1. PHARMACOECONOMICS THE ROLE OF PHARMACOECONOMICS FROM THE PHARMACOECONOMICS ON THE INTERNET ®SERIES © Paul C Langley, 2004 Maimon Research LLC

2. OBJECTIVES To consider the key audiences for pharmacoeconomic (pharmaceutical economic) studies To identify the principal information needs of each audience To consider how the disparate needs of audiences might be met To provide a redefinition of the role and scope of pharmacoeconomics

3. CLINICIANS AND ECONOMISTS While pharmacoeconomics is interdisciplinary by nature there is clearly tension between those from a clinical as opposed to an economic background The clinical mindset has dominated the field Driven by the needs to reimbursers to risk manage populations and budgets, the focus is now shifting

4. WHERE ARE WE GOING? Clearly there is a demand for effectiveness studies - for a more naturalistic approach which allows inferences to be drawn on population impacts The emerging paradigm is to move away from clinical, incidence models (and ICOR claims) to designing studies which allow population cost and outcome inferences to be drawn

5. ….AND THE DESTINATION? In the next five years we will see, driven by the needs of reimbursers and health system managers, a commitment to population impact trials as part of the drug development process These will build on the notion of “naturalistic trials” but with the brief to provide the evidentiary basis for population risk management claims by manufacturers

6. LIFE CYCLE STAGES Stage 1: Conventional Clinical Phases of Product Development Stage 2: Reimbursement Stage Stage 3: Market Entry and Support Stage

7. STAGE 1: ACTIVITIES Identify prevalence and treating prevalence in disease area for key markets Identify treatment patterns, outcomes, resources used and costs Specify potential patient switching and pricing scenarios Agree a sustainable unit price consistent with company objectives

8. STAGE 2: ACTIVITIES Achieving reimbursement: a sufficient or necessary condition for market entry? Contracting and prescribing constraints Preparing market specific reimbursement submissions Budget impacts and sub-population considerations

9. STAGE 3: ACTIVITIES Generalizability of reimbursement claims Prescriber perspectives: total cost versus silo-budgeting Modeling for generalizability Naturalistic trials and treatment pattern assessments

10. AUDIENCE NEEDS Does pharmacoeconomics meet audience needs? As presently conducted, pharmacoeconomic research is dominated by the marketing interests of drug companies Studies are commissioned because they are perceived to meet the needs of marketing departments and are typically supportive of the sponsor’s product

11. A WIDER AUDIENCE? Audience responsible for drug development and ongoing assessments of market potential Reimbursers and prescribers Journal editors and reviewers

12. BIAS A longstanding concern given the pecuniary interests of sponsors and researchers Need seen to meet the gold standards of evidence based medicine Pleas for transparency and access to data and models A failure to appreciate approximate nature of economic evaluations (?)

13. PHARMACOECONOMICS An application of the tools of microeconomics to the ongoing evaluation of the impact of new and emerging technologies in health care systems from perspectives of (i) manufacturer, (ii) reimburser and (iii) prescriber

14. ANALYTICAL FRAMEWORK Clearly seen shift away from ‘efficacy’ studies to ‘effectiveness’ studies Growing emphasis on a patient population risk management focus with requests for budget impact assessments (e.g., resource allocation and application of a reference case methodology) Budget impacts have led reimbursers to request sub-group analysis as a rationing and limited access justification

15. SUMMARY Pharmacoeconomics is increasingly being challenged to demonstrate its relevance to formulary choice and health system management We face the need to develop new tools in order to provide a better methodological basis for assessing the prospective impact of new technologies