Kantar Oncology

Oncology Market Overview: Barriers, Challenges and
Value
Bill Bagwell, RPh, Senior Vice President, Clinical and Scientific

Assessment, Kantar Health
Rhoda Dunn, Account Director, Market Access, Kantar Health
22nd Annual
Cancer Progress Conference
ONCOLOGY MARKET OVERVIEW:

BARRIERS, CHALLENGES AND VALUE
Cancer Progress
March 9, 2011
Copyright 2011 Kantar Health
PARP
KRAS
PI3
MAGE-3A
EML4-ALK
B-RAF
ALK / c-Met
CD20
CYP17A1
IGF-1R
CT
CMS
AHRQ
NICE
CER
PCORI
HTA
ICER
QALY
HEOR
Agenda
Increasing prevalence in cancer offset by economic challenges

and increasing competition
R&Ds contribution to commercial success: Safety, efficacy and
pharmacoeconomics
Nothing in life is free especially not pricing
5
INCREASING PREVALENCE IN CANCER

OFFSET BY ECONOMIC CHALLENGES
AND INCREASING COMPETITION
6
GLOBAL SALES OF TOP 100 DRUGS: Over the last decade,

cancer drugs have become a major therapeutic category
$93 billion, of which 8.9 billion
came from ten cancer drugs
1998
Source:
$282 billion, of which $51 billion

came from 20 cancer drugs
2009
Med Ad News
7
Ave. Rx Price ($ per Rx)
Total Rxs (000s)
REVENUE PER CANCER PATIENT FUELS INNOVATION:

But how sustainable is this growth?
Note:
Total Rx data in $ thousands, average price data $, for Top 10 branded products: Femara, Aromasin, Xeloda,
Gleevec, Tarceva, Temodar, Sutent, Sprycel, Tykerb and Avastin
Source: Wolters Kluwer Source Pharmaceutical Audit, Retail channel,
CANCER PREVALENCE ON THE RISE: Demand for treatment increases due

to aging population and serial incremental improvements in treatment outcomes
First- and Second-line Actively Treated Cancer Patients, 20052025 (projected)*
1,200,000
1,000,000
800,000
600,000
400,000
200,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Source: CancerMPact, Kantar Health. Accessed 10 Feb 2011

*Includes hematologic malignancies any stage and Stage IV solid tumors
2009 Estimates of Population in the EU Big 5 and the U.S.
France
Germany
Italy
Spain
UK
EU
Average
United
States
Population
(millions)
62.6
82.8
58.1
45.8
61.9
EU 15:
392,518
EU 27:
497,444
307,212
(July 2009
est)
% Population >65
years of age
16.40%
20.30%
20.20%
18.10%
16.20%
17.34%
12.80%*
Life expectancy
80.98
79.26
80.20
80.05
79.01
78.67
78.11
Mortality
rate/1000
population
8.56
10.90
10.72
9.99
10.02
10.28
8.38
% Mortality due
to cancer
28.9%
(2006)
25.7%
(2006)
28.8%
(2006)
25%
(2005)
29.2%
(2007)
N/A
24%
(2005)
*28% of the U.S. population falls in the Baby Boomer population.

Sources: 1. OECD Health Data 2009, with an EU average referencing the EU 15.
2. CIA, The 2009 World Factbook, with an EU average referencing the EU 27. https://www.cia.gov/library/
publications/the-world-factbook/geos/US.html. Accessed August 24, 2009.
3. OECD Factbook 2009. OECD Web site. http://puck.sourceoecd.org/vl=10780095/cl=11/nw=1/rpsv/
factbook/02/01/01/index.htm. Accessed August 13, 2009.
10
CANCER IS LARGELY A DISEASE OF AGE, making cost of care

a public issue even in the U.S.
Cancer Coverage for All Tumors in 2011
All Stages: 5 year prevalence
Uninsured
Military
Commercial
Medicare
Medicaid
THOUSANDS OF PATIENTS
Source: KantarHealth, Oncology Marketing Strategies U.S., Jan 2011
11
IMPACT OF EXPANDED ACCESS TO COVERAGE:

A substantial increase in covered lives by 2014
Health Insurance Enrollment (Projected)
By Source of Funds, Selected Years 20092019
400
350
300
44
50
52
27
27
26
Millions
250
200
162
167
26
16
14
24
31
11
168
165
161
150
13
15
85
82
13
12
52
60
62
46
47
48
52
61
2009
2010
2011
2014
2019
50
0
Source: Centers for Medicare and Medicaid Services (September 2010).

