Transcript P2 Financial Analysis EFPIA

Electronic Health Record
(EHR) Task Force
Financial Analysis
Isabelle de Zegher and Greg Stadler
March 2008 – DRAFT
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Imagine Europe….
 Where you need to pass through customs for
each country…
 Where you need to change currency – not
only in each country – but in each region….
Is there a difference with electronic medical record ?
There are major benefits in EHR integration but the cost is
significant as well
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Overview
 What is the vision
 What are the benefits ?
– Financial Analysis
• Cost
• Tangible Benefit
– Intangible Benefits
 Conclusions
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What is the vision ?
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What is our vision ?
 By 2015,
Use of EHRs will transform Drug
Development and Commercialization,
provided
– broadest access to interoperable records is
available;
– there is a collaborative effort within
pharmaceutical and Health Care
stakeholders.
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Vision & Use Cases (Slipstream)
Clinical
Research
1. Genetic
Association and
Linkage Analysis
2. Clinical
Validation –
Target,
Biomarker, and
Diagnostic
Clinical
Development
Regulatory /
Safety
3. Clinical Trial Execution
10. Post-Marketing
a. Connect Patients to Trials
b. Data Collection & Mgmt
c. Investigator Services
a. Safety /
Adverse Event
Monitoring
b. Pharmacovigilance
d. Compliance
e. Placebo Populations
c. P-Epi & Data
Mining
Prioritized High-Level Use Cases
Commercial
12. Pharmacoeconomics
13. Marketing
Comparative
Studies
14. Pharmaceutical/
Disease
Management
Programs
4. Clinical Trial Simulation
15. e-Prescribing
5. New Indication
11. Manufacturer’s
Identification
Recall
6. Interim analyses
7. Personalized Medicine – Pharmacogenomics
8. Outcomes Studies
9. Disease and Care Management Modeling
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Financial Analysis: first attempt !
- Cost
- Tangible Benefits
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Approach to financial analysis
 Approach taken is NOT an ROI computation but
rather
– For the cost: identification of the most appropriate
operating model based on cost comparison of different
scenarios.
– For the benefits: estimates with tangible figures =>
quantified to support realistic expectations.
 This a starting point - Any comment/ challenge
welcome !
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COST: The situation today, with EDC
1
6
5
2
3
4
EDC without data standards,
courtesy Charles Jaffe, MD, PhD
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COST: Implementation Models
Current Organization
GP’s Office
GP’s Office
GP’s Office
Pharma Industry
Hospital
Hospital
1
GP’s Office
Pharma Industry
5
GP’s Office
GP’s Office
2
Hospital
Hospital
Pharma Industry
GP’s Office
Each pharmaceutical company
connected with different hospitals
=> many links per organization
6
3 4
There is no fundamental difference … except that the “connection” is less visible !
