Market access

The Demy-Colton panel explains how to make your market access strategy a reality before phase III trials

Hogan Lovells has partnered with Demy-Colton to host a special three-part webinar series focused on US market access for life sciences companies, providing companies that are new to the US market or looking to get started in the United States, especially early-stage biotechnology companies, with basic rules from governments and commercial payers. The second panel of the series featured Hogan Lovells partners Alice Valder Curran, Adrienne Elmanand Lynn Mehler, as well as Tess Cameron, Director, Strategic Finance at RA Capital Management. Together, they discussed key issues that new drug sponsors need to consider early on when planning their clinical and market access strategies.

In the article below, we summarize the main takeaways from this webinar. You can access Part 1 of the series and register online for Part 3 of the series here:

April 27: “The Foundation: The Basics of Market Access and Why They Matter Before Phase III”

May 18:Sustainability: how to prepare a value-based market access strategy

Building on the foundational lessons provided in the first part of this year’s course Demy Colton U.S. Healthcare Market Access Webinar Series, Alice Valder Curran, partner at health firm Hogan Lovells, stressed that pre-commercial companies should focus on their market access strategies “at least before your Phase III trials, but ideally even before.” Access is the single most important success factor in the U.S. market, noted Valder Curran, and must be a research and development imperative as well as a business imperative, not least because it impacts design and l execution of a company’s clinical trial strategies.

Panelists presented a hypothetical company with a potential “Product A” to demonstrate how government and commercial payer considerations can impact both venture capital funding decisions as well as clinical trial strategies and product development to best position the product and company for success.

Adrienne Elman, a partner at mergers and acquisitions firm Hogan Lovells, described a hypothetical “realistic” preclinical company, which has identified a lead small molecule “Product A” candidate for which it plans to file an Investigational New Drug (IND) application in within the next month. The company is now seeking additional funding to help cover the anticipated costs of its planned Phase I clinical trials. Lynn Mehler, Partner and Practice Area Leader of the Hogan Lovells Pharmaceutical and Biotech Practice, and Co-Head of the Company’s Life Sciences and Healthcare Industry Sector, further described the “product A” as being effective for three different rare diseases, through weight-based dosing by infusion given in the doctor’s office from a one-size-fits-all vial, as well as for broad indication at a lower fixed dose self-administered by auto-injector or pre-filled syringe. If successful, the company plans to set prices at $350,000/year for rare disease indications and $50,000/year for the broad indication. The company assessed competition as limited for rare disease indications, but has several existing competitors for the broad indication. The company also intends to pursue a single New Drug Application (NDA) for all indications, but will seek approval for the broad indication under a different brand name than the rare disease indications.

Tess Cameron, Director, Strategic Funding at RA Capital Management, then provided advice on the approach venture capitalists take to pre-commercial companies seeking funding. Essentially, Cameron noted, VCs try to distill some key points: 1) what the product is worth if it works; 2) the probability of success; 3) how much money and how long will it take to determine “if it works”; and 4) how understandable (“perceivable”) the value proposition is. Cameron noted that market access is a key part of the “what it’s worth if it works” analysis, and noted that investors will therefore do their own due diligence on this aspect. Regarding the nuances of Product A, for example, VCs would consider the likelihood that a single NDA would be compatible with a differential pricing model and whether the differential pricing proposal in general was likely to be effective. In response to a question from Valder Curran, Cameron further explained that there are several comparable companies that have successfully commercialized rare disease indications independently, making the value creation from these indications more “noticeable”.

Ellman then provided advice on how a company can prepare for questions from sophisticated investors. Ellman stressed the importance of preparing for what is likely to include a three-pronged due diligence approach, including: 1) a very deep dive into the science, intellectual property and regulatory work already done by the company ; 2) other legal and corporate aspects such as contracts, non-disclosure agreements and appropriate assignments; as well as 3) a financial component beyond the framework of this seminar. Ellman noted that for life sciences companies “it really benefits everyone…to be as comprehensive as possible in these due diligence responses” by preparing a responsive data room showcasing what the company did. Ellman noted that it sometimes surprises companies that potential investors ask them to provide their actual raw data so investors can dig deeper and validate it themselves. Ellman pointed out that it is worth spending time before the financing on this type of documentation to better present what the company has done in a way that investors can understand. This theme was continued by Cameron, who noted that when considering a “target product profile” for Product A, if it is still useful to get the company’s perspective on pricing and justification , investors will also almost always do their own due diligence on key aspects of the investment thesis, which for Product A would include regulatory strategy and likelihood of trading success. Regarding the regulatory assumptions for Product A, Cameron noted that the multiple indications proposed in an NDA seemed “tricky” based on Mehler’s earlier discussion of the risks.

Mehler expanded on the FDA’s development roadmap for a product with multiple possible indications, noting that it’s important to “think deliberately” about regulatory strategies, such as selecting a primary indication. Mehler mentioned a variety of factors to consider, such as the balance between the perceived faster approval process of a narrower indication and the challenges of listing, the FDA review division for each indication , patent strength and likelihood of exclusivity, and how to plan for follow-up. indications, including the development of data to support subsequent indications to avoid starting from scratch. When discussing clinical trial design, Mehler noted that the ability to assess multiple endpoints, as well as diversity in clinical trials are also important considerations. Product A, which offered auto-injector dosing, also poses device problems. Mehler stressed the importance of thinking through these “difficult questions” and planning ahead to have data to provide to the FDA for effective development and approval.

Valder Curran referred the analysis of Product A to the four fundamental questions presented in Session 1:

  1. Indications: What are the indications for which my molecule is being studied and in what order do you currently plan to pursue the study and approval?

  2. Mix of payers: For each of these indications, who will pay for the drug (for exampleMedicare, Medicaid, or commercial payer)?

  3. Dosage: What is my dosage and in which product presentations? (for examplebased on weight vs. fixed uprights)

  4. Pricing: What is my pricing strategy, and should I review [based on that strategy] the order in which I plan to pursue review and approval?

The panelists framed each of these factors for Product A and determined where there might be potential setbacks to its envisioned market access strategy. Valder Curran pointed to a number of possible tensions in the proposed approach for Product A, including whether, under Medicare, the broad indication would impact whether Product A would be eligible. to the payment of Party B, as well as whether the products are “therapeutically equivalent”. Valder Curran also discussed considerations for Medicaid and Pharmacy Benefit Manager (PBM) rebate strategies of the proposed broad indication, and whether there would be a risk of patients with rare diseases switching to lower-priced dosage forms. . Valder Curran also discussed some of the price constraints arising from the proposal to have a single vial size over the proposed weight-based dosage for rare disease indications.

Returning to his main considerations, Cameron noted that it is important for companies to think about the plans they have in place to be able to fund and market the proposed indications of Product A as part of a “go it alone” strategy. , and what it looks like. for rare diseases and for broad indication. This will help potential investors understand if differential pricing would be a realistic goal. Ellman expanded on this, noting that companies often position themselves for a particular type of exit, with the idea that at some point they will sell the company or product at that time. But Ellman insisted that companies should “always plan to go it alone” and have a plan for getting the product to market and getting it to market rather than just planning for a release. Ellman noted that this strategy will better position a company not only from a funding perspective, but also potentially for a future M&A deal. Cameron agreed, noting that it “shows why market access is so important” and that having a good value creation plan is crucial for companies.

The full webinar summarized above is available for viewing online hereand our summary of the first webinar is available online here. During the final session,Sustainability: how to prepare a value-based market access strategyour panelists will provide strategies to prepare for possible changes to existing regulations.