Episode 6: Drug Development and Reimbursement in Biotech with Key Opinion Leader Allyson Best

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Where people come for the science and stay for the food, festivals, and resilient culture. Welcome to another episode of Bio on the Bayou. I'm your Hi, I'm your host, Patrick Reed, the Assistant Vice Chancellor for Innovation and Partnerships at LSU Health New Orleans. Today's guest is Allison Best. Allison is the Director of Technology Commercialization at the University of Mississippi. Her team manages innovations of UM, and so her primary role is on the tech transfer out-licensing side of biotech. She also teaches a graduate course in the university's School of Pharmacy that focuses on biomedical development, regulation, and marketing. Um, currently has 4 technologies in human clinical development, ranging from imaging pain to treating glaucoma to dealing with poison ivy. And with that impressive background, I can't wait to talk with Allison about her experiences surrounding academic engagement in drug development and reimbursement, a topic that is often new to academic innovators and new startup CEOs. Welcome to Bio from the Bayou, Allison.

Thanks, Patrick. It's great to be with y'all.

So we keep these podcasts short so our listeners can learn on the go. So let me dive right in with my first question. What activities does your Office of Technology Commercialization primarily undertake related to the development and reimbursement of new drug technologies?

Thanks, Patrick. So our primary role is to work with our innovators on our campuses who are creating great science, and our job is to help that science find its place into the market, into society. The primary goal is always to benefit society. We want to increase the quality of people's lives. We want to treat, to diagnose, to prevent disease. All of those things are the most important. But we all know at the same time that these paths that the technologies have to go down in order to make it to the market, they're incredibly complex, they're risky, and they're expensive. So it doesn't matter if it's a billion-dollar drug or one that's actually going to be ultimately given away. You have to keep an eye on what the development paths look like and how the pricing and reimbursement landscapes are going to affect technology's adoption into the market.

So there's a whole lot of alphabet soup in this space. What are some of the key terms and what do they mean?

In early-stage preclinical development, you don't, and you certainly won't, have all the answers. But not doing your homework in this space and having an appreciation for these topics can absolutely kill the conversations that you're going to have with investors and with the regulatory agencies. So at its most basic, I like to think of the biomedical ecosystem as 3 major parts, and they all start with the letter P. You have your patients, your providers, and payers. Now, early-stage innovators, tech transfer offices, we often consider the patients in the basic sciences and in early translational sciences, and you may even be thinking about the healthcare professionals that's going to be providing the technology. But that 3rd P, the payers, and that's a big one, because that's the moment where how and when and why this drug will actually be paid for. for and adopted into the market. Payers fall into 2 large buckets. There's the private side and the government side, and they each have their own management strategies, their own adoption strategies, their own vocabularies. On the government side in the United States, you're dealing mostly with the CMS, the Centers for Medicare and Medicaid Sciences, and as well as an important one, that's the individual states' employment health plans, because those are usually some of the largest employee providers In the state. On the private side, it's basically just a big old bowl in terms of alphabet soup. You have HMOs, MCOs, PBMs, POSs, all of the managed care issues that the private side does. And again, they each have their own vocabulary and way to do it. It's key that you don't have to be an expert in all of them, but you do have an appreciation— you need an appreciation of the basic vocabulary.

Sounds not confusing or daunting at all. So now that we have all that settled, what are the key points an academic inventor or a startup need to know about drug development and reimbursement?

Well, the good news here in this is that especially in early-stage development, it's absolutely impossible to know where this is going to end up. One of the key things we always say is every forecast is absolutely wrong, but it needs to be close. And this is especially true when you're talking about the regulatory, the development paths, pricing, and reimbursement. In fact, in the course that I teach with our graduate students, we bring in speakers from all different aspects of the pharmaceutical industry. And on this particular topic, they all say the same thing. You're never going to know absolutely for sure where this thing's going to end up, but you have to do the homework on the basic targets for your goals. So, for instance, key considerations: you may have a small— a novel small molecule that's going to be probably formulated into a tablet and dispensed in a community pharmacy. Are we talking about a new chemotherapy infusion that will be delivered in a hospital setting? Are we talking about a device, or now drug-device combos that are going to require a surgeon and an inpatient hospital stay? Each one of these have very different development paths within, say, the FDA or the, or the other countries' regulatory agencies, and they each have very different pricing and reimbursement strategies. So when it's either my office or one of our faculty employee startups is pitching to investors, you have to have a basic appreciation of what this path is and where it's going to go in order to communicate value.

