		The first companion diagnostics were launched in the 1980s in the face of significant skepticism from drug developers as to whether segmenting a drug’s market through a diagnostic was advisable. The commercial success of Herceptin (trastuzumab) and Gleevec (imatinib), which both require testing with companion diagnostics before being prescribed, has moved the entire field forward. From a start of a handful of oncology drugs with corresponding diagnostics, the field has expanded to include multiple therapeutic areas, and the number of combinations has grown by 12-fold with revenues now in the $1.5-billion range.

		The FDA definition of companion diagnostics only encompasses two types of companion diagnostics—theranostics (combining diagnosis and targeting the appropriate therapy) and monitoring tests. Other tests&mdash;screening and detection, prognosis, and recurrence&mdash;provide critical information but do not specify a corresponding therapeutic. While these other three categories do not fit the FDA criteria, they are essential to the growth of companion diagnostics, as they account for the majority of revenue for companies that develop these tests.  Oncology will remain at the forefront for the foreseeable future based on currently approved drugs, but other therapeutic areas are beginning to emerge, including cystic fibrosis, human immunodeficiency virus (HIV) and severe growth failure.

		Apart from situations where the potential companion diagnostic enables a drug to be commercialized, drug developers see little reason to pay a premium to the initial diagnostic test developer when numerous diagnostics players may enter the market. Diagnostic companies, on the other hand, would like to receive royalties on sales of the drug or sales-based milestones to share some of the long-term value of the combination and compensate them for the risk of the drug not being approved or lackluster sales. Up to now, drug development partners have preferred to structure payments to test developers as fee for service or through fixed milestone payments. These payments are usually not enough to ensure a profitable outcome for the diagnostic developer and require them to obtain reimbursement from payers in generating sufficient returns on investment.

		Starting with the development of the companion diagnostic, the drug developer has different interests from those of the diagnostic company. The drug developer wants the most accurate test available to the greatest number of physicians at the lowest cost in the shortest period of time, with all attention focused on selling the greatest volume of pharmaceuticals. For chronic diseases, it does not require many patients for drug volumes to increase substantially. The companion diagnostic is the key gatekeeper in determining which patients will benefit.

		Diagnostic developers, on the other hand, may not have an interest in developing a companion diagnostic test, especially if the test is for a limited patient population. Unlike the drug developer that can count on a lifetime of revenue from chronic treatment of a patient, the diagnostic developer only gets paid per test. Even in cases where the market for diagnostic tests is sufficiently large, resource constraints can create roadblocks. Few diagnostic companies have a sales force to educate health care providers on ordering the appropriate diagnostic test.

		These issues have led pharmaceutical companies to evaluate four different approaches to obtaining companion diagnostics: internal development of companion diagnostics, partnering with an established diagnostic company, acquisitions of diagnostic companies, and hybrids of the first three options.

		While pharmaceutical companies are most interested in companion diagnostics that are theranostics and monitoring types of tests, payers appear to be more interested in the other types of companion diagnostic tests, such as those that indicate whether a standard course of therapy (such as Genomic Health’s Oncotype DX test for breast cancer) can be applied, or diagnostic tests that provide information on multiple potential treatment options in a therapeutic area. The current model of a single diagnostic test tied to a single pharmaceutical agent is unlikely to survive payer pressure for greater efficiency and cost-effectiveness. As multiple therapeutic agents are approved for similar clinical indications, payers want to identify the best product for a particular patient and not pay for multiple similar tests. This push to multiplex assays, which has already occurred in most other diagnostics categories (e.g., blood work panels, metabolic panels), will become increasingly common in companion diagnostics.

		The future growth of companion diagnostics will rely upon a thriving ecosystem. The ecosystem needs multiple players to be vibrant. The major players must include drug developers that continue to develop targeted therapies based on biomarkers, diagnostic firms with the capability to create new diagnostic tests, regulators that are willing to approve combination products of drugs and diagnostics, and payers who see the value in reimbursing targeted therapies.

		However, diagnostic firms are the one group for which the business model of companion diagnostics is still uncertain. This is particularly true for those diagnostic companies seeking to develop theranostics. Those diagnostics companies that develop for all types of companion diagnostics—screening and detection, prognosis, recurrence, as well as theranostics and monitoring&mdash;can leverage their portfolio of tests to create a sustainable business model. Those companies that seek to focus only on theranostics and monitoring diagnostics will face a more uncertain future.  

		Amit Agarwal, Glenn Snyder and Daniel Ressler are all Principals at Deloitte Consulting LLP. Amit leads Deloitte’s R&D Practice on the West Coast with particular focus on diagnostic clients. Glenn is the U.S. leader of Deloitte’s Medical Technology Practice, with a focus on clinical diagnostic companies. Daniel leads Deloitte’s Life Sciences R&D Practice for North America.

This article is excerpted from “The current and future state of companion diagnostics,” Pharmacogenomics and Personalized Medicine, 2015:8 99-110, and accessible online at 

http://www.dovepress.com/articles.php?article_id=21104

Articles

While the pharma industry is growing more dependent on companion diagnostics, test developers face an uncertain business model

Understanding the companion-diagnostics environment

		On March 24-26, more than 100 supply chain and logistics professionals convened in Philadelphia for the semiannual Health and Personal Care Logistic Conference (HPCLC). Since the 1920s, HPCLC has been addressing relevant and current topics facing logistics professionals in the health and personal care product sectors. This most recent conference was no different, as the sessions and presentations focused on the transportation “capacity crunch” that most firms find themselves trying to strategically navigate.

		With a theme of “Transformational Logistics: Addressing the ‘Capacity Crunch’ through Change and Innovation,” the conference focused on how transformational approaches to managing logistics can play a role in proactively managing and mitigating the effects of emerging transportation capacity concerns. Sessions highlighted strategic and tactical best practices in areas such as change management, contracting, transportation network optimization, forecasting, and operational planning. 

		Featured talks included an opening keynote address by Caterpillar’s General Manager of Outbound Transportation, Doug Gray, who shared their journey to a more visible transportation infrastructure. Also, representatives from Johnson & Johnson and Alcon Laboratories shared examples of how pallet optimization and transportation yard tracking technologies are resulting in better transportation capacity utilization.

		Industry sponsors of the event were: Crowley, Kenco Group, Green Mountain Consulting, Landstar, Magno International, Panalpina, QProducts & Services, Total Quality Inc. (TQI) and Transaver. 

		The theme for the Fall Meeting was announced: “Mega Trends: Major Themes Impacting the Strategy and Practice of HPC Supply Chain Management.” For the first time, the conference will be held in Chicago, IL on October 12-15. For more information visit 

		Charles T. Bennett is a member of the Board of Directors of the Health and Personal Care Logistics Conference, Inc. He is also Director, Global Specialty & Cold Chain Logistics for Pfizer, Inc., in Collegeville, PA.

Logistics managers in life sciences and personal care focus on transportation capacity

HPCLC Spring Meeting recap

I get impatient with my writers who sometimes start articles with events that occurred in 1995 or 1985 or even 1875—I love histories, but Pharmaceutical Commerce is not a place to go to for the history of most anything. Nevertheless, I do want to commemorate the 10th anniversary of the publication you’re holding in your hands right now. Made it this far&mdash;whew!

