Avalere 2021 Healthcare Industry Outlook: Clearing the Path

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The accelerated changes and increased uncertainties in healthcare brought on by the COVID-19 pandemic will continue into 2021, and its impacts are likely to shape healthcare for years to come. While prevalent uncertainty is a given, the broad outline of a new era is already emerging. More than ever, careful examination of healthcare stakeholder’s business models, policy developments, and data will be essential to arrive at accurate assessments of the future state. Our experts engaged in a live discussion covering critical issues facing healthcare leaders and strategies for clearing the path.
Please note: This is an archived post. Some of the information and data discussed in this article may be out of date. It is preserved here for historical reference but should not be used as the basis for business decisions. Please see our main Insights section for more recent posts.
“For healthcare, and in a highly regulated industry like ours, a new administration is always a time of change and of opportunity. And certainly, this year is no exception.” Elizabeth Carpenter


Elizabeth Carpenter , President

As president of Avalere Health, Elizabeth Carpenter is responsible for the firm’s consulting, sales, and operational functions.

Kelly L. George , Principal, Market Access & Reimbursement

Kelly L. George, PhD, RAC, supports clients in navigating the FDA policy environment for the development and lifecycle of drugs and biologics.

Lance Grady , Executive Vice President, Life Sciences Strategy & Growth

Lance Grady is the head of Avalere’s Life Sciences Strategy & Growth.

Matt Kazan , Managing Director, Policy

Matt Kazan advises health plans, life sciences clients, and patient organizations as they navigate the policy landscape, focusing on Medicare Part D and Medicare Advantage, and implementation of the Inflation Reduction Act.

John C. Neal , Managing Director, Commercialization & Regulatory Strategy

John Neal partners with pharmaceutical and biotechnology clients to develop market access assessments and launch strategies to ensure successful asset commercialization.

Guest Speaker
Sarah Butler , Head, Client Solutions, Marketing & Operations, Avalere Health
Sarah Butler specializes in evidence-based medicine, value-based contracting, and strategy development.
Guest Speaker
Nick Diamond , Consultant II, Avalere Health
Nicholas J Diamond, JD, LLM, MBe, provides strategic counsel on health policy and market access issues spanning US (federal, state, and local) and international markets.
Guest Speaker
John E. Linnehan , Practice Director, Health Economics & Advanced Analytics, Avalere Health
John E Linnehan leads a team of consultants, strategists, and data scientists focused on driving healthcare improvement through value demonstration, stakeholder engagement, predictive and applied analytics, and data innovations.
Guest Speaker
Kristi Mitchell , Practice Director, Avalere Health
Kristi Mitchell specializes in the use of clinical data for strategic decision-making across multiple industries, including life sciences, health plans, and professional societies.
Guest Speaker
Chris Sloan , Principal, Policy, Avalere Health
Chris Sloan advises a number of clients, including pharmaceutical manufacturers, health plans, providers, and patient groups on key policy issues facing the healthcare industry.

This interview was originally published as a podcast. The audio is no longer available, but you can read the transcript below. For updates on our newly released content, visit our Insight Subscription page.


Sarah Butler: Hello and welcome to our webinar, the “2021 Avalere Healthcare Industry Outlook.” I’m Sarah Butler, and I’m the Head of Sales, Marketing and Operations here at Avalere.

Thank you for joining us on what has become a very difficult week in America, following the riots in our nation’s capital.

Many of our speakers live in Washington, DC, and we are so grateful that they and their families are safe and that they can join us today so we can discuss the critical areas in healthcare that will be prioritized in the coming year.

I have a few housekeeping items before we get started. First, we’d love to hear your questions. Please submit your questions in the Q&A box and we’ll answer what we can at the end of the event.

If you experience technical difficulties at any time during the webinar, please submit your technical issue in the Q&A box and our event producers will assist you directly.

Finally, a video recording will be available after the webinar. Look for it in your inbox later this week.

So, let’s dive in. Healthcare stakeholders are facing a unique set of challenges and opportunities in 2021 as we continue to respond to the COVID-19 pandemic and prepare for a new presidential administration. Today’s discussion will include 9 of our Avalere health experts as they discuss a variety of topics during the following panels.

  • Panel 1 will focus on impacts on coverage from the 2020 election and COVID-19, as well as Medicare Advantage and state issues.
  • Panel 2 will focus on drug pricing, the role of Center for Medicare & Medicaid Innovation (CMMI), and patient affordability.
  • Panel 3 will discuss the use of data in care models with a focus on disparities, delayed and deferred care, and public health.
  • And we will end with panel 4, which will focus on COVID-19 vaccines, therapeutics, and the role of FDA.

First, I’d like to welcome Elizabeth Carpenter who is Head of Advisory Services here at Avalere, as well as Chris Sloan, who is an Associate Principal on the Policy team.

Let’s jump in. Elizabeth, what does a new presidential administration mean for healthcare?

Elizabeth Carpenter: So, Sarah, as all our viewers are probably aware at this point, Congress voted early this morning to certify Joe Biden’s election as President. What became really clear yesterday is that we are going to emerge from this election season a deeply divided nation. That has implications for all sorts of things in our lives.

In a highly regulated industry like healthcare, a new administration is always a time of change and opportunity, and certainly this year is no exception. Of course, the makeup of Congress, specifically the Senate, which we’ll talk a lot about today, means that some of the most controversial policy change is likely off the table. That puts pressure and focus on the administration and administrative actions. In healthcare, that means things like annual rulemaking, agency guidance, and things coming out of CMMI.

