SHUTTERSTOCK
THE SOURCE the benefit of their
SELLING OUTCOMES
Drugmakers scramble for MARKETABLE DATA
on the real-world results of therapies
RICK MULLIN, C&EN NORTHEAST NEWS BUREAU
IN THE HALLS of big drug companies like
Pfizer and AstraZeneca walks a new breed
of manager that didnt exist just two years
ago. With puzzling titles like vice presi-
dent of real-world data, they are charged
with gathering information on patient out-
comeson how well their products work
once a patient leaves the doctors office or
the pharmacy.
Although monitoring the effectiveness
of a product in the market may seem like
standard practice for any industry, pharma-
ceuticals is not just any industry. Its busi-
ness model has developed around a scien-
tific process of establishing a drugs safety
and efficacy in a series of clinical trials,
after which a drug is approved by the Food
& Drug Administration and sold. Attention
has traditionally turned, at that point, back
to the laboratory where work is under way
on the product that will pick up the slack
when the newly marketed one goes off pat-
ent and is muscled out by a generic.
The hiring of a vice president of real-
world evidence at a major drug company
may or may not signal a big change to this
model. But evidence suggests that a shift
to a more patient-focused way of doing sci-
ence and business is under way.
The idea that drugmakers might be
paid for patient outcomes rather than
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BUSINESS
pills, vaccines, and injectable drugs may
seem drastic. Surely, the skeptics will say,
pharmaceutical companies will get paid for
selling drugs for as long as there are phar-
maceutical companies.
But nothing is that simple in health care
anymore. Drugmakers, regulators, and
insurance companies (payers, in industry
lingo) are adapting to a shift in the eco-
nomics of health care. That move is away
from payment on the basis of the volume
of individual services and products ren-
dered and toward payment determined by
improvements in an individual patients
health. The push for value-based health
care, which predates the 2010 Patient Pro-
tection & Affordable Care Act but is also a
key tenet of this law, involves risk sharing
on the part of health care providers, payers,
and drug companies.
As a new health care finance system
evolves, drugmakers are facing increased
requirements from regulators and pay-
ers to provide detailed information on
None of the decisionmakers have
all the information needed, and the
biggest price is paid by patients.
17 FEBRUARY 25, 2013
Electronic medical products compared
records are
amassing alongside
with alternative
patient-reported therapies, including
health outcomes as generic drugs. Phar-
a gauge of the value maceutical firms
of medicines. have launched major
efforts to get infor-
mation on how their
products are used and how they are work-
ing for patients in the real world.
There is no shortage of real-world data,
which is part of the problem. The rise of
electronic medical records and the infor-
mation technology (IT) and data banks
necessary to identify, corral, and analyze
information have helped make sense of it.
But figuring out the complicated puzzle of
just how drugs are changing the health and
lives of patients in the real world is a daunt-
ing task.
G. Steven Burrill, CEO of the investment
firm Burrill & Co., says the ongoing shift ad-
dresses gross inefficiencies that arose dur-
ing the so-called blockbuster drug era of the
1990s, when drug companies launched one
billion-dollar-selling drug after another.
Fifty-five percent of drugs used in
America dont work for the patients they
are prescribed for, Burrill says. Thats
because we have lived in a one-size-fits-all
world. Clinical trials are done on the small-
est possible population for FDA approval
on the basis of safety and efficacy, after
which the drug is thrown over the wall into
a health care system where there is incred-
ible patient variability.
DRUGS FAIL, he says, because they dont
work in the same way for every patient.
One example is Vioxx, a broad-spectrum
pain relief drug that Merck & Co. took off
the market in 2004 after adverse cardiac
events started to emerge. The system
hasnt been wired to deal with the diver-
sity, Burrill says.
At the same time, payers are increasingly
challenging drugmakers on the cost of their
products relative to the benefit they deliver,
Burrill says. Drug companies have come
to realize that they need to create value in
their product and then capture that value.
But the means of determining value are un-

clear, Burrill says, because of the variability
in what payers and regulators around the
world regard as the value of a medicine.
Burrill and others point to a concerted
effort in which drug companies, payers,
and regulators are working, sometimes in
partnership, to harness the data available
in clinics, doctors offices, and patients
homesanywhere electronic data are be-
ing generated on patient health. We are
clearly moving into the era of big data and
data analytics, and everyone is trying to fig-
ure out what data are meaningful and how
to use them, he says.
INFORMATION ON the effectiveness of
a drug compared with its alternatives is
becoming more important throughout the
health care enterprise, agrees Robert Tem-
ple, deputy director of clinical science at
FDA. What everybody is interested in now
is comparative data: Which antidepressant
works better? he says. But those are not
easy studies to do, because when the effect
of something is not huge, it is hard to show
the difference between two drugs. Its hard
enough to show the difference between
drug and placebo.
