Diabetes Care in The Netherlands: - Novo Nordisk

SummaryDiabetes is a serious and demanding disease. Complications canbe severe (e.g. stroke, heart disease, visual impairment, kidneydisease). Effective treatment allows most patients to live a lifeclose to normal, but diabetes treatment requires disciplined selfmanagement.Patients need to manage diets and exercise carefullyto control or lose weight, and most take daily medication. Insulindependent diabetes patients need to closely match insulin intakewith their diets and with their exercise intensity. Too little insulinwill lead to long-term complications and too much insulin maylead to hypoglycaemic episodes (hypos) – risking unconsciousness,coma and/or brain damage. A frustrating side-effect of insulintherapy is weight gain.For society, diabetes is a source of medical costs and lostproductivity. Our analysis suggests that the problem may beunderestimated. While recognizing that further studies areneeded (especially where data sources are conflicting), weestimate that there are already more than one million diabetespatients in the Netherlands. We estimate the costs of treatmentand complications of diabetes at EUR 2-3 billion, twice as high astypically reported. Adding other medical costs, the total medicalcosts of diabetes patients are EUR 4-5 billion. In addition, weestimate that the costs associated with lost productivity fordiabetes patients are EUR 5-6 billion. More importantly, allestimates and sources have one thing in common; they stress theimpact of diabetes on patients and society.Professionals and patients can be proud of diabetes care in theNetherlands. Quality of care is high compared to other countriesand the majority of patients enjoy a close to normal life. Evidencefrom a selection of primary care groups suggests that largequality gains have been realized since the nineties. For these caregroups, roughly two thirds of patients have blood glucose levels(HbA1c) below the target of 7% (53 mmol/mol).However, substantial non-compliance and apparent practicevariations in quality of care suggest that there is still potential tofurther improve the health of Dutch diabetes patients. Furtherimproving health of diabetes patients may lead to EUR 1.5-2 billionof medical cost and productivity benefits in 2020. The nationalprimary care benchmark for diabetes under development by thepatient federation and professionals will be important to developdetailed insight in practice variation.Projected cost savings from better care for people with chronicdiseases are sometimes received with scepticism, grounded inthe idea that complications can be delayed but not avoided.But delaying complications reduces the time that people livewith costly complications, and increases participation in both4

the workforce and in social life. In addition to societal benefits,social participation is in itself also an effective stimulator for thewellbeing of patients.We conclude that there are still important barriers to innovation,to quality improvement and to improving self-managementcapabilities for patients. The result is an environment that canbe frustrating for passionate professionals, patients and insurers.Our recommendations address these barriers. They are intendedto contribute to a more rewarding climate for quality, innovationand engagement of employers, participative care and the patient’ssocial network.Recommendation 1: Refine economic incentives toencourage integrated primary and specialist care andquality improvementCurrent economic incentives do not encourage qualityimprovement and innovation. Professionals are still primarilyrewarded for volume, not for quality of care. For insurers, savingsthat can be expected from investing in quality are difficult totrace on the macro level and easily fail to materialize. Individualpatients may have fewer hospital admissions, doctor visits andother health care costs. However, there is a risk that second‘cash change’ does not occur involving the closure of beds andsurgery infrastructure, redeployment of staff or reduction inprocurement activity. Hence, the risk is that insurers pay double:for the innovation initiative and for the unchanged volume ofregular care.Economic incentives should create more room for doctors, nursesand patients who are passionate about improving care. Ourproposed refinements include:• Integrate contracting of primary care and specialist carein networks. Introducing a model where primary care andspecialists jointly evaluate diabetes patients. This furtherempowers primary care to treat diabetes patients. It alsoreduces the inclination for specialists to maintain patients ina specialist care environment. Volume agreements betweeninsurers and health care providers are needed to ensurethat win-wins are traced and materialized. Gain-sharingcreates the right incentives to encourage continuousquality improvement (quality production instead of volumeproduction) and will remove some of the frustratingdisincentives that so often block quality initiatives.• Extra insurer compensation for diabetes patients in the riskequalization scheme. Incorporating a small profit marginon diabetes patients in the risk equalization schemes willencourage competition between insurers on quality of5