We were all glued to the news early yesterday to watch what was happening in Georgia and certainly Democratic control of the Senate has implications, the biggest being what Democrats will try to do with a 50-vote majority. While we do not currently believe Democrats have the votes to eliminate the filibuster for all actions, we do think that reconciliation is a likely vehicle for policy change. Reconciliation of course comes with some difficulties and limitations, but it’s been used for healthcare before.

I’ll end with this point—Democrats cannot afford in this moment to lose a single vote. If I were a moderate, either a Democrat or Republican, I’d feel pretty powerful headed into this session of Congress.

Sarah Butler: Before I jump over to Chris, we’ve heard a lot during the election cycle about the expansion of public programs, including the potential for a public option, such as Biden’s Medicare expansion. Given what you just said, where do the chances of that stand under a Biden administration?

Elizabeth Carpenter: The Biden administration and Congress are going to have a lot of competing priorities, and certainly the Senate makeup is going to be limiting in many ways. From my perspective, that Medicare-for-all, Medicare-for-more, public option debate is unlikely.

I also think that Joe Biden knows the Senate better than anyone. He’s going to be acutely aware of where he does and does not have the votes. I think he’s also going to be a student of history and know what a sweeping reform conversation could potentially do to his political capital and his presidency.

This is by no means to say there won’t be a focus on healthcare. I think there will be, and we’re going to talk about that today, but I think we will see a debate around some of the less controversial policies that were discussed on the campaign trail.

Sarah Butler: Thank you. As follow-up to that, we’ve talked about what is unlikely to happen as it relates to coverage, but what has a chance of getting done on this front and what role does the pandemic play in terms of the insurance landscape? Chris, I’d love your opinion here.

Chris Sloan: Job loss during the pandemic has shifted people out of commercial coverage and into a lot of the safety net programs. We’ve seen Medicaid increase by almost 10% since before the pandemic. We’ve seen a lot of new people go into the exchanges. This is going to stick around. The coverage challenges are going to continue into next year, and into the year after that. Avalere projections say we’re not getting back to February levels of insurance coverage, where we were before the pandemic, in the foreseeable future. That leads to a lot of policy decisions to shore up coverage in the US.

On the legislative front, to Elizabeth’s point, we’re looking at the types of things that can be done by getting every single Democrat on board with the Vice President, the tiebreaker, to shore up coverage, things like enhancing the ACA subsidies to make it more affordable, fixing some of the underlying issues that were part of the original bill like the family glitch, or trying to find incentives for states to expand Medicaid. Those are the kinds of legislative things that could move in the new Congress.

On the regulatory side, there are going to be a lot of rollbacks, rollbacks of what the Trump administration has done. Work requirements will be gone. Expansions of 1332 waivers for block grants will be gone. Expansions of short-term, limited-duration insurance will be gone. I think you’ll see the Biden administration really clamp down and try to return to 2016-era regulations on the ACA. As an administration, it’s going to be much more supportive of the law.

Sarah Butler: Thank you. So Chris, you mentioned the uptick in Medicaid enrollment. How does COVID impact the healthcare outlook at the state level? What can we expect on this front in 2021?

Chris Sloan: The impact is negative. For most states, Medicaid is the largest single line item in their budget and when you have 10% increase in enrollment and revenues are going down, that’s a problem for state budgets. So, I expect we’re going to see states working to find savings under the couch cushions. They’re going to be trying to do anything they can to reduce costs. We’ve already seen states going after Medicaid managed care capitation rates. We’ve seen states trying to find savings by clamping down on prescription drugs. We will see states focused on reducing payment rates to providers.

One interesting thing here, and one of my favorite fun facts, is that the CARES Act gave states a little extra money for Medicaid, 6.2% enhanced FMAP (Federal Medical Assistance Percentage) to help them deal with this burden. One of the conditions is that they can’t, for most reasons, disenroll patients from Medicaid until the public health emergency is over. We don’t know when that’s going to be. It could be this year, or it could be next year.

What I think you’re going to see is Medicaid continuing to go up and up and up because you can’t disenroll patients and folks are still coming on after losing other forms of coverage.

At some point, there’s going to be a cliff because states are going to be incentivized to save money and get these people off their rolls to reduce their costs. So, whenever the public health emergency ends, we all need to be watching Medicaid because the enrollment numbers are going to come down very rapidly.

Sarah Butler: Yeah, great point there. In terms of something else that we all need to be watching, there’s a bit of a wild card out there before the Supreme Court. What do you see in terms of the ACA case before SCOTUS?

Chris Sloan: It’s a wild card, but it’s a wild card like Yellowstone Caldera erupted. In theory, it could happen, but we shouldn’t bet on it next year.

This is by far the most likely outcome of the Supreme Court case, and I’m going to emphasize “by far”— either they uphold the law, they strike down the mandate and leave the rest of the law there, or they dismiss on standing. In all three of those scenarios, nothing changes. There’s no impact on healthcare and no impact on coverage.

That is by far the most likely outcome based on the oral arguments and other thoughts. However, if they do end up doing something to the ACA, the fact that Democrats control the Senate is a big deal because Congress is the backstop. Congress must put the thing back together and that was going to be a lot harder in a divided Congress, getting Democrats and Republicans to agree on something around the ACA, than it will be even with the Democrats’ slim majority.

Sarah Butler: One final question. Elizabeth, over to you. While we’re talking about public programs, what does all this mean for Medicare Advantage? I assume it’s also been a bit of a wild year on the MA front as well.

