Kantar Oncology

8/21/2019 Kantar Oncology

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22nd Annual22nd AnnualCancer Progress ConferenceCancer Progress Conference

Oncology Market Overview: Barriers, Challenges and

Value

• Bill Bagwell, RPh, Senior Vice President, Clinical and ScientificAssessment, Kantar Health

• Rhoda Dunn, Account Director, Market Access, Kantar Health

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ONCOLOGY MARKET OVERVIEW:

BARRIERS, CHALLENGES AND VALUE

Cancer Progress

March 9, 2011

© Copyright 2011 Kantar Health


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KRAS

3© Copyright 2011 Kantar Health

EML4-ALK

MAGE-3A

PARP

PI3

B-RAF

CD20

IGF-1R

ALK / c-Met

CYP17A1


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CMS


CER

NICE

CT

AHRQ

PCORI

ICER

HEOR

HTA

QALY


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Agenda

• Increasing prevalence in cancer offset by economic challenges

and increasing competition

• R&D’s contribution to commercial success: Safety, efficacy and

pharmacoeconomics

• Nothing in life is free… especially not pricing



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INCREASING PREVALENCE IN CANCEROFFSET BY ECONOMIC CHALLENGES

AND INCREASING COMPETITION



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GLOBAL SALES OF TOP 100 DRUGS: Over the last decade,cancer drugs have become a major therapeutic category

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• $93 billion, of which 8.9 billion

came from ten cancer drugs

• $282 billion, of which $51 billioncame from 20 cancer drugs

Source: Med Ad News


1998 2009


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REVENUE PER CANCER PATIENT FUELS INNOVATION:But how sustainable is this growth?

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T o t a l R x

s ( 0 0 0 s ) A

v e.R

x P r i c e ( $ p er Rx )

Note: Total Rx data in $ thousands, average price data $, for Top 10 branded products: Femara, Aromasin, Xeloda,Gleevec, Tarceva, Temodar, Sutent, Sprycel, Tykerb and Avastin

Source: Wolters Kluwer Source® Pharmaceutical Audit, Retail channel,© Copyright 2011 Kantar Health


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CANCER PREVALENCE ON THE RISE: Demand for treatment increases dueto aging population and serial incremental improvements in treatment outcomes

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-

200,000

400,000

600,000

800,000

1,000,000

1,200,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Source: CancerMPact®, Kantar Health. Accessed 10 Feb 2011*Includes hematologic malignancies any stage and Stage IV solid tumors

First- and Second-line Actively Treated Cancer Patients, 2005–2025 (projected)*



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2009 Estimates of Population in the EU Big 5 and the U.S.

France Germany Italy Spain UK EU

Average

United

States

Population(millions)

62.6 82.8 58.1 45.8 61.9 EU 15:392,518EU 27:497,444

307,212(July 2009est)

% Population >65years of age

16.40% 20.30% 20.20% 18.10% 16.20% 17.34% 12.80%*

Life expectancy 80.98 79.26 80.20 80.05 79.01 78.67 78.11

Mortalityrate/1000population

8.56 10.90 10.72 9.99 10.02 10.28 8.38

% Mortality due

to cancer

28.9%

(2006)

25.7%

(2006)

28.8%

(2006)

25%

(2005)

29.2%

(2007)

N/A 24%

(2005)

*28% of the U.S. population falls in the Baby Boomer population.

Sources: 1. OECD Health Data 2009, with an EU average referencing the EU 15.2. CIA, The 2009 World Factbook, with an EU average referencing the EU 27. https://www.cia.gov/library/

publications/the-world-factbook/geos/US.html. Accessed August 24, 2009.3. OECD Factbook 2009. OECD Web site. http://puck.sourceoecd.org/vl=10780095/cl=11/nw=1/rpsv/factbook/02/01/01/index.htm. Accessed August 13, 2009.



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CANCER IS LARGELY A DISEASE OF AGE, making cost of carea public issue even in the U.S.