diabetes care. Extra compensation will mitigate the riskthat insurers investing in high quality care attract morefinancially unattractive patients.• Build infrastructure for integrated primary care and specialistcare. The integrated funding model of network care shouldbe expanded to include hospital care for diabetes (e.g. byincorporating specialist care in the keten-DBC). Insurersshould support professionals in creating a supporting ITinfrastructure.Recommendation 2: Engage employers, UWV andparticipative care in diabetes careEmployers, the UWV and participative care are still little engagedin diabetes care. There is more economic benefit of better carein improving labour (and social) participation than in loweringmedical cost. Productivity benefits will gain even more importancegiven the expected tight labour market and the associated risksof wage inflation and waiting lists for cure and care due topersonnel shortage.There is a role for employers and government to contribute toincreased participation of diabetes patients.• Insurers can offer collective diabetes insurance modulesfocused on increased participation of diabetes patients;• Companies and UWV can invest in such collective insurancefor employees and welfare recipients (potentially negotiatedin central labour agreements);• Insurers can integrate contracting of participative andcurative care;• Participative care’s primary role should be to ensure aworking environment that encourages patients to complywith therapy and that keeps patients motivated to keepworking as long as possible. Coping with a disease in astimulating environment can be highly complementary tothe more classical function of curative health care.Recommendation 3: Encourage the patient’s socialnetwork to support self-managementThe patient’s social network is not systematically engaged in thepatient’s care, leaving many patients alone in self-management.For the majority of patients, regular doctor visits are sufficient,but for many this is not enough.Physicians should have tools to encourage support for patientswho need it. Patients and the patient federation should have akey role in developing these tools. We recommend:To include behavioral dimensions in medical guidelines fordiabetes (e.g. family present at key doctor visits);6

• Diabetes is a challenging disease for patients– Treatment requires large behavioural change and poses a real risks of side effects– Complications from diabetes are potentially severe (e.g. stroke, kidney disease heart disease)– Fortunately high quality treatment and strict compliance has proven to keep diabetes patients healthy for a long time• Novo Nordisk has asked Booz & Co to perform a study with the objective to identify how our health care system could beimproved to empower professionals in providing high quality of care for diabetes• Better diabetes care has value for patients and society– Improves health of the patient: improving life expectancy and quality of life– Reduces health care cost: prevention, reduction, and delaying of complications– Reduces the demand for increasingly scarce labour health care (ZorgInnovatiePlatfrom projects 450.000 vacant employmentpositions in health care in 2025)– Improves productivity by increasing workforce participation of diabetes patients• This document presents the findings of the study. It is intended to serve as a basis for further discussion with patients, medicalprofessionals, policymakers and insurers8

ContentsSummarized findings and recommendationsThe opportunity• Diabetes is a major and underestimated source of medical costs and lost productivity• Diabetes care in The Netherlands has reached a high level of quality, but there is still opportunity for further improvement• Further improving health of patients may lead to EUR 1.5-2 B of economic benefits in 2020The road• Refine economic incentives to encourage integrated care and quality improvement• Engage employers, UWV and participative care in diabetes care• Engage the patient’s social network to support self management• Introduce conditional market access models for new therapies and medication to assess behavioural impactAppendix: list of sources9

Main conclusionsObjectiveFurther improvehealth forpatients andsociety11Diabetes is a is challenging a challenging disease disease for patients, for patients, and a major and and a major underestimated and source ofmedical underestimated costs and lost source productivity of medical for society costs and lost productivity for society• 1.0-1.1M 1.0-1.1M diabetes diabetes patients patients (~100,000 (~100,000 more diagnosed more diagnosed patients patients than reported) than reported)• EUR 4-5 EUR B total 4 -5 medical B total costs medical for costs diabetes for diabetes patients, patients, of which of EUR which 2.5 EUR B costs 2.5 for B costs diabetestreatment for and diabetes complications treatment (more and complications than double of (more reported). than On double top of that reported). EUR 6 On B lost topproductivity of that EUR 6 B lost productivity• Total costs Total could costs rise could to EUR rise 16-19 to EUR B 16 in 2020 -19 B in 2020• Diabetes care in The Netherlands has reached a high level of quality, but22Diabetes care in The Netherlands has reached a high level of quality, but there is stillopportunity there is still for further opportunity improvement for further improvementFurther improving health of diabetes patients may lead to EUR 1.5 -2 B ofeconomic benefits in 2020 (less medical costs and higher productivity)33Further improving health of diabetes patients may lead to EUR 1.5-2 B of economic benefits in2020 (less medical costs and higher productivity)Insurers and governments should adjust certain economic incentives to11 Refine stimulate economic high incentives quality to care encourage integrated care and quality improvementThe roadFewer barriersfor quality in ourhealth caresystemTo increase labour participation, government and companies can invest indiabetes care via collective insurance models22Engage employers, UWV and participative care in diabetes care3 Engage the patient’s social network to support self managementInsurers , patient federations and Pharma companies could facilitate34 Introduce conditional market access models for new therapies and medication to assessnetwork solutions around the patient to support better diabetes carebehavioural impact4Government and insurers could introduce temporary medication marketaccess models to assess impact on therapy complianceBooz & Company 14 November 201110Prepared for Novo Nordisk2