Elizabeth Carpenter: You know, it’s interesting. When we think about the spectrum of impact the environment has had on the healthcare industry, whether it’s COVID or the election, Medicare Advantage is on the more stable side of that spectrum. There is bipartisan support for the program at this point. Enrollment is growing. But, everything is relative in this moment and that’s not to say, to your point, that Medicare Advantage plans haven’t had things to think about. They have spent most of 2020 figuring out how to engage beneficiaries enrolled in their plans.

Because we have access to Inovalon’s MORE2 Registry, we’ve been able to look at Medicare Advantage claims and what we’ve seen is that claims were down 60% or more in some months. What is tricky about Medicare Advantage is that 2020 claims drive 2021 risk scores and payments. Plans had to submit bids and made a guess about what utilization was going to look like for the remainder of the year. So, depending on what estimation they made, there is the chance that 2021 payments may not cover costs.

Again, the program has a very stable outlook even under the new administration. That’s not to say there won’t be policy change and things to pay attention to in this space moving forward, but it will be around the edges compared to some of what else we’ll talk about today.

Sarah Butler: Thank you so much, Elizabeth and Chris. While we’re talking about Medicare, it seems like a good time to go ahead and transition over to another hot button issue from the 2020 campaign trail—drug pricing.

I’m pleased to welcome Lance Grady, who is a Practice Director on our Market Access team, and Matt Kazan, who is a Principal on the Policy team, to discuss some drug pricing issues.

Matt, let’s start with you. The Trump administration released several impactful regulations at the end of last year, including Most Favored Nation (MFN) and Part D redesign, or the rebate rule.

We’ve already had the courts issue an injunction on MFN. I’m assuming that this means that the next steps will sit with Biden. What do you think the Biden administration will do here?

Matt Kazan: Yes, Sarah, that’s right. All eyes on the MFN front are on the Biden administration. I think the Biden administration can take this opportunity to fulfill a campaign promise and shift MFN to more of a broader Medicare negotiation model under CMMI. You may see it look a bit different, though. CMMI could broaden the scope of the model to include both Part B and Part D, but unlike HR3, which was the Medicare negotiation legislation that passed in the last Congress, CMMI can really only focus on the Medicare market and not the commercial markets.

I think one of the big sticking points for the Biden administration if they go down this road is how they choose to set prices. Do they rely on international prices, like the Trump administration did? Do they focus on HTA (Health Technology Assessment) and the value assessments that were touched on during the campaign by President-elect Biden? Or do they do a mix of both? I think either way, CMMI is a huge level of authority here, and I would expect the Biden administration to use that authority.

Sarah Butler: So going back now to Part D, are we in the same situation in terms of elimination of rebates? Does the implementation of this regulation also fall on the Biden administration?

Matt Kazan: Unlike MFN, we’re in a bit of a different place with the rebate rule. The rebate rule is still currently set to be implemented, starting in planning year 2022. What needs to happen next falls to CMS to fill in a bunch of really important details on how to operationalize this change in the Part D program. These details, like how the chargeback administrator will work, or the definition of negotiated price, are important to stakeholders. The Inspector General punted those decisions to CMS.

So, we are expecting a Part D final rule and a rate notice out of CMS before inauguration. Those questions can be answered in either of those two documents, or we could be waiting until the Biden administration takes office, but time is tight. A lot of these decisions need to be made before the spring. These are really important decisions and stakeholders need to be engaged now to affect and shape the outcome of this policy.

Sarah Butler: Yeah, absolutely. We’re a little bit in flux. Given the range of possibilities that Matt just spoke about, Lance, from your perspective, how should life sciences companies be preparing?

Lance Grady: I certainly think on the MFN side or the physician administered side of pharmaceutical manufacturing and pharmaceutical pricing, this idea of global market access and US market access, maintaining an integrated strategy, that does not go away just because we’ve seen an injunction on MFN.

To Matt’s point, if the Biden administration advances Medicare negotiation or HTA-like reimbursement or HTA-like pricing, certainly ex-US markets have paved the way. Manufacturers have to be focused on that integrated global and US market access and pricing strategy.

Pertaining again to Part B, unless the Biden administration sees action, although we’ve seen a published MFN price by CMMI and many of us can certainly do the calculations there on the difference between an international and US price, other than just transparency into that price, it’s not likely to hit a market or become a market price. So, from a pharma perspective, eyes turn toward what the Biden administration does through CMMI in Part B.

For Part D and rebate elimination, we hear from health plans today that they’re preparing bids and thinking about benchmarks in a world with rebate PMPM (per member per month) for member strategy, and a world without rebates. As far as pharmaceutical manufacturers think about a tiering strategy and an access strategy, they must prepare for, simulate, and think through bid strategies that look for rebate passthrough, and also potentially rebates as they exist today.

I also think that there is some concern about price transparency and rebate passthrough. Does that create a new net price or a new market price, and will other commercial markets in the pharmacy benefit look to try to accelerate their negotiations towards life sciences clients?

So that is a sort of a tertiary or second order concern relative to Part D. And then finally, we have this chargeback administrator that Matt discussed, and that becomes a separate piece of paper in terms of contracting, and it may not necessarily be with the PBM (Pharmacy Benefit Manager). It could be with a GPO (group purchasing organization) or it could be with a wholesaler.

Navigating this new entity of a chargeback administrator and how that contract exists is also a very near-term bridge that pharmaceutical manufacturers are going to have to cross.

Sarah Butler: You mentioned a lot there that would impact other healthcare stakeholders, but just briefly, can you highlight one or two things that health plans and providers should be thinking about?

