design to target and CROSS-SECTIONAL DESIGNS. Cross-sectional studies profile patients when a new drug comes onto the market. encompass a class of research methods involving observation of a total population, or a representative RETROSPECTIVE DESIGNS: These studies have a backward subset, at a defined time. They can be used, for example, focus, examining factors related to healthcare resource use to estimate the prevalence of a disease or treatment or medication use in relation to clinical outcome, clinical characteristics and burden of disease. On the plus side, they and/or cost-related, that is established at the start of the are less-time consuming and less costly than prospective study. In retrospective designs, existing data have usually designs, and importantly, they are ethically safe7. However, been recorded for reasons other than research. In HEOR, they do provide descriptive rather than causal evidence, a retrospective study design uses “chart reviews” as a and are subject to patients’ recall bias7. preferred method to collect the data because the source of information is the medical record. Medical claims, Most often, a cross-sectional study design is linked to a electronic medical records (EMR) and other databases can retrospective chart review. For example, data are obtained also be used when the information sought according to on healthcare resource use and medication use for a sample of patients with a particular condition visiting the objectives of the study is contained in the database. their physicians from their medical records. Data on Broadly speaking, there are three general types of patient-reported outcomes such as productivity and retrospective study: quality of life for instance, are obtained by interviewing 1. Case report these patients when they visit their physician as part of their routine clinical care. (The ability to link claims, chart 2. Case series review and EMR data is still in its infancy, but studies 3. Case-control employing this linking are on the rise.)

While a retrospective study may contain several of the same study-design elements as a prospective study, payers CONCLUSIONS often consider these designs as providing weaker evidence Globally, the use of real-world data in demonstrating the than their prospective counterparts. value of medical technologies is increasingly relevant to Although a retrospective design is usually not adopted reimbursement and market access decision making. when a prospective study is feasible, there are a number Whether prospective, retrospective or cross-sectional, of instances where it is appropriate: observational research has a critical and growing role to 1. First, a well-designed retrospective chart review study play in driving a better understanding of the health may serve as a pilot for a prospective study with the outcomes of medical technologies, facilitating the resulting information used to help the HEOR team focus development of compelling value dossiers and supporting the study question, define the hypothesis, calculate an appropriate product use in everyday clinical care. • appropriate sample size and identify feasibility issues for a prospective study8.

1 Abel U, Koch, A. The Role of Randomization in Clinical Studies: Myths and 2. Secondly, if companies have only limited knowledge of 2 Beliefs. Clin Epidemiol, 1999; 52(6):487-97.

Black, N. Education and Debate: Why We Need Observational Studies to clinical management at the launch of a product, as well as Evaluate the Effectiveness of Healthcare. BMJ 1996; 312:1215-1218 limited resources, a stand-alone retrospective chart review 3Mann, CJ. Observational Research Methods. Research Design II: Cohort, or EMR analysis can provide valuable information on real- Cross-sectional and Case-control Studies. Emerg Med J, 2003;20:54-60 doi:10.1136/emj.20.1.54 world practice that will be used to complement the data 4Black, N. Experimental and observational methods of evaluation. BMJ from the experimentally controlled, randomized controlled 1994; 39:540.

5 Badia X, Herdman M. The Importance of Health-Related Quality-of-Life trials when submitting to payers for reimbursement.

Data In Determining The Value Of Drug Therapy. Clin Ther 2001; 23(1): 3. Finally, retrospective studies, especially those done with 168-75 6 existing databases, can typically be completely less Badia X, Guyver A, Magaz S, Bigorra J. Integrated health outcomes research strategies in drug or medical device development, pre- and post-marketing: expensively and faster than prospective studies. This makes time for change. Expert Rev Pharmacoeconomics Outcomes Res 2002; them especially useful for exploratory and confirmatory 2(3): 269-78.

7 Centre for Evidence-Based Medicine. 2010. studies. http://www.cebm.net/index.aspx?o=1039. Website accessed 04.10.2010 8

Hess, D. Retrospective studies and chart reviews. Respiratory Care 2004, 49(10): 1171-1174.

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PROJECT FOCUS | INFLUENZA Longitudinal patient-level databases have a key role to play in supporting analyses to inform and determine best practice and cost-effective care.

Informing the interests of public health The growing complexity of market access and increasing emphasis on maximizing health service efficiency have made the need to demonstrate the value of medicine an imperative for pharmaceutical companies worldwide. Identifying the economic burden of a disease and the impact of treatment shortfalls can play a major role in this process, particularly in areas of potential significance to national public health. Longitudinal patient-level databases derived from health insurance claims are able to provide new levels of insight into disease outcomes, cost, and treatment implications that are key to determining clinical best practice and advancing costeffective care.

SCOPING COST AND OUTCOMES IN A COMMON SEASONAL DISEASE The U.S. brand team of a leading global pharmaceutical company came to IMS for help in generating economic support for its new antiviral agent. The drug was an important development in the treatment of seasonal influenza, an infection that results in significant levels of morbidity and hospitalization. Estimates of infection rates range from 4% to 15% in adults but are highest in the pediatric population (14% to 37%). Children who are otherwise healthy are also more prone to secondary complications than adult and elderly patients, although the absolute number of healthy adults who develop complications is high. With its known links to increased healthcare provider visits, reduced productivity, and higher absenteeism from work and school, influenza imposes a considerable socioeconomic burden.

