Pricing Pressure, Payer Perspectives and Innovative Diagnostic Platforms
Posted 24th August 2018 by Kieran Chambers
We spoke to Alex Bastian about how he got started in precision medicine, where he sees it going and how he intends to use real world evidence to unlock the potential around personalised approaches to drug development:
Can you tell us a little bit about your current position at Incyte?
I am the Head of Value, Access, and Pricing. This includes both the access and pricing strategy and also the health economic and outcomes research strategy elements of our global planning process. Basically, we lead the early translation of our science into a meaningful story that can bring value to payers, society and patients. That’s what wakes me up every day and makes me excited to help drive my team.
Incyte’s pipeline is pretty diverse, rapidly advancing, and is primarily focused in oncology – both solid and blood tumours. One of our most exciting products is a new therapy for patients with FGFR2 fusions in cholangiocarcinoma – a rare tumour of the biliary tract. In the past year I can think of multiple products that we are either proactively or retrospectively looking towards biomarkers to help us understand the disease or treatment approach in a more nuanced manner.
Almost all of our programs consider whether a targeted approach is warranted but this all starts with the science. If there is a clear clinical rationale, then we pursue to because we think this not only serves value for patients, but also society and payers.
How did you get started in Precision Medicine?
I started working in Precision Medicine during my time in consulting. Back then I used to work with the likes of Roche/Genentech, Novartis, Pfizer, Amgen, etc. These were really the pioneers so it gave me a great crash course into the marriage between drugs and diagnostics.
When I moved to San Francisco my work also expanded into the field of diagnostics strategy. I worked with a variety of innovative companies throughout California to help better understand and communicate the value of their diagnostics to the medical and payer community.
What are your predictions for the next 5 years when it comes to Precision Medicine?
On the pharmaceutical side of Precision Medicine, there are going to be challenges associated with pricing pressure that is unavoidable with targeted therapies. While a targeted approach identifies those that will largely get the most benefit from any given therapy, the exclusion of many patients that are not candidates means that already small therapy areas will become even more small, niche areas for treatment. To make these attractive areas for pharmaceutical investment, high prices may be necessary to justify the market opportunity.
If you look at the price of a medication on a pure “per month” basis these might seem extremely expensive from any patient’s perspective, but at the societal or payer perspective, only a handful of patients may be eligible for therapy and, so, the absolute budget impact or total spending may be quite limited. Rationalizing these two divergent, but important, perspectives is a critical task.
On the diagnostics side, we’re really tapping into an explosion of information that will result from more available NGS technology, but I also think this will come with a many questions. How we mine this information, interpret it, validate it, and discover solutions to it will become clearer in the next 5 years.
Innovative diagnostic testing platforms have also faced challenges in proving the clinical utility and value they provide – most focus on quality and accuracy rather than what it means in the real world. This will become even more important if you don’t want to viewed as a thought experiment or gimmick. One of the challenges of HTA related to companion diagnostics is the generally limited evidence base compared to therapeutics, upon which the payer can make an evaluation of value.
Could you briefly run through the topic of your presentation at the upcoming congress?
I hope to outline the payer mentality as it relates to three key areas of Precision Medicine: First, how do payers define clinical utility and purposeful intent of the companion diagnostic? Second, what are the costs and consequences, in clinical terms, of the diagnostic and treatment? And finally, at what cost – in terms of the price of the diagnostic, the drug, and the total budget impact – does it come to the system or society?
These three areas tend to break down into barriers to either test access or demand. On the access side, there might be diagnostic reimbursement challenges, limited tissue/samples, or restricted distribution. On the other side, demand challenges can take the form of test cost and system economics, lack of perceived utility or need for testing, or the lack of a medication that is actionable once a biomarker is identified.
I’ll try to provide some examples to bring it to real terms in how to unlock the potential around personalised approaches to drug development.
Are there any speakers that you are looking forward to meeting or are there any presentations in particular that you are looking forward to seeing at the congress?
The 2018 summit is a tremendous forum to network, learn, and interact with colleagues at leading biopharmaceutical companies worldwide. The sessions around real-world evidence approaches as well as innovative initiatives, strategies and approaches are what piqued my interest. There’s no better place to stay on the cutting edge than this event in September in Munich.
Alexander Bastian is the Head of Value, Access, and Pricing at Incyte. He will be giving his presentation “Understanding payer perspectives and RWE approaches” at the 5th Global Precision Medicine and Biomarkers Leaders Summit: Europe.
Time is running out to guarantee your place, book now to avoid disappointment.
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