Lance Grady: Health plans are focused on vertical integration, but they still have a Part D strategy as well. So as patient cost share decreases through rebate passthrough, plan liability increases and so tighter formularies, who’s going to offset that liability, is going to be a very critical focus for Part D plans, Medicare Advantage plans, and commercial plans that learn on that model, if we see the elimination of rebates.

On the provider side, they breathe a sigh of relief for now, but providers are looking at significant disruptions, not only due to the public health emergency, but also further mergers and acquisitions and changes in provider-based reimbursement, which today is drug price-based. Expect providers to take another look toward value-based or prospective payment as stability in their business model as opposed to always having to succumb to whatever drug-based reform occurs that then becomes a reimbursement reform for providers.

Sarah Butler: Yeah, great point. Thank you. So switching gears a little bit. Matt, we just had a special election 2 days ago. We can’t ignore that. So how do the results impact what we are likely to see on the drug pricing front in 2021?

Matt Kazan: The results of the Georgia election have huge implications for drug pricing in 2021. Democrats will now obviously take the majority in the Senate, and I think that means a couple things. Number 1, Biden nominees for certain positions are more likely to be confirmed through the Senate, and we know that personnel is also policy. The folks that will be set in leadership positions will be very important as part of this debate—CMS administrator among others.

On the legislative side, Democrats will set the agenda and will decide what gets votes and what doesn’t. There are several drug pricing policies that have bipartisan support today that may not have gotten votes absent the Georgia election. I think things like the Part D benefit redesign, inflation rebates, changes to the Medicaid drug rebate program—those are a lot more likely today than they were this time last week.

But as Elizabeth said, the margin of their majority is very narrow, so I would suspect that a lot of the very controversial drug pricing pieces probably don’t have a pathway in Congress. We again look toward CMMI as an option there. Finally, the notion of reconciliation is going to be very important. Knowing what can and cannot be passed via reconciliation is going to be so important for stakeholders trying to plan and understand what’s coming at them in 2021.

Sarah Butler: Thus far on this panel, we’ve talked a lot about the political arena, but Lance, there are clearly some market pressures that are going to impact drug pricing as well. Can you talk about some of these potential market drivers or market events that we should be paying attention to this year?

Lance Grady: Sure. So, we know through our work with our parent company Inovalon that most commercial health plans have gotten really comfortable in the exchange market, in the Medicare Advantage market, and they’re learning about total cost of care management, care coordination, enhanced benefits, and things of that nature. A lot of Inovalon’s plan clients and a lot of healthcare stakeholders are going to be looking toward integrated benefit design, integrated care delivery, and maybe even further integration in M&A activity.

I expect the big 4 to continue to look at a health system, a health provider footprint, a network footprint, as they try to move point-of-care and point-of-care innovation closer to the patient.

We haven’t formally seen any austerity measures at the federal or state level, but through our claims data and our data assets, we have a rich understanding of what’s happening from point-of-payer to point-of-care to point-of-patient. As a healthcare stakeholder in the US, understanding those vulnerable markets, those strong markets, and what those incentives are from point-of-care to point-of-payer, is critical as we all try to rebound from the public health emergency.

Sarah Butler: Thank you so much, Matt and Lance. Lance, I’m glad you brought up the data. That’s a great segue into our next session where we’re going to talk about the use of data in care models.

So with that, I’d like to welcome John Linnehan, the Practice Director of our Health Economics and Advanced Analytics team, as well as Kristi Mitchell, who is the Practice Director for our Center for Healthcare Transformation.

One note to the audience. I see many questions coming in through the Q&A. Thank you so much. We are going to carve out some time to answer those questions at the end of our last panel.

John, one thing that we’ve seen during the COVID pandemic is that patients are deferring care, largely due to challenges in getting to the doctor’s office in person. What are we seeing in our data?

John E. Linnehan: Sure, I’m happy to talk about this and elaborate on some of the elements that Lance mentioned at the end of his session. The topic of delayed and deferred care as related to the pandemic is certainly one that has been a huge focus over the past 9 months. Many folks watching have probably seen it in some form or another, and it’s one that we’ve spent a lot of time examining.

One of the reasons we spend a lot of time looking at it is, by virtue of being an Inovalon company, we have access to the proprietary provider clearinghouse data, which allows us to look at real time. For example, provider claims and payments from as recently as last week. So that allows us to have very accurate, very up-to-date viewpoints on utilization changes in healthcare, and there has been a clear story that’s emerged relative to delayed and deferred care.

We published some data at the end of last year specific to oncology that was featured in The Wall Street Journal, which showed that at the beginning of the pandemic, oncology-related evaluation and management services were down over 70%. That’s rebounded a little but is still significantly down. In the fourth quarter of 2020 versus fourth quarter of 2019, utilization of these services was down 25 to 40%, and that really has continued throughout the spectrum of oncology care. We’ve seen similar declines year-over-year in utilization for screening for key cancers like lung, prostate, breast, and colon. We’ve seen decreases in rates of biopsies, rates of physician-administered drug administrations, and surgeries, and it’s not limited to oncology.

We’ve seen similar data in the primary care space, in cardiovascular disease. We’ve seen similar data in other specialty conditions like rheumatoid arthritis. It’s certainly something that merits a lot of focus, and the outcomes merit a lot of focus as well.

Sarah Butler: Yeah, absolutely. That is a pretty significant decline in a lot of areas across the care continuum. Given this amount of deferred care, whether it’s receiving drugs or screening biopsies, what are some of the longer-term implications that we need to be prepared for, not just for patients, but also for providers?