So it sounds like there definitely is a lot of homework that you got to do on the front end in order to get these, these deals the best chance to succeed early on. So can you give us some examples Do you have any examples of how not doing your homework can create challenges?

Sure, and I've done all of these. So it is a matter of, again, starting to take a look at the environment. I'm listening to some of the other podcasts, and Dr. Elaine Hamm mentioned work in infectious disease and some of that basic data that you have to collect in order to be successful. A part of that is knowing where that infectious disease candidate sits in the spectrum of other candidates. So let's do an example. Let's say you've got a preclinical candidate for an infectious disease, but you also know that you've got a pharmacokinetic or a PK problem. So right now, the only way this, this technology is getting any sort of decent data out of it is if it's infused. And then you're realizing that these infusions may take up to, say, 30 minutes if it actually were to get into a human patient. So that's the challenge, but let's also say that the early data looks really, really good in clearing the infection. It's better than the other technologies out there, and the tox profile is really clean, and the other ones don't. So now it's time to actually pitch this. So even though you've got— an early innovator does this a lot— you've got a really good candidate, you have to make the value proposition when you're pitching this to investors. That it can overcome the fact that you're looking at putting a patient in a hospital setting, which is going to cost twice as much, if more than that, factors more. Infusions are going to cost more, they're going to be priced more, and so it's going to be harder to get on those formularies and get the government and the private payers to invest in this. So again, you don't have to have all the arguments made, but you have to realize when you're in the room with them this early, That, that is a barrier that you just need to address. That say, I don't, I don't have all the answers yet, but we know that this is a barrier.

Got it. So really kind of understand the landscape that your technology fits in.

That's right.

So how do early innovators, offices like ours, and small companies start doing their homework?

Yeah, and the good news here is that there is a ton of information out there for you to do an early landscape analysis. And a good portion of this is already public. For those at universities too, I highly recommend that you go and look at all the data that your libraries are currently subscribing to because they have phenomenal data. I've set up a page, a course page for my students that has both technical and market data links for them. So especially if you're at a university, go talk to your librarians. That's a big one.

I'm going to have to steal that idea.

