Pharmaceutical Commerce - July/August 2017 - 6

Op-Ed
Artificial intelligence's value in influencing treatment decisions
By Steve Silvestro, Chief Commercial Officer, and Anne Bentley, Chief Marketing Officer, Prognos

As political
ambiguity shrouds the
healthcare ecosystem,
pharmaceutical
organizations find
themselves in the unique
position of balancing
volume and value.
The era of massive
blockbuster drugs has
now faded away and most
pharma companies are
endeavoring to engage
smaller pools of highvalue patients. This shift
comes at a time when the healthcare industry
has begun a steady transition to value-based
care. The pursuit of better outcomes at lower
costs implies the need for certain efficiencies
in the care delivery system: where unnecessary
tests and trial-and-error treatments are
reduced to a minimum, if not eliminated.
Enter precision medicine, with companies
like Prognos utilizing specific lab test results
to more effectively identify and help treat
patients at the earliest opportunity.
Pharma has traditionally focused on largevolume patient pools with chronic conditions
as a focal point for many of their programs.
Pivoting to diverse initiatives focused on
rare and niche diseases requires a different
approach. Patients with these diseases have

an atypical patient journey, which starts with
symptoms and, in many cases, biomarker
testing to determine a correct diagnosis and
subsequent treatment regimen.
In the aftermath of the Affordable Care
Act, a larger portion of household budgets
now goes toward healthcare-related expenses.
Growing premiums, higher deductibles and
skyrocketing care costs cause consumers to
take a more active part in their treatment
decisions. These decisions, such as testing
regimens, treatments and ongoing adherence,
have traditionally been unilaterally made by
medical professionals. This phenomenon is
referred to as "patient as payer," implying that
the patient is making the ultimate treatment
decision, not the physician or the insurance
company.
This trend doesn't eliminate the need
for a competent physician. Providers are
encouraged to become highly attuned to
the specific needs of individual patients as
the value-based care payment model ties
their incomes directly to patient outcomes.
Physicians are incentivized to help patients
get tested appropriately for both new
conditions and ongoing treatment regimens.
A key success factor in the new outcomesbased world is the timeliness of diagnosis,
particularly in the case of malignancies or rare
diseases that may go unidentified for years.
Many drug brands have recognized this

shift and are adapting their business models
to suit the new environment. An average
company's focus on understanding the
complete patient journey has evolved to
entertain pre-symptomatic, symptomatic and
diagnosis stages, as well as post-treatment
issues like persistence and compliance.
This expanded focus requires a deep
understanding of both testing patterns
and diagnosis decisions in early stages, as
well as monitoring biomarkers and access
to medicines in later stages. Biomarker test
results are among a group of triggers for
determining a treatment regimen early in a
patient's journey, and biomarker monitoring
can help identify patients who are not getting
optimal care and aid them in selecting the
next line of therapy.
Right information at the right time
This more comprehensive approach to
the patient presents a perfect opportunity for
pharmaceutical organizations to proactively
educate healthcare professionals on the
benefits of their therapies at the right time:
either earlier in the process before a patient
receives a first-line therapy or when a first-line
therapy fails to meet the patient's need and a
subsequent second-line therapy is evaluated.
At Prognos, for example, we have
partnered with more than 200 labs to build
the largest repository of diagnostics results.

These results are captured in real-time:
we receive them at the same time that the
ordering physician does. The timing and
periodicity of these data empower brands
to engage healthcare professionals before
treatment decisions are made, so that
physicians are armed with the best knowledge
to prescribe. We leverage healthcare AI, which
uses techniques like machine learning and
natural language processing on reams of
clinical diagnostic data to determine specific
and complex patient journeys. AI empowers
us to "see" what patient trajectories look
like and compare them to historical data
to predict where these patients are in their
disease progression.
The result of these technological
advances enables pharmaceutical firms to
find providers with patients who may
benefit from a specific therapy or need an
alternative or additional therapy earlier in
the care process-before treatment decisions
are made. Earlier diagnosis and treatment,
in many cases, prolong life and improve
outcomes for patients. We believe that early
identification holds the potential to flatten the
disease curve and decrease other unnecessary
spending as a result of misdiagnosis or
treatment. This is an exciting opportunity to
be a part of the rapidly changing healthcare
environment and to help pharma brands
eradicate disease.

How Pricing & Contract Management looks-from the inside
By Brian Deppen, TGaS Advisors