		The cover reproduction from May/June 2005 you see here presents topics that we were staking out as part of the overall logic of Pharmaceutical Commerce: to cover the issues, technologies and business practices that affect the movement of biopharma products into the marketplace. Since the beginning, we’ve hewed to every-issue coverage of six specific categories:

 M&A activity, financial services and the CFO perspective on company revenue and expenses. A key element of this is how biopharma interacts with its trading partners—wholesaler/distributors, retail pharmacy, health systems and payers

 Sales, marketing, advertising, promotion and the resources (online and offline) to reach prescribers and patients

 The physical movement of products from place of manufacture to place of dispensing, which can reach as far back as contract development and manufacturing organizations (CDMOs) and as far forward as the patient’s home. And we’ve carved out regular coverage of cold chain practices and traceability in the supply chain

 All things IT, ranging from cloud-based computing to social-media “listening,” as well as basic functionalities in analytics, IT validation and data exchange

 All things FDA, plus legal practices in trade, financial services, intellectual property and professional practices

 We don’t cover the shop floor, per se, but we do cover how packaging interconnects with marketing, distribution channels and product security, and how pharma brand owners connect with their contractors.

		A more recent addition—a testament to the growing overlap between drug research, personalized medicine and commercialization&mdash;is Clinical Operations, where we look at the mechanics of running trials, recruiting patients and reporting meaningful results.

 covers the flow of funds, goods and information between biopharma companies and their markets and clients. Another theme that we harp on, throughout our coverage, is breaking down the silos between each of these functional areas and the rest. The biopharma industry has gotten better at this, but it’s still all too often the case that marketing doesn’t know what IT is doing; IT doesn’t know what Regulatory is doing, and executive management struggles to obtain meaningful information in all these functional areas. Our ideal reader is someone in one of these functional areas who wants to keep tabs on what’s going on in all the others.

		Back in 2005, our headline topics for the inaugural issue were “Fee for Service”—the shift from straight transactional interactions between manufacturers and distributors to collaborative, service-oriented interactions; “Parenteral Packaging”&mdash;the business dynamics of how injectable products are packaged; and “Sales Force Automation” (which, quaintly, was only anticipating the shift first to smartphones and then to tablets).

		With this issue, we’re looking at brand security and product traceability, through our annual 

; and compliance packaging, which increasingly influences such vital topics as 

. You’ll find news and analysis of many other topics in this issue; again, think of the flow of funds, products and information.

		About half of you, our valued subscribers, are reading these words by holding the printed page in your hands; we remain committed to the print medium based on feedback from subscribers. But this is a digital age; we’ve steadily upgraded our digital capabilities and expect to do more in the near future.

		Finally, I want to heartily thank our writers that help us expand and deepen our coverage; our advertisers and business partners, whose support is fundamental to our ability to produce this publication; and our readers and fans, who continually challenge us and win our admiration for the stunning accomplishments of this industry. In my inaugural editorial, I noted that while the cost, innovativeness and efficacy of biopharma products are endlessly debated, in the ultimate analysis, it is helping all of us live longer, healthier lives. That continues today—this is an industry that never stands still.

Pharmaceutical Commerce at 10

The Drug Supply Chain Security Act (DSCSA) was passed in 2013 with a complex schedule of deadlines starting this year and continuing into the early 2020s. That mandate is generating a dramatic upswing in pharma industry capital investment and operational change. One of the service providers at the center of this transformation is TraceLink, which just moved into expanded headquarters in North Reading, MA, and is developing software tools and data services for both the US market and countries around the world that are also mandating traceability in pharma supply chains.

Shabbir Dahod, TraceLink president and CEO, has long been associated with the traceability subject, going back to his founding of an earlier company, SupplyScape, in the early 2000s. (That company was ultimately absorbed into TraceLink after its founding, in 2009.)

 sat down with Dahod to talk about DSCSA, the pharma industry’s current supply chain management capabilities, and the future outlook of commercial IT management. Here’s what he had to say.

1) You’ve spent well over a decade focused on pharmaceutical supply chain integrity. How did you come to dedicate yourself to that topic, so early and for so long?

		After I graduated college (Boston University, 1985, computer science), I had the opportunity to work in a variety of IT fields, including a company, Asymetrix, founded by Paul Allen after he left Microsoft. I worked on databases, natural language learning and multimedia, and early on was tagged for a management role. Later, I became familiar with the work going on at the Auto-ID Lab at MIT, which was one of the earliest developments in what has become known as “the Internet of Things (IoT)”—the concept that physical objects would have an identity and would communicate on the Internet.

		Around this time, in the early 2000s, the efforts by FDA and the States of Florida and California to combat counterfeit drugs started to build up. I had hired some of the Auto-ID people, and we realized very quickly that we could marry IoT concepts with the problems of the pharma supply chain—it was an area where technology could have a big impact. That led to the founding of SupplyScape and the work we started on drug pedigrees and traceability. Along the way, a passion grew in us with the realization that people’s lives are at stake&mdash;thousands or hundreds of thousands can be affected by counterfeit drugs. It’s a silent killer; we’ve met people who have personally been impacted. We made it our mission to protect patients.

		This has been very fulfilling work; I’ve been at it more than 13 years now, and through some tough times. When California postponed its e-pedigree plans in 2008 (at the time, a fairly rigorous track-and-trace system was being scheduled for use within the state; the postponement included a deferral to federal action, which eventually took place in 2013—ed.), we went from a growing company of more than 100 to a reduction to 15. Our core team restarted the effort as TraceLink in 2009.

2) The current march toward traceability started in the mid-2000s, and has many years yet to progress. Why is it taking so long?

		The basic issue is, traceability and supply chain coordination is very, very hard and complex to manage. The US pharma supply chain is very complex, multi-tiered, and operates at high volumes. Combining all these complexities is challenging in and of itself. Placing serial numbers on pharma packages are not just a matter of getting the right printer; a manufacturer has to figure out how to manage the volume of data generated by the events associated with that number. When you operationalize this process, you have to think about conveying that serial number data into an inventory system, then into a picking, packing and shipping process—you have to move that data through an internal architecture.

		What we’re observing is that it’s hard and complex to do all these things, and it’s taken longer than anyone had estimated initially. There is now a knowledge base and set of standards that has taken the industry 10 years to evolve. There are good technology providers and good technologies on the operational side, but now there’s a network problem in an industry where trading partners who are accustomed to phone, fax or email ordering have to deal with these volumes of data. Massive networks and massive databases are being created. Just the first step in the Drug Supply Chain and Security Act (DSCSA)—exchanging information at the lot-level&mdash;has been complex and challenging. On paper, it looks as if most transaction data flows through the three major wholesalers, but the reality is that there are hundreds of wholesalers shipping product to tens of thousands of pharmacies and doctors’ offices. There is a good framework to advance, but it’s going to take time.

3) You’ve been outspoken that the current traceability initiative will protect against counterfeit products entering the supply chain, but many experts note that traceability initiative will not be a bulletproof protection. What do your clients ask you about this?

		The perspective I get from our clients is that serialization is happening because it’s a matter of compliance with the law. But they also realize that serialization will create the infrastructure to support the prevention of counterfeiting. And once that infrastructure is built, you will have an incredibly valuable information network that connects to the market, and has fidelity at the item level to track product movement. Now you can leverage that information to improve inventory levels, address market demand and overall supply chain management. There will be an improvement in financial relationships—being able to reconcile chargebacks, rebates and product returns&mdash;and to do that more quickly.

		On top of those enhancements, companies will be able to improve their market effectiveness. There will be better market information, how you’re doing on a real-time basis and how you’re doing on a regional basis. If pharma companies invest in the right kinds of information layers, the benefits will encompass supply chain, commercial operations and marketing, as well as compliance. Our success is built on the fact that we position our technology to be part of a long-term solution, not a point solution for regulatory compliance. It’s going to be transformational.

4) Traceability is moving forward rapidly worldwide. How is TraceLink addressing this?

		Some of our clients are the biggest pharma companies in the world; they are looking at traceability from a global perspective. They are evaluating their needs on an enterprise level not just for today, but for tomorrow’s emerging markets. They need a single platform to manage all their products, because you don’t want a porous aspect to the integrity of your supply network.

