ure, we have been waiting now for some time and feedback should be any day now. There isn't a lot we can actively do but simply wait!Don't for an instant think that I also am not frustrated, bored and wondering why they haven't gotten back to us yet. It's very overdue. Does it worry me? Not overly, I know the size and magnitude of what are attempting, I'm a bit more forgiving perhaps than the average holder. Is that a good thing?
What keeps me sleeping very well at night is my awareness of how much work has gone into the application but more importantly what this drug does and how safely it does it. It's the supreme broadness of the drug's capabilities that keeps me going. True, this is not all that we need. History is full of examples of companies that have good products but have failed. That's also not lost on me, we need to have this in the back of our minds and also invest in this way too. I'm pretty sure we will be right, but what happens if we aren't? At least consider it.
Ok so we wait. While we wait, I research. (I've very recently uncovered a couple of new sciency things but I'll need time to write em' up). But let's take a break from the science directly tonight... Let's explore a different angle tonight.
To have a real blockbuster on our hands we need a few things to line up.
My posts predominately cover the science of the drug. How it works, why it works and how well it works. To be honest there is a lot more to cover and I will drip feed this over the next few months, maybe even over the next few years!
But there are a few components beyond this that we need to consider. There is the usual aspects like manufacturing, fit and finishing, distribution and many others. But tonight as we (still) wait...I'm going to cover off a topic I haven't spent much time at all on in the past:
Insurance
Please now enjoy.
INTRO
Drug coverage in terms of insurance is a really important aspect as far as commercialisation goes. Without good cover of insurance you are going to find it quite a struggle to get your product out to the masses. In Australia this process is a bit easier as there aren't too many insurers and most have national coverage. It's quite different in other countries specially the USA. There are some 900 plus insurance companies 1 and this means a lot of time can be spent negotiating how much will be covered and what gets packaged up into a typical insurance plan.
Pharmaceutical spending is an enormous business and continues to grow, survey after survey asking people what their priorities in life continually come back with Health as being the number one category they want to address and keep as a focus.
"Prescription drug spending in the United States grew from $30 billion in 1980 to $335 billion in 2018, and 80% of spending is on brand-name drugs".2
WHAT MAKES FOR A HIGHER INSURANCE COVERAGE?
Let's put ourselves in the insurers and payers' shoes for a sec.
At the end of the day you either want to make money or save money.This is why the insurance business exists. They take a small (well somewhat small) amount from the masses and then if there is a disaster that affects only a small faction of the insured population then they can cover it.
You can insure all kinds of things from cars, boats, houses, medical health, mate even space rockets and the share market. (See Appendix A for an interesting example of this).Now why would the insurers be interested in us? Because, finally, we could save them some money. Well not some, but a lot.
Well finally that's going to boil down to a measure known as QALYs.
QALYs stands for Quality Adjusted Life Years. It's given a scale of 0 (Dead) to 1.00 (perfect health). This measures in factors into a product of duration and a measurement of the quality of life.
"For example, 2 years of perfect health = 2 QALYs. Therefore, 2 years in a status measured as 0.5 of perfect health followed by 2 years of perfect health = 3 QALYs".3
The insurers use statistics to determine how much they could save by taking on and covering a drug to some extent. In some cases it's a no brainer for them, if they cover a drug, they make it accessible, they save millions or even billions in the long run.
In other words, are we meeting the following criteria?
Efficacy Safety Selectivity Bio availability Stability Minimal drug interactions Predictable pharmacokinetics Ease of administration Reversible action Affordability
Insurance involves the study of actuaries. Essentially, statistics that compare the benefits of a drug versus the cost and the risk profiles, it factors in many points like some of the criteria listed above.4
At the end of the day you want to have a great drug that works well, is definitely safe and is a product that patients want to use...that demands it!But you need a bit more than that, you need to it to be a decent competitor to what's already out there.
Guys, there is nothing really out there in our potential markets.