John E. Linnehan: Yeah, it’s a huge issue, and it’s one that’s going to be a big topic to tease out in 2021 when we think about an outlook perspective. I would definitely segment this into questions around utilization, provider revenues, and patient outcomes.

From the provider revenue and utilization perspective, it’s a mixed story. If we continue with the oncology example, especially in the fee-for-service models, the math doesn’t look good when you consider utilization, but it hasn’t been consistent. We put out some research late last year looking at home health, for instance. Home health has rebounded to pre-pandemic levels, but similar services that are provided in skilled nursing facilities has not, so you’re really seeing a mixed bag. There are several elements that make this vary.

But I think, again, we’re here talking about an outlook and the big question is, when and how quickly we’re going to start to see some change. The forecast of what that looks like really considers many of the aspects that we’ve already heard about. We look at epidemiology of the disease. We look at coverage and insurance shifts, like what Chris talked about. We look at geography. We look at the level of innovation that we see in certain therapeutic areas. We look at setting of care, and we look at patient outcomes.

On the other hand, we’re also very focused on patient outcomes and what the impact of delayed and deferred care is going to be there. This is an area where frankly, I see some differences of opinion. Some individuals find challenge in looking at this question because outcomes research historically has required longitudinal data and retrospective data, but the reality is we’re in the midst of this pandemic.

We’re still looking at how utilization is changing. There’s really limited visibility or data available right now to see how patient outcomes are going to be impacted, but we also need to look at this. Stakeholders are focused on this. Service providers are focusing on how they can evolve care delivery models to treat patients. Life sciences organizations are looking at ways to ensure that patients get the drugs that they need, regardless of where they’re going to receive care. Insurers are looking to make sure that they’re designing benefits or implementing benefits for their members in a way that can anticipate changes and outcomes as much as possible. We cannot afford to miss the mark here.

This is another area where analytics play a significant role. I mentioned the fact that we have very near-term data on provider utilization or utilization of services. We also have the benefit of the Inovalon data that was referenced early which is 20 years’ worth of historical clinical claims and demographic data. So what we’ve been doing is looking at changes in utilization in real time using historical data to assess how outcomes change as a function of that utilization and then predicting how we might expect outcomes to change going forward. So it’s near-term changes in utilization, how that projects the longer-term impact on outcomes, and then you can take intervention to mitigate that.

Sarah Butler: Absolutely. So you mainly talked about care that requires an in-person interaction, but during the pandemic, we’ve also seen a substantial uptick in the use of telehealth services.

Kristi, I know you’ve got a lot to say about this. Is it likely that telehealth is here to stay? And what do you think this means for patients?

Kristi Mitchell: Thank you for that. So, the pandemic has pushed telehealth and virtual care more broadly to the forefront of healthcare delivery, and that’s notable within primary care and behavioral health. Now that we’ve gotten a taste of it, there is tangible consumer demand pushing for it to stay. Latest surveys show patients increasingly comfortable with telehealth. More than half say that online tools have strengthened their relationship with their provider and they actually want more access to these tools, not less.

Telehealth offers the opportunity for healthcare to become more patient-centric and we’re so excited for that. I think we’re poised to see it continue to grow in 2021. But, this growth will not be without overcoming some known barriers for widespread adoption. We’ve begun chipping away at some of these issues. For example, the federal government has relaxed some reimbursement policies, but there continue to be HIPAA and privacy concerns as well as more cultural and change management issues among clinicians. We’re just simply trying to get used to engaging with patients in this new way.

I can only imagine that there are other barriers that will emerge around equity and access and this is going to be particularly relevant for our underserved populations where they may not have broadband internet access or the ability to connect to video conferencing or even overall digital literacy.

I think that we will need to keep an eye out for this development and identify actual solutions. With this as a backdrop, it comes down to the data and to better understand telehealth’s clinical and financial impact to showcase its long-term value if we invest enough clinical data or enough of this utilization data from telehealth services. I think I would put remote patient monitoring into this bucket.

We may find ourselves in this enviable position to use artificial intelligence to advance clinical decision making and perhaps it’s a pipe dream, but I do think that it’s on the horizon.

Sarah Butler: Absolutely, and it’s certainly something that we’re focused on here at Avalere and Inovalon as well.

Kristi, you mentioned some of the struggles that COVID has highlighted and I don’t think that we can ignore that longstanding racial and socio-economic disparities have been exacerbated during the pandemic, not in terms of just healthcare access, but also care delivery and certainly patient outcomes. We know, for example, that people of color are experiencing much higher-than-average rates of coronavirus infections, hospitalizations and deaths.

Do you think that the pandemic will be the linchpin to finally drive some meaningful change in how our healthcare system addresses these disparities?

Kristi Mitchell: Absolutely. It’s a topic that we at Avalere are so passionate about.

To truly address your question, we’re going to need to tackle the root causes of long-standing health disparities in order to facilitate real change. From my perspective, change is going to be driven by a few different things, and at its core, it’s going to be data.

So first and foremost, we will need to take a real hard look at the vaccines and drug development process looking for areas of innovation that seek to promote health equity. Sounds easy, but over the years, we’re seeing that it hasn’t been. How do we recruit more people of color to clinical trials? How do we begin investing in equity-driven analytics throughout the entire clinical development process? And finally, could we be so bold as to engage the community in something novel like community-based participatory research?

