Background
Due diligence is a common yet critical practice in the pharmaceutical industry. While the process is complex, it fundamentally assesses a molecule’s potential risks and benefits.
Methods
As we know, registration does not equal commercial success. It is becoming increasingly important to understand how payers will evaluate a drug’s evidence to determine its place in therapy and pricing to determine its value. This awareness is critical to effectively evaluate a molecule.
There are two payer factors to consider when evaluating a molecule’s potential risks and benefits:
1 – Probability of payer relevant evidence (efficacy and effectiveness evidence)
- Comparators
- Gold standard active comparator (10 points)
- Active comparator (5 points)
- No comparator or placebo (0 points, except orphan therapy)
- Measurement (endpoint relevance and statistical result)
- Payer relevant endpoint and superiority (10 points)
- Payer relevant endpoint and non-inferiority (5 points)
- Payer irrelevant endpoint (0 points)
- Patient Populations (the appropriate recipient)
- ICD-9/10 + phenotype or genotype (10 points)
- ICD-9/10 (5 points)
2 – Probability of payer acceptance:
- Molecule addresses payer relevant unmet need
- Unmet patient need in high priority diseases (10 points)
- Unmet patient need in low priority diseases (5 points)
- Does not target unmet patient need (0 points)
- Value (benefit / cost)
- Robust cost-effectiveness or significant budget reduction (10 points)
- Marginal cost-effectiveness or budget reduction (5 points)
- Not cost-effective or no budget reduction (0 points)
Scoring
- 50 – 25 points: Molecule potentially attractive to a payer
- < 25 points: Molecule unlikely to be attractive to a payer
Discussion
For pharmaceutical companies planning to out-license their products, understanding the payer perspective is critical to create strategies, execute tactics and communicate a molecule’s value to be an attractive out-license molecule.
For pharmaceutical companies looking to in-license a product, understanding the payer perspective is important to determine the potential commercial value of a molecule.