		This brings in another complexity: While there are core capabilities to most national traceability programs, each country has its own local flavor. In China, serial numbers are obtained from the national government. Brazil has its own requirements, as does the EU and other European nations.

		We’ve architected the TraceLink Serial Manager solution to have the same basic building blocks, then modules are added for each country’s unique requirements. It’s also a fact that some packaging lines handle production for multiple export markets—a line might be producing for the US on one day, then China or another country on another. The serialization management system needs to be able to support those local flavors in managing numbers according to each country’s requirements. This is also true for the reporting and data exchange requirements.

5) TraceLink isn’t the only cloud-based traceability system, but arguably no other company has made such an extensive commitment to cloud-based computing. How is this going over with pharma clients?

		Today’s true cloud-based services are transformational for pharma companies. But first, you have to distinguish between true cloud-based computing, with an elastic computing framework, and what IT experts are calling “cloud washing,” or claiming to be cloud-based simply because data are stored remotely and delivered via an Internet connection. I’m old enough to remember the transition minicomputer networks to client server-based computing, and then what had been called software as a service. Today, the resources from vendors like Amazon Web Services (AWS), with whom we’re closely aligned, represent a real step change from the past. AWS is a massive infrastructure of more than 50 data centers around the globe, with massive redundancy that allows you to host and manage enormously large volumes of data.

		With AWS cloud services, the concepts of “single-tenant” or “multi-tenant” hardware architectures are becoming outdated. Cloud services feature database tools like Amazon’s Dynamo, which stores databases across multiple servers, providing both fast database access and the capability for massive data storage. With these newer data storage methods, you have a network-based platform capable of sharing computing resources without sharing the same database. So the question becomes, not whether you’re single- or multi-tenant, but how distributed and scalable your data and computing resources are.

		We’ve heard of instances where a company attempted to store 100,000 or so serial numbers in a single relational database. Even after taking hours and hours to load this database, the system falls over and dies because of the scale of numbers and events being stored.

		Another question that comes up is data security. AWS, with its massive redundancy, and with the wide range of certifications and audits it goes through, actually provides better security than what any single pharma company can develop on its own. That’s why clients of AWS like the Nasdaq stock exchange, or even the US Dept. of Defense, use AWS.

		Here’s another way to look at the question. A typical mid-tier pharma company might ship 125 million units of products in a given year. There are, at a minimum, five or so “events,” such as commissioning, storage in inventory, etc., that will accompany that unit. So now we’re talking about more than 600 million records that have to be stored and associated with each other. That data must be kept in an archive for up to 12 years, so now it’s nearly two billion records. The scaling issue becomes very important in this context.

		We have a very interesting dialogue with pharma clients when we’re talking about cloud-based computing. They are already committed to cloud-based computing for IT needs; they are looking for business partners who can go with them to where they need to be.

6) TraceLink has published data on tens of thousands of “members;” how does that translate into actual customers?

		We define customers as those who pay annual subscriptions for applications running on the Life Sciences Cloud.  But here’s how it takes effect: We have more than 100 customers in the pharma industry—manufacturers, wholesale distributors and dispensers. In the case of manufacturers, they each might have 100 other distributors, and those distributors might have several thousand ship-to points, such as retail pharmacies or clinics. When our solutions are installed, our customer invites their trading partners to log into our network to be able to receive transaction history data electronically. Now the network efficiency comes in: Those end users (or customers of our customers), once they are logged in, are also recognizable to other suppliers&mdash;they don’t have to open another account. So a pharmacy might be receiving product from multiple distributors or manufacturers, and that pharmacy can access the transaction data from any of their suppliers that are using TraceLink.

		TraceLink’s networking tools aren’t used solely for traceability data; we have multiple customers who are using it to exchange quality management data, supplier tracking and performance measures, such as would be seen between a pharma company and its contract manufacturers. We want to be part of a larger vision, that the supply chain can be monitored end-to-end, from raw materials to finished products delivered to patients.

		Exchanging transaction data to comply with DSCSA is happening right now, every day. Our network count is more than 124,000 and growing every day. We’ve already processed more than two million transaction histories, representing about 100 million trade exchanges at the lot level. Some of these are already being tracked at the unit level, which is the industry requirement starting in 2017.

7) The full import of DSCSA isn’t scheduled until the early 2020s. What will today’s pharma supply chain look like by then?

		I think the first thing to note is that counterfeit and diverted products will be greatly reduced, enhancing patient safety. That’s No. 1. On top of that, there will be a more efficient, responsive supply chain, and manufacturers will have greater visibility and less friction in their contractual relationships. Demand by regional levels will be better understood, so that production in one region might ramp up even as it scales down in another region. Sales and marketing effectiveness will be better monitored and better understood

		Still, it’s worth mentioning that over the past few years, we’ve learned that there’s a lot of work to be done to build these systems. Some companies that waited until the last minute to begin recording lot-level transaction data are now scrambling to get into compliance—wholesalers have said that their products won’t be accepted without the regulatory information. Downstream customers, logistics partners and others still have to come onboard, and government agencies in the US and abroad need to be brought in. All this takes time, and not just a few months. Manufacturers need to start now to meet the 2017 deadlines.

A Conversation with Shabbir Dahod, TraceLink

Telerx’s Adaptive Command Center centralizes the services that can be offered to patients. Credit: Telerx

		Health data from digital channels is exploding. Whether companies gain insights through analytics from pharmaceutical research, social media, wearable technologies, health records or other sources, pharma marketers and patient engagement managers can use that data to provide services more attuned to patient needs, address marketplace challenges, and, ultimately, gain greater success in providing products that improve outcomes.

		Today’s patients are more involved in their healthcare than ever before due to the availability of information online, through social media and community groups. Patients also want to be treated as individuals. As pharmaceutical companies and healthcare providers increasingly focus on patient outcomes and outcome-based results, the importance of analytics and data mining grows exponentially.

		One of the most critical uses of big data by pharmaceutical companies and their data collection partners is leveraging the analytics to develop strategies to improve medication adherence rates, which, by one estimate, costs the US healthcare system approximately $290 billion annually. Medication nonadherence also results in loss of sales and loss of brand equity for pharmaceutical companies.

		Experts have concluded that the six most common reasons for nonadherence are:

			Knowledge — Patients often have inadequate knowledge, misunderstanding of, or negative perceptions of their disease, tests, risks and treatments necessary to treat or control their disease.

			Coverage — Depending on the type of tests and disease, patients may be faced with inadequate reimbursements or coverage that deters them from obtaining the testing or medical equipment necessary to manage their ailments. In some cases, patients might not understand the basics of their healthcare plan.

			Side Effects — Patients may be fearful of the side effects mentioned in the drug guides of their medication, which might deter them from obtaining the necessary tests or drugs.

			Cost — As healthcare costs rise, patients may not fill their prescribed medications or they may avoid certain tests due to high co-pay rates or out-of-pocket payments.

			Disease — Depending on the disease, severity of symptoms, level of disability due to the disease, rate of progression and availability of effective treatments, patients may weigh the risks and benefits of certain treatments before proceeding, even though their physician has prescribed specific therapies.

			Social Support — The existence of a patient’s effective social support network, whether they are part of a culture or hold certain beliefs about their disease and treatment, has been shown to have a serious effect on their adherence to prescribed treatments and testing.

		With the right partner and analytic technology solutions, pharmaceutical companies are able to track their own patient programs to drive behavioral changes to improve adherence rates and overall healthcare for their patient customers.

		It’s for this reason that many companies and their partners develop customized programs through which they engage patients in multichannel conversations that not only improve their personal healthcare knowledge, but also tend to empower them, resulting in improved patient adherence to prescribed treatments or therapies.

		Patient care programs enable pharmaceutical companies to engage in a variety of ways: track the interactions, track responses, and capture the data for analysis to help improve any processes or develop optimal communications. However, it’s the data that is collected through these interactions that enables pharmaceutical companies to really hone in on what needs to be done to overcome barriers to engagement and adherence.

