With the transition to value, payers are insisting that pharmaceutical manufacturers deliver real world evidence of their drug’s efficacy before being allowed on formulary. The cost of new specialty treatments has forced companies to bolster and go beyond clinical trial, proving that their drugs improve health outcomes and reduce the cost of care in actual use. Gathering and compiling the myriad of needed data points requires a digital strategy that connects patients, providers, and payers. These comprehensive digital technology platforms are also effective tools for delivering competitive differentiation, better speed to market, and a source for new and expanded revenues.

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The Shift to Value:
What it Means for Pharmaceuticals
Medullan Webinar Series !

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Benjamin Dean
Business Strategy
Todd Greenwood, PhD, MPH
Director, Digital Strategy

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We’re Digital Health Experts. !
• 100% Healthcare since 2005
• Driven by User-Centered Strategy & Execution
• Geared for Client Collaboration
• Focused on Driving Outcomes

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Today’s Discussion
1
Understanding
Pharma and
Biotech’s
Shift to Value!
How
Digital Enables
RWE Collection
& Drives
Revenue!
What it takes to "
Get Started!
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3

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You’ll walk away with….
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An understanding of the shift to value’s impact on the
pharmaceutical and biotechnology industry
Knowledge of the opportunities that digital presents and the
accessible value they create
Next steps to leverage digital opportunities and move towards a
value-based proposition
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Understanding the
Shift to Value

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US spends
significantly more of
GDP on Healthcare

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Yet outcomes are worse
• “Americans live shorter lives and experience more injuries and illnesses than
people in other high-income countries” (Institutes of Medicine Report, 2013)
• US health disadvantage can’t be attributed solely to racial and income disparity
• US fares poorer, on average, than other peer countries in:
- Adverse birth outcomes
- Injuries and homicides
- STDs
- HIV/AIDS
- Drug-related mortality
- Obesity and diabetes
- Heart disease
- Chronic lung disease
- Disability

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Biopharma needs to
prove population impact
of costly new drugs
Source: “Rx Price Watch Report: Trends in Retail Prices of Generic Prescription Drugs Widely Used by Older Americans: 2006 to 2013,” AARP Public Policy Institute

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Shift to Value: Address healthcare costs, quality of
care and patient outcomes
Moving from Fee-For-Service (or
volume-based pricing) to
payments linked to performance
against quality metrics
By 2020, 75% of commercial payments will be
through value-based arrangements
Health Care Transformation Task Force (coalition of payers,
providers, patients, purchasers)

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Different types of value-based arrangements
Payment Dependant on
Desired Outcome
Larger Rebate in
Absence of Outcome
Performance Against
Competitors
Indication Specific
Pricing
Payment based on:
Reduction in
hospitalizations
Higher Rebate if:
Missed LDL goals
and utilization
Rebate based on:
% A1C target vs.
other GLP-1s
Higher price in lung based on:
Better survival
rates vs.
pancreatic cancer
Aetna, Cigna, Harvard Health
Heart failure
$5,475 per year
Cigna, Harvard Health
High Cholesterol
$16,920 per year
Aetna, Cigna, Harvard Health
Type II Diabetes
$8,967 per year
Express Scripts
Lung & Pancreatic Cancer
$105,788 per year

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Value-based contracts are still rare in the US
Underlying Reasons
• Fragmented U.S. healthcare system
• Plethora of EHR providers with some patient records still in paper!
• Inability to track patient adherence to drug regimen and drug effects on health
• Patient Privacy concerns
"The basic infrastructure of electronic medical records,
let's call it 'real-world data', is going to have to increase
so that we can easily track and monitor outcomes”
- Novartis CEO Joe Jimenez
http://www.fiercepharma.com/pharma/novartis-roche-ceos-see-performance-based-future-but-u-s-isn-t-ready-yet