PHI: Private Health Insurance, Other Public includes Military and Indian Health Services (IHS)
Exchanges
Other PHI
Employer PHI
12
100
Uninsured
Other Public
Medicaid/CHIP
Medicare
12
BOTTOM LINE FOR CANCER: Increase in covered lives translates

to an additional 68,000 cancer patients in 2014
2014 Insurance Mix Stage III and IV Cancer Without and With Potential Reform
Uninsured
178,544
110,542
-38%
Commercial
727,274
787,252
+8%
Medicaid
90,868
98,893
+9%
Medicare
1,378,204
1,378,204
59,944
59,944
Without Reform
With Reform
Military
Source: Kantar Health Coverage Estimator (2010 based on 2014 population) for Stage III and IV Cancer Population; CBO,
Estimated Effects of the Insurance Coverage Provisions of the Reconciliation Proposal Combined with H.R. 3590 as
Passed by the Senate, 3/20/2010
13
THE COST PROBLEM PREVAILS:

Absolute and relative health expenditures will continue to rise
$2,500
100%
Expenditures ($ Billions)
% of GDP
Public
$2,000
1,919
1,877
2,340
2,232
1,015
756
70%
60%
50%
1,107
40%
840
596
13.60%
15.60%
90%
80%
2,114
1,406
1,232
$500
2,184
1,446
$1,500
$1,000
Private
16.20%
17.90%
19.20%
20.00%
20.37%
30%
20%
10%
0%
$0
2000
2004
2008
2012
2016
2018
2019
Projected Projected Projected Projected
Total Healthcare Spending as Share of GDP
Public Versus Private Spending, 20002019 (Projected)
2011 marks the first year that U.S. public health expenditures outpace private health expenditures
The increase in percentage of GDP growth is exacerbated by the recessions constriction of GDP
Slowing the rate at which healthcare costs rise will be an enduring Congressional challenge
Source: Congressional Budget Office (August 2010), Centers For Medicare and Medicaid Services (September 2010).
14
ENTITLEMENT PROGRAMS FUEL MANDATORY SPENDING: Solutions

that threaten entitlement programs or increase taxes are unpalatable
Cumulative Public Debt and Budget
Deficits, 20092020
Shares of Federal Spending Projected

in 2020
Other
spending
14%
Medicare
10%
Medicaid
21%
Social Security
2%
Exchanges
Other health: 1%
Mandatory
Net
interest
Defense
Source:
Congressional Budget Office, The Budget and Economic Outlook: An Update (August 2010).
15
R&DS CONTRIBUTION TO COMMERCIAL

SUCCESS: SAFETY, EFFICACY AND
PHARMACOECONOMICS
16
MEGA BRANDS AND ONCOLOGY: They exist, but are not

commonplace despite the success of Genentech/Roche
Source:
Delphi Pharma, Market Forecasts
MEGA BRAND OUTLOOK: Market pressures, segmentation and

increased competition limit prospects
The Future of the Mega Brand in Oncology
Driver
Life cycle challenges:
Patent cliffs
Biosimilars
Direct competition
PRICE
Budget Limitations: More patients drawing on the

public dollar
Impact on Net Sales

/

Formulary considerations:
Comparative effectiveness analysis (U.S.)
Health technology assessments (ex-U.S.)

