Medco, Sanofi drug deal brings payor view to R&D (Reuters)

NEW YORK (Reuters) – Pharmacy benefit manager Medco Health Solutions Inc will provide services to Sanofi SA that could help the French drugmaker navigate increasingly difficult reimbursement and regulatory waters.

The agreement between the two high-powered healthcare companies, announced on Wednesday, is designed to give Sanofi a broader perspective as it develops treatments, especially the views of health insurers and governments seeking evidence of a drug's demonstrated benefits before paying for it.

"The payor perspective is frequently overlooked until the very end," Robert Epstein, Medco's clinical research and development officer, said in an interview. "It's really about linking in a constituent that has previously been missing in the research equation."

The companies did not provide terms of the deal, beyond saying it was multiyear and global.

Medco, which administers pharmacy benefits for millions of Americans through its employer and health plan clients, has access to voluminous claims data. The company also conducts studies of drugs after they reach the market through last year's purchase of United BioSource (UBC), which also expanded Medco more internationally.

Drugmakers often are required only to test their medicines against a placebo to win marketing approval. But insurers and governments may balk at covering a drug if it lacks evidence it is better than therapies already on the market.

"Medco and UBC offer robust capabilities to help us close the gap between R&D and the real-world clinical setting," Sanofi Chief Medical Officer Jean-Pierre Lehner said in a statement.

Under confidentiality agreements, Medco will help Sanofi review project plans across its portfolio of experimental and approved drugs.

Medco may consult for Sanofi on studies such as those comparing its medicines with similar ones from other companies. For drugs designed for a condition with no approved treatments, Medco might gather data on the disease's prevalence, hospitalizations from the disease, and its total costs, Epstein said.

Medco can also help frame data in a way that is more useful to payers, Epstein said, such as extrapolating how much blood pressure changes could affect heart outcomes.

Even after a drug is approved, Epstein said, Medco's clients often want more information such as how a drug stacks up against its competitors.

"Our payers frequently see a new drug hit the market where it has been proven to work against placebo in a Phase III program, but that doesn't really answer our questions," he said.

For example, to win approval for a respiratory drug, companies may gather data on breathing gauges such as the ability to blow up a ballon, Epstein said. "But you're not collecting ER visits and hospitalizations -- that's just not as relevant to the payor community," he said.

Epstein said intervening after early stage, or Phase I, studies is desirable to ensure a development program is gathering information payors want.

"If you get past Phase II, it's kind of too late," Epstein said.

(Editing by Steve Orlofsky)