Even placebos become an issue, Temple
says, because the use of a placebo and other
standard practices in controlled clinical
trials is not feasable in real-world
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outcome studies. What is clear,
however, is that when undertak-
ing such studies, patient-reported
outcomes are of more value than
physician-reported outcomes.
Physician-reported data are less
reliable, Temple says, as they are
influenced by the skills of the physi-
cian in communicating a patient out-
come. Patient-reported outcomes
do a much better job at getting the
full picture of a drugs impact on
day-to-day life, Temple explains.
Marc L. Berger, vice president
of real-world data and analytics at
Pfizer, agrees that drugmakers need
to continue studying the safety
and efficacy of their drugs beyond
traditional clinical trials. He says
methods for doing so are opening
up, energized by technology and ac-
cess to data.
Science moves forward when
the opportunity is there, Berger
says. Our insights are getting
stronger and the availability of data
is allowing us to utilize those scien-
tific insights.
BUSINESS
Berger, who came to Pfizer from United-
Health Group last year to head a new group
studying patient outcomes, notes that
Pfizer recently formed a partnership with
Humedica, a health care analytics compa-
ny, to mine Humedicas database and glean
insights into the health impact of therapies.
Sachin H. Jain, chief medical informa-
tion and innovation officer at Merck, also
acknowledges a focus on outcomes in the
pharmaceutical industry tied to a height-
ened effort to deliver personalized care.
Although the industry has always been
concerned with real-world outcomes, Jain
says, access to data and advances in health
care IT have catalyzed a surge in activity.
The increased focus on patient out-
comes across the industry is driven by our
ability to measure it, he says. Electronic
medical records have been a boon, but only
lately have drug companies and academic
research institutions begun the arduous
task of amalgamating and standardizing
the data from a vast field of sources.
Like other drug companies, Merck has
acted to access data through partnerships,
including one with Regenstrief Institute, a
nonprofit medical informatics and health
care research organization affiliated with
Indiana University School of Medicine.
The partners are studying patient health
VALUATION AstraZeneca
has put epidemiologists,
bioinformaticians, and
other researchers to work
on determining real-world
evidence of its drugs
benefit to patients.
WWW.CEN-ONLINE.ORG 18 FEBRUARY 25, 2013
outcomes in the area of osteoporosis with
data culled from Regenstriefs information
on 13 million patients.
We are involved in a number of conver-
sations with potential partners, Jain says.
The idea is to garner meaningful informa-
tion to advance what has long been the
companys mission of improving patient
health. That mission is not changing, he
says, but with better information on pa-
tient outcomes, the companys business
model will change.
AstraZeneca is also working with part-
ners to access patient data, according to
Greg Rossi, vice president of payer and
real-world evidence. In addition, the com-
pany employs a group of epidemiologists,
bioinformaticians, and other health out-
come researchers who focus on determin-
ing real-world evidence of its drugs benefit
to patients. Its an increasing capability
that I think the industry needs to have and
we have to develop, he says.
THE CHALLENGE, according to Rossi, is
getting at data outside the controlled envi-
ronment of clinical trials. Drug companies
have to shift their focus from gathering in-
formation on people with a particular dis-
ease, the kind that is derived in the clinic,
to gathering information about individual
patients. If I can measure in close
to real time, not at a population level
but at a patient level, he says, I can
start thinking about how I can link
performance incentives to payments
based on the outcomes actually be-
ing achieved.
This is not a new idea, Rossi
points out. Disease management
has been talked about since the
1990s, but its very difficult to do,
he says. Now we are starting to re-
ally be able to integrate electronic
medical records, which enable us to
think much more clearly about qual-
ity indicators and the performance
of the health care system.
Rossi says the information
gleaned from actual medical records
will go toward answering questions
that AstraZeneca is already fielding
from insurance companies about
why their products are worth what
the company charges for them.
AstraZeneca is in the middle of
a four-year contract with Health-
Core, the health outcomes research
subsidiary of WellPoint, a big man-
aged-health-care firm that keeps a
huge database culled from the 44 million
patients it covers. The partners have con-
ducted studies on a number of AstraZeneca
drugs that have enabled the firm to put
together a patient outcome narrative. We
are able to use that information in a very
successful way with payers as well
as with our internal R&D organiza-
tions to better design our own criti-
cal programs, Rossi says.
Timothy Wright, the global head
of development at Novartis, says his
firm is also channeling outcome data
into drug development research. He
expects that outcomes will increas-
ingly influence the entire science and
business life cycle of a drug.
