Featured Viewpoint:
Maximizing Product Value in the Era of Comparative Effectiveness Research

By: Charles A. Stevens, JD, MBA
Vice President and General Manager, Reimbursement and Market Access

In today’s cost-conscious healthcare arena, public and private insurers are increasingly demanding that novel products demonstrate an ability to reduce treatment costs, improve medical outcomes, or provide some other tangible benefit over existing therapies if they are to be placed on formularies, approved for reimbursement, and added to the therapeutic guidelines used by healthcare professionals.  To attain optimal market success, new therapies must be supported by data-driven evidence that they offer greater value than the currently accepted standard therapy – a concept that encompasses safety, cost, convenience, treatment outcomes, and quality of life – as well as meeting the regulatory requirements for efficacy. 

Comparative effectiveness research, or CER, describes the process by which a biopharmaceutical company obtains reliable clinical data to demonstrate a product’s value.  This data can be gathered in a variety of ways, including pre- and post-approval trials, head-to-head comparisons, patient registries, and retroactive studies using administrative or electronic health records.

The growing importance of CER in the US healthcare market was highlighted by the inclusion of $1.1 billion in the American Recovery and Reinvestment Act (ARRA) of 2009 specifically for comparative effectiveness research.  The ARRA also established the Federal Coordinating Council for Comparative Effectiveness Research to foster optimum coordination of CER conducted or supported by Federal departments and agencies.  The Federal Coordinating Council for Comparative Effectiveness Research has published this definition of CER:

Comparative effectiveness research is the conduct and synthesis of research comparing the benefits and harms of different interventions and strategies to prevent, diagnose, treat and monitor health conditions in "real world" settings.  The purpose of this research is to improve health outcomes by developing and disseminating evidence-based information to patients, clinicians, and other decision-makers…about which interventions are most effective for which patients under specific circumstances.

Although proof of product value – also known as evidence-based medicine – is not yet required for market approval in the US, this concept is already well-established in major European markets.  For example, regulations in the UK, Germany and France currently require a Health Technology Assessment – a systematic review of all relevant technologies available – to determine whether new products fill an unmet need.  A related requirement in some countries is research data to demonstrate that a new product will be cost effective compared with other treatments, using an analysis such as a Quality Adjusted Life Year (QALY).

The incorporation of CER into the US regulatory system is inevitable, given the intense scrutiny being applied to all healthcare costs.  Even without regulatory requirements, major US health insurers are already asking biopharmaceutical companies to demonstrate that their new products provide measurable, meaningful advantages over the products already on the market.  Whatever changes may be made in the regulatory arena, biopharmaceutical companies must account for these marketplace realities as they create development and commercialization plans if they want to maximize the likelihood of product acceptance and reimbursement by public and private payers around the world.

What do payers want to know?

Although cost-benefit analyses have been a part of formulary and insurance reimbursement decisions for many years, the concept of evidence-based medicine places a much greater emphasis on product value, with payers requiring new levels of data to inform their decisions.  The type of clinical information insurers might request includes:

• A direct therapeutic comparison of the new product against the current “gold standard” treatment or an acceptable surrogate
• Proof that the product improves the overall delivery of care
• Demonstrated value for the payer’s patient population
• Positive third-party technology assessments
• Results supported by peer-reviewed clinical data or presentations at major scientific/professional conferences
• Analysis of the cost impact of the new product on the total treatment process for the condition being targeted – not just the cost of the product itself – and how it will affect the payer

In short, payers want to know if a new product makes clinical and economic sense for the people they cover. 

To support that determination, payers are demanding reliable – and relevant – clinical data to support the value proposition of a new therapy.  However, payers are increasingly unwilling to base coverage decisions and formulary placement solely on data from randomized clinical trials.  Instead, they are asking for value data based on results from real patients treated by physicians in the various care settings typical of their networks.  While some of these requirements may be less stringent for a product that addresses a serious unmet medical need, cost-effectiveness and product value have become the paramount criteria in most payer decisions about adding novel therapies to formularies and treatment guidelines.

What should biopharmaceutical companies be doing?
Biopharmaceutical companies and their clinical research partners must alter their trial paradigm to incorporate the gathering of relevant CER data into the earliest stages of the product development process if they are to meet the demands of evidenced-based medicine.  That paradigm needs to include a new approach to determining which products will be developed, improved methodologies to analyze trial data, and innovative trial designs – such as adaptive trials and “real world” studies utilizing comparators instead of placebos – that will produce the data necessary to demonstrate the overall therapeutic value of novel products.  Only by analyzing the current market and the needs of all CER stakeholders – including healthcare providers, public and private payers, policy makers, advocacy groups, and patients – can a biopharmaceutical company develop a clinical plan that will supply the CER data needed to optimize a new product’s chances for regulatory and market acceptance. 

There are a number of vital questions that must be addressed about a potential therapy before a company makes the decision to move it forward into clinical trials, such as:

• What are the current standard of care guidelines and first-line therapies for the targeted condition? 
• Do patients currently have ready access to the existing therapies?  
• What are the public and private payer coverage policies and payment rules for currently available therapies?  What are the perceptions of payers and providers about the efficacy and cost of those therapies?
• Does the clinical profile of the new product have the potential to provide tangible benefits compared with existing therapies, in terms of convenience, compliance, cost, side effects, or efficacy?
• How will the product impact the payers’ overall treatment costs for the targeted condition?
• Are the major payers covering patients with the condition likely to utilize CER data to make coverage decisions?  If so, how will payers determine the product’s value? 
• Will the clinical trials provide the necessary data to demonstrate CER?  Are the clinical endpoints appropriate to support the product’s value proposition?

While the global healthcare environment is constantly evolving, it is clear that evidence-based medicine and the concept of product value will continue to grow in importance as key elements in payer decisions about new products.   The essential message for the biopharmaceutical industry is that a strong value proposition is absolutely vital for every new product, because CER requirements will impact all areas of product development, including decisions about which products to develop, the design of pre- and post-marketing clinical trials, regulatory strategies, negotiations with payers, and, ultimately, patient access to new therapies – which directly translates into commercial success.

By incorporating CER strategies into the earliest stages of the product development process, companies with potential new therapies will be better prepared to demonstrate their products’ value and maximize their market success as payers and regulators increasingly focus on cost-efficiency and improved health outcomes for new biopharmaceutical products.