11Diabetes is a major and underestimated source of medical costsDiabetes is major and underestimated source ofand medical lost costs productivity and lost productivityMore than 1M diabetes patients in the Netherlands2010; ‘000Diabetes Type 1 may be more prevalent than assumed2010; ‘000Higherprevalence~710-850~920-975~95-190~1,0 M-1.1 M75-90~100--125More costsDiagnosedother sources1)DiagnosedBooz estimateUndiagnosed2)TotalTraditional estimateBooz estimateCosts of complications and treatment diabetes double of reported. Lost productivity more than medical costsEUR B , 20101.21.3X22-31.84-5>X25-610-1158%42%Type 2Type 1Reportedmedical costs (RIVM)Unreportedcost of complications~1.4 M Diabetes Patients in 2020MCosts diabetestreatment andcomplicationsOther medical costsfor diabetes patientsTotal medical costsfor diabetes patientsLost productivitydisabledMedical andproductivity costsdiabetes patientsTotal costs could rise to EUR 16-19 BEUR BFaster growth1.0-1.1+3%1.3-1.5Cost grow faster due toincreasing share ofdiabetes patients inworkforce age10-11+5%16-1920102020201020201) Other sources include CBS (710), DVN (750) and RIVM (850) (2) Range between 10% and 20%Source: CBS, DVN, RIVM, SFK, Janssen et al. Screening Study, DFN, IDF, CMR-Nijmegen, ADA, Diabetes Richtlijnen, DBC pricelist 2011, DiabetesZorgBeter, UWV, Booz & Company AnalysisBooz & Company 14 November 2011Prepared for Novo Nordisk411

2 2Diabetes care in The Netherlands has reached a a high level of ofquality, but but there there is is still still opportunity for for further further improvementimprovementDiabetes care clearly improved in The NetherlandsSelected Care Groups– 1996-2010Diabetes care clearly improved in The NetherlandsSelected Care Groups – 1996-20107.5%1996Average HbA1c values now below target value7.1%2000-20076.7%2008Target value

33Further improving health of of diabetes patients may lead lead to to EUR 1.5 -EUR 2 B of 1.5-2 economic B of economic benefits benefits in 2020 in 2020Estimated Economic BenefitsEUR M , 20201.000-1.5001.500 – 2.000Fully disabled400-600Partially disabledPresenteeismAbsenteeismComments:Less medical costs fromreduction incomplicationsReduction of lost productivityMedical costs andproductivity benefitsSource: Booz & Company AnalysisBooz & Company 14 November 2011• Reduction in cost due toless complications• Reduction in inflow of newworking disabilities• Reduction of ab- andpresenteeism in line withreduction in complicationsPrepared for Novo Nordisk613

11Recommendation 1: Refine economic incentives to encourageintegratedRecommendationcare and1:qualityRefineimprovementeconomic incentives to encourageintegrated care and quality improvementBarrierCurrenteconomicincentives donot encouragequalityimprovementand innovationDiagnosis• Insurers are supporting quality improvement, but theyare confronted with (perceived) financial disincentives- High quality care is perceived to only delay complications andcost (however, an indicative analysis suggest ~25% life timecost reduction if complications are delayed with 3 years)- Differences in risk exposure for specialist and primary care- Higher quality diabetes care may attract more loss-makingpatients for the insurer- (Hospital) capacity that is freed up by quality improvementstends to fill up with other patients (leading to double cost)• Limited collaboration incentive for primary care andspecialist care• Quality improvement initiatives are frustrated byfragmented budgeting (and ad hoc budget cuts)• Individual quality incentives are lacking for Primary Care,Specialists and Patient• Significant evidence gaps in basic statistics and intreatment evidence suggest insufficient supportingincentives for critical researchRecommendationInsurer• Integrate contracting of primarycare and specialist care in networks• Provide patient incentive forcompliance (bonus miles, gainsharing)• Enable research funding fromregular budgetGovernment• Adjust risk equalization scheme toensure small profit margin ondiabetes patients for insurers• Create an integrated funding modelfor primary and specialist carenetworksBooz & Company 14 November 2011Prepared for Novo Nordisk714