EXPLORING THE EVIDENCE FROM A COMPREHENSIVE BASE The use of antiviral drugs has been shown to reduce the severity and duration of influenza in otherwise healthy adults and children.

Studies have also demonstrated cost benefits associated with reduced consumption of in-patient and out-patient services.

However, many of these analyses have used models to assess direct and indirect costs; reports on the relationship between antiviral treatment, healthcare use, and direct costs are limited.

The IMS LifeLink Health Plan Claims Database enabled the role of antiviral therapy to be determined in relation to current care, outcomes and expenditure linked to influenza. The geographical breadth of the database – which draws on claims from over 95 health plans in the United States - makes it a critical tool for national and regional benchmarking of patterns of care, drivers of treatment choice, resource utilization, and direct medical costs. Its depth allows for comparisons across a range of patient demographics, including age, gender, diagnosis, concomitant therapy, and co-morbidities.

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INFLUENZA | PROJECT FOCUS

As the first step in their retrospective evaluation of complications, hospitalizations, and healthcare use and expenditure associated with influenza and antiviral therapy, the IMS experts began by identifying five influenza seasons (01 October – 31 March) between 2001 and 2006. Their analysis focused on a 30-day period following influenza diagnosis among patients prescribed the antiviral therapy in usual care versus those with no evidence of receiving the drug. Patients were included in the treatment group only if the drug prescription was issued within ±1 day of the influenza diagnosis – a period chosen as a proxy to ensure exclusion of patients who had not commenced therapy within the recommended period of <48 hours following diagnosis (see Figure 1 below).

FIGURE 1: PROCESS OF PATIENT SELECTION FOR STUDY INCLUSION

Patients with a diagnosis of influenza Patients excluded Patients meeting study requirements

Patients with a claim for antiviral therapy

Patients with no antiviral claim

Antiviral therapy claim outside of index date

Patients with a claim for antiviral therapy within ± 1 day of index

Propensity matching (one-to-one)

Patients with a claim for antiviral therapy

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The identified clinical outcomes were a diagnosis of pneumonia, otitis media, and rates of hospitalization.

Utilization included prescriptions for the antiviral agent, antibiotics, and respiratory therapies; out-patient physician office visits, emergency room visits, laboratory diagnostic tests, and respiratory or influenza diagnostic tests; and hospitalizations for pneumonia-related and non-pneumoniarelated conditions. Costs were evaluated for all utilization and defined from the perspective of a healthcare payer. Over 45,000 patients were included in each cohort for analysis.

CLEAR DEMONSTRATION OF TREATMENT VALUE The results showed that children and adolescents who received the antiviral therapy were at lower risk of developing pneumonia and otitis media following influenza, while adults were less likely to be hospitalized, compared with those not receiving treatment. In aggregate, the relative risks of pneumonia, otitis media, and hospitalization were reduced by 11%, 16%, and 29%, respectively. Additional noted benefits included fewer pharmacy claims for antibiotics among patients prescribed antiviral therapy than in the comparator group; significantly fewer physician office visits, emergency room visits, and other out-patient visits; and significantly fewer days spent in hospital for any reason or for diagnoses other than pneumonia. Despite higher pharmacy expenditures, primarily due to the cost of treatment, the drug was also associated with lower medical costs, including out-patient costs for physician office visits, emergency room visits, and other types of out-patient visits.

These patients also had lower expenditure for nonpneumonia-related hospitalizations.

SIGNIFICANT BENEFITS FOR PUBLIC HEALTH Considered representative of the commercially insured population in the U.S., the findings of the complex IMS analysis, which were subsequently published, offered key insights into the clinical outcomes, utilization, and medical costs associated with influenza treatment in a real-world setting. Importantly, they not only confirmed the benefits of antiviral therapy in otherwise healthy children, adolescent, and adult patients, but also provided critical information on the budgetary impact of non-treatment, further underscoring the importance of appropriate care. The study also delivered important updates to existing data for economic modeling from the payer perspective to inform reimbursement and formulary decision making. •

Patients with no antiviral claim

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PROJECT FOCUS | DIABETES Validated economic modeling utilizing short-term clinical data can deliver insights into long-term outcomes and financial impact that would otherwise take years to generate.

Demonstrating the costeffectiveness of a modern diabetes therapy in China Rapid economic development, mass urbanization and the adoption of more Westernized lifestyles have placed China on the verge of a diabetes epidemic. Of particular concern is growth in Type 2 diabetes, especially among the middle-aged, with huge implications for workforce productivity. New therapeutic options are emerging but are typically more expensive than established agents. With healthcare resources in China already stretched to capacity, the ability to demonstrate local cost-effectiveness is increasingly valid in securing product use over alternative available treatments.

One of the major challenges for cost evaluations in diabetes is the importance of showing an impact on its associated long-term complications, which represent by far the largest share of its financial burden. Robust, validated modeling techniques that can project potential outcomes over time and in the local setting, have a key role to play in determining best practice strategies for optimal care.

REQUIREMENT FOR LONG-TERM PROOF A leading pharmaceutical manufacturer was keen to develop economic support for use of its new analogue insulin mix in Type 2 diabetics in China. The drug had proven benefits in improving HbA1c levels and reducing hypoglycemic events when used in place of standard insulin in a poorly controlled patient sub-group over a 3-month period. Based on the results of this study in Chinese patients, and mindful that the drug would be competing with cheaper alternatives, the company was keen to understand its associated long-term cost and clinical outcomes. This would not be an easy task, particularly given the paucity of studies on the cost of diabetes complications in China.