Let's explore this in just a little more detail:
Pain relief
Sure there is pain relief in the form of nsaids and corticosteroids, there are opioids if the pain is real bad, but none of these are designed for long term use. All of them have side effects and all can result in long term harm. The insurers don't want this, what's the point of getting temp pain relief BUT it causes more health damage over the years? That's not a recipe for success. But at the moment, that's the only recipe that's out there!
Function improvement
Again, there are drugs that can temporarily result in some indirect function improvement, what drugs can actually halt or even reverse the course of the disease?
Durability
We need a drug we don't have to take every few days, every week, and even every month.
Convenience
Intra-articular is the route of many purported OA drugs, ours is SubQ. This is not only more patient convenient and less painful, it is also systemic. If two or more joints are in pain, this isn't two different courses of drug we need to take or even intra-articular into them. The one SubQ dose does it all simultaneously, voila!
and safety?
The biggest factor, the one the agencies and the insurers are particularly cognisant of; Is this drug safe? No point if it does all of the magic I've listed above if the thing isn't safe, that's counter productive and it's a story we will never be able to sell to the insurance guys. It has to be absolutely safe and certain do less damage than garner benefit. Thankfully, and one of the main reasons I pursue this so much (personal opinion, not advice) is because of the immaculate safety profile. I know just how much a payer would cover if it was a raging debate about the benefits iPPS has against any safety concerns. See Appendix D for a little more info on this as a further example. (My bold emphasis added).
"A recent 2021 analysis of results from the 2017 Global Burden of Disease Study found that approximately 303.1 million cases of hip and knee OA existed worldwide, accounting for a global cumulative 9.6 million years lived with disability. Further underlining the economic burden, an additional comprehensive study estimated that in 2013, total US arthritis-attributable medical expenditures reached almost $US140 billion, which when combined with wage losses, totalled losses of over $US303 billion. Current OA therapies, such as paracetamol, opioids, and nonsteroidal anti-inflammatory drugs (NSAIDs), as well as intra-articular medications, such as corticosteroids and hyaluronic acid, are solely focused on symptom management, as there are no established disease modifying therapies. Due to patient dissatisfaction with current OA treatments, there is a high unmet medical need for new therapies that can effectively reduce pain, improve joint function, and impede OA progression in tandem with symptomatic improvement".5
THE MOZZ QUANDARY
I had come across a few times in the past statements declaring that if you get a drug in the OA space that can reverse the disease, you are going to make it. That made a lot of sense to me. We want a drug that can not only address symptoms but hopefully slow the disease down!
One better? Halt the disease!
One even better than that?
Reverse the disease!
BUT, I also heard the statement that yes, if you get such a drug that's good but also if you can delay the chance of surgery, ie a TKA or THA...that's also going to be good and lucrative.
Now I always had this as a question mark in my head, how is delaying surgery going to benefit an insurance company?
Wait a sec, how does DELAYING surgery help anyone? Finally they will eventually NEED surgery right?
If it's required, it is required....if you delay it a few years, it's still an inevitable cost right?
WRONG !
There is a distinct attractiveness to delaying surgery, specially for a payer.
I'll illustrate this with a case example.
Bill is 55, his niggling pain in his left knee is getting worse...some days he might be ok, but overall he can draw it out for you on a whiteboard...it's trending downwards and he knows he will have to escalate it...the painkillers give him some relief but the pain is breaking through.
Poor Bill...he knows the inevitable is coming...
He goes to see his Doc and the Doc suggests an MRI to start with. After that result is back, it's time for a total knee replacement.
At 56 Bill goes in for one and he gets the average usage out of it, around 10 to 12 years. At 68, Bill will need to go in for a replacement.
Now imagine the exact same scenario but the same prescribing Doc (finally) has access to this new product called Zilosul®. He tries it out on our Bill and like magic, over the ensuing 6 weeks the pain comes down and it's tolerable....Bill sleeps better at night...Bill can finally walk more easily up and down the stairs, Bill feels a whole heap better....in fact he manages through the much lower thresholds of pain ...