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Commercial

Uninsured Military

Medicare

Medicaid

Cancer Coverage for All Tumors in 2011 All Stages: 5 year prevalence

Source: KantarHealth, Oncology Marketing Strategies U.S., Jan 2011


THOUSANDS OF PATIENTS


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IMPACT OF EXPANDED ACCESS TO COVERAGE: A substantial increase in covered lives by 2014

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Source: Centers for Medicare and Medicaid Services (September 2010).PHI: Private Health Insurance, Other Public includes Military and Indian Health Services (IHS)

46 47 48 52 61

52 60 6285 82

12 13 12

13 15

167 162 161

168 165

27 27 26

14 1116

31

44 50 52

2624

0

50

100

150

200

250

300

350

400

2009 2010 2011 2014 2019

Uninsured

Exchanges

Other PHI

Employer PHI

Other Public

Medicaid/CHIP

Medicare

Health Insurance Enrollment (Projected)By Source of Funds, Selected Years 2009–2019

M i l l i o n s



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BOTTOM LINE FOR CANCER: Increase in covered lives translatesto an additional 68,000 cancer patients in 2014

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2014 Insurance Mix Stage III and IV Cancer – Without and With Potential Reform

59,944 59,944

1,378,204 1,378,204

90,868 98,893

727,274 787,252

178,544 110,542

Without Reform With Reform

Military

Medicare

Medicaid

Commercial

Uninsured

+9%

-38%

+8%

Source: Kantar Health Coverage Estimator (2010 based on 2014 population) for Stage III and IV Cancer Population; CBO,“Estimated Effects of the Insurance Coverage Provisions of the Reconciliation Proposal Combined with H.R. 3590 as

Passed by the Senate,” 3/20/2010© Copyright 2011 Kantar Health


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THE COST PROBLEM PREVAILS: Absolute and relative health expenditures will continue to rise

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• 2011 marks the first year that U.S. public health expenditures outpace private health expenditures

• The increase in percentage of GDP growth is exacerbated by the recession’s constriction of GDP

• Slowing the rate at which healthcare costs rise will be an enduring Congressional challenge

13.60% 15.60% 16.20% 17.90%

19.20% 20.00% 20.37%596

840

1,107

1,446

1,919

2,184 2,340

756

1,015

1,232 1,406

1,8772,114

2,232

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

$0

$500

$1,000

$1,500

$2,000

$2,500

2000 2004 2008 2012Projected

2016Projected

2018Projected

2019Projected

% of GDP Public Private

Source: Congressional Budget Office (August 2010), Centers For Medicare and Medicaid Services (September 2010).

E x p e n d i t u r e s

( $ B i l l i o n s )

T o t al H e al t h c ar e S p e

n d i n g a s S h ar e of GDP

Public Versus Private Spending, 2000–2019 (Projected)



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ENTITLEMENT PROGRAMS FUEL MANDATORY SPENDING: Solutionsthat threaten entitlement programs or increase taxes are unpalatable

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Source: Congressional Budget Office, The Budget and Economic Outlook: An Update (August 2010).

Cumulative Public Debt and BudgetDeficits, 2009–2020

Shares of Federal Spending Projectedin 2020

Mandatory

Defense

Netinterest

Otherspending Medicare

Medicaid

Social Security

Exchanges

Other health: 1%

14%

10%

21%

2%



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R&D’S CONTRIBUTION TO COMMERCIALSUCCESS: SAFETY, EFFICACY ANDPHARMACOECONOMICS


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MEGA BRANDS AND ONCOLOGY: They exist, but are notcommonplace despite the success of Genentech/Roche

Source: Delphi Pharma, Market Forecasts



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MEGA BRAND OUTLOOK: Market pressures, segmentation a

increased competition limit prospects

The Future of the Mega Brand in Oncology

Driver Impact on

PRICE

Life cycle challenges:

•Patent cliffs

•Biosimilars

Direct competition /

Budget Limitations: More patients drawing on thepublic dollar

Formulary considerations:

•Comparative effectiveness analysis (U.S.)

•Health technology assessments (ex-U.S.)