Typically in clinical trials, we
would launch a drug and try to get
as many people to take it as pos-
sible based on its safety and efficacy
profile, he says. The assumption Rossi
followed that a drug would have a
patent-protected life span during which
Novartis could explore options for follow-
up drugs.
Whats different now, Wright says,
is that were looking at our portfolio,
figuring out how we can find something of
transformational valuesomething that
can change the outcome in a significant
way such that the drug will become a new
standard of care, a new drug of choice for
physicians to offer patients.
Whereas this used to be a postmarket-
ing exercise, we are now bringing this
thinking and some of these end points into
our development program, Wright says.
Soon we will not just be launching and
selling the pill, but selling it with the out-
come data that show the value of it to the
patients, physicians, and the payers.
Many of the health care data analysis
firms that have partnered with pharma-
ceutical companies have been collecting
outcomes data for decades. Like the drug-
makers, they cite the rise of electronic
medical records in the health care industry
as important in advancing patient outcome
research. They also cite payer pressure for
outcome data as a catalyst for change in the
drug industry.
When drug executives speak of sell-
ing outcomes rather than pills, they are
speaking the language of the payer, says
Jon Duke, an assistant professor at Indi-
ana University School of Medicine and a
research scientist at Regenstrief. Health
care reform writ large is about value-based
care. Yes, they are trying to sell products,
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but the way to sell in the future is through
outcomes. That is the new reality.
Regenstrief began collecting clinical
data in the 1970s to support a health care
information exchange. By the 1980s, the
organization was gathering data from a
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Wright
network of Indiana hospitals. It currently
manages a data bank of 4 billion data points
from 13 million patients, including lab
studies, radiology studies, prescribed med-
ications, test reports, insurance claims, and
other routine medical data.
A VENTURE that started as an academic
and public health system information
resource, Regenstrief now has booming
collaborations with industrial partners. In
addition to the Merck partnership, Regens-
trief has worked with GlaxoSmithKline and
its neighbor in Indiana, Eli Lilly & Co. Its
a great time to do what we do, Duke says.
Someone described it as selling umbrellas
in a rainstorm.
Marcus Wilson, president of Health-
Core, also sees a growth market because
drug companies lack the resources to add
real-world studies onto their current clini-
cal trial organizations. If they studied ev-
ery population, it would cost $20 billion to
get a drug to market instead of $10 billion,
Wilson says. It would take 20 years.
Wilson points to a complex, shifting
health care landscape in which the drug
companies are only one element undergo-
ing change. Physicians are assuming great-
er risk as reimbursement for care becomes
tied to improving the health of the patient
through a regime in which prescription
drugs are only one facet.
HealthCore was launched in the early
1990s and acquired by WellPoint in 2003.
Wilson says the group operates behind
a fire wall, making it possible to partner
19 FEBRUARY 25, 2013
with drug companies whose drugs are reim-
bursed through WellPoint. Wilson charac-
terizes the partnership with AstraZeneca as
an effort to build an effective environment
to evaluate patient care, no matter who is
asking the questions. We both acknowledge
this is likely going to be a 10-year
NOVARTIS
project. That being the case, the
partners have begun negotiations to
extend their initial four-year agree-
ment, which expires next year.
Humedica, founded in 2008 by
former pharmaceutical executives
to conduct drug effectiveness stud-
ies, also sees a big rise in outcomes
research. Now, 40% of our revenue
comes from outcome studies as
opposed to drug effectiveness stud-
ies, says Steve Davis, the firms vice
president of life sciences. We didnt
even go after that business. It came
to us. Humedica is currently doing
work for 20 drug companies, he says.
The Boston-based company, which
claims to have the worlds most com-
prehensive clinical database, says it has
access to information from health care
provider organizations treating approxi-
mately 30 million patients in more than
38 states.
Drug firms and their partners agree that
gaining access to such large stores of data
on patient outcomes will lead to near-tec-
tonic shifts in health care. But the change
may be more radical for pharmaceutical
companies than anyone can anticipate.
Right now, we are still in the business
of selling productsthe pill or injections,
Novartis Wright acknowledges. But in
the future, if we were to go down the road
of actually delivering specific outcomes,
there is a bit of a scenario where pharmas
become like insurance companies, mak-
ing risk-based determinations of outcome
criteria and appropriate payments. Its a
matter of whether the system evolves in
this way. If it does, it will require a different
set of skills.
Whether drug companies will, like in-
surance companies now, make decisions
on which patients will be reimbursed for
drugs, is a good question for a glass of
wine, HealthCores Wilson says. I dont
think patients will be denied drugs. But
the question remains: How well do the
drugs work? All decisions today are based
on suboptimal information, Wilson says.
None of the decisionmakers have all the
information needed, and the biggest price
is paid by patients.