		The best patient-care programs start with knowledgeable medical liaisons who are not only well trained on the profile of a particular drug therapy, but are also patient-focused in their approach. For example, some therapies might involve interactions with the patient’s caregiver (parent, sibling), as well as the patient. Side effects of a therapy can be addressed with specific instructions, such as changing diet or addressing comorbidities. The communication preferences of patients—telephone, email, texting&mdash;should also be addressed.

		The key next step in high-quality patient care is to document and track results, which is often the downfall of poorly administered programs. Data are collected and analyzed, and determinations can be made for what is working well and what is not. Another important element of patient care is documenting adverse events, which not only interfere with successful therapy, but have a regulatory requirement to be met.

		These types of test-and-learn studies are likely to become even more important in the effort to raise adherence rates. Companies will need to evaluate a variety of channels, methods and circumstances to find out what works best and when. Tactics that may work well face-to-face or via a computer screen in a doctor’s office may not work as well for a patient who is reading a text or a social media post on their smartphone.

		According to recent research by benchmarking firm, Best Practices, LLC, between 30—40% of pharmaceutical companies said that they expect their data capabilities to increase over the next two years. Additionally, 40% of the study participants said they have a centralized or dedicated big data group.

		Case studies and other documentation show double-digit improvements in adherence rates with patients obtaining high-quality support. The ROI for well-run programs is 3:1 or higher.

Third-Party Partners in Tracking and Data Capture

		Pharmaceutical companies understand the importance of data collection, but they know they can’t go it alone. Instead, companies know they need to invest in a partnership with experienced third-party patient engagement experts that know how to harness analytics through various

		technologies and can adopt a more holistic approach to multichannel patient interactions. These companies are able to mine data from phone, email, chat, video, text and social media interactions to provide a 360-degree view of a patient and provide new insights into their behavior. The 360-degree view is a cornerstone of optimal analysis and the development of comprehensive patient engagement tactics.

		Additionally, one of the many advantages of a patient engagement provider with analytics capabilities is their ability to deliver one of the most crucial aspects of big data—context. Without context, the data has no meaning. In order to really understand the mind of the patient, companies and their patient engagement partners must embrace all the ways that patients communicate with companies and with each other, and deliver the information back to them via their preferred channels.

		The optimized patient experience lies in the following approach, which can be customized by a third-party expert:

			Employing skilled health liaisons focused on delivering high-quality customized support

			Implementing tools to profile and assess patients for potential barriers to adherence

			Develop data-driven communication tactics

			Utilize an integrated, multichannel technology platform to support optimal patient engagements

			Provide detailed data and analytics reports to determine effectiveness of programs, and specific activities and trends.

		The most successful partnerships come from a third-party partner that takes a command center approach to support and adherence with profile-centric programs that deliver real value. These customized programs are not preference-driven, but are also adaptive based on ongoing analysis of messaging efficacy. Experienced partners provide an overall program strategy creation, tactical analysis, reviews and recommendations throughout the whole program.

		Patient engagement partners are able to provide assistance during the patient empowerment process and cutting-edge tools for transition to self-empowerment to increase adherence rates, such as:

			Ongoing access to core resources and materials

			• Program “alumni” online community

			• Blogs, community discussions and support, reinforcement of knowledge, etc.

			• Core highlights, updated resource listings, etc.

		To combat the problem of “you don’t know what you don’t know,” companies’ patient-engagement centers provide the best data from their direct patient contacts through a number of channels and deliver it to their clients in almost real-time, whether daily, weekly or monthly—depending on what the client deems important. These partners also provide analysis of the data to help companies understand how best to implement any changes to their processes or adherence programs.

		Ultimately, pharmaceutical companies hungry for key data and insights look to third-party providers to help them harmonize services; provide data reconciliation and follow up via electronic interfaces; and increase focus on service levels, trending and risk management activities.

		As the entire healthcare system focuses on best practices and ways to deliver a more personalized experience for patients, companies recognize they must invest in technology, programs and experts to do so. By focusing all these investments on data mining, all stakeholders will have an opportunity to collaboratively improve patient engagement, medication adherence and overall health of the population. Using today’s insights, and using them correctly, is the key to predicting what might happen in the future, and what actions must be taken and what changes need to be made in order to affect those results.

		Big data has transformed the way companies and providers operate, engage with and deliver expectations to their patients. As the field of big data continues to increase—and it will&mdash;companies and their data-analytics partners will continue to work hand-in-hand with technology to extract the usable from the static. Similarly, as drug treatments, disease management and patient behaviors continue to evolve&mdash;and they, too, will&mdash;successful companies will continue to adapt through the help of, not just big, but smart data. 

Combining high-quality patient-support services with comprehensive and continually updated analytics results in better outcomes

A Big Data approach to patient engagement and adherence

Drug distribution in the United States is in something of a state of upheaval, caused by the flow of high-cost specialty pharmaceuticals into the market. High-priced drugs, in some cases costing tens of thousands of dollars for rare (and some not-so-rare) conditions set payers on edge, but at the same time attract the interest—and rewards&mdash;of the investment community for up-and-coming drug developers, especially new biologics.

	Specialty pharmaceutical manufacturers generally prefer—or require out of necessity&mdash;specialty pharmacies to dispense their drugs to patients. At the same time, while some specialty pharmaceuticals are in general distribution (i.e., any local pharmacy), some manufacturers restrict the dispensing channel to a “limited distribution” set of mail-order or specialty pharmacies. Such restriction serves multiple purposes: drugs accompanied with a REMS (risk evaluation and mitigation strategies) program sometimes require pharmacists to be trained in appropriate dispensing; certain infused drugs require compounding; and extra care must be taken for the storage, dispensing and follow-on treatment of the drug and the patient receiving it.

But here’s the catch: other than stating that they are a “specialty” pharmacy (SP, or often, “specialty pharmacy provider,” or SPP), there is little in a regulatory or policy context to distinguish SPPs from all other pharmacies. You are what you say you are. This gap is being addressed by a number of accreditation agencies, most of which have been around for years, but in one case, relatively new and yet to accredit its first SPP.

“There’s a simple reason for the attention being paid to SPP accreditation,” says Quintin Jessee, a partner at D2 Consulting, which assists pharmacy clients in obtaining accreditation. “Payers require it for handling complex therapies, because they want to ensure the best possible patient outcome to justify the expense of these drugs.” In a like manner, manufacturers want to ensure that appropriate care is given to patients; a wave of avoidable adverse-event reports or poor patient adherence could quickly affect patient health and, ultimately, the commercial success of the drug.

	From the pharmacy-business perspective, accreditation does serve an additional purpose: to position an SPP better in the competition for limited distribution products. And the motivation for that is to gain access to the larger revenue stream that specialty pharmaceuticals represent. “A typical retail pharmacy fills hundreds of low-cost generic prescriptions and makes a few percentage points on each fill; with high-cost specialty pharmaceuticals, that same percentage can generate tens of thousands of dollars annually for a pharmacy,” notes Jesse.

Diplomat Specialty Pharmacy, which has gone from a small regional provider to a national, publicly traded star of the SPP trend, gained its accreditation from the leading organization, URAC (Washington, DC), five years ago, says Atheer Kaddis, PharmD, SVP of sales and business development. “We initiated the process not necessarily to win contracts, but to ensure that we had appropriate, consistent internal processes to meet patient needs, and trained staff that followed those processes to the letter.” The first time through the review, he says, was a “heavy lift” for the organization; accreditation stays in place for three years, and then renewals are based on a review of standing procedures, and documenting compliance with them.