22Recommendation 2: Engage employers, UWV and participativecareRecommendationin diabetes care2: Engage employers, UWV and participativecare in diabetes careBarrier Diagnosis RecommendationEmployers,UWV andparticipativecare are stilllittle engaged indiabetes care• Ageing will create an extremely tight labour market overthe coming decade• Labour shortage from late nineties illustrates the risk forour economy• Diabetes has a high prevention potential for lostproductivity- 92,000 of working disabled have diabetes,• However, curative and participative care (arbo- andbedrijfsarts) are still two different worldsInsurer• Offer collective insurance modules fordiabetes to increase the participationof diabetes patients• Integrate contracting of participativeand curative careCompanies and UWV• Invest in collective insurance foremployees and welfare recipientsParticipative care• Ensure a working environment thatencourages compliance andmotivates to work as long as possibleBooz & Company 14 November 2011Prepared for Novo Nordisk815

3Recommendation 3: Engage the patient’s social network to supportself managementRecommendation 3: Engage the patient’s social network tosupport self managementBarrier Diagnosis RecommendationThe socialnetwork is notsystematicallyengaged inpatient’s care• Medical treatments for Diabetes Type 1 and Type 2can be effective, however compliance is a hugechallenge- Effects of non-compliance are severe- Non compliance is a challenge of distant benefits and largerequired behavioural change• Facilitated patient networks are successful in otherdistant benefits – high behavioural change conditions• Examples of patient networks for other conditions (e.g.obesitas) can be instructive for diabetes• Integrated behavioural interventions have beensuccessful in improving compliance (e.g. KaiserPermanente Evidence)Medical professionals: Includebehavioural dimension in medicalguidelines• Include family in standard treatment(e.g. family at key doctor visits)• Add checklist for aligning treatment withpersonal life (mass customization)Novo Nordisk: Scale-up social media• Scale-up diabetes health communitieswith patients and their professionals(mijn zorgpagina DVN, mijnzorgnet)Novo Nordisk: Educate amateur coachesfor non-adherent patients• Develop screening instrument forcoaching eligibility for physicians• Educate amateur coaches• Select professional coaches in aselected group of complicated casesBooz & Company 14 November 2011Prepared for Novo Nordisk916

44Recommendation 4: Introduce conditional market access modelsforRecommendationnew therapies4:andIntroducemedicationconditionalto assessmarketbehaviouralaccessimpactmodelsfor new therapies and medication to assess behavioural impactBarrier Diagnosis RecommendationDecisions oninsurancecoverage tendto undervaluebehaviouralimpact• Optimal treatment with current generation of diabetesmedication is therapeutically highly effective if patientsare compliant• But new medication could add a lot of value in boostingcompliance• CFH medication access criteria allow evaluation of impacton compliance, however the required evidence is usuallynot generated by trialsGovernment and insurer• Define models that allow forconditional access to proofindirect effects on compliance• Include compliance in theguidelines as a factor driving thechoice of medicationsBooz & Company 14 November 2011Prepared for Novo Nordisk1017

ContentsSummarized findings and recommendationsThe opportunity• Diabetes is a major and underestimated source of medical costs and lost productivity• Diabetes care in The Netherlands has reached a high level of quality, but there is still opportunity for further improvement• Further improving health of patients may lead to EUR 1.5-2 B of economic benefits in 2020The road• Refine economic incentives to encourage integrated care and quality improvement• Engage employers, UWV and participative care in diabetes care• Engage the patient’s social network to support self management• Introduce conditional market access models for new therapies and medication to assess behavioural impactAppendix: list of sources18