Ad d re s s i n g
the demands of
customers-payers, PBM
managers and others-
remains the No. 1 priority
of Pricing and Contract
Management leaders,
a cco rd i n g to F u t u re
Issues in Contract Management: 2016-2019, a
landscape study conducted by TGaS Advisors.
Calls for outcomes-based or risk-based
contracting was the No. 2 priority. Changing
legislation, access restrictions, new types of
customers and calls for pricing transparency
are among other high-level concerns.
By comparison, the top issue two years ago
was "maintaining optimal/profitable access,"
which indicates that the pendulum has swung
to a point where manufacturers have much
less leverage now with payers than in the
past. This is primarily because manufacturers
are still in the process of figuring out how
to address the multiple demands. A second
priority from two years ago was "increasing
analytical capabilities."
The landscape analysis is based on data
and information from interviews with 17
leaders of PCM organizations. They report
taking a number of key steps to address these
priorities. After customer demands, the most
critical action items for the next few years

include (in order of number of mentions):
* Keeping on top of legislative
developments; monitoring market changes;
and attending training, seminars, webinars
and conferences
* Adjusting contracting strategies
and exploring innovating contracting
offerings (outcomes-based or risk-based
contracting)
* Integrating pricing and contracting
strategies to create alignment; working
with internal stakeholders to assess pricing
change impact and transparency
* Increasing analytical capabilities
(both pre-deal and post-deal) to assess the
marketplace and target/segment customers
* Maximizing resource efficiencies
by exploring outsourcing or alternative
resourcing models to handle increases in
contract volume and complexity
* Creating formal modeling scenarios
of political change impact
* Spending more time with account
teams and internal stakeholders to help
them understand the marketplace
* Integrating pharmacy and medical
claims.
Regarding outsourcing, a recent TGaS
study indicates that 16 of 25 responding
companies (large-, mid-tier and small) have

6 Visit our website at www.PharmaceuticalCommerce.com July | August 2017

outsourced at least one contracting function.
The most common include data validation,
rebate processing, chargeback processing,
coverage gap/donut hole processing and
Medicaid rebate processing. The presignature contract functions of pricing/
contract strategy and proposal development,
however, are rarely outsourced.
Respondents to the landscape analysis
were asked to force-rank 15 pre-determined
internal PCM functions in terms of their
importance. The top seven include 1)
creating innovative contracting strategies; 2)
preparing for product launches; 3) ensuring
compliance for government price (GP)
calculations and reporting; 4) upgrading
current systems; 5) successfully completing
required audits and SOP creation; 6)
reducing revenue leakage; and 7) predicting
contract value.
It's worth noting that "innovative
contracting strategies" finished either first
or second on each of the three individual
rankings: Top Priorities, Most Critical Action
Items and Most Important Internal PCM
Functions. While skeptical views of the
current and future prevalence of innovative
contracting certainly exist within the
pharmaceutical space, primarily due to poor
data, lack of system support and many other
reasons, there is no doubt that PCM leaders

currently have this topic very high on their
radar.
A few additional insights:
* PCM budgets (does not include the
rebate line) in general have decreased in
2017 as compared to 2016.
* Access-based contracts continue
to dominate the industr y, and price
protection is almost universal.
* If resources are increasing within
PCM teams, the most common function
to receive additional resources is Pricing/
Contract Strategy. Contract Administration
(i.e., data and formulary validation) is the
No. 2 area of resource expansion.
* PCM leaders are looking to hire
individuals with higher level skills, such as
strategic thinking, marketplace knowledge,
business acumen, analytics, stakeholder
management and communication.
ABOUT THE AUTHOR
For more information on the Future
Issues in Contract Management: 2016-2019
landscape analysis, please contact Brian
Deppen, bdeppen@tgas.com. Deppen is
VP, Pricing & Contract Management at TGaS
Advisors, (www.tgas.com), a benchmarking
and advisory services firm for commercial
organizations in the life sciences industry.


http://www.tgas.com http://www.PharmaceuticalCommerce.com

Table of Contents for the Digital Edition of Pharmaceutical Commerce - July/August 2017