Fast forward to say 15 years...Bill is now 68...yes maybe now the pain is coming back and he is once again losing functionality....maybe now it's bone on bone and Bill finally is recommended a knee replacement....at 68, he will probably only ever need one replacement, after that his needs would change and he prob wouldn't ever need another replacement.
This means the insurance company has saved an entire operation via the delaying of the surgery. Automatically they save some 50K is today's dollars. All they had to do was cover most of the cost of the $2500 of iPPS and the yearly boosters (in some, but not all, cases, @Happell where are you) ... they will run it through their sophisticated actuary calcs and the net result over the entire population will be enormous.
The above is for one knee, we have two knees and two hips joints. That's 4 per person. Even if this iPPS stuff only acts as a DM for say 20% and can delay surgery in another 50%, this will be compelling for them....and for us.
In terms of allied OA related costs, it's been estimated that the average cost in the USA is "...medical costs attributed to OA averaged $11,502 per-year between 2008 to 2014".6
That's the cost that needs to be added to the actual surgery.
IF one can even halve these costs due to iPPS (a saving of some $5800) for a coverage of some $2400 as an example ($100 out of pocket), well they are going to be well ahead just on this metric. Then add in the cost savings of a typical TKA/THA and I can see a situation where the vast majority of those 900 insurance dudes are going to be very happy covering the ol' iPPS.
QALYS
From an insurance point of view, this is an important measure. What is it?
Simply, it stands for Quality Adjusted Life year, in other words, it means a year of life in perfect health.
We want both, Quality of life in a given year AND extended good years! 7
"It combines two different benefits of treatment—length of life and quality of life—into a single number that can be compared across different types of treatments. For example, one year lived in perfect health equates to 1 QALY". 8
REIMBURSEMENT
"The other aspect to this is reimbursement. And if you have got disease modification your reimbursement price goes up significantly". 9
That above quote came from the interview with Paul by Scott a few years ago.
Indeed it is interesting to see what the insurers are after to ensure a good amount of reimbursement. There was a study in Scotland that looked at this very question. Their results showed that indeed there are a number of factors involved in increasing the odds of reimbursement levels but one stand out was the Cost-effectiveness with supporting cost minimisation analysis.
"Economic evidence seemed to be strongly influential for the reimbursement recommendation. Submissions supported by a cost-minimization analysis had higher odds of receiving a positive recommendation (OR ¼ 8.3; 95% confidence interval [CI] 3.9– 17.6) than did submissions supported by a not robust cost-utility analysis (base-case ICER below £30,000/QALY and sensitivity analyses above £30,000/QALY). Similarly, economic evidence showing that the new treatment dominates the comparator treatment (i.e., demonstrating cost savings and yielding additional QALYs) was associated with high odds of a positive recommendation (OR ¼ 6.4; 95% CI 2.2–18.9)". 10
PAR would no doubt benefit if they go into the payer's negotiations armed heavily with this sort of data;
HOW DOES OUR DRUG PERFORM
WHY DOES OUR DRUG PERFORM
HOW MUCH BETTER IS IT THAN THE CURRENT STD OF CARE
HOW BROAD IT IS (Future applications, layered indications)
and importantly HOW SAFE IT IS (so as to not cause you {the insurance company in question} any bother in the future)
WHAT IS THE NET ECONOMIC BENEFIT TO YOU, dear Insurer, THAT WILL SAVE YOU HUNDREDS OF MILLIONS BY COVERING US?
I would so love PAR to go in strong, to go in hard in these upcoming insurance meetings, they have a number of months/years to plan for this. Armed with the sheer quality of data, this is a meeting they will enjoy.
The article does also go on to mention about adequately powered clinical trials and well controlled trials, it's all great evidence that will be required. Definitely another piece of the puzzle that PAR have already tackled is how we stack up against competitors in the pain domain. We sometimes complain about PAR but in my humble, there are unquestionably areas they have gone way beyond what a lot of companies would do.