	URAC originated in the 1980s as an evaluator of “utilization review” processes within healthcare organizations; now, with more than 30 separate accreditation programs in place, it calls itself “one of the fastest growing healthcare accreditation organizations in the world.” Some 240 pharmacies have earned, or applied for, specialty pharmacy accreditation (see Tables 1-2); new applicants are showing up at a rate of a handful per month.

	But it is not the only accrediting body at work. Another is the Accreditation Commission for Health Care, Inc. (ACHC; Cary, NC), which has a group of standards focused mainly around patient care providers (home health, hospice and including specialty pharmacy). It, in turn, is an authorized “Medicare Deeming Authority,” which figures in CMS processes. In addition to a “specialty pharmacy” accreditation, it provides for infusion pharmacy, long-term care pharmacy, community pharmacy and others, and administers the accreditation of the Pharmacy Compounding Accreditation Board (PCAB). ACHC has around 1,000 pharmacies listed under one or another of these pharmacy-related categories.

	Then there is the newly established Center for Pharmacy Practice Accreditation (Madison, WI), which was formed by three pharmacy professional organizations: the American Pharmacist Assn., the National Assn. of Boards of Pharmacy and the American Soc. of Health-System Pharmacists, and was founded in 2012. It delivered community-practice accreditation standards in 2013 and the accreditation program was opened in 2014. A year later, in January 2015, CPPA announced the availability of a specialty-pharmacy accreditation process. A handful of retail pharmacies have already earned the community pharmacy accreditation; several specialty pharmacies including Diplomat are currently going through the accreditation process.

	“The door is open,” notes Lynnae Mahaney, executive director of CPPA. “Our standards are focused on recognition of specialty pharmacy practices, which provide care that enables patients to reach cost effective, therapeutic outcomes. She notes that the various committees overseeing standards development includes input from pharma manufacturers, as well as PBMs, payers and healthcare providers.

	Each of these organizations accredits pharmacy enterprises; there is a Specialty Pharmacy Certification Board (Alexandria, VA), which has established individual certifications for specialty pharmacists. SPCB is an offshoot (but now independent of) the National Assn. of Specialty Pharmacy (NASP; Alexandria, VA), which calls itself the “unified voice of specialty pharmacy in the United States.”

	Another organization with a stake in specialty pharmacy accreditation is The Compliance Team, Inc. (Spring House, PA), which certifies “Exemplary Provider” status for pharmacies (including community, specialty, long-term care and compounding pharmacies), rural health clinics, medical equipment suppliers and several other categories. It has CMS Deeming Authority for rural health and durable medical equipment (DMEPOS). Its website, www.TheComplianceTeam.org, lists hundreds of certified entities, but there appears to be little overlap with URAC or ACHC.

	Specialty pharmacies can be as small as the local store, run by an individual, independent pharmacist, but they can also be massive players in the healthcare industry. Diplomat, which went public last year, is the “private label” specialty pharmacy service behind 13,000 local pharmacies, as well as maintaining relationships with health systems. When Catamaran, the PBM now merging with United Health, acquired Salveo Specialty Pharmacy (St. Petersburg, FL) in January, the purchase price was $260 million. Specialty pharmacy is a multibillion-dollar activity of major players, such as Express Scripts, AmerisourceBergen Specialty Group, McKesson Specialty Solutions, Cardinal Specialty Solutions, Omnicare and others.

	In this overlap with drug wholesaling, some SPPs have also garnered certification from NABP as Verified Authorized Wholesale Distributors (VAWD), a program run by NABP; some have also garnered the VIPPS (Verified Internet Pharmacy Practice) accreditation from that organization as well. For manufacturers, these certifications provide assurance that the storage, transportation and distribution activities of the pharmacies meet the toughest distribution standards.  

	Certification is a “ticket to entry” in handling specialty pharmaceuticals, observes Nick Calla, now VP of industry relations for Cardinal Health Specialty Solutions (Dublin, OH). Past president of the National Assn. of Specialty Pharmacies, and former member of the steering committee at CPPA, he notes that URAC certification is especially important for pharmacies working with PBMs, while ACHC is valued by insurers (through its OncoSource specialty pharmacy, Cardinal has URAC certification). CPPA has “a strong approach, but it will take a while to get a foothold” among manufacturers and drug distributors, he says.

The growing number of certifications has become a competitive issue for SPPs bidding for Pharma's business

What makes specialty pharmacies 'special'?

Fig. 1. Even with a global push for unit serialization via barcodes, there are national variations.

	The land rush is on. After years of wrangling over compliance requirements for serialization and traceability in the US pharma supply chain, manufacturers and their trading partners now have definite deadlines to meet (including a May 1 deadline hitting just as this report goes to press). The first movers and pioneers are already gaining experience on meeting the current compliance deadline, and are moving forward with a next milestone, in 2017, for unit-of-use serialization.

	Traceability is a key component of product security and brand integrity for the US pharma industry going forward; but already the US is playing catch up with the rest of the world, which moved forward even while US legislators and lobbyists wrangled over the details of the Drug Supply Chain and Security Act (DSCSA), which was passed, in a rare instance of Congressional bipartisanship, in late 2013.

	The investment that manufacturers are making is substantial: estimates range from $150,000 to $500,000 to install the serialization machinery (bar-code printers, machine vision systems and the like) on a single packaging line; and additional sizable costs are incurred for the site- or enterprise-level IT systems necessary to collect, store and deliver the traceability data. The number of pharma packaging lines, worldwide, is somewhere between 5,000 and 10,000 (although no one is expecting all lines to be fully DSCSA-compliant any time soon).

	DSCSA is the centerpiece of a national effort to secure the pharma supply chain from the entry of counterfeit products, diversion from one distribution channel to another (which can affect the integrity of the products, as well as revenues for trading partners), and, through tighter licensure and FDA inspections, the ability of companies to handle life-saving medical products with appropriate safeguards. It parallels, to a degree, FDA’s own emphasis on better product quality, as evidenced by the opening of the Office of Pharmaceutical Quality at the beginning of this year.

	But supply chain integrity is only one aspect of the overall effort. Manufacturers and their service providers are clamping down on cargo theft, which, besides the obvious loss of the product itself, can impact the safety of all of the inventory of a branded product in distribution. And while manufacturers have long employed a variety of authentication or anti-counterfeiting measures in their packaging, there is a noticeable uptick in use of these countermeasures, especially for products in global circulation.

Fig. 2. DSCSA compliance begins at the packaging line, with barcoding equipment like this Model 8610 from Videojet.

	Mention of globalization brings attention to e-commerce, and the ease with which products can be marketed in one country and sold in another. The biggest gap in total product security remains the Internet, which, in the US, remains partially open for consumers to purchase products (whether FDA-approved or not, and whether authentic or counterfeit) relatively easily. There are significant efforts in this regard as well, notably the capability that the National Assn. of Boards of Pharmacy (NABP), under the aegis of the Internet Corporation for Assigned Names and Numbers (ICANN), to regulate the use of “.pharmacy” as a domain-name extension, which began late last year. In theory, going forward, all legitimate online pharmacies will have a “dot-pharmacy” name, and consumers will only use those for online purchasing.

	Brand security begins with the physical products themselves, and the anti-counterfeiting measures manufacturers employ. For years, technology developers, and contract packaging organizations that partner with them, have been offering such techniques as microprinting, holograms, invisible inks and other printing and mechanical methods to add anti-counterfeiting measures to paperboard cartons, syringes or vials. At best, these techniques (which add some cost to the packaging) have been used in perhaps 10% of pharma packages (although in some categories it reportedly goes as high as 40%). Industry experts harp on the theme of “multilayer” security—by which logic, more than one technique should be used. The other guideline is to identify anti-counterfeiting methods by application: overt (visible to the end user); covert (locatable only with specialized knowledge); or forensic (for validation in the field or laboratory).

