Section 1
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Providers and exs
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Last updated
6 years ago
Date created
Mar 1, 2020
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Section 1
(50 cards)
Providers and exs
-Entities that actually purchase and take both title and physical possession of products from manufacturers and either directly or indirectly provide them to consumers. -Ex. Wholesalers, pharmacies, hospitals, physician offices that administer medicines or insert devices -Manufacturers are selling directly to providers, and thereby providers can negotiate with the manufacturers -Ex. Pacemakers, oncology, planned parenthood
Competitor-based pricing (Types of Manufacturer Pricing)
-When testing the perceived value of a new product, its potential benefits are benchmarked against its current competitors. That perceived value becomes the key element of the new pricing. -Rarely used alone, this pricing is usually a component of value-based pricing -A breakthrough product with a significant price premium may still face restrictions from payers preferring a lesser, older product solely based on price
Biologic drug
An often protein-based therapeutic product that is distinguished by its molecular complexity
Basket master protocol
To study a single targeted therapy in the context of multiple diseases or disease subtypes. -disease or histologic feature 1, disease or histological feature 2, disease or histological feature 3 > screen for presence of target > target-positive participants > trial of one targeted therapy -ex) lung cancer, colorectal cancer, overian cancer, etc into one basket to screen for presence of one target -disease (large) to targets (small)
Phase II of clinical trials
-100-500 patients with targeted disease -More info on drug kinetics -Common adverse reactions -Possible efficacy -Dosing regimen for Phase III
brief history PBMs (ex)
-Expanded from pharmacy claims processing to a business model that forced drug manufacturers to engage in price competition in several drug categories (angiotensin-converting enzyme inhibitors, statins, etc)
Specialty drug
A drug designated by a payer for special attention, often because of its high price, but also potentially because of the need for distinctive handling or particular patient monitoring. -usually administered by nurse or at a hospital
Generic Drug
A version of a brand-name small-molecule drug manufactured by a different supplier Generic drugs can be certified as bioequivalent by the FDA and substituted for brand-name drugs by a pharmacist.
Value based pricing
price relative to effectiveness.
Discount (value-based pricing)
rarely see this; high effectiveness for a low price
Cost-based pricing (Types of Manufacturer Pricing)
Adding up the cost of all expenses incurred to bring a product to market and adding an acceptable profit on top. -Research and development costs cannot justify prices for most products especially specialty products --> pricing structure is never used for pharmaceutical products.
pre-clinical steps in new drug development (step 2)
-understand the disease process -identity potential targets for pharma action -identify chemicals that modify the targets -pre-clinical studies in vivo and in vitro -etc.
phase III of clinical trials
-clinician investigators -rigorous assessment of efficacy -common side effects -at least one randomized clinical trial -500-5,000 people ~the most costly and time consuming part of the process
New Drug Approval
-after clinical trials phases 1-3 for approval -"safe and effective under conditions of intended use" (statutory standard) -risks are considered acceptable for the potential benefits for a given indication
PBMs reduce costs by (4)
1. Offering home delivery of medications and creating selection networks of more affordable pharmacies (in mail order, they automatically switch a brand to a generic that drives savings) 2. Encouraging the use of generics and more affordable brand medications 3. Negotiating rebates from drug manufacturers and discounts from drugstores 4. Managing high-cost specialty medications Reducing waste (prescriptions filled but not taken) and improving adherence
Brand-name drug
A medication usually sold by the original sponsor of the application for regulatory approval
Formularies (aka drug list)
A list of prescription drugs covered by a prescription drug plan or another insurance plan offering prescription drug benefits.
basket trial disadvantages
-prognostic heterogeneity across tumor types (different tumor types have different response levels) -single arm sub-studies require tumor rr endpoint with a high bar -challenging to define historical controls across disease
Evergreening strategies
Premium (value-based pricing); why may this be the case?
-Same effectiveness as the leader but higher price (ontop of leader) -This may be the case if the product has less adverse side effects, if it is quicker-acting, or if there is increased compliance
Pharmacy and Therapeutics Committee (P&T)
-consists of non-employee physician members and pharmacists from active community and academic-based practices and represents a broad range of medical specialties.
Average Wholesale Price
-In nearly all branded drug transactions between manufacturers, wholesalers, and pharmacies, reference is made to this "price" -role as a reference or benchmark price from which various discounts are taken is a critical part of contracting in markets (reference point that they use to take discounts from, 20% off of that is how they set WAC) -Neither an average nor a wholesale price
Skimming Pricing (Types of Manufacturer Pricing), what does it require?
