Wednesday, December 14, 2011

2011 Alliance Of The Year Nominee: AZ/HealthCore

It's time for the IN VIVO Blog's Fourth Annual Deal of the Year! competition. This year we're once again presenting awards in three categories to highlight the most interesting and creative deal making solutions of the year. The categories are: M&A Deal of the Year, Alliance Deal of the Year, and Exit/Financing Deal of the Year. We'll supply the nominations (a half dozen in each category throughout December) and you, the voting public, will decide the winners (by voting early and often, commencing once we've announced all the nominees). Strap yourselves in, it's The Race for the Roger™.

Never mind scientific or regulatory challenges. Payers are arguably the single most important hurdle between pharma and future profits -- and a flurry of 2011 deals showed that drug firms know that. They also know that, where payers are concerned, it's time to move from the battlefield into bed.

AstraZeneca's February 2011 tie-up with HealthCore was the first and among the most ambitious of 2011's pharma-payer deals, so that's our nomination here, but votes count toward any/all of the copy-cat deals, too: Sanofi/Medco (June) and Pfizer/Humana (October). They are all aimed, ultimately, at measuring health outcomes and understanding how drugs contribute (or not) to those outcomes. They're looking at cost-effectiveness. They're seeking to identify the inefficiencies in the provision of health care, and, in theory, feeding that information back into pharma development plans and pipelines.

Hoorah! These alliances are the surest sign yet that industry realizes that the game isn't about getting novel chemicals (or biologicals) past FDA, fun as that might be. That the way to reap future financial rewards involves developing practical, value-for-money health care solutions to prop up a crucial service within modern society that's on its knees.

Now if that financial-crisis-defying, social-responsibility-ridden big picture doesn't draw your vote from you, let's dig down. AstraZeneca -- which hasn't shied away from declaring its ambition to be a leader when it comes to payer interactions -- has tied up for at least four years with HealthCore, which is the clinical outcomes research unit of WellPoint, the U.S.'s largest managed-care organization. The partners aim to generate real-world data on the most cost-effective ways to treat chronic diseases like diabetes, cardiovascular disease and dyslipidemia -- and to evaluate drugs' cost-, clinical- and comparative-effectiveness.

In sum, AZ hopes that, by drawing on HealthCore's database of pharmacy and medical claims from 36 million members of Blue Cross and Blue Shield insurance plans, it can get better at persuading payers to cover its drugs, not least by better anticipating the kinds of cost-effectiveness studies that payers will use to decide whether or not to reimburse. The deal may also help identify where AZ should invest its future R&D efforts.

So for now, it's mostly words. But they're the right words. AZ is working more closely with the groups that influence drug purchasing decisions, and that's sensible. It may be ambitious in its aim to expand the project into a public-private consortium, including other drug firms, payer organizations and governments, but working with real-world data on real-world problem-solving is big and requires multiple collaborators. That's in part why the U.K. government recently announced plans to make accessible unnamed patient records from the country's vast National Health Service.

Indeed, AZ's business development chief Shaun Grady has made it clear he wants to emulate the HealthCore deal in other geographies, likening these actual and future collaborations to "building up a toolbox of solutions and approaches" to addressing health care issues.

What about the potential conflict of interest (since WellPoint is a big customer)? Not an issue, said AZ's executive director, corporate business development Mahmood Ladha, speaking at Elsevier's Pharmaceutical Strategic Alliances conference in New York in September. "There's an extraordinarily solid firewall" between HealthCore and its parent. "This is not a vendor relationship. HealthCore is a true partner."

Sanofi no doubt would say the same of its global deal with Medco Health Solutions and its United BioSource health economics and outcomes research unit. This tie-up appears to be more directly focused on informing development strategy for drugs in Phase II and III of the French giant's pipeline. But the thrust is the same.

So is that of the five-year Pfizer-Humana deal. Speaking in October to "The Pink Sheet" DAILY, Jim Harnett, Pfizer's Senior Director of U.S. health economics and outcomes research, neatly summed up why this trio of deals deserves your vote: "Previously we had not [included] the decision-makers" in our work to identify and define a research agenda.

Seems silly, really, doesn't it?

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