This leads me to the second point, which is encouraging unique and often unprecedented partnerships. This is a way to begin to move the needle in a discernible way. Let’s look to collaborations between local public health departments, historically black colleges and universities, regional health plans, local providers, churches, CBOs (Community-Based Organizations), and life sciences. These groups will need to come together if we seek to improve education around vaccinations, increase outreach, and ultimately build trust, because that’s the fundamental linchpin in all of this. Trust.

The major caveat here is that these partnerships can’t be just a press release. We’ve seen many examples of that. We need to measure the impact of these coordinated efforts.

Finally, we need to place greater emphasis on demonstrable actions that speak to social determinants of health. Can we measure, not just what is, but what can be?

John, I know that Avalere has published quite a bit on social determinants for past few years, highlighting the problem. How can our data assets be used to support better understanding of the impact of some of the solutions to close health disparities?

John E. Linnehan: I think the imperative to bring elements of social determinants into data analytics has absolutely increased as a function of the pandemic and exacerbation of racial injustice initiatives in the US. I would say the one thing that’s important to think about is that there are very granular sources of social determinants data, things like spending habits, income level, living situation, education, all at a neighborhood level.

When we bring that into our research, we start to see some really interesting trends emerge into how outcomes, care delivery, care consumption differs at those levels. It’s crucial to start to bring that into analytics and research and I would say imperative to do so at this point.

Sarah Butler: Absolutely. Well, thank you so much, Kristi and John. You’ve touched on so many different aspects of healthcare that really impact the public health of the nation. So now we’re going to transition to the issue of the hour, COVID-19 vaccines and therapeutics.

I’m excited to welcome Nick Diamond, who is a Consultant on our Policy team, Kelly George, who is a consultant on our Market Access Team, and John Neal, who is a Managing Director on our Market Access Team.

Clearly there’s been a ton of activity when it comes to COVID vaccines, vaccine distribution, therapeutics, and EUA (Emergency Use Authorization) approvals. What are each of you watching right now when it comes to COVID? Kelly, I’m going to start with you.

Kelly L. George: What I’ve been watching is these dynamics between the mutations in the virus and the products we have on the market. Honestly, I’m quite hopeful, not because the variance exists, but because of the way we develop the products. We develop them with a lot of structure-based design methods and emphasis on biotech. We have this depth of knowledge of the 3D structure of the drug, the spiked protein, the vaccine itself, and really understand how they specifically interact.

What I’ve been watching is our ability to monitor and predict if current or future mutations are going to impact efficacy. Not only is it exciting to see that we have this ability to do that, but fascinating to see the convergence of maturing technologies that enable that, to think through how this mix of experimental computational approaches can be harnessed for future drug development and better determine how to identify products that may have greater success in clinical trials, for example.

Sarah Butler: Great. Well, I certainly love your optimism, because there’s been a lot of scrutiny. Nick, one area where we’ve seen a lot of attention in terms of scrutiny is around the vaccines distribution process and specifically around the speed that vaccines are getting out. What are your thoughts in terms of how we’re doing in that regard?

Nick Diamond: This is an area that I’ve been watching quite closely lately. We’ve had EUAs for several COVID-19 vaccines for a little while now, and we’re in this critical distribution and administration phase. Going into the rest of the year, there are 3 areas that I’m watching very closely.

First, if we think about the vaccines themselves, some have very specific cold chain requirements, which adds a layer of complexity to the distribution process.

Second, during this initial government purchase phase, allocation of those doses will be made based on a very specific tiering structure, which basically prioritizes individuals like frontline healthcare workers and older adults. How decisions are made about sub-tiering and when it’s appropriate to switch from one tier to the next tier will become increasingly important as we think about the potential for very different experiences for patients state to state.

Finally, there’s a very complicated IT infrastructure that stitches together all these pieces at the federal, state, and local levels. It relies on things like state immunization registries and newly created systems, and how all these systems communicate with each other and work together will become really important throughout the rest of the year for distribution.

Sarah Butler: It seems like such a simple concept, but there’s so much that goes into it. Kelly, we’ve been reading about how the UK is approaching vaccine distribution quite differently from the US. What are your thoughts on this?

Kelly L. George: Yeah, it’s interesting to watch, but at the end of the day, I really do believe each country has to make its own risk/benefit analysis based upon the information they have in front of them and the resources at hand.

I’m fairly confident that in the US, as soon as FDA has data supporting an alternative distribution model, they have the opportunity to review it quickly. At the same time, when ACIP (Advisory Committee on Immunization Practices) sees the data, they also have the opportunity to quickly implement changes that are appropriate.

Thankfully, because these were both approved through EUA and are authorizations rather than approvals, there’s additional opportunity to rewrite the scope and conditions of use as data proves appropriate.

Sarah Butler: Another issue that I don’t think we can ignore when it comes to the COVID vaccine is vaccine hesitancy, and it’s certainly not COVID-specific, but is an issue in terms of getting to herd immunity. John, what are your thoughts here?

John C. Neal: Yeah, thanks Sarah. It’s really difficult to make these vaccines, and the distribution challenges are immense, which is part of the problem. As you mentioned, vaccine hesitancy is an issue that will affect how we deal with COVID and how these vaccines are ultimately going to be used and covered in the population. Unfortunately, it’s a public education issue.

At the beginning, there were a lot of messages on how difficult it was to make these vaccines and how long vaccine development typically takes, and then suddenly we were making these vaccines in record time.

I think what’s really critical on this one is that the public needs to be educated on these vaccine trials that cut no corners. What you saw is just a massive mobilization and investment by the pharmaceutical companies. The number of patients that were in these clinical trials were in 10s of thousands in these phase 3 trials. The safety signals and adverse events were no different than any other vaccines that are typically brought to market. Plus, you had the FDA, which was allowing a rolling submission for these files.