Prevalence: on the rise in many tumor types

QUANTITY
Demographics: More cancer patients covered
Source:
Kantar Health, Inc., September, 2010

18
BIOSIMILARS: All three oncology mega brands are at risk for

generic competition in the next few years
EPO
Neupogen Herceptin Rituxan
Avastin
Market launch
1990
1991
1998
1997
2004
Patent expiry
2013
2013
2015
2015
2017
Data exclusive
expiry
2002
2003
2010
2009
2016
Market open to
biosimilar entrant
2013
2013
2015
2015
2017
Source: The Lewin Group and i3 Innovus for Department of Health and Human Services, Office of the Assistant Secretary for
Planning and Evaluation (July 2009), Economic Analysis of Availability of Follow-On Protein Products, retrieved from
http://aspe.hhs.gov/sp/reports/2009/fopps/index.shtml
19
COMPETITION IS FIERCE:
Manufacturers seek to turn unmet need into good business
Medicines in Development for Cancer*
Bladder cancer
23
Brain cancer
61
Breast cancer
Cervical cancer
106
13
70
Colorectal cancer
Head/neck cancer
34
Kidney cancer
44
Leukemia
129
35
Liver cancer
Lung cancer
122
Lymphoma
99
Multiple myeloma
52
Ovarian cancer
63
Pancreatic cancer
54
Prostate cancer
Sarcoma
103
27
Skin cancer
Stomach cancer
Other cancers
Unspecified cancers
67
27
55
74
* Some medicines are listed in more than one category

Source: 2009 Report, Medicines in Development for Cancer, PhRMA, www.phrma.org, downloaded July 20, 2009
20
SOME TUMOR TYPES WILL SEE WINNERS AND LOSERS:

When differentiation fails, therapies must jockey for position
RCC Drug-treated Patients and Potential Drug Therapy Options by Year
(Actual through 2009 and Projected through 2012) RCC patients receiving drug therapy
10,854
7,181
10,632
10,795
11,534
11,982
12,414
7,607
Interleukin2 Interferon
Nexavar
Sutent
Nexavar
2004
2005
2006
Torisel
Sutent
Nexavar
Torisel
Sutent
Nexavar
Votrient
Avastin
Afinitor
Torisel
Sutent
Nexavar
Votrient
Avastin
Afinitor
Torisel
Sutent
Nexavar
Votrient
Avastin
Afinitor
Torisel
Sutent
Nexavar
2007
2008
2009
2010
2011
12,844
Anyara
AV-951
Axitinib
Adjuvant
Rencarex
Votrient
therapy for
Avastin
Stage III
Afinitor
represents an
Torisel
additional
Sutent
3,000-5,000
Nexavar
Interleukin-2
patient
Interferon
opportunity
2012
# products, advanced
10
# lines of therapy, advanced
# products, high-risk Stage III

Increase in new products
Source:
CancerMPact Kantar Health. Accessed 10 Feb 2011

21
OTHER TUMOR TYPES WELCOME NICHE POPULATIONS: Smaller

more defensible market segments reduce the value of plan interventions
2000
2006
2009
Other and non-specified 1%
EML4-ALK
Other nonsmall cell
Adenocarcinoma
Small cell
24%
37%
Large cell
Small cell
4%
18%
PIK3CA
1%
14%
Pending
HER2
14%
1%
2%
Squamous
BRAF
1%
20%
EGFR 16%
86%
Non-small
cell
20%
1%
4%
Squamous
14%
Small cell
Other and nonspecified

Large cell
20%
KRAS
24%
Other nonsmall cell
Source: CancerMpact Patient Metrics, October 2008; SEER

22
THE CURRENT SITUATION: Budget constraints introduce the

importance of value, which must be cultivated in the development phase
Policy level
Regulatory considerations
4
National and regional payer
considerations
5
National / regional / local
Safety
Efficacy
Quality
HTA /
economic
evaluation
Budgeting
HTA: Health technology assessment

23
MACROECONOMIC FORCES PRECIPITATE TOUGH CHOICES:

Balancing clinical and cost effectiveness in the face of limited funds
Drug A costs 10,000 and results

in 5 QALYs
Drug B costs 100,000 and results

in 10 QALYs
Cost/QALY = 10,000/5 = 2,000
Cost/QALY = 100,000/10 = 10,000
2,000,000 = 1,000 QALYs
2,000,000 = 200 QALYs
Conclusion
Drug B is more clinically effective and Drug A is more cost effective.
If the policy goal is to maximize population health gains, then Drug A
must be used.
Maynard A. Rational Pharmacology and Health