Already more than 1M diabetes patients in the Netherlands -Already more than 1M diabetes patients in the Netherlands -~100.000 more diagnosed than usually reportedNumber of Diabetes PatientsNumber of Diabetes Patients2010, ‘0002010, ‘00095-190~1.0-1.1M850920-975710Type 2557752795-875Total number of diabetes patientsthat use medication plus estimated10% to 15% patients that use nomedicationType 115398100-125CBS : based onpatient surveyRIVM based on sample ofGP registrations (2007figure extrapolated to 2010)Booz estimate(based on SFK dataon diabetesmedication users)Undiagnosed (basedon ’02-’04 study insouthwest NL) 1Total number of diabetespatients (estimated)(1) Based on study of 50-70 years old patients. Undiagnosed rate of 10-20% has been extrapolated. SFK reports 830.000 patients on diabetes medication. SFK data covers 92% of the market. We have notscaled up SFK numbers because there is also a fraction of over-registration SFK data (~5-10%) as some people taking medications from multiple pharmacies are counted twiceBooz & Company 14 November 2011Prepared for Novo NordiskSource: CBS, RIVM, SFK, Janssen et al. Screening study, Booz & Company Analysis1219

Diabetes Type 1 may be more prevalent than assumed – but databut sources data are sources highly are conflicting highly conflictingNumber of Diabetes Type I Patients based ondifferent sources2010, ‘000CommentsCommentsDVN / DFN1501)• DVN and NDF quote 150,000 Type 1 patients (methodology not further explained)• This translates into 20% of diagnosed diabetes patientsCBSBased on samplein BrabantRIVM98153163• Survey sample in which patients responding yes to 3 questions were identified as Type1: (1) Do you have diabetes? (2) Do you use insulin for this? (3) Did you start usinginsulin within 6 months after being diagnosed?• Drawback of methodology is that the answers to the questions may not be a reliableproxy for share of Type 1 patients• PoZoB (GP support Brabant) includes 15,500 Diabetes Type 2 patients in theirprograms, of which 14% uses insulin• Extrapolating this to the national level, and with a total of 285,000 insulin users(source SFK), this would imply 162.500 Type 1 patients• RIVM estimates 10% Type 1 of diagnosed patients, based on GP registration• Drawback of methodology is that maybe not all Type 1 patients are registered by GP,such that GP registrations are not fully accurateInternationalDiabetes Federation98• IDF estimates 10% Type 1 of diagnosed patients, however not NL specificCMR -Nijmegen96Range• CMR -Nijmegen estimates 9.8% Type 1 (‘05-’08 period) of diagnosed patients, based onGP registration in Nijmegen• Drawback of methodology is that representatively may be questionableEstimate100125• Booz estimates 100,000 to 150,000 Type 1 patients, based on different sources• For calculation purposes the average of 125,000 will be used1) 2011 estimateSource: DVN/DFN, CBS, RIVM, IDF, CMR-Nijmegen, Booz & Company analysisBooz & Company 14 November 2011 Prepared for Novo Nordisk1320

Costs of of complications and treatment of of diabetes diabetes double double of ofreported, lost productivity more than medical costs costsCost of diabetesEUR B , 2010>X21.21.3In 2007 the average cost ofdiabetes patients was EUR 4,443 /year in comparison to the nationalaverage of EUR 1,646 / yearX22-31.84-50.22.63.510-11Type 258%42%Type 1• Complications andlost productivity /welfare assumed100% distributedas insulin patients• Other costassumed 70%distributed asinsulin patientsand 30% totalpatients• Insulin patients:Type 1 ~45%Type 2 ~65%CommentsReportedmedicalcosts ( RIVM)Estimated byRIVMUnreportedcost ofcomplicationsBottom up BoozestimateCosts diabetestreatment andcomplicationsOthermedical costsfor diabetespatients 1)Difference betweenmedical costs forpatients with diabetesand medical costs fortreatment andcomplications ofdiabetesTotal medicalcosts fordiabetespatientsBased on totalmedical costsfor diabetespatients(NPCF )Absenteeism &presenteeismEffect of hyposon absence fromand inefficiencyat work, basedon ADF study(but numbersvary in differentpublications)WelfarepaymentsdisabledBased on 75% ofmodal income *and 98,000disabled withdiabetesLostproductivitydisabledBased on modalincome and98,000 disabledMedical andproductivitycosts diabetespatients1) Other unreported medical costs include costs caused by additional use of medical care by diabetes patients; 2007 estimateBooz & Company 14 November 2011 Prepared for Novo NordiskSource: NPCF, ADF, CBS, RIVM, SFK, DiabetesZorgBeter, Diabetes Richtlijnen, DBC pricelist 2011, Booz & Company Analysis1421