	The rap against these security measures is that they can be defeated by the sophisticated counterfeiter, or that the verification methods simply get ignored by careless purchasers of the products. But technology developers continue to roll out additional methods, with the current focus on optical or Internet-based methods.

	Advances in near-infrared spectroscopy are one of the drivers for InfraTrac, whose president, Dr. Sharon Flank, presented at the Healthcare Compliance Packaging Council’s RxAdherence meeting this spring (see p. 22). InfraTrac uses a combination of conventional wet chemistry and spectroscopy to create unique fingerprints of products and materials; the fingerprint can be made from excipients or additives already in a pharmaceutical formulation, and the spectrograph of the resulting scan, stored in a digital library, provides the in-field authentication. Whereas conventional spectroscopy requires laboratory equipment and considerable testing time, Flank says that the spectrograph can be performed in the field with a hand-held device.

	Optics are also the foundation of Alpvision, which encodes a microdot pattern, called Cryptoglyph, on packaging that can be read with cameras and even smartphones. This authentication step is backed up with an online platform, Krypsos, to streamline in-field authentication.

	In the Internet arena, Sproxil has won considerable attention with its method of providing a product code, on a scratch-off panel, that can be checked with a simple text message. The company’s technology is in use in several African countries; the company claims that 15 billion consumer packages (pharmaceuticals as well as other products) have been authenticated through early 2015.

	Incorporating lot-level serial data into a packaging line is not especially challenging from a technology perspective—manufacturers have been doing this for a long time (although the reporting requirements of that are now changing), notes Rich Nemesi, global vertical marketing manager, life sciences, at Videojet, a major supplier of barcoding and serialization equipment. But the right perspective is to look ahead, to coding requirements globally (which have a variety of requirements) and make capital investments with the future in mind. To that end, Videojet offers a variety of coding technologies (continuous ink-jet; thermal transfer, thermal ink-jet and laser methods) which, in turn, can handle most types of substrates. Most recently, the company introduced the 7810 ultraviolet-laser marketing system, which avoids the need for a “knockout window” on the substrate that has a coating to react to the laser light. Additionally, the company is introducing an online service to enable customers to have printers serviced remotely, from a central Videojet engineering facility. “Few packagers have marking-equipment engineers on hand, so when there’s a problem, we often need to send a service engineer out on a call,” says Nemesi. The remote service could save money, at least on routine servicing, for both Videojet and the client.

	SICPA Securink Corp. is a major player in global banknote and security-document authentication, offering both online code-verification schemes as well as on-product inks and taggants for product authentication. In October, the company joined in with a World Bank-organized pilot project involving several international nongovernmental organizations to fight counterfeit medicines in the developing world. “There is interest from pharmaceutical brand owners to protect their products and consumers from counterfeiting and diversion but that this is taking a back-seat currently as stakeholders work towards serialization compliance,” the company tells Pharmaceutical Commerce. “While the US pharma supply chain is perceived as relatively safe compared to others globally, there have been incidents of counterfeited and diverted product over the last several years and we feel this will continue until the pharma industry adopts multi-layered security solutions.”

	Currently, the main activity of pharma manufacturers has been to upgrade their packaging lines’ coding capabilities, both to improve lot-level data generation (to meet current DSCSA requirements) and to prepare for the eventual unit-level serialization, due to take effect in 2017 in the US, and already a factor in Turkey, China, Brazil and elsewhere. Under the Falsified Medicines directive in the European Union, a similar requirement—and deadline&mdash;is looming, with packagers based in Germany already installing the unit-level machinery.

	This has made substantial business for such companies as Optel Vision, which opened a new operations center in the Netherlands, Systech International, Seidenader (part of Korber Group), Mettler Toledo PCE, Antares-Xyntek and others. Coding technology itself comes from Videojet, Domino, Epson America, and Zebra Technologies, among others.

	At last month’s Interphex exhibition (New York, April 21-23), a trio of companies demonstrated how all this is coming together for manufacturers and contract packagers. The iTech15 laser barcode printer, from Domino Amjet, is paired with packaging machinery from Omega Design, and assembled for use by 3C! Packaging, a contract packager. This grouping calls to mind the collaborations and partnerships that were in the winds during the 2005-2008 period, when the possibility of using RFID technology (instead of, or in addition to, barcode technology) was being touted; although that technology failed to get broad acceptance so far in pharma, it emphasized the need to have a unified, interoperable system among packaging technology providers.

	“Impending regulations such as DQSA and UDI are driving a flurry of compliance activity in both Pharma and Medical Devices,” said Mark Shaffer, Domino business development manager, in a statement released before the show (DQSA refers to the Drug Quality and Security Act, of which DSCSA is a part; UDI refers to “unique device identification,” a parallel serialization effort in the medical device community). “These are fixed timelines that aren’t changing. Couple that with similar global regulations in Europe and other parts of the world, and you’ll see it’s more important than ever to work with partners that are well-versed in the regulations, global in scope to scale solutions across the world, and are well-respected by both end users and the OEM partners.”

Fig. 4. Sproxil’s scratch-off code is used, with SMS texting, by consumers to authenticate products. Credit: Sproxil

	Successfully encoding packages, at the lot or unit level, is the first step to meeting the compliance requirements of DSCSA, but the next step—communicating that information to trading partners, simultaneously with delivering actual product&mdash;is a next and bigger challenge. As of May 1, all products being sold in the US are supposed to go from a manufacturer (or its agent) to an authorized distributor, and be accompanied by documentation (in most but not all cases) detailing the Transaction Information, Transaction History and Transaction Statement (aka TI/TH/TS, also as 3T). DSCSA allows for these to be delivered in paper form, but wholesalers, balking at the mountains of paperwork that would be involved, are insisting on electronic delivery. Without 3T information, a shipment cannot go into commercial distribution and would be quarantined at the wholesaler until the documentation shows up.

	All this is supposed to occur in a likewise manner with dispensers—pharmacies and hospitals&mdash;by July 1. While some dispensers, particularly the chain drug stores, are ready for this, many in the supply chain are not. The likelihood is that the major wholesalers will be offering to record and store the data, especially on behalf of independent pharmacies to whom they are suppliers; there’s also a better-than-even chance that FDA will delay implementation, as it did for five months at the end of 2014 for manufacturers.  

	A survey conducted at the beginning of this year by Frequentz, one of the companies developing software in this area, indicated that 80% of manufacturers were ready for DSCSA’s May 1 deadline, and that 10% are ready for the 2017 unit-level requirement in 2017; of a small number of retail-pharmacy respondents, however, readiness was doubtful.

	To a considerable degree, transmitting the lot-level data to trading partners is a marginal upgrade of what they’ve been doing for years, although the need to have actual product shipment align with documentation precisely is a challenge. Many manufacturers and wholesalers are exchanging data via the fairly standard Advance Shipping Notice component of electronic data interchange (EDI); the Healthcare Distribution Management Assn. was instrumental in developing guidance for aligning ASN with the requirements of DSCSA over the past couple of years. But it’s a big additional step to incorporate 3T data into ASN, and for that reason, most trading partners are looking at the adoption of the EPCIS standard from the GS1 organization. (EPCIS stands for “electronic product code information standard,” and was developed originally for RFID communications, to which it is still applicable).

	With EPCIS, protocols are established to record and store events, such as the movement from a packaging line to a warehouse, or a warehouse to a retailer; this information is meant to accompany shipments as part of the 3Ts.

	According to Gena Morgan, director of implementation and services at GS1 Healthcare US, EPCIS is ready to go for developers to write software and for clients to put to use; EPCIS has also been identified by FDA as a suitable framework for meeting DSCSA requirements. Even so, there are working groups within GS1 Healthcare US developing protocols for, among other things, handling exceptions to conventional transactions, and GS1 Healthcare US is planning to publish an updated implementation guidance document later this year. A third, ongoing element of GS1’s activities is to set up a certification process for IT vendors who want to claim that their technology is “EPCIS certified.” (Several vendors make this claim already; how relevant it is to the current state of the art in EPCIS and DSCSA requirements is unclear.)