Recognizing the inherent complexities involved and with limited knowledge of the local market in China, the HQ team approached IMS HEOR experts for help. In IMS they found a partner that would complement their own skill set in diabetes with extensive capabilities in evidence-based economic modeling, in-depth market knowledge, on-the-ground expertise and a network of local contacts in China, and access to the IMS CORE Diabetes Model – the leading, validated, all-round model of diabetes available – with the necessary skills in its optimal interrogation.

IMS CORE DIABETES MODEL In order to determine the cost-effectiveness of the new analogue insulin mix, the IMS experts began by identifying relevant local inputs for the IMS CORE Diabetes Model – a peer-reviewed, policy analysis tool for simulating the effects of different clinical characteristics and changing costs on cohorts of diabetes patients over a range of time frames (Figure 1). It addresses pharmacy,

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DIABETES | PROJECT FOCUS management and complication costs, screening and treatment strategies for micro- and macrovascular complications, and treatment practices for end-stage complications. Disease progression is simulated through a series of inter-dependent Markov sub-models each of which uses time, health state, time in health state, and diabetes type-dependent probabilities derived from published sources.

The reliability of the simulated outcomes has been tested and fully validated against those reported in clinical trials and epidemiological studies.

GATHERING THE EVIDENCE In a detailed program of data collection and supplementary research, the IMS experts focused on gathering the wide range of China-specific clinical and cost information that would be needed for a robust, comprehensive economic evaluation.

Treatment effects and patient characteristics were drawn from the original client study and country-specific published sources. Risks of modeled complications were derived from landmark clinical trials and epidemiological studies. To fill the considerable gap in data on patient management practices, resource use and diabetes-related complication costs in China, the IMS experts also completed a survey of physicians based in Tier 3 (large with specialist units) and Tier 2 (community-based) hospitals. These were located in two demographically and economically dissimilar cities which went some way towards addressing regional variation in treating diabetes.

The analysis was performed from a third-party payer perspective, incorporating future treatment costs, patient management costs, and the costs of medical complications, thereby ensuring its direct relevance for decision making bodies in China. Costs and clinical projections were made

FIGURE 1: IMS CORE DIABETES MODEL FLOW

over patient lifetimes and discounted annually. Quality adjusted life expectancy was also included. The willingnessto-pay threshold used was based on the mid-point between the values applied in two recently conducted utility analyses in China. Finally, extensive sensitivity analyses were performed to assess the effect of varying key model parameters on financial outcomes.

CLEAR DEMONSTRATION OF VALUE The results of the IMS study showed that any increase in lifetime direct medical costs associated with switching poorly controlled Type 2 diabetes to the new analogue insulin mix would be largely offset by lower diabetes-related complication costs, thereby rendering the drug cost-effective in the Chinese setting from a third-party payer perspective.

Sensitivity analyses supported this demonstration of its value for money over time. The analysis represented the first ever compilation of nationwide cost data in China for diabetes management and complications A FIRST FOR COSTING DIABETES IN CHINA The IMS cost-effectiveness analysis provided the client with key insights and the evidence it needed to show the positive long-term clinical and cost benefits of its new analogue insulin mix. Critically, too, it also represented the first ever compilation of nationwide cost data in China for the range of complications and management costs associated with diabetes - information that formed the basis of a major research publication and which enabled the client to pioneer the way for future economic evaluations in this increasingly important market. â&#x20AC;˘

User sets simulation conditions Generate baseline population

No

Any patients to run?

Yes

Stop Yes

Time horizon reached?

No

Microvascular complications

Macrovascular complications

Specific mortality

Specific mortality

Non-specific mortality

Overall annual survival Time counter advances Update simulation data

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IMS HEOR | OVERVIEW IMS Health Economics and Outcomes Research offers a spectrum of world-class expertise delivering the local excellence you need.

Realizing product value •

Insights and experience of more than 300 highlyqualified, multi-disciplinary experts in Health Economics, Outcomes Research and Pricing and Market Access

•

Strategy

Evidence Development

Communication

P&MA STRATEGY & DETERMINING VALUE

DEMONSTRATING VALUE

COMMUNICATING VALUE

Market expertise combined with local presence and a relationship network of key healthcare decision makers and opinion leaders worldwide

•

Scientifically-sound, commercially-relevant solutions for the entire product lifecycle

•

Highly respected, world-leading skills in strategic strategy, evidence development and value communications –

Our integrated approach – spanning deep expertise in

planning, evidence development and market access •

is reflected in all of our work.

Experience in virtually all therapy areas with a bibliography of over 2000 references

•

Outstanding results with the world’s most comprehensive pharmaceutical and medical information, analytics and consulting resources

•

Relied on and consulted by policy makers and regulatory

IMS HEOR ONLINE Visit us online at www.imshealth.com/heor

authorities globally

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COMMUNICATE DEMONSTRATE DETERMINE IMS HEOR BIBLIOGRAPHY Please ask us for a copy of our current bibliography covering publications from 2008-2010 or access the full online catalog of 2000 references at www.imsheorbibliography.com IMS HEOR brings unrivalled experience and specialist expertise to help you determine, demonstrate, communicate and realize product value

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LOCATIONS | IMS IMS HEOR is located in 14 countries worldwide and has published on projects completed in 40 countries on all continents.

