Medical Devices and HEOR: Positioning Yourself to Meet Payer Needs in 2015

Unlike the pharma industry, medical device companies face challenges with their sometimes complex product lifecycle. One of them is being adequately prepared to meet payer demands, and undertaking health economics and outcomes research (HEOR) for medical device companies is absolutely critical for understanding payer needs, satisfying payer demands and maintaining pricing levels—especially for Class II and Class III medical devices that require extensive outcomes research that demonstrate value to payers.

Cutting Edge Information, a pharmaceutical business intelligence provider, recently explored how HEOR teams can best be used to support medical devices through their lifecycles in the new report, “Health Economics for Medical Devices: Addressing Payer Concerns with a Successful Value Proposition.” PM360 spoke with Jacob Presson, Senior Analyst, and Victoria Cavicchi, Research Analyst, of Cutting Edge Information about key insights from the report, including the best way companies can structure their HEOR teams, provide the right type of data to meet payer needs and be prepared for payer demands and HEOR going forward.

PM360: The data in the report showed that the majority of companies have dedicated HEOR departments, with many of them being overseen by market access. Why is it important for medical device companies to align their HEOR group under a market access department?

Jacob Presson: One of the advantages that a market access team brings to HEOR is the ability to coordinate between the commercial and clinical teams. HEOR teams that report into market access are well positioned to effectively liaise between the scientific and commercial sides of the organizations. Communicating payer needs when designing prospective studies (e.g., randomized clinical trials) is extremely important. These teams are also able to engage in retrospective HEOR studies that use data from drugs already on the market to see how effective they are in the real world.

However, for companies that do not have a product portfolio or complexity that warrants a dedicated team, cross-functional communication is key in coordinating these efforts. Our other research into HEOR has shown that key players in market access and medical affairs should be touching base at least weekly to make sure that products are supported by adequate HEOR data. Ideally, this collaboration should begin 12 to 18 months before launch so that the data can be developed and prepared for use as soon as the product reaches the market.

In the report, we see that some companies rely heavily on outsourcing. You recommend staffing HEOR teams with full-time employees and growing internal teams, as opposed to outsourcing. That would be a lot easier for larger companies to undertake. What would you advise smaller device companies that may not have the resources to build an internal functional team?

Presson: For small companies with a limited product portfolio, in some cases a single experienced individual is able to manage the health economics activities by working closely with vendors that provide both raw data and conduct full studies on products in the portfolio. Among those we spoke to for our research, some preferred working with small boutique vendors that specialize in HEOR studies as they felt that they got more for their money in terms of the relationship and personalized attention.

Ideally, this individual will come armed with extensive health economics experience, especially in terms of how to bring a product to launch and support it afterwards with sufficient backing data, but in the device space that can be a tricky proposition. HEOR managers we interviewed for the report indicated that the right health economics skillset is difficult to find for medical device companies due to the relatively new nature of the work, especially in the U.S. Some companies are facing an organizational restructure as their clinical teams shift from a narrow medical focus to include a health economics component.

Let’s discuss one of the HEOR spending insights mentioned in the report. It mentioned that providing data to payers can take up close to half of the total HEOR spending, which indicates the importance of providing the right type of data to meet payer needs. What factors should companies consider in order to provide the right type of data?

Presson: Understanding the needs of payers can be achieved via market research and understanding what the major concerns are for an individual payer. Regional differences can shape how payers prioritize their formularies and how a new drug will impact their budget models.

Payer advisory boards are also an exceptionally valuable way to reach out directly to payers and make sure that the information available to them answers their questions in a thorough but digestible way. The best payer relationship managers are very tuned into how their message is being received and are always working on the best ways to communicate those ideas.

Only 7% feel patient-reported outcomes (PROs) are a “very” reliable data measure, however a large majority of medical device companies (71%) are using PROs to help in negotiating reimbursement with payers. What steps can companies or clinical research organizations take to increase the reliability of the data? And how important will having PROs data be going into 2015?

Victoria Cavicchi: PRO reliability is dependent on the companies’ instrument selection and delivery modality. Companies should be sure that their PRO instrument applies both to their product and patients, and that it collects the data necessary to support reimbursement conversations. To increase PRO data reliability, teams can look to evolutions in PRO delivery; specifically, ePRO (electronic patient-reported outcomes) delivery mechanisms improve data quality over traditional pen-and-paper formats. Not only do ePROs limit data entry errors, they also restrict patients from submitting incomplete reports or reports inconsistent with the required format.

Moving forward, PRO data is becoming more useful as regulators and reimbursement agencies look to a more patient-centric ideal. From our separate PRO study, surveyed companies report that PRO data was most effective working with EU and U.S. regulators, but that these data are gaining traction in Latin America and Asia as well. These data are particularly useful as companies encounter health technology assessments (HTAs) during the reimbursement process.

Let’s talk about Comparative Effectiveness research for a minute. We understand that these studies are becoming increasingly important for understanding general population health and controlling costs. When companies lack the data from randomized, controlled clinical trials to make the best case for comparison, what is the best way companies can approach this type of research?

Presson: When prospective studies are either not an option or too expensive, retrospective studies represent a way for companies to look at data generated by hospitals, doctors and payers using the product, as well as its competitors, on the market. Generally this data is pulled from electronic medical records. Companies can either conduct the retrospective studies in house or outsource the data collection and study to a vendor.

In 2015, what trends can medical device companies expect when it comes to HEOR?

Presson: As always, establishing useful sources of information will continue to be a priority for HEOR groups in 2015, but one of the key trends moving forward is the importance of the information system that supports this influx of data. According to those we spoke to about the future of HEOR, those with the most robust and usable information management system will be in the best position to meet payer needs.

We expect there to be a shift towards more budget impact models as companies are asked to help healthcare systems deal with increasingly tight budget restrictions. Also, continuing the trend towards patient-centricity discussed above, companies are being asked to look at patient adherence to make sure that the drug achieves the same efficacy that it gets in clinical trials. Real-world usage of the medicine, especially devices that are administered by the patient such as some injections or inhaled devices, must be a part of health economics and outcomes research moving forward.

In terms of how this information is disseminated to payers, many companies have already begun this process but the importance of well-trained health outcomes liaisons (HOLs) is only going to grow. It can be difficult to find these kinds of people that generally have both clinical and financial backgrounds, but the ability to go to payers and present technically complex health economics information and distill it down to an effective value argument is absolutely crucial.

To learn more or to purchase a copy of this report, visit: https://www.cuttingedgeinfo.com/research/market-access/medical-devices-health-economics. Or contact Jacob Presson at jacob_presson@cuttingedgeinfo.com.

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