Economics.
24
PILLARS OF VALUE: Consider your audience

Safety
Efficacy
Tolerability
Quality of life
Disinvestment (i.e., decreased
utilization of healthcare goods
and services)
Practice economics
DEFINING VALUE: Comparative effectiveness vs. cost effectiveness
Concept
Definition
Comparative effectiveness
analysis
Comparison of the health outcomes of the

drug/technology with available alternatives
Cost effectiveness
analysis
Analysis as to whether improvements in health

outcomes are commensurate with the additional
costs of the technology
Quality-adjusted life years (QALYs) is the most
common, but not exclusive, metric used
26
THE PURSUIT OF COMPARATIVE EFFECTIVENESS IN THE US:

Changing names and steering committees, but charter consistent
27
CER FUNDING GROWS: General revenues and contributions from the

Medicare trust fund and private health plans fuel comparative effectiveness
CER Funding American Recovery and Reinvestment Act
of 2009 and Affordable Care Act of 2010
$ Millions
Note:
Medicare Beneficiary Transfer Fee and Private Beneficiary Fees estimated based on Aug 2010 HHS estimates of
beneficiary enrollments.
28
FRAGMENTATION CHALLENGES CER EFFORTS:

But does not stymie them
Confounding factors include:

Presence of target
Primacy of target
Existing and developing genetic mutations
Relative contribution of multiple lines of therapies
Size of eventual population and ability to accrue trial patients
29
THERE IS NO SUCH THING AS FREE

ESPECIALLY NOT PRICING
30
PRICE CONTROLS: Well established in the E.U.
E.U.
Up front
+ Reference pricing
+ Price-volume agreements
+ HTA-driven formulary decisions
Back end
+ Claw-backs, rebates and/or
discounts
31
PRICE CONTROLS: Well established in the E.U. and not new to the U.S.
E.U.
Up front
+ Reference pricing
+ Price-volume agreements
+ HTA-driven formulary decisions
Back end
+ Claw-backs, rebates and/or
discounts
U.S.
Up front
+ Medicaid rebate formula/
340B discount
+ VA pricing
+ Medicaid Federal Upper
Limit (FUL) pricing

Back end
+ Rebates and discounts
32
MEDICARE DOMINATES CANCER COVERAGE:

Medicare covers approximately 58% of cancer patients
Cancer Coverage for All Tumors in 2011
All stages: 5-year prevalence,
thousands of patients
Medicare Coverage Segments

All stages: 5-year prevalence,
thousands of patients
435
Medicare FFS only
562
Dual (Medi-Medi)
1,016
<65, 3,081
no SSI
4,220
>65, SSI
896
Medigap
1,226
Retiree
44 8
32
Source:
Medicare Advantage
VA
Uninsured <65, treated
Uninsured <65, not treated
Kantar Health, Oncology Market Access U.S., 2011

33
393 Vintage Park Dr., Suite 250

Foster City, California 94404, U.S.A.
Tel:
(650) 403-7012
Fax:
(650) 403-7062
E-mail: info@kantarhealth.com
URL:
www.kantarhealth.com
US:
Rhoda Dunn
rhoda.dunn@kantarhealth.com
Bill Bagwell
bill.bagwell@kantarhealth.com
Please contact us if you have any questions.
34
PHARMACOECONOMIC CONSIDERATIONS IN THE EU: Existence of

institutionalized cost-effectiveness analyses drives reimbursement price
Country Specific Information
European Comparison of Cancer Drug Prices, May 2010 ()
Source: Kantar Health Oncology Market Access, 2010
France: A new Public Health