-Maximizing margins in an attempt to extract as much profit as possible. -This strategy requires a lack of strong competition or no competition at all. -The push in the past few years has been towards refining the tools and methods employed to develop value-based pricing strategies
Payers and exs
-Typically take neither title to nor physical possession of drug products but instead reimburse providers for the purchases they or their beneficiaries have made. -Ex. Health plans, PBMs, GPOs (group purchasing orgs), self-insured employers
US Drug Approval Process
1) drug discovery 2) pre-clinical trials 3) clinical trials (6 years longest) 4) new drug application and FDA review 5) Phase 4 (of clinical trials)- post-marketing surveillance (ongoing) -length of total process = 14.5 years and ongoing
Parity (value-based pricing)
Point C: Another drug may come to market that is not as effective, needs to charge less of less effective (on line but further down) Point E: If someone comes to market that is more effective, going to charge more (on line but higher up)
Formulary Development Process (3 stages and what)
1) therapeutic assessment (clinical considerations): creates monographs for P&T 2) pharmacy and therapeutics (clinical considerations): review monographs; determines clinical parameters for VAC 3) value assessment (clinical and financial considerations): makes formulary recommendations for P&T using parameters 4) back to the P&T committee: review VAC recommendations to make final determination about formulary
Pharmacy Benefit Managers current use (4)
-Hired by health plans, employers, unions, and governments to 1) design formularies, 2) negotiate rebates, 3) set up pharmacy networks, and 4) process claims
total amount of people involved in clinical trials
1,120-5,600 people
Tiered (formulary types)
Plan sponsors offer different copays or other financial incentives to encourage participants to use preferred formulary drugs, but will still pay a portion of the cost of the non-preferred drug. -For example, when a plan sponsor offers a three-tier benefit design, it may cover non-preferred, non-formulary products on its third tier with a higher copay
Wholesale Acquisition Cost (WAC)
-The price at which brand manufacturers sell to wholesalers and chain warehouses. A published list price, minus a discount of a few percent for prompt payment and other incentives. -wholesalers receive a 15-20% or larger discount off the AWP (Average Wholesale Price) -Wholesalers sell branded small molecules to retail (pharmacies) and mail order pharmacies, currently near or at a few percent above their WAC -Supposed to be more transparent than AWP
advantages of basket trial
-relatively small sample size -increased precision -offer an array of novel agents to a broad group of patients who may benefit
Leader (value-based pricing)
Market leader establishes the price relative to how well the product works. -on the value-based pricing line
Platform master protocol
To study multiple targeted therapies in the context of a single disease in a perpetual manner, with therapies allowed to enter or leave the platform on the basis of a decision algorithm.
estimated phase transition probability (of getting drug through drug process)
overall: 11.8% -phase 3 submission relatively high 62% and NDA high 90.4%
cost of drug development
-pre-human phase: out of pocket cash outlays and capitalized costs -clinical phases: out of pocket cash outlays and capitalized costs ~capitalized costs > out of pocked costs
phase I of clinical trials
-Metabolism, dosing, common toxic reactions (safety) -20-100 healthy volunteers
post-approval R&D costs for manufacturers (6)
phase IV studies, new indications, new target populations, modified dosage forms and strengths, required pharmacovigilance
P&T Recommendations
Must add / Include May add / Optional Must not add / Exclude
Pay for delay
A pharmaceutical industry practice that involves brand-name drugmakers compensating their generic counterparts for holding off on marketing their versions of brand-name drugs, causing longer delays in getting cheaper, generic drugs to the pharmacy counter. (not my def)
Drug discovery
identifies targets (proteins that specific compound can attract)
Phase IV of clinical trials
-drugs that have been approved by the FDA and available to be prescribed by physicians -May involve thousands of people -Typically the safest type of trial as it has been studied in detail and many instances for a long time -May gather data on long-term side effects, recurrence or survival -Outcomes may include quality of life or cost-effectiveness
Biosimilar drug
A biological product that is very similar to a reference biologic and for which there are no clinically meaningful differences in terms of safety, purity, and potency.
Institute for Clinical and Economic Review (ICER)
-An independent and non-partisan research organization that objectively evaluates the clinical and economic value of prescription drugs, medical tests, and other health care and health care delivery innovations. -conducts rigorous analyses of all clinical data and publicly convenes key stakeholders - including patients, doctors, life science companies, private insurers, and the government - to translate this evidence into policy decisions that lead to a more effective, efficient, and just health care system. -The reports use these analyses to establish a "value-based price benchmark" reflecting how each drug should be priced to appropriately reflect long-term improved patient outcomes - also evaluate the potential short-term budget impact of new drugs (to alert policymakers to situations)
ICER Assessments
-Totally transparent about process and evaluation -Perspective is always a US Health sector perspective -A modified societal perspective which includes the productivity costs of patient and informal caregivers -Future costs and outcomes discounted at 3% per year +Measure is a cost effectiveness ratio - cost/quality adjusted life year or QALY +Comparative measure: Incremental cost effectiveness ratio or ICER
Value-based pricing (Types of Manufacturer Pricing)
-Understanding the perceived value of the product by key stakeholders and to what extent a price premium can be applied. -Well-designed market research with payers, physicians and patients is crucial to understand the perceived value of a product and the roadblocks that may have to be overcome. -Used in one form or another by most drug companies, but the use of pharmacoeconomic data is not common.
Closed (formulary types)
The plan sponsor will only cover drugs listed on the formulary. Non-formulary drugs are not covered unless approved through a formulary override process.
Umbrella master protocol
To study multiple targeted therapies in the context of a single disease. -single disease > screen for presence of targets > targeted therapies are single group or assigned according to group (ex. biomarker 1+ positive targeted therapy 1, biomarker 2+ targeted therapy 2, etc.) -disease (small) to targets (large)
Master protocols
One overarching protocol designed to answer multiple questions. -new trial designs -three types: umbrella, basket, platform
Distribution Channel Pricing
-Prices of the same biopharmaceutical will differ in various transactions simply because the pathway from manufacturer to consumer involves distinct distribution channel transactions -Prices will differ between providers and payers
Section 2
(15 cards)