Global scope, local expertise IMS HEOR Experts are located in key markets around the world.

YOUR KEY CONTACTS: Dr. Michael Nelson Regional Leader Americas Health Economics and Outcomes Research IMS Health 300 N. Washington Street Suite 303 Falls Church, VA 22046, USA Telephone: +1 703.286.2862 Email: MNelson@us.imshealth.com

Dr. Jacco Keja Regional Leader EMEA Health Economics and Outcomes Research IMS Health 7 Harewood Avenue London NW1 6JB, UK Telephone: +31 (0) 631 693 939 Email: JKeja@nl.imshealth.com

IMS HEOR office locations worldwide NORTH AMERICA REGIONAL HEADQUARTERS 660 West Germantown Pike Plymouth Meeting, PA 19462 USA Tel: +1 610.834.5000

EUROPE REGIONAL HEADQUARTERS 7 Harewood Avenue London NW1 6JB United Kingdom Tel: +44 (0) 20 3075 4800

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AUSTRALIA Level 5, Charter Grove 29 - 57 Christie Street St Leonards, NSW 2065 Australia Telephone: +61 2 9805 6800 CHINA 7/F Central Tower China Overseas Plaza Jianguomenwai Avenue, Chaoyang District Beijing 100001 China Tel: +86 10 8567 4255 KOREA 9F Handok Building 735 Yeoksam1-dong Kangnam-ku Seoul 135-755 S. Korea Tel: +82 2 3459 7307 TAIWAN 8th Floor No 2, Tun Hwa South Road Section 1 Taipei 10506 Taiwan ROC Tel: +886 2 2721 5337

FOR FURTHER INFORMATION: email HEORinfo@uk.imshealth.com or visit www.imshealth.com/HEOR

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harmaceutical companies worldwide rely on LifeLink to drive patient-centered decisions – from the first explorator

IMS | EXPERTISE The strength of our ability to support clients in healthcare decision making for pricing and market access is built on the quality of our global team.

Expertise in depth We apply unrivalled experience and specialist expertise to help our clients meet the demands of an increasingly complex global, regional and local pharmaceutical landscape.

IMS has one of the largest global teams of experts in health economics and outcomes research of any organization in the world. We have more than 300 highly-qualified consultants and researchers with multi-disciplinary experience and proven skills covering all key therapy areas.

Our experts have extensive capabilities in a wide range of health economic and outcomes research disciplines in industry, consulting, government and academia, with a global grasp, local experience, and a unique, inside perspective of key market access issues.

Here we introduce members of our senior team.

Franck Amalric, PHD • Dr. Franck Amalric is a Principal and Group Manager, Pricing and Market Access at IMS Health in France.

• Formerly Deputy Director of Human Sciences and Economics at the French National Cancer Institute, Franck has extensive experience in the management and development of economic projects, gained in roles as a Program Director at the Society for International Development (SID) in Rome, a Senior Economist at UBS in Switzerland, and as Head of Research at the Center for Corporate Responsibility and Sustainability.

• A graduate of the Ecole Polytechnique in France, Franck completed his training at the Ensaé (National School of Statistics and Economic Administration) and holds a PhD in Economics from Harvard University.

Xavier Badia, MD, MPH, PHD • Dr. Xavier Badia is Global Leader Observational Center of Excellence, Senior Principal HEOR at IMS Health in Spain.

• A founder of Health Outcomes Research Europe, Xavier has extensive experience in consulting and research outcomes, patient-reported outcomes, and effectiveness and cost-effectiveness evaluations. A respected scientific speaker and member of EuroQol since 1993, he serves on several international advisory and editorial boards and has published over 150 peer-reviewed papers.

• Xavier holds an MD, a PhD in Medicine, and a Masters in Public Health and Health Economics from the University of Barcelona.

Marc Benoff, MBA • Marc Benoff is Vice President and Practice Leader, Pricing and Market Access at IMS Health in the U.S., applying quantitative and qualitative methodologies to help clients solve pricing and reimbursement issues and develop global market access strategies for new and existing products.

• A former Director of Commercial Investment and Pricing Strategy at Wyeth Pharmaceuticals, where he pioneered the incorporation of pricing, reimbursement, policy and health outcomes into the drug development process, Marc has over 15 years healthcare experience working with physician groups, hospitals, health plans and pharmaceutical companies across a range of therapeutic areas.

• Marc holds an MBA from the Graduate School of Business at the University of Chicago, and a BA in Mathematical Economics from Wesleyan University.

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ry questions that drive clinical development to tactical sales planning for mature brands.

EXPERTISE | IMS Karin Berger, MBA • Karin Berger is a Principal, Health Economics and Outcomes Research at IMS Health in Germany with a particular focus on outcomes research, patient-reported outcomes, and cost-effectiveness evaluation analyses at a national and international level.

• Formerly Managing Director of MERG (Medical Economics Research Group), an independent German organization providing health economics services to the pharmaceutical industry, university hospitals and European Commission, Karin has more than 14 years experience in the health economics arena. She lectures at several universities, has published extensively in peer-reviewed journals, and regularly presents at economic and medical conferences around the world.

• Karin graduated as Diplom-Kaufmann (German MBA equivalent) from the Bayreuth University, Germany, with a special focus on health economics.

Richard H. Chapman, PHD • Dr. Rick Chapman is a Principal, Health Economics and Outcomes Research at IMS Health in the U.S., directing the design and analysis of economic evaluations and health outcomes studies addressing a range of client issues.