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High profile value based contracts
Year! Drugs! Condition! Pharma! Payer!
2009
Januvia and Janumet
Type 2 Diabetes
Merck & Co
Cigna
2011
Rebif
MS
EMD Serono
Cigna
2012
Rebif
MS
EMD Serono
Prime Therapeutics
2015
Harvoni
Hepatitis C
Gilead / Catamaran
Cigna
2015
Repatha
Cardiovascular
Amgen
Harvard Pilgrim
2016
Praluent
Cardiovascular
Sanofi / Regeneron
Cigna
2016
Repatha
Cardiovascular
Amgen
Cigna
2016
Ernesto
Heart Failure
Novartis
Cigna
2016
Ernesto
Heart Failure
Novartis
Aetna
2016
Januvia and Janumet
Type 2 Diabetes
Merck & Co
Aetna

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Pharma & Payers are NOT aligned
Payers Want!
• Immediate cost containment
• Comparative data sets
• Real-world Evidence data (RWE)
Pharma Provides!
• Standard adherence and
patient experience programs
• Data from randomized clinical
trials against a placebo (RCT’s)
EY Progressions 2014: Navigating the payer landscape.

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RCTs are insufficient for payers

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Real World Evidence goes beyond claims data

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How Digital Enables
RWE & Drives Revenue

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The Digital Continuum
Increasing Complexity, Connectivity, Comprehensiveness, and Points of Engagement
App!
• Standalone product
• Discrete focus
• Limited enterprise support
and services
• Limited integration
Program!
• A first-class operation
around bringing the solution
to market
• Focused on continuous
improvement of outcomes
• Strategic asset of real world
evidence for clinical studies
and value-based leadership
Solution!
• The right combination of
technologies and ecosystem
partners
• Behavior changing interventions
and content
• Digital and non-digital
(multi-channel) set of components

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What digital offers
Developing medicine in better ways!
– Accelerated clinical trials
– Improved patient tracking
– Real world outcomes
– Learning health systems
– Clinical research as a care option
– Virtual trials
Developing better medicine!
– Personalized medicine (genomics,
proteomics, metabolomics)
– Companion digital therapeutics
– Adherence controls
– Inter-disciplinary therapies
Two sides of the same coin

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Digital impacts early development to commercialization
Product Lifecycle!
Medical!R&D!
Product
Supply!
Comm.
Launch!
• Modeling / simulation
• Genomics
• RWE packaging
• E-clinical
Recruitment
• Digital monitoring
• Medical
information
• AE Reporting and
Social Listening
• e-Safety
• Smart factory
with IoT
• Digitized supply
chain
• Omni-channel
• Post-marketing
monitoring
• Patient marketing
• Digital therapeutic
Data Analytics, Storage and Security
Treatment!
Customer pathway!
• Fitness/Wellness
Tracking
• Genomics
• Social media
• Electronic health
records
• Remote monitoring
• Telemedicine
• Patient communities
Diagnosis!
Self-care!

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RWE takes a robust platform
Steps to RWE Acquisition!
1. Generating patient-centered data
2. Compiling existing data from
disparate sources including
Pharmacy POS, utilization claims,
EHR claims and notes
3. Leveraging data for contracting and
patient-centric purposes
NEHI: Real World Evidence: A New Era for Health Care Innovation

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Monetization potential of digital technology for
Pharma
Epidemiology Underlying
a Drug Purchase
Prevalence!
Incidence!
Seeking Treatment!
Prescribed Drug !
Compliance!
Sales!

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Monetization potential of digital technology for
Pharma
Behavioral Goals:!
• Increase incidence through screening
• Drive patients to seek treatment through
education and campaigns
• Influence Rx habits by educating and raising
awareness of both patients and providers
• Drive compliance through behavioral therapy
Prevalence!
Incidence!
Seeking Treatment!
Prescribed Drug !
Compliance!
Sales!

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What it Takes to
Get Started

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1. Measure the success and capability of your current workflow
2. Seek and drive internal alignment
3. Establish baseline of existing channels and tools
4. Test a “Fail Fast, Succeed Faster” Mindset
5. Anticipate needed investment for 2017 planning
How can you get started down this path?

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Thank you
tgreenwood@medullan.com
@medullan
bdean@medullan.com
@Ben_Dean
Benjamin Dean
Todd Greenwood, PhD
Director, Digital Strategy
Business & Monetization
Strategist