Better Value, Better Health
April 18, 2022
Daria O’Reilly sees health and economics as allied forces and is putting her forward-thinking ideas into action at TELUS Health.
As TELUS Health’s first full-time health economist (official title: Lead Health Economist, Pharmacy Consulting, Health Benefits Management), Daria O’Reilly uses both a clinical and an economic lens to help inform decisions around high-cost medications. With a PhD in epidemiology (specializing in pharmacoepidemiology), postdoctoral studies in pharmacoeconomics, and years of research and consulting experience in health technology assessment, Daria brings both academic depth and practical knowledge to her current role. Daria keeps it pragmatic and real in this chat about the management of high-cost drugs in the private payer space.
What prompted you to take on your new role?
It’s not that new anymore—I’ve been here for four years! After spending all my life researching and assessing health technologies within a public payer framework, I thought it would be exciting to apply my learning to the private payer world. It hadn’t been done before and it’s an opportunity to blaze a new trail.
For context, what types of services does TELUS Health provide and where do you fit in?
TELUS Health is Canada’s largest health IT company that offers broad and comprehensive healthcare services including electronic health records, benefits management, claims management, pharmacy management, and virtual care—which has come into its own since the pandemic.
I work in pharmacy benefits management (PBM), with a team of pharmacists and business analysts. Using both clinical and health-economic metrics, we work with our insurer clients to help them make evidence-based formulary decisions. We also have some formularies of our own. Our most comprehensive managed formulary is called Telus Complete. To get listed on this managed formulary, a medication needs to meet both clinical and cost-effective benchmarks.
I would also like to take this opportunity to make the distinction between a managed formulary—a formulary that we develop and that clients can select “off the shelf”—and formulary/plan management, which means applying tools to a formulary to support plan sustainability. Such tools may include prior authorization, generic substitution, and step therapy, and we can apply them to any formulary, whether managed, open, or provincial.
A few years ago, it would have been rare to find a health economist working for a PBM. What changed?
Drugs have become more complex and expensive, cell and gene therapies being notable examples. This means we need to consider the trade-offs between the cost of these medications and their value to patients and payers—and cost-effectiveness analysis is a way to quantify that. Cost-effectiveness involves more than determining cost: it also assigns value to the outcome. So with the evolution of the medication landscape, we have seen a need for in-house health economics expertise within the private payer space. In fact, we’re seeing more and more health economists enter the space, not just at TELUS Health.
“Drugs have become more complex and expensive, and this is where a health-economic approach fits in. The goal is not to find the cheapest product, but the product with the greatest value.”
Can you tell us about the evolution of health economics at TELUS?
TELUS first initiated the Enhanced Drug Review (EDR) process in 2017, based on requests from our insurer clients. They needed help interpreting evaluations from health technology assessors such as CADTH and applying them to the private payer landscape. So we developed a drug review process that considers both the clinical and economic impact of drugs being considered for formulary listing. What is unique about TELUS’ EDR process is that we conduct the economic evaluation and budget impact analysis using a private payer lens. For example, we consider only private payer costs and also take elements such as productivity and absenteeism into account.
How has this initiative been received by your clients?
Carriers want to provide formularies that are attractive to employers, and our private payer lens helps them achieve this goal. Like all payers, our clients are looking to get value for their money and ensure plan sustainability.
Do you ever have to explain to payers how a high-cost medication can provide good value?
There may be instances when a costly medication may not seem affordable at first glance, but could provide great value in terms of increased survival, quality of life, or productivity. When talking to carriers and plan sponsors, my takeaway is always this: the goal is not to find the cheapest product, but the product with the greatest value.
How would you describe the main differences in perspective between the public and private payer worlds?
Cost-effectiveness is a well-established metric in the public sphere, but it’s new to private payers. The same goes for budgets: unlike public payers, private payers don’t use a budget as a starting point. Rather, they have tolerance limits for rising costs. On the flip side, concepts like pooling and risk management—standard considerations in the private insurance world—are foreign to public payers.
Do private payers consider different factors than public payers?
Yes. For one thing, private payers are dealing primarily with a working-age population, so they focus on goals such as keeping the workforce healthy, reducing absenteeism, and reducing disability claims. They also want to make sure their drug plans attract and retain quality employees. Public payers are primarily interested in society-level costs such as hospitalizations and physician visits. These differences in perspective can impact the cost-effectiveness of a drug.
How would you advise manufacturers when submitting drug dossiers to private insurers?
The submission process on the public side is rigorous and highly formalized, so manufacturers can use that as a starting point. They don’t need to create a whole new process—just to tweak what they already have by removing irrelevant metrics and adding relevant ones. With a migraine medication, for example, productivity and absenteeism data is far more relevant than hospitalization data.
The past few years have seen product listing agreements (PLAs) become the norm in the private payer space. Where do you see this trend going?
PLAs are here to stay. We currently have negotiated PLAs and we have a PLA committee in place at TELUS. The next step would be to develop outcomes-based agreements (OBAs). Of course, OBAs come with their own challenges: Where do you find the data? Who collects the data? Who designs the studies? What outcomes are we interested in tracking? Even so, TELUS Health is very interested in getting into this area.
This raises the question of real-world data (RWD) and real-world evidence (RWE). How does TELUS Health generate or use RWE today?
We haven’t used RWE to a great extent to date, but it’s an area we plan to explore. With specialized treatments like gene therapies for rare diseases, it is sometimes impossible to generate the needed evidence through randomized clinical trials, so we need RWD to fill in the gaps. Potential sources of RWD include prior authorization forms, claims data, electronic medical records (EMRs), and patient support programs.
How do you see your own role at TELUS evolving in the future?
I’m interested in what happens not just in the lead-up to a formulary decision, but in the impact of the decision on the payer and patient. Did the medication deliver on its promises? Did the plan sponsor get the value they wanted? I hope to explore this area in greater detail.