All these things came together to solve a public health emergency. Unfortunately, it’s just going to take a little bit of time as these vaccines roll out and they’re proven safe and effective. As more people see these vaccines used, vaccine hesitancy will decrease.

I think the other part of it is what manufacturers can do to bend the curve with regards to vaccine hesitancy, to work with all public and private stakeholders, channel intermediaries, HCPs, and patient vaccine advocacy groups on consistent messaging that no corners were cut when it came to vaccine development. These vaccines truly are going to be safe and effective.

Sarah Butler: FDA has certainly been in the spotlight throughout the pandemic. We’ve already mentioned several areas where they have weighed in. How has COVID changed how FDA operates for the longer term, and what are likely some of the implications of this? Kelly, your thoughts?

Kelly L. George: Yeah, I think FDA has really had to learn to be more agile, more responsive, as these changes have been occurring rather rapidly.

Across the globe, everyone’s been having to become more responsive, but I think FDA has taken it on headfirst. I think they’re going to emerge from the pandemic with the ability to have more regulatory flexibility and the ability to focus on a bigger picture, broader public health mission. We’ve seen this through quicker guidance releases, more updates of older guidances coming out, more question and answers, and earlier engagement in the development process as well as an embrace of development, such as decentralized, remote, adaptive trials.

On the broader level, we see that this is going to allow for a recalculation, a rebalance between the stable regulatory predictability that we expect and regulatory flexibility to really collaborate at the agency and take on the public health mission and focus on patient health needs by going beyond the traditional regulatory mindset.

Sarah Butler: That definitely sounds like a positive for the industry at large. So Nick, the role of pharmacy has gotten a lot of attention in terms of getting the COVID vaccine to people. Can you talk about how this looks a little bit different for the COVID vaccine versus other vaccines?

Nick Diamond: Pharmacists have really always been an integral part of the immunization neighborhood, as they say, whether it’s for routine immunizations or in public health emergencies. If we think all the way back to the H1N1 pandemic, pharmacists were an integral part of the immunization campaign to respond to that pandemic, and we’re seeing that today with COVID-19 as well. Last month we saw some specific announcements about initiatives focused around pharmacies in the long-term care setting. And then as the pandemic evolves, we’re likely to see an increasing emphasis on the role of retail, so bricks-and-mortar pharmacies helping to get doses into arms.

Sarah Butler: We’ve talked a lot about the vaccine aspect, but we haven’t touched too much on therapeutics. John, looking forward, what will the market be like for COVID therapeutics after this initial crisis settles down a bit?

John C. Neal: That’s a great question, Sarah. The beginning of 2020 was the year of therapeutics. It was an unprecedented time in the rapid development of antivirals, convalescent plasma, and most recently, emergency use authorization of two monoclonal antibodies for use of mild or moderate treatment of COVID-19.

What’s interesting to note about the two monoclonal antibodies is that, unlike previous products that came to market, these products were completely purchased by the US government, similar to how they’re managing these vaccines. These monoclonal antibodies will be given out free of charge. The distribution will also be managed by the US government.

For therapeutic manufacturers, the long-term forecast for these products really focuses on 4 main areas. Some of them are quite obvious.

First is number of vaccines—the total number approved and available.

Then there is vaccine efficacy, how well will these vaccines work to prevent COVID-19. We’re seeing very positive data with the MRNA vaccines, so that’s a positive for everyone except therapeutic manufacturers.

The third area relates to this hesitancy question. When these vaccines do become available, what’s going to be the coverage and uptake of these products?

The fourth point, to what Kelly was saying earlier, is mutations and variations in the virus. As this virus circulates and encounters immunized populations, what is the ability of these viruses to mutate to avoid some the protective effects of these antibodies? If that happens, then there will be a consistent need for therapeutics going forward.

So it’s a mixed bag, but I think most experts, most epidemiologists, indicate that unfortunately, COVID-19 is not going to go away anytime soon, so there will unfortunately be a continued need for these products and continued development in this area.

Sarah Butler: Thank you, John. So you mentioned emergency use authorizations, or EUAs. These have historically been rare, but they certainly been an effective way to address the COVID pandemic. Kelly, from your perspective, is there an opportunity for FDA to learn from this and potentially apply these learnings to other areas, for example, rare diseases?

Kelly L. George: FDA has long taken into account the severity of disease and level of unmet medical need when considering the risk/benefit of any product.

But that said, you’re right. The past year will certainly lead to better understanding of how to balance that risk/benefit, how to expedite streamlined development review for both sponsors and the agency itself.

I think trends that push in this direction are the diverse methods of communication with agency as well as more dramatic embrace of upcoming technologies. Both of those will have a direct impact on rare disease.

Sarah Butler: Great, well thank you so much, John, Kelly, and Nick.

Now I’m going to invite all our experts back on to answer a few questions from the audience. I hope Matt is getting back online because I’m going to send the first question his way.

With Democrats likely to control both the House and the Senate in 2021, there’s been discussion about the budget reconciliation process as a way for Congress to pass legislation that may not have been passed if Congress had remained split. Can you briefly explain what reconciliation is and why it matters for stakeholders?

Matt Kazan: Yeah, absolutely. So budget reconciliation is a special process in Congress and it essentially allows certain bills to be passed in the Senate with 50 votes rather than your typical 60 votes. That is obviously important given the results of the Georgia election where now there will be 50 Democrats in the Senate. So bills get this special privilege to get passed with fewer votes, but there are certain limitations and certain requirements that those bills must meet in order to get this special privilege. I won’t bore our audience with some of the arcaneness of those budgetary rules, but it really does, from a practical standpoint, open up the playing field in terms of the types of policy areas that Congress can consider, stuff like ACA changes or drug pricing changes that maybe weren’t on the playing field last week.