Benefit and Post-Launch Studies
Group (ISP-EP) is expected to
provide ex ante and ex post
opinions on drugs based on postlaunch study data, including cost
effectiveness data.
Germany: As of 2011, free
pricing will be limited by the on the
outcome of an early benefit
evaluation (f-NB) to be
implemented in 2011
Italy: HTAs operate at the national
and regional levels, although
regional efforts are limited beyond
Emilia Romagna and Veneto.
Spain: Use of cost-effectiveness
analyses is expected to grow with
recent legislation establishing an
expert body to conduct economic
evaluations.
UK: NICEs pursuit of value for
money and cost-effectiveness
drive all aspects of pricing and
reimbursement.
35
Oncology Market Overview: Barriers, Challenges and

Value
Bill Bagwell, RPh, Senior Vice President, Clinical and Scientific

Assessment, Kantar Health
Rhoda Dunn, Account Director, Market Access, Kantar Health
22nd Annual
Cancer Progress Conference
36

Kantar Oncology

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Kantar Oncology

Uploaded by

Copyright:

Available Formats

Oncology Market Overview: Barriers, Challenges and

Bill Bagwell, RPh, Senior Vice President, Clinical and Scientific

Rhoda Dunn, Account Director, Market Access, Kantar Health

ONCOLOGY MARKET OVERVIEW:

Copyright 2011 Kantar Health

Copyright 2011 Kantar Health

Copyright 2011 Kantar Health

Increasing prevalence in cancer offset by economic challenges

INCREASING PREVALENCE IN CANCER

GLOBAL SALES OF TOP 100 DRUGS: Over the last decade,

$282 billion, of which $51 billion

Copyright 2011 Kantar Health

Ave. Rx Price ($ per Rx)

Total Rxs (000s)

REVENUE PER CANCER PATIENT FUELS INNOVATION:

Copyright 2011 Kantar Health

CANCER PREVALENCE ON THE RISE: Demand for treatment increases due

Source: CancerMPact, Kantar Health. Accessed 10 Feb 2011

2009 Estimates of Population in the EU Big 5 and the U.S.

*28% of the U.S. population falls in the Baby Boomer population.

CANCER IS LARGELY A DISEASE OF AGE, making cost of care

IMPACT OF EXPANDED ACCESS TO COVERAGE:

Source: Centers for Medicare and Medicaid Services (September 2010).

BOTTOM LINE FOR CANCER: Increase in covered lives translates

THE COST PROBLEM PREVAILS:

Total Healthcare Spending as Share of GDP

Public Versus Private Spending, 20002019 (Projected)

ENTITLEMENT PROGRAMS FUEL MANDATORY SPENDING: Solutions

Shares of Federal Spending Projected

Copyright 2011 Kantar Health

R&DS CONTRIBUTION TO COMMERCIAL

MEGA BRANDS AND ONCOLOGY: They exist, but are not

Copyright 2011 Kantar Health

Delphi Pharma, Market Forecasts

MEGA BRAND OUTLOOK: Market pressures, segmentation and

Budget Limitations: More patients drawing on the

Impact on Net Sales

Prevalence: on the rise in many tumor types

Kantar Health, Inc., September, 2010

Copyright 2011 Kantar Health

BIOSIMILARS: All three oncology mega brands are at risk for

Neupogen Herceptin Rituxan

* Some medicines are listed in more than one category

SOME TUMOR TYPES WILL SEE WINNERS AND LOSERS:

# lines of therapy, advanced

# products, high-risk Stage III

CancerMPact Kantar Health. Accessed 10 Feb 2011

Copyright 2011 Kantar Health

OTHER TUMOR TYPES WELCOME NICHE POPULATIONS: Smaller

Other and nonspecified

Source: CancerMpact Patient Metrics, October 2008; SEER

THE CURRENT SITUATION: Budget constraints introduce the

HTA: Health technology assessment

MACROECONOMIC FORCES PRECIPITATE TOUGH CHOICES:

Drug A costs 10,000 and results

Drug B costs 100,000 and results

Cost/QALY = 10,000/5 = 2,000

Cost/QALY = 100,000/10 = 10,000

2,000,000 = 1,000 QALYs

2,000,000 = 200 QALYs

Maynard A. Rational Pharmacology and Health

PILLARS OF VALUE: Consider your audience

Copyright 2011 Kantar Health

DEFINING VALUE: Comparative effectiveness vs. cost effectiveness