• Formerly a Senior Director at ValueMedics Research, and Research Associate at the Center for Risk Analysis, Rick has considerable experience in designing and conducting cost-effectiveness analyses, and particular expertise in the methodological quality of health economic analyses, medication adherence and patient-reported outcomes, including quality of life and patient preferences.

• Rick holds a PhD in Health Policy (Decision Sciences) from Harvard University and an MS in Health Policy and Management from the Harvard School of Public Health.

Mandy Chui, MBA • Mandy Chui is Regional Practice Leader, Pricing and Market Access at IMS Health in the Asia Pacific, helping clients formulate growth strategies, optimize price and reimbursement, and address issues in business model, sales force and marketing optimization.

• In a career spanning more than 15 years at IMS Health, including roles as Country Principal for China and Director of Area Sales & Marketing in Singapore, Mandy has developed an exceptional understanding of Asian market dynamics and an extensive network of major stakeholder contacts in this rapidly evolving region. She has also authored various publications on China and emerging markets.

• Mandy holds an honors degree in Biology from the University of Hong Kong and an MBA from McGill University, Montreal.

Frank-Ulrich Fricke, PHD, MSC • Dr. Frank-Ulrich Fricke is a Principal, Health Economics and Outcomes Research at IMS Health and Professor for Health Economics, Georg-Simon-Ohm University of Applied Sciences, Nuremberg in Germany, with a focus on health economic evaluations, market access strategies and health policy.

• Formerly a Managing Director of Fricke & Pirk GmbH, and previously Head of Health Economics at Novartis Pharmaceuticals, Frank-Ulrich has conducted health economic evaluations across a wide range of therapeutic areas, developing a wealth of experience in pricing, health affairs and health policy. As a co-founder of the NIG 21 association, he has forged strong relationships with health economists, physicians and related researchers working in the German healthcare system.

• Frank-Ulrich holds a PhD in Economics from the Bayreuth University, and an MBA equivalent from the Christian-Albrechts-University, Kiel.

David Grant, MBA • David Grant is a Senior Principal and Country Leader, Health Economics and Outcomes Research at IMS Health in the U.K., specializing in reimbursement and market access, environmental analysis, prospective and retrospective data collection and communications for product support.

• A co-founder and former Director of Fourth Hurdle, David’s experience spans 10 years in health economics and outcomes research consulting, and 15 years in the pharmaceutical industry, including roles in clinical research, new product marketing and health economics in the U.K. and Japan.

• David holds a degree in Microbiology and an MBA from the London Business School.

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IMS | EXPERTISE Jacco Keja, PHD • Dr. Jacco Keja is Regional Leader, EMEA, Health Economics and Outcomes Research, at IMS Health in the UK, drawing on deep expertise in global market access, operational and strategic pricing, and health economics and outcomes research.

• Jacco’s background includes four years as global head of pricing, reimbursement, health outcomes and market access consulting services at a large clinical research organization and more than 13 years experience in the pharmaceutical industry, including senior-level international and global roles in strategic marketing, pricing and reimbursement and health economics.

• Jacco holds a PhD in Biology (Neurophysiology) from Vrije Universiteit in Amsterdam, a Masters in Medical Biology, and an undergraduate degree in Biology, both from Utrecht. He is also visiting Professor at the Institute of Health Policy & Management at Erasmus University, Rotterdam.

David C. Klingman, PHD • Dr. David Klingman is a Principal, Health Economics and Outcomes Research at IMS Health in the U.S., with expertise in retrospective analyses of survey and administrative databases, medical-record abstraction, provider, payer, and patient surveys, health-economic modeling, cost-effectiveness analysis, meta-analysis, and literature synthesis in numerous therapeutic areas.

• In a career that spans both business and academia, including roles at ValueMedics Research LLC, the Center for Clinical Quality Evaluation, and the Health Program of the U.S. Congress Office of Technology, David has developed extensive experience in health economics, outcomes research, quality evaluation and analytics.

• David holds a PhD in Political Science from Michigan State University, an MA in Political Science from the University of Wisconsin-Milwaukee, and a BA in Government from the University of Texas.

Mark Lamotte, MD • Dr. Mark Lamotte is a Principal and Location Manager, Health Economics and Outcomes Research at IMS Health in Belgium with responsibility for the content and quality of all health economic evaluations conducted by his team.

• A physician by training (cardiology), Mark spent a number of years in medical practice before joining Rhône-Poulenc Rorer as Cardiovascular Medical Advisor and later becoming Scientific Director at the Belgian research organization, HEDM. He has since worked on more than 150 projects, involving expert interviews, patient record reviews, extensive modeling and report writing across a wide range of therapy areas, and authored many peer-reviewed publications.

• Mark holds an MD from the Free University of Brussels (Vrije Univeristeit Brussel, Belgium) and is fluent in Dutch, French, English and Spanish.

Won Chan Lee, PHD • Dr. Won Chan Lee is a Principal, Health Economics and Outcomes Research at IMS Health in the U.S., specializing in prospective and retrospective health economics research.

• Over the course of his career, Won has completed numerous international economic evaluations employing a variety of analytical methods across a range of diseases and geographies. His expertise includes econometric database analysis, quality of life assessment and advanced economic modeling to establish the economic and humanistic value of new and existing therapeutic interventions.

• Won holds a Masters in Economics from the University of Grenoble II, and a PhD in Economics from the Graduate Center of the City University of New York.

