A rigorous budget impact modeling tool delivers credible economic evidence to payers and differentiates a treatment approach based on its financial impact.

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The Client Situation

What would you do if you faced this situation?

  • Your clinical trial data were sufficient to meet regulatory criteria for safety and efficacy.
  • Since launch, you’ve seen acceptable provider uptake.
  • Preliminary results from a retrospective claims study show the product continues to demonstrate clinical effectiveness when used in a larger patient population.
  • But you launched into a competitive market where alternative treatments seem to offer similar benefits.
  • Your teams lack the information and tools to communicate your product’s financial impact.

Health authorities and reimbursement agencies require evidence to determine coverage placement for your treatment. They don’t simply want evidence of clinical efficacy and safety. They want economic evidence of the financial impact and cost-effectiveness of your product.

You are shrewd. You know that health authorities and payers often challenge the economic evidence produced by pharmaceutical companies, particularly the assumptions applied to economic models. So if you develop a budget impact model, it must meet 3 criteria to be credible:

  1. It must be rigorous and methodologically sound.
  2. It must be based on uncontestable and transparent sources of clinical evidence.
  3. It must be applicable to a specific patient population.

For the treatment to reach its full commercial potential, you know you need a budget impact model. But you really prefer not to tie up internal staff with this important project. What’s more, since your treatment launched in several countries, your budget impact model needs to be flexible to take into account the requirements of numerous Health Technology Assessment (HTA) organizations, multiple languages, and all of the currency systems of those countries.

This is indeed no small task. Where would you turn for support? A global pharmaceutical company facing this situation chose Xcenda.

Xcenda’s Recommendations

One of the main reasons this client chose Xcenda is confidence. They were confident that Xcenda consultants possessed the much-needed expertise to create credible economic models to which health authorities and payers give credence.

This confidence was bolstered as Xcenda consultants met with the client to discuss goals. The consultants navigated through the complex issues required to build a credible economic model and made numerous suggestions about how to achieve the goal efficiently without sacrificing quality.

From the outset, Xcenda consultants focused on 3 core components: cost-effectiveness, cost-minimization, and budget impact modeling. Xcenda staff identified 1 major goal: to design and build a rigorous, integrated economic model that is highly effective in negotiations with health authorities, reimbursement agencies, and other decision makers – and to develop a tool that works globally.

To achieve this goal, Xcenda consultants outlined a comprehensive approach that has been highly successful for other clients in similar situations. The approach struck the right balance between methodological rigor, credibility, and applicability to the market while also carefully documenting all assumptions and sources of data.

The Service Package

Xcenda consultants outlined a service package composed of 5 core steps:

  • Phase 1 – Review and critical analysis
  • Phase 2 – Workshop to report findings
  • Phase 3 – Modeling tool conceptualization
  • Phase 4 – Modeling tool development
  • Phase 5 – Model testing and finalization

For the review and critical analysis, Xcenda consultants met with the client to define activities, milestones, and timelines and to gather supporting documentation. Then Xcenda conducted a targeted literature review of cost-effectiveness and other economic models to inform and shape the final budget impact model.

The literature review began with careful construction of a search protocol to include and exclude certain study criteria, search engines, and key words. Xcenda staff recommended several sources including bibliographic databases (MEDLINE, EMBASE, Cochrane Library), HTA/payer decisions (NICE, HAS, CDR, PBAC), and others (NHS, EED, DARE, AHRQ).

After conducting the literature review, Xcenda consultants analyzed the findings and developed a report based on guidelines outlined by Philips et al in Health Technol Assess 2004;8(36). Xcenda staff presented the findings of the literature review to the client in a workshop and discussed the implications of the economic evidence. This laid the groundwork for the conceptualization of the economic tool.

During the modeling tool conceptualization phase, Xcenda consultants drew upon the latest standards and methods for developing and presenting economic models as defined by the International Society for Pharmacoeconomics and Outcomes Research, the Society for Medical Decision Making Model Guidelines, the National Institute for Clinical Excellence (NICE), other regulatory agencies, and the Academy of Managed Care Pharmacy Model Guidelines.

The key areas taken into account during this phase include:

  • Perspective and time horizon per country
  • Patient population
  • Treatment comparators from 3 competitors
  • Utilization of the client’s product as identified in existing market research, retrospective database analyses, published research, and/or expert opinion
  • Direct costs associated with each therapy
  • Medical cost-offsets, including reductions in resource use due to reduced utilization from improved clinical outcomes
  • Cost-minimization
  • Budget impact modeling
  • Incremental cost-effectiveness ratios (ICERs) where comparators were ranked based on cost

During the modeling tool development phase, Xcenda consultants aggregated all of the evidence and applied economic data to develop a highly functional model that can be used with health authorities and payers.

This model ensures easy re-configuration for local adaptation and global use simply by permitting the user to enter country-specific data in a hidden screen. In the model testing and finalization phase, Xcenda consultants tested and debugged the tool for internal consistency and developed a technical report describing the model design, assumptions, inputs, outputs, and results. This documentation can be made available to payers at any time to bolster confidence in the economic evidence the tool reports.

The Client’s Results

This global pharmaceutical company is now equipped with the type of economic evidence that satisfies payers and gives their teams the confidence to have successful product dialogue with health authorities and payers. With just the click of a few buttons, manufacturer representatives can customize the economic model for virtually any payer in nearly any country. What’s more, with a professional, clean, and intuitive graphical user interface, and compatibility on laptop and iPad platforms, the manufacturer’s representatives do not have to fumble with complex technologies and risk losing focus on the end goal – proving product value and maximizing patient access.

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