That entire 008 program and all the observations they included continues to blow me away. Considering how very few staff PAR has, I think they are overall doing a sterling job. Please watch the burn out, stay motivated, we are ever so close to material pivot in my humble.
COMPLEXITY
So we can see there is a fair degree of complexity in the insurance space. In the USA and no doubt a number of other countries, there is an essential list of medications that insurers have to cover. They essentially have to cover at least one drug type from every Pharmacopeial (USP) therapeutic category. 11
See ref 12 for an example list of some of these medications. A couple include ibuprofen and even some opioid analgesics like: Morphine. Therapeutic alternatives: - hydromorphone - oxycodone and yes, fentanyl* (*= for cancer pain).
(Mozz note: Imagine the benefits of some cancer patients one day being able to at least try iPPS as a substitute for this nasty fentanyl analgesic!)
Example of medicines suggested to be covered.
THE PROS AND CONS OF PHARMA INSURANCE
There certainly are a number of PROS, let's tackle the PRO's first
1) Insurance cover should be fairly deep and broad because the insurers would save a lot in the long run
2) The actual drug price isn't that crazy, perhaps it is $3000 or so US for the initial dose, perhaps the boosters might be a fraction less? Maybe it is the same. At any rate there are a plethora of good medications out there that cost multiples of that.
There are however, some potential Cons.
1) There are a lot of insurers in the USA - that's a lot to negotiate and will take time
2) Remember Point 1 above in the PRO section? This can also be a CON. How? Because once we are given a full licence, the potential uptake may be quick and wide spread, that will be a lot for the insurers to absorb all at once.13 There may be ways of progressively rolling it out but the lower cost of the drug for us could indeed be helpful to get good coverage.
Some of us think that PAR isn't such a great company, they are slow, they over promise on deadlines and while any company can do a better job, the positives are not lost on me and they are building a bridge that's at least more future proofed than a lot understand/realise. There are a few examples of this, 008 program, top KOL's lined up, presence at some of the world's best OA conferences. But one particular example I wanted to briefly feature tonight has to do with a subtle patent. Let me explain.
We all know iPPS is going to be used for some really good stuff like bringing pain levels down, improving functionality. But we have something really fascinating like DM. Structural change, positive cartilage morphology signs and rescinding BMEs faster than anything else. However, PAR has not only thought of the PRE Surgery domain...they have also covered the OTHER SIDE...
iPPS reducing the chance of this, but is there any hope for those on the other side of surgery?
What I infer by this is that they know a lot of patient's OA may still progress or at least are too far gone and have to have the inevitable TKA or THA surgery. The stats for post surgery state that there is still some 20% of patients that still continue to endure pain! Yes, we have a patent for post op pain and it's quite remarkable, please see Appendix B for a story that is quite a read if you haven't come across it.
CONCLUSION
We have something quite wonderful, but we need the ability to proceed, we wait for this. But I try and occasionally look into the future and what the next step and steps might be like for us. I see that insurance along with the label is going to be very, very important for us. We get a better cover and it will make an enormous difference to our scope, our potential and our sheer and deep penetration. We won't need a lot, just a tiny slice, a tiny sliver of the OA pie will result in literally billions for us. With some 350 million shares on issue, maybe even another I dunno, maybe 100 mil at some point in the future, that is a very small amount to divvy up some big future deal cash amongst each share.
Each and every share could become valuable one day. (See also Appendix C).
I continue to wait.
Mozz
DYOR of course
APPENDIX A
Speaking of insurance, here is an interesting play utilising derivatives, namely a vehicle called PUTS.
We insure our house, we insure our car, we insure assets....but isn't it interesting that some of us have millions invested in the share market but we don't even ever think of insuring it!
Car, house,even life, sure...but what about our shares?
Yes that's right, you can insure your portfolio utilising PUTS. These are a derivative, they control an underlying share.