Claude Le Pen, PHD • Dr. Claude Le Pen is a member of the strategic committee of IMS France and Professor of Health Economics at Paris-Dauphine University providing expert economic advisory services to the consulting practice.

• A renowned economist, leading academic, and respected public commentator, Claude has served as an appointed senior member of several state commissions in the French Ministry of Health and is an expert for a number of parliamentary bodies, bringing a unique perspective and unparalleled insights into the economic evaluation of pharmaceutical technologies at the highest level.

• Claude studied Business Administration in HEC Business School in Paris and holds a PhD in Economics from Panthéon-Sorbonne University.

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EXPERTISE | IMS Adam Lloyd, MPHIL, BA • Adam Lloyd is a Senior Principal, Health Economics and Outcomes Research at IMS Health in the U.K., where he leads the economic modeling practice with a particular focus on economic analysis and the global application of economic tools to support the needs of local markets.

• A former founder and Director of Fourth Hurdle, and previously Senior Manager of Global Health Outcomes at GlaxoWellcome, Adam has extensive experience leading economic evaluations of pre-launched and marketed products, developing submissions to NICE and the SMC, decision-analytic and Markov modeling, and in the use of health economics in reimbursement and marketing in continental Europe.

• Adam holds an MPhil in Economics, and a BA (Hons) in Philosophy, Politics and Economics from the University of Oxford.

Eva Marchese, PHD • Dr. Eva Marchese is a Principal and Location Manager, Pricing and Market Access at IMS Health in Italy, with a particular focus on market access, regulatory, pharmacovigilance, pricing and reimbursement, and health economics and outcomes research.

• An experienced consultant and founding partner of S&M Consulting, Eva has been involved in several ministerial committees at the Italian Ministry of Health, looking at cost evaluation and analysis of day surgery procedures. She was previously Professor of Public Management and Policy at Bocconi-SDA, the foremost Italian Business School, and a contracted Research Fellow at the Centre for Research on Healthcare and Social Management at Bocconi University.

• Eva holds a PhD in Public Management from the Parma State University, and a degree in Business Administration from Bocconi University in Milan.

Frédérique Maurel, MS, MPH • Frédérique Maurel is a Principal, Health Economics and Outcomes Research at IMS Health in France, with a particular focus on observational research and health economics studies.

• A skilled consultant and project manager, Frédérique has extensive experience in the economic evaluation of medical technologies gained in roles at ANDEM, Medicoeconomie, and AREMIS Consultants.

• Frédérique holds a Masters degree in Economics – equivalent to an MS – and completed a postgraduate degree equivalent to an MPH with a specialization in Health Economics at the University of Paris-Dauphine (Paris IX) as well as a degree in Industrial Strategies at the Pantheon-Sorbonne University (Paris I).

Juliet Munakata, MS • Juliet Munakata is a Principal, Health Economics and Outcomes Research at IMS Health in the U.S., with a particular focus on global economic modeling, value development planning, and survey data analysis.

• An accomplished researcher and author of more than 25 original articles, Juliet has extensive experience in managing clinical trials, health economic studies and decision analytic modeling work, gained in senior roles at ValueMedics Research LLC, the VA Health Economics Resource Center and Stanford Center for Primary Care & Outcomes Research, and Wyeth Pharmaceuticals.

• Juliet holds an MS in Health Policy and Management from the Harvard School of Public Health and a BS in Psychobiology from the University of California, Los Angeles.

Karl-Johan Myrén, MSC • Karl-Johan (Kalle) Myrén is an Engagement Manager, Pricing and Market Access at IMS Health, with responsibility for the Nordic region. He has extensive expertise in global and affiliate pricing, market access, reimbursement and health economics and a deep understanding of many different national healthcare systems.

• Karl-Johan’s career spans more than 13 years experience in global health economics gained in roles at the Swedish Institute of Health Services Development, Astra Zeneca and Eli Lilly, latterly as Senior Area Health Economist coordinating and managing health economic activities for the European middle-sized (EMS) countries, including the Nordic markets, Belgium, Switzerland, the Netherlands and Portugal.

• Karl-Johan holds an MSc in Economics and a BSc in Mathematics from the University of Stockholm.

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IMS | EXPERTISE Michael Nelson, PHARM D • Dr. Michael Nelson is Regional Leader, Americas, Health Economics and Outcomes Research at IMS Health in the U.S., with particular expertise in retrospective database research, prospective observational research, health program evaluation, and cost-effectiveness analysis.

• During a career that includes leadership roles in HEOR at PharmaNet, i3 Innovus, SmithKline Beecham, and DPS/UnitedHealth Group, Mike has gained extensive experience in health information-based product development, formulary design, drug use evaluation, and disease management program design and implementation.

• A thought leader in health economics for more than 20 years, Mike holds a doctorate in Pharmacy and a Bachelor of Science degree, both from the University of Minnesota College of Pharmacy. He also served as an adjunct clinical faculty member at the University of Minnesota whilst in clinical pharmacy practice.

Tini Nguyen, PHARM D • Dr. Tini Nguyen is Regional Principal, Health Economics and Market Access at IMS Health in France.

• Previously European Market Access Director at Sanofi-Aventis in Paris, Tini has more than 15 years experience in the global pharmaceutical industry, including 7 years in senior roles focusing on health economics, health outcomes, pharmacoeconomics and market access in the Asia Pacific, Russia, Latin America, Middle East and Africa.

