The journey to commercialization is a long and arduous one. While regulators assess therapies based on the risk versus benefit to the patient, each market’s decision to adopt or fund a therapy will also need to consider the payer perspective which balances the net benefit with the net cost of introducing a therapy.
The way many payers, or health technology assessment (HTA) bodies, assess the cost-benefit equation is through health economic modeling[1]. Health economic modeling includes parameters like patient population characteristics, clinical data — both from the new therapy and current disease management — resource use from pharmaceuticals as well as hospitalizations and other ways to manage a given disease[2].
Health economic modeling will typically also include quality of life data, which is quantified by specific scales. Generally, trial endpoints need to be translated to a quality-of-life outcome. For instance, in oncology trials developers are required to transform progression-free survival or overall survival data to a generic value regarding quality of life[3] to enable a health economic analysis.
Health economic modeling aims to provide a value for a new therapy, which allows HTA decision-makers to assess its value for money across multiple therapeutic areas and types of therapies. The generic value is then used for informed decision-making regarding funding/recommendation, within the limited healthcare budget.
These assessments are required in most European markets as well as many other markets where the state is the payer, and will still be the framework for local funding/recommendation processes following the newly initiated Joint Clinical Assessment (JCA) in the EU[4]. What they don’t do is give sponsors early insight into the potential and challenges of a treatment, even before clinical trial data is available.
Determining therapeutic and commercial viability
One internal tool that can help sponsors better assess the expected value of a new treatment versus current management before heavy investments are made is early phase modeling (EPM).
Even with limited information and a large degree of uncertainty in the input variables compared with later in clinical development, EPM can help to identify key drivers for cost benefit.
Put simply, EPM is a simulation tool, typically run in Excel, that allows users to interactively play around with different variables and to assess the relative impact of different inputs.
The type of information needed to perform EPM will vary with the scope, but typically includes clinical effectiveness – both of the new therapy and current management of the disease, or even no management, as is the case with many rare diseases[5]. If relevant, input for adverse events and complications can also be included.
Potential resources associated with the new therapy should also be fed into the model, including, for example, administration of the drug, potential requirements for monitoring, diagnostic tests, healthcare visits, hospitalization, and any add-on therapies that might be needed. Additionally, other factors such as site of care and local treatment guidelines might vary across different countries and can also be relevant to consider.
Finally, a placeholder for the target price is required, in order to explore the impact of the different parameters in the EPM.
Finding relevant data inputs with early phase modeling
Since EPMs will have limited hard data, the model will need to be informed with alternative sources of information. Where this data comes from will depend on where the therapy is in the development cycle. For example, if it is already in clinical development, data can be drawn from interim analysis from phase one or two trials.
Data can also be gathered from scientific publications, real-world evidence, or registry studies, medical price lists, and treatment guidelines to help determine potential positioning of the therapy from a market access perspective. Sometimes, when working with rare conditions, there will be very limited information available, even from scientific publications, so it might be necessary to rely on proxy conditions, which will be diseases showing the same hallmarks, symptoms and manifestations. Sometimes clinical expert input might be sought. And in some cases, modelers will have to rely on best-guess assumptions if there is no data or information.
Since EPM is a simulation tool, robust data is not really required to support an internal evaluation of a development program. Its purpose is to offer a means for defining key parameters from an HTA perspective and assess the impact on target price.
Answering questions with early phase modeling
Unlike later phase health economic modeling, which is required by many HTAs, EPM is intended as an internal tool to help sponsors answer questions that can prove invaluable for any research and commercialization decisions.
EPM can help sponsors identify data gaps and potentially address these gaps before trials get underway or are completed. This can help to inform trial design endpoints and patient subgroups. EPM can also help to inform potential surrogate endpoints for drugs being considered for conditional funding/recommendation but where there is limited clinical outcome data.
EPM can be the basis for strategic corporate decisions, such as go/no-go decisions for a given therapy. It can be used to prioritize further research or to plan for non-trial data generation, such as performing a real-world evidence study in parallel to the trial program. It might be used to inform product acquisition or licensing and to support communication of a therapy’s potential to payers or investors.
Furthermore, EPM can be used to guide the relevant indication from a market access perspective early on. While the regulatory process will determine a therapy’s specific use, or indication, EPM can define the likely sub-population, positioning and treatment line relevant for subsequent market access since it is possible that only a restricted part of the full regulatory indication will be funded or recommended for funding once the payer has done their value assessment. In markets that use cost-effectiveness as a formal evaluation criterion, sponsors can, early on, identify key drivers or parameters that need further substantiation, and get an understanding of the feasible target price. EPM can further be used to assess feasibility for a particular therapy to be introduced as the standard of care, particularly with rare diseases or diseases with few other treatment options available.
Making the market access case for a therapy with EMP
As a simulation tool, EPM offers sponsors a way to assess a therapy’s market access and commercialization potential very early without needing to rely on robust data. Ideally, the model will leverage quality data, but where data is limited, place-holder assumptions can be fit-for-purpose in EPM.
How the model is intended to be used, and its scope, will guide the design of the model. It will also guide the best timepoint to set up an EPM, preferably in time to act on the information produced by the model. However, EPM can be performed at any stage of therapy development to support better understanding of the opportunities and challenges from a market access perspective.
About the author:
Annabelle Forsmark, Ph.D., is Associate Director, Market Access and Healthcare Consulting, at PharmaLex, a Cencora company. She has vast experience in managing projects in all the Nordic markets, including reimbursement dossiers, supporting payer negotiation processes, health economic modeling, evaluation of clinical and health economic data, and strategic advice on market access.
[1] Health Economic Modelling for HTA Assessment: A Comparison of Economic Protocols Submitted to Three HTA Bodies, ISPOR. https://www.ispor.org/heor-resources/presentations-database/presentation/euro2022-3565/119696
[2] Health Economic Assessment: A Methodological Primer, Int J Environ Res Public Health, 2009. https://pmc.ncbi.nlm.nih.gov/articles/PMC2800325/
[3] Clinical endpoints in oncology – a primer, Am J Cancer Res. 2021. https://pmc.ncbi.nlm.nih.gov/articles/PMC8085844/
[4] Mapping of HTA national organisations, programmes and processes in EU and Norway, European Commission. 2018_mapping_npc_en_0.pdf
[5] Rare Disease Day: Frequently Asked Questions. https://rarediseases.org/wp-content/uploads/2019/01/RDD-FAQ-2019.pdf