Let's pretend you have a portfolio of shares on a given market, spread across a number of stocks, some might be speculative, some might be bigger slower moving companies. Did you know for just a few thousand dollars you can buy Puts on an index for example (or even some individual companies) and if the entire market goes down....you actually make money. You can align it so you would even make a profit if that happens OR you still may lose over all, but not as much.
It's true with car insurance, you might be able to slightly over insure a car...or under insure, it's your choice. Usually you can't over insure it, but you CAN do this in the share market!
My point here is that this is how the insurers work, they take the other side of the trade and collect all the little premiums, they work the stats out and they ensure that year after year they are usually in front, the sum of all those premiums is much less than their payouts. Companies like Warren's Berkshire Hathaway even use these excess funds (called a float) to invest in other ventures or just sit in a good fund earning interest. Geico is one of the bigger core holdings for Berkshire over the decades. (Mozz note: It's currently worth some $32 Billion USD).
Psst: Berkshire H. is currently worth 962 B USD overall!!
Warren uses options like this, not a lot realise this...
APPENDIX B
Here is an extract 14 of one of the examples provided as part of the above patent, my red underline added below, and check out that table also below as a summary, it's quite a read!
APPENDIX C
Time for a quick update, helllllo PME....it just hit $167.62 a share, their shares on issue is 104 million - I one day see us potentially in a situation like this, not too much further dilution with steadily increased revenues. We do our calc on a market penetration rate of just 5% and it's huge. We don't include other indications like, but certainly not limited to, Heart Failure, ARDS, COPD Psoriasis, CHIKV. But remember, Humira at peak hit a whopping 65% market penetration. Can you guys even fathom what that would mean for our share price in the future?
I understand that it's not strictly apples compared with apples but humour me for a sec.
PME has 104 million shares, at market cap of some 17.51 Billion and a share price of a crazy amazing $167 per share. But the important thing is not the share price, it's the fact that they only have aquired 7% of the USA market, and something like ONE hospital in all of Germany, NOTHING else in Europe and NOTHING in Asia. Ie they have a long way to go in terms of growth..
Compared to us, we have zero of any market. But my point here is that once we get going, it will be quite something. If we do a share to share calc it works out that based on our 350 mil shares, it's like us being at $49 (ie if we were to have the same market cap and pro rata the shares back to 104 million of them). In other words we don't have a lot of shares on issue.
Companies like Opthea, Botanix, they are all a billion plus (Bot is 1.813 B), OPT is 1.231 B.
WHEN (IF?) we get this green light, we really don't have a lot of shares on issue. I like that. A Lot.
APPENDIX D
I've covered this in the past but there could be a few of you brand new to us, in that case welcome and please leave a comment on this thread, we would love to hear a little about your background and how indeed did you come across PAR?:
(Single left click the words above, 'I'm new to PAR')
I've covered Humira a number of times over the years, but did you know while this has been one of the top most drugs in the Rheumatoid Arthritis (RA) space (Don't forget, we are OA not RA though it looks like we may have some efficacies even in this area), selling $20 Billion USD of their drug in the peak year, there have been fatalities. Not just a handful, thousands:
Humira was linked to 169,000 reported serious adverse events and 13,000 reports of deaths, followed by Enbrel with 135,000 serious events and 8,000 deaths. 16
My point here is that there is a great drug with some really super results but it has had many serious AE's and fatalities and despite that it is still so successful, what will our iPPS be like with NO serious AE's?
I don't stop and think about it nearly as much as I could... the future for us longer term holders could really indeed be quite so bright...
ure, we have been waiting now for some time and feedback should be any day now. There isn't a lot we can actively do but simply wait!Don't for an instant think that I also am not frustrated, bored and wondering why they haven't gotten back to us yet. It's very overdue. Does it worry me? Not overly, I know the size and magnitude of what are attempting, I'm a bit more forgiving perhaps than the average holder. Is that a good thing?
Efficacy
Safety
Selectivity
Bio availability
Stability
Minimal drug interactions
Predictable pharmacokinetics
Ease of administration
Reversible action
Affordability
(20min delay)