But I— one example I always give is actually this is the second assignment that my graduate students have to do in the class, and they have to pick a drug that's currently in clinical trials, say, and with the FDA, more acronyms, but let's say it's Phase 1, Phase 2, 3, or a hybrid of those. But you start really looking at that technology or the one that you're investing in, and you do this environmental analysis, and you start at the top. So if we're going to look at the U.S. first, here's a big one. What division of the FDA is actually going to regulate your technology? Is it CDER for drugs, or is it going to be on the drug path, a vaccine path, a biologic? They're all different, but they're all on the website, and you can— they all have great outlines of what that's going to take. But again, especially if you're in— you mentioned earlier that we have some work in poison ivy. It's not technically a vaccine. So where is it? And how is how is the FDA going to look at this technology in order for it to get to a patient that's dealing with terrible reactions to poison ivy? Another great question to ask is how many interventions are actually out there on the market now, and especially in pharmaceuticals. This is one where I say don't just look at the drugs. Prostate cancer is a great example in this. You need to look at all of the different ways that the providers that we've talked about. can intervene and help with the patient. So is it always a pharmaceutical solution first, or do they do surgery first, or can it be either/or? Is there other interventions that actually have nothing to do with being in a hospital? Sometimes wait and see is a way, but you're— what you're trying to do is kind of start dissecting that patient population to see, again, how and when new technologies are adopted. Then you got to go back and look at what the pipeline looks like. So what are— what's out there behind it? When I say a pipeline, I mean, because the pipeline's long in biomedical, right? We know it's going to— these things take sometimes years, a lot of money, a lot of time. So you look at the things that are currently out there and do a high-level analysis. Are things— lots of things in the pipeline, but yet nothing can just seem to get across the finish line? And why is that? Or is there absolutely nothing even in development for your work? This is especially true in rare diseases, tropical medicine, orphans. But again, having an appreciation of that helps you talk to investors where you say, look, I know this pipeline's loaded, but everything's failing because everything seems too toxic. Or I know this pipeline's loaded, but it seems to me that everything that's failing is because it just can't prove that it's any better. The other thing you want to look at are how the current drugs, therapies, and interventions are actually provided out there. So, and what their pricing schedule and reimbursement schedule looks like. And this one's getting in the weeds a little bit, but it's information that's out there, and again, you can look. If the market out there is predominantly dominated by generics and you're looking at something new, well, then you're going to have to overcome an economic argument that there are low-cost generics out there and why yours may or may not be better. 5 or 6 years from now. And that includes looking at that, again, that what those formularies look like both on the private and the public side for the drugs that you're looking at. And again, all of this is out there. Another huge one, final one that I like folks to take a look at, and this is just a high-level analysis, is what outcomes are currently being measured in your target market. And this one is sometimes very, very new to pharmaceutical drug delivery and other types of innovators. But the truth of the matter is, is that both the federal government and the private payers and the Food and Drug Administration require you to not just look at the technological aspects of the drug, but they want to look at how it actually performs out in the market to again see what outcomes actually happened when it went into a patient. And it's different for every market. In diabetes, you know, they're looking at Maybe less days on insulin, what your ACs look like, what your numbers look like, less days in the hospital, fewer amputations after the drug was introduced onto the market. Every market is a little different, but these are key considerations when they're talking about communicating value, and the more that you can take an early look at how other companies are communicating that value, the better shot yours has about moving through the pipeline.

Yeah, that's great. It sounds like there's a ton of information that needs to be combed through and really putting together the story, the pitch that we're talking about here. Who do they go to to get this information? Let's start with the faculty inventor, and then we can talk about startups.

Or— and for the faculty inventor, again, answering all of these questions with in-depth reports is not necessarily important, but working with your either your investments, your consultants that you have, your tech transfer offices, you do need to perform that sort of high-level analysis and pull out those salient data points. Again, if you're talking about diabetes, these are the 3 things right now, or anything in the space I'm looking at, seem to be salient for this technology to be successful. And as opposed to something that's in a hospital setting that It may be a lot easier to get it through development because, again, it's an unmet need, and you can say it's an unmet need. And one thing I just want to point out here, especially for faculty, is that these exercises are absolutely critical far beyond whether or not you want your technology to ultimately be commercialized, because the federal funding landscape has already moved to this. value proposition in their model. So your proposals are going to be more competitive when you have the ability to communicate value in your proposals. For startups, you know, just one of the easiest ways I say, especially for a faculty-based startup, is you've got to get yourself a very good regulatory consultant right out of the gate if you don't have a CEO that's already done this. I mean, if you've got a CEO that's already done a complete regulatory submission and approval, that is an invaluable resource. If it's not, then just admit you don't have it and go find somebody that can help you with this, because that reg consultant, if you get it wrong in the beginning and you're going— you're spending money down one regulatory path and you thought you were going to be, and it turns out that you're going to be on another one, it doesn't matter how much you say this drug is going to be priced at, it's wrong.

Got it. Well, we also hear a lot about reimbursement codes. Who has influence and control over getting one set up?