• Tini holds a diploma in Health Economics for Healthcare Professionals from the University of York, and a diploma in Marketing and a doctorate in Pharmaceutical Sciences from the Université René Descartes in Paris.

Olaf Pirk, MD, PHD • Dr. Olaf Pirk is a Principal, Health Economics and Outcomes Research at IMS Health in Germany, with a particular focus on health technology assessment, healthcare system research, health policy and health economic modeling across a range of countries and therapeutic areas.

• Formerly a Managing Director of Fricke & Pirk GmbH, Olaf has considerable pharmaceutical industry experience gained in roles within health economics, pricing, health policy, marketing and clinical research. As a co-founder of the NIG 21 association, he has forged strong relationships with health economists, physicians and related researchers working in the German healthcare system.

• Olaf holds an MD and PhD in Medicines from the Medical University of Lübeck.

Mercedes Prior, MBA • Mercedes Prior is a Principal, Health Economics and Outcomes Research at IMS Health in Spain where she leads the Health Economics and Strategic Consulting team helping clients develop and execute market access strategies at the local and international level.

• With a consulting background that includes senior-level roles at Booz Allen & Hamilton and The Wilkerson Group (IBM Consulting), Mercedes has in-depth experience of market assessment, forecasting, identification and evaluation of licensing opportunities, and pricing, financing and market access strategies.

• Mercedes holds an MBA from Columbia University in New York.

Jon Resnick, MBA • Jon Resnick is Vice President and Practice Leader, Pricing and Market Access at IMS Health in the U.K., advising pharmaceutical and biotech companies on a wide range of strategic, pricing and reimbursement issues.

• A former Legislative Research Assistant in Washington DC and member of the Professional Health and Social Security staff for the U.S. Senate Committee on Finance, Jon combines public policy and industry expertise to provide a unique grasp of the healthcare market place. He has co-authored several major U.S. healthcare initiatives, including proposals to reform managed care.

• Jon holds an MBA from the Kellogg School of Management, Northwestern University, where he majored in Management and Strategy, Finance, Health Industry Management, and Biotechnology.

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EXPERTISE | IMS Javier Sabater, MPHARM, MHE • Javier Sabater is a Principal, Health Economics and Outcomes Research at IMS Health in Spain, where he leads a wide range of projects across many therapy areas for major international pharmaceutical companies, healthcare providers and national policy institutions.

• A pharmacist by training, Javier has considerable industry experience in clinical research, medical information, health economics, market access and outcomes research gained in roles at GlaxoSmithKline, Roche and Schering-Plough. He has co-authored a number of publications and abstracts in HEOR. • Javier holds a Bachelors degree in Pharmacy, a Masters in Health Economics and has completed a post-graduate course in Pharmaceutical Marketing.

Vernon Schabert, PHD • Dr. Vernon Schabert is a Principal, Health Economics and Outcomes Research at IMS Health in the U.S., leading the development of prospective trials, the assessment and validation of patient-reported outcomes (PRO) instruments, retrospective analyses of claims and survey databases, and primary data collection surveys.

• A founder and former President of Integral Health Decisions, Inc, Vernon has extensive experience in conducting claims analyses, creating custom administrative databases, developing business intelligence software, and leading national quality research projects, gained in roles with Thomson Reuters, Strategic Healthcare Programs LLC, and CIGNA HealthCare. His expertise spans numerous disease areas and diverse topics including medication adherence, in-patient safety and outcomes in post-acute care.

• Vernon holds a PhD in Personality and Social Psychology from Stanford University and a BA in Psychology from Princeton University.

Núria Lara Surinach, MD, MSC • Dr. Núria Lara is a Principal, Health Economics and Outcomes Research at IMS Health in Spain, where she leads the Outcomes Research group in the design and coordination of local and international observational and patient-reported outcomes studies.

• A former practicing GP and clinical researcher, Núria’s experience spans roles in outcomes research at the Institute of Public Health in Barcelona and in Catalan Health Authorities, and consulting positions within the pharmaceutical and medical device industries focusing on medical regulatory and pricing affairs, pharmacoeconomics and market access strategies.

• Núria holds an MD (specializing in Family and Community Medicine in Barcelona), and a Masters in Public Health from the London School of Hygiene and Tropical Medicine and London School of Economics.

Jonothan Tierce, CPHIL • Jonothan Tierce is General Manager and Center of Excellence Leader, Global Health Economics and Outcomes Research, at IMS Health in the U.S., supporting the industry’s growing need for real-world evidence of the clinical and economic value of new technologies in advancing health.

• A pioneer in applied pharmacoeconomics and value strategy development, and co-founder of ValueMedics Research LLC, Jonothan has nearly 25 years experience in health economics, working with clients to identify customized strategies and tactics for product access, value propositions and evidence-based demonstrations of value.

• Jonothan holds a C Phil, MA, and BA in Political Science from the University of California in Los Angeles. He also received two years of post-graduate training in econometrics and experimental design.

Meng Zang, MBA • Meng Zang is a Principal, Pricing and Market Access at IMS Health in China, applying evidencebased analytics to help clients address key business issues in global pricing, product launch readiness, market opportunity assessment and product portfolio optimization.

• During the course of his career in the U.S. and China, Meng has developed extensive expertise in pricing and reimbursement, new market entry, competitive analysis and corporate strategic planning, in consulting roles at SDI Health and Accenture, business development at J&J, and as a professional representative at Xian-Janssen Pharmaceutical Ltd in China.