Table of Contents
Pharmaceutical Commerce - July/August 2017 - Cover1
Pharmaceutical Commerce - July/August 2017 - Cover2
Pharmaceutical Commerce - July/August 2017 - Table of Contents
Pharmaceutical Commerce - July/August 2017 - 4
Pharmaceutical Commerce - July/August 2017 - 5
Pharmaceutical Commerce - July/August 2017 - 6
Pharmaceutical Commerce - July/August 2017 - 7
Pharmaceutical Commerce - July/August 2017 - 8
Pharmaceutical Commerce - July/August 2017 - 9
Pharmaceutical Commerce - July/August 2017 - 10
Pharmaceutical Commerce - July/August 2017 - 11
Pharmaceutical Commerce - July/August 2017 - 12
Pharmaceutical Commerce - July/August 2017 - 13
Pharmaceutical Commerce - July/August 2017 - 14
Pharmaceutical Commerce - July/August 2017 - 15
Pharmaceutical Commerce - July/August 2017 - 16
Pharmaceutical Commerce - July/August 2017 - 17
Pharmaceutical Commerce - July/August 2017 - 18
Pharmaceutical Commerce - July/August 2017 - 19
Pharmaceutical Commerce - July/August 2017 - 20
Pharmaceutical Commerce - July/August 2017 - 21
Pharmaceutical Commerce - July/August 2017 - 22
Pharmaceutical Commerce - July/August 2017 - 23
Pharmaceutical Commerce - July/August 2017 - 24
Pharmaceutical Commerce - July/August 2017 - 25
Pharmaceutical Commerce - July/August 2017 - 26
Pharmaceutical Commerce - July/August 2017 - 27
Pharmaceutical Commerce - July/August 2017 - Cover4
https://www.nxtbook.com/nxtbooks/pharmcomm/202006
https://www.nxtbook.com/nxtbooks/pharmcomm/202003
https://www.nxtbook.com/nxtbooks/pharmcomm/201911
https://www.nxtbook.com/nxtbooks/pharmcomm/201909
https://www.nxtbook.com/nxtbooks/pharmcomm/201906
https://www.nxtbook.com/nxtbooks/pharmcomm/201903
https://www.nxtbook.com/nxtbooks/pharmcomm/201811
https://www.nxtbook.com/nxtbooks/pharmcomm/201809
https://www.nxtbook.com/nxtbooks/pharmcomm/201806
https://www.nxtbook.com/nxtbooks/pharmcomm/20180304
https://www.nxtbook.com/nxtbooks/pharmcomm/20171112
https://www.nxtbook.com/nxtbooks/pharmcomm/20170910
https://www.nxtbook.com/nxtbooks/pharmcomm/20170708
https://www.nxtbook.com/nxtbooks/pharmcomm/20170506
https://www.nxtbook.com/nxtbooks/pharmcomm/20170304
https://www.nxtbook.com/nxtbooks/pharmcomm/20170102
https://www.nxtbook.com/nxtbooks/pharmcomm/20161112
https://www.nxtbook.com/nxtbooks/pharmcomm/20160910
https://www.nxtbook.com/nxtbooks/pharmcomm/20160708
https://www.nxtbook.com/nxtbooks/pharmcomm/20160506
https://www.nxtbook.com/nxtbooks/pharmcomm/20160304
https://www.nxtbook.com/nxtbooks/pharmcomm/20160102
https://www.nxtbook.com/nxtbooks/pharmcomm/20151112
https://www.nxtbook.com/nxtbooks/pharmcomm/20150910
https://www.nxtbook.com/nxtbooks/pharmcomm/20150708
https://www.nxtbook.com/nxtbooks/pharmcomm/20150506
https://www.nxtbook.com/nxtbooks/pharmcomm/20150304
https://www.nxtbook.com/nxtbooks/pharmcomm/20150102
https://www.nxtbook.com/nxtbooks/pharmcomm/20141112
https://www.nxtbook.com/nxtbooks/pharmcomm/coldchaindirectory2014
https://www.nxtbook.com/nxtbooks/pharmcomm/20140910
https://www.nxtbook.com/nxtbooks/pharmcomm/20140708
https://www.nxtbook.com/nxtbooks/pharmcomm/20140506
https://www.nxtbook.com/nxtbooks/pharmcomm/20140304
https://www.nxtbook.com/nxtbooks/pharmcomm/20140102
https://www.nxtbook.com/nxtbooks/pharmcomm/dataservicedirectory
https://www.nxtbook.com/nxtbooks/pharmcomm/20131112
https://www.nxtbook.com/nxtbooks/pharmcomm/20130910_hubreport
https://www.nxtbook.com/nxtbooks/pharmcomm/20130910
https://www.nxtbook.com/nxtbooks/pharmcomm/20130708
https://www.nxtbook.com/nxtbooks/pharmcomm/20130506
https://www.nxtbook.com/nxtbooks/pharmcomm/coldchain2013
https://www.nxtbook.com/nxtbooks/pharmcomm/20130304
https://www.nxtbook.com/nxtbooks/pharmcomm/20130102
https://www.nxtbook.com/nxtbooks/pharmcomm/20121112
https://www.nxtbook.com/nxtbooks/pharmcomm/20120910
https://www.nxtbook.com/nxtbooks/pharmcomm/20120708
https://www.nxtbook.com/nxtbooks/pharmcomm/20120506
https://www.nxtbook.com/nxtbooks/pharmcomm/20120506_coldchain
https://www.nxtbook.com/nxtbooks/pharmcomm/20120304
https://www.nxtbook.com/nxtbooks/pharmcomm/20120102
https://www.nxtbook.com/nxtbooks/pharmcomm/20111112
https://www.nxtbook.com/nxtbooks/pharmcomm/20110910
https://www.nxtbook.com/nxtbooks/pharmcomm/20110708
https://www.nxtbook.com/nxtbooks/pharmcomm/20110506
https://www.nxtbook.com/nxtbooks/pharmcomm/20110304
https://www.nxtbook.com/nxtbooks/pharmcomm/20110102
https://www.nxtbook.com/nxtbooks/pharmcomm/20101112
https://www.nxtbook.com/nxtbooks/pharmcomm/20100910
https://www.nxtbook.com/nxtbooks/pharmcomm/20100708
https://www.nxtbook.com/nxtbooks/pharmcomm/20100506
https://www.nxtbook.com/nxtbooks/pharmcomm/201004
https://www.nxtbook.com/nxtbooks/pharmcomm/201003
https://www.nxtbook.com/nxtbooks/pharmcomm/20100102
https://www.nxtbook.com/nxtbooks/pharmcomm/20091112
https://www.nxtbookmedia.com