Sure, and when you get to coding, that's the ultimate holy grail in the weeds of this whole value proposition that we're talking about. The ultimate way that your technology is going to be coded, again, both on the federal side and on the public side, is the moment in time where you're actually going to figure out where your pricing strategies are going to be and what your ultimate reimbursement strategies are going to be. So again, it's Critical for you to be cognizant of the fact that all of the data, all of the things that you're doing now are getting you to get those codes. Again, it's not important necessarily right now what the specific code's going to be, but again, you need to know where the general fields are because they are based on, again, whether it's inpatient, what diagnosis codes you're getting at. If you think— cancer is a great one in this one. You don't get a cancer code anymore, you're going to get, say, salvage therapy. It's very, very specific. And so if you're not detailing and thinking about what clinical strategies need to be in place when you're designing your clinical trials about where you want those codes and those label claims ultimately need to be, you're going to waste a lot of money.

Interesting. So we're still in the midst of COVID-19. And so thinking of the COVID-19 pandemic, How does development of new drugs and reimbursement for inventors and providers work within a space of unusual desperation for new technologies?

I mean, it's definitely changed everything. One of the biggest ways it's changed is the narrative around these have always been in the public eye, but now more than ever they are, especially when it— again, when it comes to pricing, how fast something can or cannot get through the Food and Drug Administration. What we hope is that the efficiencies for these systems, whether it be the regulatory agents or the public and private payers. We're hoping that the efficiencies are there that it can happen a little quicker, and you are seeing that not just in the vaccines for COVID, but other drugs are getting through faster. But what's not going to change are the basics that we've talked about today and in the other podcasts. I mean, you're still going to have to prove efficacy. or prevention, you're still going to have to have a tox profile that matches the target that you're going after, whether it means you need a completely clean tox profile for, say, a pediatric asthma patient versus acceptable toxicity issues with, say, a cancer chemotherapeutic. Those are not going to change. So the good news is, is that we have efficiencies in the system. The challenge for all of us today is that because these value propositions are going to go faster and they're going to happen earlier, It's important to do your homework as soon as you can.

You know, it's interesting listening to you talk about all of these various pieces of information, the homework that we have to do, the understandings we need to reach. It almost sounds like offices like both of ours could really have one dedicated person doing this and this alone. Are there any events or resources you recommend where people can get help with this?

Sure. So, for the faculty innovator out there who's new to this whole world, I will say that the Food and Drug Administration's primers on drug development— again, vaccines, biologics, and small molecules— is extraordinary, and we're happy to post that. That's a fantastic place to start. There are also tons of courses out there, sometimes 6 hours, sometimes 2-3 days, where if you really want to start getting into this from the perspective of a startup, that those are available to you as well. For those at universities, I always say too, this is where I love my graduate students We use fantastic graduate students, team, innovation team that works with us every semester, and I just have them start looking. Again, go find me any paper out there that talks about outcomes measurements for poison ivy. They go out there and they do a fantastic job. Last thing I would say too is more and more clinical trials, it's a trend that started about 20 years ago, are not necessarily, even for US-based technologies, are not starting in the United States. We actually just announced a Phase 1 trial for one of our candidates that has started in Australia. And then they're going to bring the US Food and Drug Administration on board, probably in '23 or '24. So again, having a very high-level appreciation of what the other regulatory agencies look like is a good idea because they are, they are a little bit different.

That's great. And hopefully we can get a lot of this information in the show notes for this episode so people can access that information. Well, thanks so much, Allison. I know I actually learned a lot today, and I hope some of our listeners have too. And thanks so much for being a guest on the podcast today.

Thank you. I look forward to it. And thanks so much for this series. It's, it's a great resource.

We'll have Allison's contact info, some relevant links to some of the resources she talked about posted in our show notes. Make sure to check them out to learn more about the often overlooked realm of drug development and reimbursement.

Thanks for joining us for Bio from the Bayou, and we hope you'll join us again.

If you'd like to learn more about the emerging biotech scene in New Orleans and the Gulf Coast region, visit us at biofromthebayou.com, where we have more info on who we are, how to get involved and connected in biotech in New Orleans, and the industry events we'll be hosting where you can meet with us in person.

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