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COST: Implementation Models
Current Organization
GP’s Office
GP’s Office
Third party support
GP’s Office
GP’s Office
GP’s Office
GP’s Office
Pharma Industry
Pharma Industry
Hospital
Hospital
Hospital
Hospital
GP’s Office
GP’s Office
Pharma Industry
THIRD PARTY
(“Honest Broker”)
Pharma Industry
GP’s Office
GP’s Office
GP’s Office
Hospital
Hospital
Pharma Industry
GP’s Office
Hospital
Hospital
GP’s Office
Pharma Industry
GP’s Office
Each pharmaceutical company
connected with different hospitals
=> many links per organisation
Each actor connected through a Third party
(e.g. SWIFT in banking, 1 link per organisation)
(Note: in Health Care we would rather
foresee a federation of national TPs)
We need to look at different organizational/interaction models
These are 2 extremes; the truth is probably in the middle
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COST: Implementation Models
Current Organization
GP’s Office
GP’s Office
Third party support
GP’s Office
GP’s Office
GP’s Office
GP’s Office
Pharma Industry
Hospital
Pharma Industry
Hospital
Hospital
GP’s Office
GP’s Office
Pharma Industry
GP’s Office
GP’s Office
Hospital
THIRD PARTY
(“Honest Broker”)
Pharma Industry
GP’s Office
Hospital
Hospital
GP’s Office
Pharma Industry
GP’s Office
Hospital
Hospital
Pharma Industry
GP’s Office
Each pharmaceutical company
connected with different hospitals
=> many links per organization
Each actor connected through a Third party
COST (5 years): 129 Billions EUR
COST (5 years): 20 Billions EUR
(e.g. SWIFT in banking, 1 link per organisation)
(Note: in Health Care we would rather
foresee a federation of national TPs)
10 Billion w/ data standards
Key Assumptions: 100.000 Health Care “data” sources – 20% “EHR ready”
(by 2014)
300 Pharma companies – 50% “EHR ready”
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COST: Implementation Models
 Main Cost Drivers in this model (1/2)
– (one of) Cost of setting up communication
• for computer to computer interaction
• in each organization
• Estimated to be 25 K per organization/per C2C
interaction
– In current organization, multiplication factor => 75 BEUR
– With Third party support, addition => 504 MEUR
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COST: Implementation Models
 Main Cost Drivers in this model (2/2)
– (annual) Cost of checking data standards
• For each site and each study (as type of data
needed may change)
• Estimated to be 5 days per sites
– done once at the start
multiplied by number of site per study and number
study per phase
=> 3.4 BEUR without standards
– if we want to add checks on data per visit
=> 5.7 BEUR without standards
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Tangible Benefits: Expected Value Approach
 2 types of benefits
– “operational” benefits
– life cycle time reduction benefits
 Benefits evaluated in 2 steps:
– identification and description of the benefits
• Trial phase considered when quantifying the benefit
• Estimates of the parameters used across all benefits case (e.g.
average number of studies, cost per patient…)
– probability that a benefit would be realized in a given
year.
A few benefits were quantified and agreed.
Several others remain to be discussed.
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Tangible Benefits: details on one
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Tangible Benefit: Cycle time
 Estimated improvement Time reduction (days)
– Improvement per phase 2 and 3 = 70 days
•
•
•
•
•
30: Set up - Study Design Concept/SDC to FPFV
30: Execution - FPFV - LPFV - (faster patient recruitment)
Execution - LPFV - LPLV - DBL
10: Data Cleaning / SDV - DBL to CSR
TOTAL 70 Days Saved
– Only 1 phase II and 1.5 phase III on critical path
Therefore time savings on critical path =175 days
 Assume Profit from one day = 0.7 MEUR
 Assume 10 new brands/products per yr
 Total benefit = 1.2 BEUR
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Tangible Benefit: Overview
This is only a first pass – further work is needed
Additional Benefits identified – not quantified
(e.g. decreased cost of monitoring , data collection, epi studies…)
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Financials: Overview
 Critical enablers to reduce show-stopper costs
– Federation of third parties – top priority to reduce cost of
industrialising information exchange across multiple interaction
– Data standards (also required for data quality)
 Both enablers require political support, collaboration and
shared funding
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Intangible benefits
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Intangible benefits
 The “train” started already: do we jump in or wait and see
– Drug safety projects based on EHR are funded in EC (FP7), and US
(FDA, FNIH)
– As electronic sources becomes more available, requirements from
regulatory authorities increase
 Is there any other way to support development of targeted
product ?
– 1 or 2 patient per site is a “site failure” today; it will be an “site hit”
tomorrow
– With the current way of working this is not affordable
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Conclusions
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Conclusions
 This was a first attempt to quantify !
 Probability to achieve significant benefits by 2013/2014,
– Tangible benefits possible today (protocol feasibility, patient
recruitment)
– Activities/investment required today to achieve 2013/2014
 Long term, EHR integration is key for Drug Development
 Critical enablers to reduce show-stopper operating cost
require top-down support
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