• Meng holds a degree in Biology from Nanjing University, a Masters in Biochemistry from the University of New Brunswick, Montreal and an MBA from the Wharton School of the University of Pennsylvania, with a major in Healthcare Management.

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IMS | LIFELINK Pharmaceutical companies worldwide rely on IMS LifeLinkTM to drive patient-centered decisions – from clinical development to mature brands.

Powering a patient perspective Your business models have changed. So have the metrics that keep the healthcare industry moving forward. Today, a patient perspective is a must.

Through the global IMS LifeLink™ program, we provide a powerful patient lens to drive focus and alignment across your business, deepening your understanding of critical patient, physician and payer dynamics. LifeLink allows you to identify the right patient segments early on, in order to gain competitive advantage in today’s complex environment.

We make a patient-centered perspective simple — by integrating patient-level intelligence into our industryleading offerings and giving you expert consultants who apply it to your key issues.

IMS LifeLink provides insights of primary research with the benefits of secondary — lower cost, repeatable, faster and a larger sample size.

IMS LifeLink has everything you need to succeed in a patient-centered universe.

POWERING A PATIENT PERSPECTIVE We make a patient perspective easy, with familiar tools, integration into our industry-leading offerings and expert consultants who apply patient insights to your business issues.

A PARTNER YOU CAN TRUST Pharmaceutical companies worldwide rely on LifeLink to drive patient-centered decisions — from the first exploratory questions that drive clinical development to tactical sales planning for mature brands. They are recognizing significant benefits, such as: • Better global decision making through consistent insights across all brands and across the product lifecycle • Improved internal alignment with consistent patient segments defined across research & development and commercial functions • Enhanced communication with healthcare payers and other stakeholders with the use of a consistent patient view and common language • Faster and more accurate views across three key dimensions: patients, payers and prescribers • Confidence working with a partner who is committed to driving new metrics for new business models

AN UNPARALLELED ARRAY OF ANONYMIZED PATIENT-LEVEL DATA WORLDWIDE CANADA • Longitudinal Rx • Health Plan Claims Database

UNITED STATES • Longitudinal Rx • Health Plan Claims Database • Oncology Analyzer

EUROPE • Longitudinal Rx (Germany, UK, Netherlands and Belgium)

• Anonymized Patient-Level Data from Electronic Medical Records (France, Germany, Italy, UK)

ASIA • Oncology Analyzer (China, Japan, Korea, Taiwan)

• Oncology Analyzer (France, Germany, Netherlands, Italy, Spain, Turkey, UK)

• Longitudinal Rx (Japan)

• Stroke Database (France, Germany, Italy, Spain, UK)

• Hospital Disease Database (Belgium)

AUSTRALIA • Longitudinal Rx

• Longitudinal Patient Database (Sweden)

IMS has made extensive investments in anonymized patient-level data in markets around the world.

Today, we capture information for more than 260 million patient lives – for unparalleled treatment insights.

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IMS HEALTH ECONOMICS AND OUTCOMES RESEARCH

Today’s universe is patient-centered.

Discover its power with IMS. Your business models have changed. So have the metrics that keep the healthcare industry moving forward. Today, a patient perspective is a must.

Through the global IMS LifeLinkTM program, we provide a powerful patient lens to drive focus and alignment across your business, deepening your understanding of critical patient, physician and payer dynamics. Our tools allow you to identify the right patient segments early on, in order to gain competitive advantage in today’s complex environment.

We make a patient-centered perspective simple — by integrating patient-level intelligence into our industry-leading offerings and giving you expert consultants who apply it to your key issues.

IMS LifeLink has everything you need to succeed in a patient-centered universe.

Let us power your patient perspective.

Contact us at HEORinfo@uk.imshealth.com or visit imshealth.com/HEOR

© 2010 IMS Health Incorporated or its affiliates. All rights reserved.

IMS helps you realize the potential of your products

Maximizing market access demands the best scientific evidence and the right commercial awareness to deliver the insights you need.

IMS has built a global team of more than 300 experts in Health Economics and Outcomes Research and Pricing & Market Access — with publication and project experience in more than 40 countries across all continents.

We combine rigorous scientific research — evidenced by nearly 200 publications each year — with commercially focused consulting to help you determine, demonstrate, communicate and realize product value.

Our HEOR experts leverage unparalleled claims, medical, hospital and patient-centered pharmaceutical databases to create an Evidence-Based ConsultingSM powerhouse.

So the next time you think about product value, think about us.

MORE INFORMATION For additional information on our HEOR expertise and offerings please email HEORinfo@uk.imshealth.com or visit: www.imshealth.com/HEOR IMS HEOR OFFICES ARE LOCATED IN MANY COUNTRIES AROUND THE WORLD WITH PRINCIPAL OFFICES IN: UNITED KINGDOM 7 Harewood Avenue, London NW1 6JB, United Kingdom • Tel: +44 20 3075 4800 UNITED STATES 300 N. Washington Street, Suite 303 Falls Church, VA 22046, USA • Tel: +1 703.286.2900 ASIA PACIFIC 7/F Central Tower, China Overseas Plaza, Jianguomenwai Avenue, Chaoyang District, Beijing 100001, China • Tel: +86 10 8567 4255

©2010 IMS Health Incorporated or its affiliates. All Rights Reserved.