Fig. 5. The basic structure of GS1’s EPCIS standard: matching a product identity with ‘events’ that occur. Credit: GS1

	The competitive environment in EPCIS traceability for pharma is hot and getting hotter, with claims and counterclaims flying back and forth among vendors. Arguably, a market leader currently is TraceLink, whose founders have been involved in pharma traceability since the early 2000s (see p. 11). Shabbir Dahod, founder and president, says that more than 100 manufacturers or distributors have implemented TraceLink’s cloud-based technology, and they, in turn, have brought more than 100,000 trading partners (from big wholesalers to the local corner pharmacy) into the TraceLink network. A key capability is that once an entity is logged into the system, that entity becomes available to any other TraceLink client—a network effect that could propel widespread connectivity in traceability (and make a lot of business for TraceLink).

Meeting the compliance deadlines of the Drug Supply Chain Security Act has the attention of many in biopharma product and brand security

2015 Product Security Report

Fig 1. MCOs most frequently make use of prior authorization protocols to control drug costs; note also the relatively high effectiveness rating of limited-distribution specialty pharmacy networks. Credit: Genentech

		Year by year, as the number of cancer patients rises, the number of survivors living longer grows and the cost of care climbs, the drumbeat to do something dramatic is increasing. On the medical science front, new ways to conduct trials while identifying the most likely patients to respond to therapy show promise. On the payer side, a variety of approaches to bundling drug costs with care are being explored. Among manufacturers, the attractiveness of the oncology market—and the possibility that one drug might work well across a range of cancer types&mdash;brings more and more companies into the fray.

		Caught in the middle of all this, however, are the patients who are dealing with backbreaking costs for treatment. Rising out-of-pocket costs—even for those with fairly generous healthcare coverage&mdash;are leading commentators to bemoan the “toxic side effects” of cancer care to patients’ finances.

		The biopharma industry is being excoriated in the public arena for the high costs of newly approved drugs, and the sizable cost inflation of drugs already on the market. At the same time, the industry is making more effort to support patient care through patient assistance programs, and supplementing doctors’ care with patient support services. Drug distributors (among others) are trying to position themselves more favorably in the market by advancing the principles of clinical pathways—protocols to define more precisely how patients’ care should progress.

		The market drivers, combined with the new science around oncology development, are drawing more interest from pharma. An oncology product, Imbruvica (ibrutinib, for blood cancers), was the sole justification for AbbVie paying $21 billion to acquire Pharmacyclics, announced in early March. Valeant Pharma bid $296 million to acquire the assets of now-bankrupt Dendreon, maker of a prostate-cancer therapy, because “We believe that oncology has similar characteristics to our current therapeutic portfolios, such as strong growth, high durability, strong patient and physician loyalty, and a terrific reimbursement regime,” according to a statement by J. Michael Pearson, chairman and CEO. “We have not previously found an economic way to enter this market, but with the unique dynamics of this situation, we believe that this transaction will create significant shareholder value.”

		Pharma giant Pfizer has double downed in oncology: “What we’ve done [is] to create a presence in oncology and immuno-oncology,” said Ian Read, Pfizer CEO, at a recent investor conference. “We may not have been first; we may have been behind on PD-1 and PD-L1. But I think the assets that we’ve now put together will give us a leadership position over the next five years in oncology.” (PD-1 and PD-L1 are two types of new modes of action against cancer with strong potential. Merck’s Keytruda [pembrolizumab] and BMS’ Opdivo [nivolumab], both PD-1 inhibitors that were approved last year are the first to market.)

		In recent years, ongoing discoveries about the role that certain genetic mutations can play in drug development efforts have changed the face of oncology. Whereas traditional cytotoxic chemotherapy agents act against rapidly dividing cells (including healthy ones), today’s newer targeted therapies are explicitly designed to interfere with specific molecular targets that are involved in cancer cell growth or progression. According to IMS Health, the role of targeted therapies in oncology treatment has grown from 11% in 2003 to 46% in 2013.

		When the biomarker is used as the gateway to treatment, patients experience higher response rates, fewer toxicity-related side effects and adverse events, and improved outcomes—improvements that can help to reduce the cost and duration of clinical trials, support favorable reimbursement decisions, and improve patient outcomes. “When you can limit the patient cohort in this way, you get a higher proportion of patients who are likely to benefit and there is less cost wasted on futile therapy,” says Debbie Warner, VP, oncology commercial strategies, Kantar Health (New York).

		“Since chemotherapy drugs tend to be among the most expensive specialty drugs, the ability to avoid the unnecessary administration of toxic therapies that will provide no positive outcome for the patient provides both clinical improvements (in terms of side effects and toxicity) and financial advantages for both patients and payers,” says Lindsay Conway, a managing director at the consultancy The Advisory Board Co. (Washington, DC).

		To help manage the high cost of biomarker-indicated therapies (and their companion diagnostic tests), it has become increasingly common for payers to write very specific prior authorization (PA) criteria to ensure appropriate use,” says Warner of Kantar Health. In fact, 68% of managed care organizations (MCO) now require PAs for specific molecular or biomarker tests, and 46% of oncologists reported “frequently” encountering payer restrictions related to genomic testing or pathology in 2013—up from 37% in 2012, according to the 2014 Genentech Oncology Trend Report. [1]

		In recent years, the discovery of useful recognized genetic mutations has led to the commercialization of biomarker-targeted oncology agents and the pursuit of others, including:

			The BRAF V600E in melanoma, colon cancer and lung cancers

			The KRAS mutation in colorectal and lung cancers

			The HER2+/neu amplification in breast cancer

			The ALK+ mutation in non-small-cell lung cancer, lymphoma, neuroblastomas and a rare form of sarcoma

			EGFR-mutant non-small-cell lung cancer (NSCLC)

		“To support further advances, greater effort is needed to develop the technology needed to obtain tumor tissue and rapidly identify molecular or proteomic aberrations in order to inform treatment decisions,” says Stephanie Hawthorne, PhD, senior director at Kantar Health. “Next-generation sequencing (NGS) is one approach that has been receiving a lot of attention lately for its ability to provide a readout on a tumor’s full genomic sequence and all possible aberrations.”

		“There has been explosive growth in the uptake of NGS technology over the past five years, and today, NGS is really becoming more of a part of oncology care,” says Jennifer Levin Carter, MD, MPH, chief medicine officer and founder of N-of-One (Lexington, MA), which has developed domain expertise for the clinical interpretation of NGS and other molecular tests. “With this changing paradigm comes better response rates using today’s newer, targeted therapies.”

		NGS and biomarkers, together, are pointing toward another exciting cancer-fighting opportunity: the fact that certain genetic mutations are common to several types of cancer, which leads to the potential that one drug can be useful for multiple cancers. “The biomarker HER2 is an example of this,” says Carter. “The identification of HER2 amplifications in breast cancer have been a game changer, and now we are seeing different types of cancer such as gastric cancer with alternations in HER2 that also respond to HER2 inhibitors,” says Carter.

		This development has multiple implications for drug pricing. Originally, biomarkers could separate patients who would respond to certain therapies from those who would not, thus constraining the patient population and, in turn, justifying higher pricing for a drug with limited commercial potential. Conversely, if the same drug can be shown to be efficacious for multiple cancers, there is justification for a lower price. Examples where a manufacturer has lowered its pricing as more indications are approved by FDA, however, are hard to find.

