1. March 2008 – DRAFT 1 Electronic Health Record (EHR) Task Force Financial Analysis Isabelle de Zegher and Greg Stadler

2. March 2008 – DRAFT 2 Imagine Europe….  Where you need to pass through customs for each country…  Where you need to change currency – not only in each country – but in each region…. Is there a difference with electronic medical record ? There are major benefits in EHR integration but the cost is significant as well

3. March 2008 – DRAFT 3 Overview  What is the vision  What are the benefits ? –Financial Analysis Cost Tangible Benefit –Intangible Benefits  Conclusions

4. March 2008 – DRAFT 4 What is the vision ?

5. March 2008 – DRAFT 5 What is our vision ?  By 2015, Use of EHRs will transform Drug Development and Commercialization, provided –broadest access to interoperable records is available; –there is a collaborative effort within pharmaceutical and Health Care stakeholders.

6. March 2008 – DRAFT 6 Vision & Use Cases (Slipstream)

7. March 2008 – DRAFT 7 Financial Analysis: first attempt ! - Cost - Tangible Benefits

8. March 2008 – DRAFT 8 Approach to financial analysis  Approach taken is NOT an ROI computation but rather –For the cost: identification of the most appropriate operating model based on cost comparison of different scenarios. –For the benefits: estimates with tangible figures => quantified to support realistic expectations.  This a starting point - Any comment/ challenge welcome !

9. March 2008 – DRAFT 9 1 2 3 4 5 6 EDC without data standards, courtesy Charles Jaffe, MD, PhD COST: The situation today, with EDC

10. March 2008 – DRAFT 10 COST: Implementation Models Pharma Industry Hospital GP’s Office Hospital GP’s Office Each pharmaceutical company connected with different hospitals => many links per organization Current Organization There is no fundamental difference … except that the “connection” is less visible ! 1 2 3 4 5 6

11. March 2008 – DRAFT 11 COST: Implementation Models Pharma Industry Hospital GP’s Office Hospital GP’s Office Hospital GP’s Office Pharma Industry GP’s Office Hospital GP’s Office THIRD PARTY (“Honest Broker”) Each pharmaceutical company connected with different hospitals => many links per organisation Each actor connected through a Third party (e.g. SWIFT in banking, 1 link per organisation) (Note: in Health Care we would rather foresee a federation of national TPs) Current OrganizationThird party support We need to look at different organizational/interaction models These are 2 extremes; the truth is probably in the middle

12. March 2008 – DRAFT 12 COST: Implementation Models Pharma Industry Hospital GP’s Office Hospital GP’s Office Hospital GP’s Office Pharma Industry GP’s Office Hospital GP’s Office THIRD PARTY (“Honest Broker”) Each pharmaceutical company connected with different hospitals => many links per organization Current OrganizationThird party support COST (5 years): 129 Billions EUR COST (5 years): 20 Billions EUR 10 Billion w/ data standards Key Assumptions: 100.000 Health Care “data” sources – 20% “EHR ready” (by 2014) 300 Pharma companies – 50% “EHR ready” PRELIMINARY RESULTS Each actor connected through a Third party (e.g. SWIFT in banking, 1 link per organisation) (Note: in Health Care we would rather foresee a federation of national TPs)

13. March 2008 – DRAFT 13 COST: Implementation Models  Main Cost Drivers in this model (1/2) –(one of) Cost of setting up communication for computer to computer interaction in each organization Estimated to be 25 K per organization/per C2C interaction –In current organization, multiplication factor => 75 BEUR –With Third party support, addition => 504 MEUR

14. March 2008 – DRAFT 14 COST: Implementation Models  Main Cost Drivers in this model (2/2) –(annual) Cost of checking data standards For each site and each study (as type of data needed may change) Estimated to be 5 days per sites –done once at the start multiplied by number of site per study and number study per phase => 3.4 BEUR without standards –if we want to add checks on data per visit => 5.7 BEUR without standards

15. March 2008 – DRAFT 15 Tangible Benefits: Expected Value Approach  2 types of benefits –“operational” benefits –life cycle time reduction benefits  Benefits evaluated in 2 steps: –identification and description of the benefits Trial phase considered when quantifying the benefit Estimates of the parameters used across all benefits case (e.g. average number of studies, cost per patient…) –probability that a benefit would be realized in a given year. A few benefits were quantified and agreed. Several others remain to be discussed.

16. March 2008 – DRAFT 16 Tangible Benefits: details on one PRELIMINARY RESULTS

17. March 2008 – DRAFT 17 Tangible Benefit: Cycle time  Estimated improvement Time reduction (days) –Improvement per phase 2 and 3 = 70 days 30: Set up - Study Design Concept/SDC to FPFV 30: Execution - FPFV - LPFV - (faster patient recruitment) Execution - LPFV - LPLV - DBL 10: Data Cleaning / SDV - DBL to CSR TOTAL 70 Days Saved –Only 1 phase II and 1.5 phase III on critical path Therefore time savings on critical path =175 days  Assume Profit from one day = 0.7 MEUR  Assume 10 new brands/products per yr  Total benefit = 1.2 BEUR

18. March 2008 – DRAFT 18 Tangible Benefit: Overview This is only a first pass – further work is needed Additional Benefits identified – not quantified (e.g. decreased cost of monitoring, data collection, epi studies…) PRELIMINARY RESULTS

19. March 2008 – DRAFT 19 Financials: Overview  Critical enablers to reduce show-stopper costs –Federation of third parties – top priority to reduce cost of industrialising information exchange across multiple interaction –Data standards (also required for data quality)  Both enablers require political support, collaboration and shared funding PRELIMINARY RESULTS

20. March 2008 – DRAFT 20 Intangible benefits

21. March 2008 – DRAFT 21 Intangible benefits  The “train” started already: do we jump in or wait and see –Drug safety projects based on EHR are funded in EC (FP7), and US (FDA, FNIH) –As electronic sources becomes more available, requirements from regulatory authorities increase  Is there any other way to support development of targeted product ? –1 or 2 patient per site is a “site failure” today; it will be an “site hit” tomorrow –With the current way of working this is not affordable

22. March 2008 – DRAFT 22 Conclusions

23. March 2008 – DRAFT 23 Conclusions  This was a first attempt to quantify !  Probability to achieve significant benefits by 2013/2014, –Tangible benefits possible today (protocol feasibility, patient recruitment) –Activities/investment required today to achieve 2013/2014  Long term, EHR integration is key for Drug Development  Critical enablers to reduce show-stopper operating cost require top-down support