QUANTITY

Prevalence: on the rise in many tumor types


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BIOSIMILARS: All three oncology mega brands are at risk for“generic” competition in the next few years

EPO Neupogen Herceptin Rituxan Avastin

Market launch 1990 1991 1998 1997 2004

Patent expiry 2013 2013 2015 2015 2017

Data exclusive

expiry2002 2003 2010 2009 2016

Market open to

biosimilar entrant 2013 2013 2015 2015 2017

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Source: The Lewin Group and i3 Innovus for Department of Health and Human Services, Office of the Assistant Secretary forPlanning and Evaluation (July 2009), “Economic Analysis of Availability of Follow-On Protein Products, ” retrieved from

http://aspe.hhs.gov/sp/reports/2009/fopps/index.shtml© Copyright 2011 Kantar Health


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COMPETITION IS FIERCE:Manufacturers seek to turn unmet need into good business

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* Some medicines are listed in more than one categorySource: 2009 Report, Medicines in Development for Cancer, PhRMA, www.phrma.org, downloaded July 20, 2009

Medicines in Development for Cancer*

74

55

27

67

27

103

54

63

52

99

122

35

129

44

34

70

13

106

61

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Unspecified cancers

Other cancers

Stomach cancer

Skin cancer

SarcomaProstate cancer

Pancreatic cancer

Ovarian cancer

Multiple myeloma

Lymphoma

Lung cancer

Liver cancer

Leukemia

Kidney cancer

Head/neck cancer

Colorectal cancer

Cervical cancer

Breast cancer

Brain cancer

Bladder cancer



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SOME TUMOR TYPES WILL SEE WINNERS AND LOSERS:When differentiation fails, therapies must jockey for position

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7,1817,607

10,854 10,632 10,79511,534

11,98212,414

12,844

2004 2005 2006 2007 2008 2009 2010 2011 2012

Interleukin-2 Interferon

NexavarInterleukin-2 Interferon

SutentNexavar

Interleukin-2 Interferon

ToriselSutent


ToriselSutent


Votrient Avastin AfinitorToriselSutent






Anyara AV-951 AxitinibRencarex


NexavarInterleukin-2

Interferon

# products, advanced 5 5 8 8 8 10

# lines of therapy, advanced 3 3 4 4 4 4

# products, high-risk Stage III 1 3

Increase in new products 1 0 3 0 1 2

Adjuvant

therapy forStage III

represents an

additional

3,000-5,000patient

opportunity

Source: CancerMPact ® Kantar Health. Accessed 10 Feb 2011

RCC Drug-treated Patients and Potential Drug Therapy Options by Year (Actual through 2009 and Projected through 2012) RCC patients receiving drug therapy



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OTHER TUMOR TYPES WELCOME NICHE POPULATIONS: Smallermore defensible market segments reduce the value of plan interventions

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86%

14%

37%

14%

20%

24%

1%4%

14%

20%

24%20%

16%

2%

1%

18%4%

2000 2006 2009

Non-smallcell

Small cell

Adenocarcinoma

Other and non-specified

Large cell

Small cell

Squamous

Other non-small cell

Other and non-specified – 1%

Large cell

Small cell

Squamous

Other non-small cell

KRAS

EGFR

BRAF –1%

PIK3CA –1%

EML4-ALK

HER2 Pending

Source: CancerMpact Patient Metrics, October 2008; SEER



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THE CURRENT SITUATION: Budget constraints introduce theimportance of value, which must be cultivated in the development phase

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HTA /economicevaluation

Budgeting

Quality

Policy level

Regulatory considerations National and regional payerconsiderations

National / regional / local

11 33 44 5522

Safety

Efficacy

HTA: Health technology assessment



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MACROECONOMIC FORCES PRECIPITATE TOUGH CHOICES:Balancing clinical and cost effectiveness in the face of limited funds

• Drug A costs €10,000 and results

in 5 QALYs

• Cost/QALY = €10,000/5 = €2,000

• €2,000,000 = 1,000 QALYs

• Drug B costs €100,000 and results

in 10 QALYs

• Cost/QALY = €100,000/10 = €10,000

• €2,000,000 = 200 QALYs

Conclusion

Drug B is more clinically effective and Drug A is more cost effective.If the policy goal is to maximize population health gains, then Drug Amust be used.

Maynard A. “Rational Pharmacology” and HealthEconomics.