Fig. 2 Outpatient drug costs can be as much as 259% over the same drug in an office setting. Source: IMS Health

Fig. 3. Per an annual survey of community oncologists, Kantar Health finds that carrying costs (bad debt risk, reimbursement levels, patient affordability) outweigh medical factors as a reason to refer patients out of the practice. Credit: Kantar Health

		As more and more oncology practices (both private and hospital-based) adopt published clinical guidelines from the National Comprehensive Cancer Network (NCCN; Fort Washington, PA), ASCO, and the NCI, and published clinical pathways from private companies such as Via Oncology (Pittsburgh, PA), the P4 unit of Cardinal Specialty Solutions (Dublin, OH), the Innovent/US Oncology unit of McKesson (Woodlands, TX), eviti (Philadelphia, PA) and New Century Health (Wellesley, MA), the oncology community signals its support for greater “standardization of care.” Broadly speaking, both guidelines and pathways provide decision-making assistance to oncologists, based on clinical evidence; pathways tend to have an added focus on cost of care. Today, roughly three-quarters of MCOs are currently following cancer treatment pathways, according to the Genentech Trend Report. Among oncologists surveyed by Genentech, 63% use treatment guidelines and half use pathways. Nearly half of these oncologists are measuring the impact of guidelines on the quality of care and nearly a third report doing so with pathways.

		In some cases, the use of guidelines or pathways is voluntary; in others, adoption is driven by employer or payer mandates, or incentives such as reduced prior authorization (PA) or precertification requirements, higher reimbursements for drugs and others. For example, one of the requirements for participants in The Aetna Medical Home Model is that they adopt national clinical pathways (choosing from among three options—Via Oncology, New Century Health or McKesson). Last year, insurer Anthem (Indianapolis, IN; formerly Wellpoint) announced a pathways program combined with incentives to providers, in part, “to offset the lower fees they receive when prescribing less expensive drugs,” according to a company statement.

		Among employers surveyed by Genentech, nearly 40% reported that tying provider reimbursement to compliance with evidence-based cancer treatment guidelines is the leading change to be implemented in the next 2—3 years.

As new cancer drugs with promising efficacy but brutal costs enter the market, providers, payers and manufacturers are strategizing new payment approaches

When worlds collide: Grappling with the rising therapeutic value--and rising cost--of cancer drugs

Fig. 1 AstraZeneca’s Seroquel (top), the 2014 HCPC winner; Lilly’s Strattera (middle); Novartis’ Exforge (bottom)

	Pharma manufacturers (and their contract packaging providers) who are considering compliance (unit-dose) packaging have three trends to take advantage of:

			More of the overall healthcare system (payers, providers and pharma manufacturers) is united around the theme of improved patient adherence than ever

			A growing awareness of drug shelf stability, and the advantages of packaging like blister cards, with controlled environments around each tablet, to enhance stability

			A growing crossover, in an era of specialty pharmaceuticals with complex administration procedures, of both clinical-trial packaging and physician’s sample packaging, that makes use of compliance packaging techniques.

		Unit-dose packaging (mostly blister cards, but including foil pouches and, in some contexts, single-use prefilled syringes) has been a source of struggle for its proponents for years; while many European markets are accustomed to unit-dose packaging for many oral solids, and were ahead of the US in adopting prefilled syringes, the US market is dominated by the ubiquitous amber bottles with 30-day supplies dispensed at the local pharmacy. While pharmacists sometimes complain of the chore of filling our prescriptions by manually counting out pills, they are also protective of that step as part of their reimbursed services. Manufacturers, for their part, have long identified filled bottles as the lowest-cost option for delivering either 30-day supplies of an oral solid, or bulk containers whose pills are then counted out at the local pharmacy.

		“In the US, less than 20% of oral solids are in unit-dose packaging; outside the US, the proportion is reversed,” notes John Zripko, president of Bilcare Research (Delaware City, DE), which provides a full range of films and cards for unit-dose packaging. He sees growth in this type of packaging being propelled by two drivers—an overall goal of higher quality standards in packaging (an element of which is stability issues); and the greater degree of branding that the combination of cartons and blister cards affords. The company has been a provider to WalMart, which private-labels a number of chronic-care drugs that are sold through its pharmacies; these packages include calendar features to aid in patient compliance, and are labeled with WalMart’s logo.

		The range of compliance features in unit-dose packaging have been exemplified by the annual winners of the Compliance Package of the Year, conducted by the Healthcare Compliance Packaging Council (Bon Air, VA); this year’s winners were announced at its RxAdherence meeting (March 31, Florham Park, NJ). The 2014 winner is a blister-carded 14-day sample kit from AstraZeneca, for its Seroquel XR (extended release quetiapine), an “atypical antipsychotic” for treatment of a variety of mental health conditions. First runner-up is Eli Lilly’s Strattera (atomoxetine, for ADHD) physician’s sample pack, and second runner-up is the Exforge HCT blister package. Novartis’ Exforge HCT (amlodipine, valstartan, hydrochlorothiazide) is indicated for high blood-pressure treatment and is taken daily.

		All three products make use of package designs from MeadWestvaco (Richmond, VA); specifically the Dosepak design for Strattera and the ShellPak Renew for Exforge. Packaging Coordinators Inc. (Philadelphia, PA) is the contract packager for Strattera and Exforge.

		Both Seroquel and Strattera kits include carefully laid-out processes for titrating appropriate dosages for patients beginning therapy. For Seroquel, noted John Grinnell, managing director, Secondary & Adherence, MWV Healthcare, in a statement, “The initiation of this medication regimen is complex, with daily doses and numbers of pills adjusting throughout the titration process. Both patients and providers needed a hands-on tool to help guide medication initiation.”

		A number of patient-support features also stand out among these award winners. The Strattera package includes patient education facts regarding ADHD as well as information directing patients to a supporting website to establish an online goal-setting progress resource, as well as information for prescription savings for the patient. The Seroquel package has a multi-panel insert (instead of the usual loose leaflet) for convenient storage and reading.

Rondo’s SafePack carton both packages and protects fragile biopharmaceuticals. Credit: Rondo-Pak

		Innovative packaging designs are a hallmark of the packaging suppliers and contract packaging organizations serving the pharma industry, which thus has a multitude of options to choose from. At Rondo-Pak (Norristown, PA), there is a focus on the cartons needed for containing biotech products (for example, prefilled syringes or glass vials); the company is introducing SafePack, an all-paperboard container that has shock- and vibration-resistant features to protect the drug, as well as patient convenience in opening the container and gaining access to the syringe. “Patients using therapies for, as an example, rheumatoid arthritis need ease-of-use features for access to the drug,” notes Victor Dixon, president of Rondo-Pak.

		SafePack has a double-walled construction and auto-actuating cushion flaps on its top and bottom that protect against severe impact and provide higher crush resistance than standard cartons (Fig. 2).  It was also designed to accommodate on both manual and automated packaging lines. Other containers make use of thermoformed plastic trays and/or foam cushioning; this design replaces all of that with 100% recyclable paperboard.

Heightened concern over adherence and product stability may win over more pharma clients

Pharmaceutical Commerce - May/June 2015

Understanding the companion-diagnostics environment

HPCLC Spring Meeting recap

Pharmaceutical Commerce at 10

A Conversation with Shabbir Dahod, TraceLink

A Big Data approach to patient engagement and adherence

What makes specialty pharmacies 'special'?

2015 Product Security Report

When worlds collide: Grappling with the rising therapeutic value--and rising cost--of cancer drugs

Compliance packaging vendors keep innovating

US spending on drugs hit $373.9 billion in 2014, up 13.1%

Cryoport expands the user base of its cryogenic shipping services

FedEx-TNT Express merger will expand healthcare logistics options

TrialCard takes closer aim at market access solutions

New EMD Serono Specialty Digest finds 'site of care' management a top payer priority

H. D. Smith reorganizes, expands upper management

Reltio targets pharma sales and marketing with 'data as a service'