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Case Study: Launching and Sellinga Pharmaceutical Compound with the Payer in Mind Dr. Stefan Walzer General Manager AiM Assessment in Medicine GmbH Tel.: +49 7621 705 105 20 stefan.walzer@assessment-in-medicine.de

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The ultimate goal for a new compound • The ultimate goal is Commercial Success • Commercial success is defined by revenue generation Revenue = Sales * price • Payers could influence the success of a new compound on each side of the equation • Sales: Caps, volume agreements, paybacks, etc. • Price: Discount, Cost share agreement, etc. 2

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Payer perspective critical forcommercial success • Payers dictate global pharmaceutical pricing and market access today. • While there are critical costs and resource trade- offs to consider, companies should focus on the payer perspective throughout the drug development and commercialization processes. • Those that build the payer perspective into phase III drug trials and ensure the availability of supportive evidence for all key claims will create a strong payer value case. 3 Source: Schonveld, Think like a payer, 2011

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What happens if payers decide to notreimburse a new drug? • Implications for the pharmaceutical company: • No revenue generation • No Return on Investment • Potential lay-offs • Implications for the patients • No new (more efficacious) drug available • Potential negative impact on Quality of Life • No new future innovations which might be based on a new compound 4

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General market access flow combinedwith key 7 payer questions 1 Why do patients need this? Determine Funding Path or Benefit Coverage What am I currently paying for treating this 2 disease? Evaluate Product Clinical Value Economic Value How is your drug better than the 3 alternatives in my specific setting? How much is your drug and why is it worth 4 the cost? Determine Reimbursement Rate Can I afford it and what part of my budget 5 will I use to fund it? Negotiate Price & Contract 6 What are the consequences of not funding? What patients should get it and how can Manage Utilization 7 use be limited to appropriate patients? 5

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When could a company influence apositive payer decision? • Between phase I and II program • Early pricing & reimbursement evaluation • Investment decisions using early modelling • Before start of phase III program • Payer consultation (e.g. NICE UK, GBA Germany, …) • Joint regulatory and payer consultations • Design of the study including the payer requirements: – Endpoints – Comparator – Sample size & study power – Subgroups / biomarker – Minimum effect size – Potential bias – … 6

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When could a company influence apositive payer decision? • After the availability of the phase III data • Availability of data (final vs interim data) • Payer consultation (e.g. NICE UK, GBA Germany, …) • Payer story aligned with regulatory submissions • Final pricing decision • Health Economic data including cost-effectiveness • Strategic Publication Planning – Primary efficacy article – Secondary articles – Health Economics 7

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Case study: Sunitinib in Renal CellCarcinoma• Renal Cell Carcinoma from a payer‘s perspective: • Relatively low incidence / prevalence • Few ‚old-school‘ treatments • High clinical trial failure rate • Low budget impact • Oncology: Key endpoints are Overall Survival (OS) and Progression Free Survival (PFS) 8

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Case study: Sunitinib in Renal CellCarcinoma• Early development phase: • Dosing studies • Potential price anchors: – ‚Old-school‘ RCC treatments – Innovative oncology treatments in other indications » Erlotinib » Bevacizumab » Cetuximab » Trastuzumab » Imatinib » Rituximab »… 9

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Case study: Sunitinib in Renal CellCarcinoma• Preparation of the market: Awareness of disease burden • Epidemiological review • Economic review 10

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Case study: Sunitinib in Renal CellCarcinoma– Start with the „worst“ patients: 2L RCC– No comparator in trials– Phase II trials as basis– As efficacy results were so astonishing Pfizer decided to request a marketing authorization and reimbursement 11

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Case study: Sunitinib in Renal CellCarcinoma• However, the feedback by payers was different (examples) • France: ASMR III, conditional market access (before Mediator scandal!) • Germany: Full market access (no AMNOG at that time!) • Italy: Long negotiations, cost-share agreement • UK: No NICE recommendation for 2L 12

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Case study: Sunitinib in Renal CellCarcinoma• Cost-Effectiveness in 2L: Various publications 13

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Case study: Sunitinib in Renal CellCarcinoma• Break-through data in 1L • Confirming the strong signals in 2L in front of clinical and payer audience • Beneficial QoL outcomes 14

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Case study: Sunitinib in Renal CellCarcinoma• Indirect Comparison and Cost- Effectiveness in 1L• NICE confirming cost- effectiveness• ASMR II in France• Market access and fast uptake in most countries around the world 15

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Conclusions• Payers dictate global pharmaceutical pricing and market access today.• In order to have a successful market access story the payer perspective would need to be included as early as possible, the latest for the information of the phase III design• In the case study Pfizer planned especially for a market access in 1st line and developed an optimized strategy for it 16

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Thank you Dr. Stefan Walzer General Manager AiM Assessment in Medicine GmbH Tel.: +49 7621 705 105 20 stefan.walzer@assessment-in-medicine.de