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PILLARS OF VALUE: Consider your audience

• Safety

• Efficacy

• Tolerability

• Quality of life

• Disinvestment (i.e., decreased

utilization of healthcare goods

and services)

• Practice economics



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DEFINING VALUE: Comparative effectiveness vs. cost effectiveness

Concept Definition

Comparative effectivenessanalysis

• Comparison of the health outcomes of thedrug/technology with available alternatives

Cost effectivenessanalysis

• Analysis as to whether improvements in healthoutcomes are commensurate with the additionalcosts of the technology

• Quality-adjusted life years (QALYs) is the mostcommon, but not exclusive, metric used


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THE PURSUIT OF COMPARATIVE EFFECTIVENESS IN THE US:Changing names and steering committees, but charter consistent

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CER FUNDING GROWS: General revenues and contributions from theMedicare trust fund and private health plans fuel comparative effectiveness

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Note: Medicare Beneficiary Transfer Fee and Private Beneficiary Fees estimated based on Aug 2010 HHS estimates ofbeneficiary enrollments.

CER Funding – American Recovery and Reinvestment Actof 2009 and Affordable Care Act of 2010

$ Millions



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FRAGMENTATION CHALLENGES CER EFFORTS:But does not stymie them

Confounding factors include:

• Presence of target

• Primacy of target

• Existing and developing genetic mutations

• Relative contribution of multiple lines of therapies

• Size of eventual population and ability to accrue trial patients

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THERE IS NO SUCH THING AS FREE…ESPECIALLY NOT PRICING


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E.U.

• Up front

+ Reference pricing

+ Price-volume agreements+ HTA-driven formulary decisions

• Back end

+ Claw-backs, rebates and/or

discounts

PRICE CONTROLS: Well established in the E.U….


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PRICE CONTROLS: Well established in the E.U…. and not new to the U.S.

E.U.

• Up front

+ Reference pricing

+ Price-volume agreements+ HTA-driven formulary decisions

• Back end

+ Claw-backs, rebates and/or

discounts

U.S.

• Up front

+ Medicaid rebate formula/

340B discount+ VA pricing

+ Medicaid Federal Upper

Limit (FUL) pricing

• Back end

+ Rebates and discounts

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65, SSI3,081 4,220

MEDICARE DOMINATES CANCER COVERAGE:Medicare covers approximately 58% of cancer patients

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Medicare FFS only

Dual (Medi-Medi)

VA

Medicare Advantage

Medigap

Retiree

Source: Kantar Health, Oncology Market Access U.S., 2011

Cancer Coverage for All Tumors in 2011 All stages: 5-year prevalence,

thousands of patients

Medicare Coverage Segments All stages: 5-year prevalence,

thousands of patients

Uninsured


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393 Vintage Park Dr., Suite 250Foster City, California 94404, U.S.A.Tel: (650) 403-7012Fax: (650) 403-7062

E-mail: [email protected]: www.kantarhealth.com

Please contact us if you have any questions.

US:

Rhoda Dunn

[email protected]

Bill [email protected]



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PHARMACOECONOMIC CONSIDERATIONS IN THE EU: Existence ofinstitutionalized cost-effectiveness analyses drives reimbursement price

European Comparison of Cancer Drug Prices, May 2010 (€)

Source: Kantar Health Oncology Market Access, 2010

Country Specific Information

• France: A new Public HealthBenefit and Post-Launch StudiesGroup (ISP-EP) is expected toprovide ex ante and ex postopinions on drugs based on post-launch study data, including costeffectiveness data.

• Germany: As of 2011, “freepricing” will be limited by the on theoutcome of an “early benefitevaluation” (f-NB) to beimplemented in 2011

• Italy: HTAs operate at the nationaland regional levels, althoughregional efforts are limited beyondEmilia Romagna and Veneto.

• Spain: Use of cost-effectivenessanalyses is expected to grow withrecent legislation establishing an

expert body to conduct economicevaluations.• UK: NICE’s pursuit of “value for

money” and cost-effectivenessdrive all aspects of pricing andreimbursement.



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22nd Annual22nd AnnualCancer Progress ConferenceCancer Progress Conference

Oncology Market Overview: Barriers, Challenges and

Value

• Bill Bagwell, RPh, Senior Vice President, Clinical and ScientificAssessment, Kantar Health

• Rhoda Dunn, Account Director, Market Access, Kantar Health

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Kantar Oncology

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