The details matter and the details will be dictated a lot by that process. So as I said earlier, trying to predict what’s coming at you as a healthcare stakeholder, you really need to understand not only the political positions of the members of Congress, but the process of reconciliation and what it allows and doesn’t allow, because I would anticipate us seeing that and having this debate over the next year.

Elizabeth Carpenter: Matt, you were in the Senate for two of these, right? So you’re going to be getting a lot of questions this year, I suspect.

Matt Kazan: Yes, I was involved.

Elizabeth Carpenter: For better or worse, right?

Sarah Butler: This next one I’m giving to Chris. With the increase in patients enrolled in Medicaid programs during the pandemic and the proposed changes in the 340B program, for example, moving to a full rebate program, do you anticipate less access to drugs for this patient population?

Chris Sloan: That’s a fantastic question. I don’t think so. I think it depends on what we mean by less access. I do expect states to try and pursue New York-style basic caps on what they’re spending in Medicaid to try and reduce their total spend on prescription drugs and I think they’re going to try to squeeze manufacturers on that.

I don’t think that we will see approvals from a Biden administration with something like Massachusetts proposing a closed formulary in Medicaid to actually exclude drugs entirely from Medicaid.

I think to the extent that efforts by state start to impact supply and innovation and the ability of manufacturers to provide these drugs to patients, there could be some effect on access, but I think more what’s going to happen is they’re just going to start squeezing on the rebate side through the state Medicaid programs and try to recoup savings that way.

Sarah Butler: Right, thank you. Next question. Lance, I’d love your quick thoughts on this one. If the panel can address or provide any insights as to why Haven was disbanded by Amazon, JP Morgan, and Berkshire Hathaway, that would be super helpful. Lance, your thoughts?

Lance Grady: Yeah, it’s a good question. We have not done a full postmortem as of yet. We’re looking to publish an insight on this in the very near term.

Personally, I think consolidation of benefit design and how some of these health plans have started to do more wraparound member strategies to almost act like a turnkey solution is likely a contributing factor. I would look at it primarily from how health plans are evolving as a potential sort of dynamic, but I wasn’t in the room where it happened with Berkshire and everyone else, so I would be probably reaching a bit to offer any further insight.

Sarah Butler: Great, thank you. I’m going to let Matt and Elizabeth weigh in on this next one. Do you think a Biden administration will attempt to roll back some of the more administrative/technical regulations, such as the value-based purchasing, best price reporting final rule issued last month. If so, to what extent?

Matt Kazan: I would assume that the Biden administration is going to focus more on some of the ACA and Medicaid-related regulations, and I think Chris touched on many of those. Some of these other pieces may fall to lower priorities. Obviously, COVID is the number 1, 2, and 3 priorities for the transition. So, I think their focus will be there as well as these immediate hits on the ACA and Medicaid regulatory front.

Elizabeth Carpenter: The only thing I would add, and I think you touched on it, but this is a really important point—prioritization is going to be the name of the game. I think the incoming administration is really clear that priority 1, 2, and 3 is COVID. There’s a lot of opportunity from a regulatory perspective in healthcare and they’re going to have to make some tough choices because it’s unrealistic to think it can all happen at one time. I’m sure people are spending a lot of time right now figuring out, after COVID-related action, what they’re going to tackle.

Lance Grady: You can’t really do value-based or HTA-like drug pricing without the benefits or the liberties that the value-based purchasing rule provides. It’s going to be really difficult to walk back a VBP that creates a lower price for Medicaid in states that, to Chris’s point, are already overburdened. So not only do you have the dynamics of, do I continue what the previous administration did, but on its political face, how do you then walk back an initiative that would drastically lower drug pricing in a vulnerable market, i.e., Medicaid beneficiaries?

Sarah Butler: Great. So one last question. I know that there are many other questions that we weren’t able to get to. We will do our best to follow up over email. John, are the reduced utilizations you mentioned leading to better or poorer health? For example, are the number of deaths or some other measures decreasing or increasing, respectively?

John E. Linnehan: Yeah, it’s a great question. I saw a couple of them to that effect, and I’d say I continue to go back to the mixed bag we’ve been seeing. I think there’s an excellent case for that and I think it’s likely true in many instances. I would suggest that it has led to increase in utilization in certain services that are important, like in mental health. That’s an area where telehealth has had a real success story. We should think about it from both perspectives, unintended, or utilization that we don’t want to see, but also increased utilization in things that we do want to see.

Let’s not forget that for decreases in things like biopsies, infused drugs, and surgeries in oncology, it’d be very hard to argue the majority of those are not needed. So, I think we’re still looking at an issue that it’s critical here.

Sarah Butler: Thank you, John, and thank you to all of our panelists. We’ve got a great team here. Thank you to everyone for tuning in to today’s webinar.

The most common question was whether there will be a recording, and there will. It should be in your inbox later this week. Please also look for a brief survey. We’d love your feedback. Clearly, we could have spent several more hours talking about these issues, so we would appreciate any feedback you have.

If you’d like to learn more about Avalere, please feel free to reach out to us on social media. We’re on LinkedIn and Twitter or visit us at Avalere.com.

We look forward to partnering with all of you in 2021 and we wish you a very Happy New Year. Please stay safe and thanks again for tuning in.

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