Costs of diabetes complications and treatments areunderestimatedCosts of diabetes complications and treatments areMedical costs for diabetes patientsEUR M , 2010BACK -UP~4,000-5,000~1,800OtherSecond lineNerves (neuropathy)Eyes (retinopathy)Kidney dialyseHeart failure& diseaseX2~1,20052167 158 104Stroke~1,300305853518952,000-3,000Medications684Cost of treatment ofdiabetes andcost of complicationsunique to diabetes 1)Unreported costsof complications 2)Costs diabetes treatmentand complicationsOther medical costsfor diabetes patients 3)Booz estimate total medicalcosts for diabetes patients1) Other includes other health care providers and maintenance; costs of diabetic foot and hypos are included in the second line2) Cost of direct treatment of complication for heart disease, eyes and nerves; lifetime costs of stroke, heart failure and kidney dialyse3)3)OtherOtherunreportedunreportedmedicalmedicalcostscostsincludeincludecostscostscausedcausedbybyadditionaladditionaluseuseofof medicalmedicalcarecarebybydiabetesdiabetespatientspatientsSource: NPCF, RIVM kostenvanziekten.nl, DiabetesZorgBeter , Diabetes Richtlijnen , DBC pricelist 2011, Booz & Company analysisSource: NPCF, RIVM kostenvanziekten.nl, DiabetesZorgBeter, Diabetes Richtlijnen, DBC pricelist 2011, Booz & Company analysisBooz & Company 14 November 2011Prepared for Novo Nordisk2215

Number of patients reaches ~1.4M in 2020Total number of Diabetic patientsUndiagnosedDiagnosed‘0002.6%~1350-1475601990Diagnosed Type 13.7%‘0002.5%83 125 1602000 2010 2020• Past figuresextrapolatedfrom CBS data• Future growthmaintained ataverage growth• Estimate type 1based on higherend of range 2010~5503.4%~900~1000-1100220Diagnosed Type 26.8%445‘0002.6%8251,070• Past figuresextrapolatedfrom RIVM• Future growthbased on actualType 2 growth2000 to 20101990200020102020Diagnosedrate1990 2000 2010 202050% 60% 80-90% 80-90%280Undiagnosed-3.4%‘0002.8%360140 185• Past rate basedon quotes• Current rateexpected to bestable in future19902000 2010 2020Source: RIVM, SFK CBS, Booz & Company analysisSource: RIVM, SFK CBS, Booz & Company analysisBooz & Company 14 November 2011Prepared for Novo Nordisk1623

Medical costs costs and and lost lost productivity of diabetes of patients could could riseto rise ~ EUR to ~ 16-19 EUR B 16-19 BTotal cost of Diabetes to SocietyEUR B , 2010-202016-196.5Lost productivity disabled10-113.54.8Welfare payments2.60.21.81.31.220100.52.31.71.62020Absenteeism & presenteeismOther medical costCost of complicationsDirect medical costSource: Source: RIVM, Booz RIVM, & Booz Company & Company Analysis AnalysisBooz & Company 14 November 2011Prepared for Novo Nordisk1724

Increase in lost productivity is driven by an increasing number ofdiabetes patients in workforce (~380k in 2020)Increase in lost productivity is driven by an increasing number ofIncrease and breakdown of diabetes patients in workforce2010 - 2020, ‘000• Disability estimates based on welfareregistration of the UWV• Reflects the number of disabled with diabetesBACK -UPYounger diabetic populationRetirement age 67Net increase patients ’10 – ‘20261117202275~3801892424Working withdisability assumed30% disabled1412010Total workforcediabetes patientsIncrease ’10to ’202020Number ofdiabeticsin workforceWorking withwith nodisabilityWorking withdisabilitywithoutadjustmentsWorking withdisabilitywith adjustmentsOne out of three new diabetes patients in the workforce will beType 1 patientsNot ableto workSource:CBS, UWV, Booz & Company AnalysisBooz & Company 14 November 2011Prepared for Novo Nordisk1825

ContentsSummarized findings and recommendationsThe opportunity• Diabetes is a major and underestimated source of medical costs and lost productivity• Diabetes care in The Netherlands has reached a high level of quality, but there is still opportunity for further improvement• Further improving health of patients may lead to EUR 1.5-2 B of economic benefits in 2020The road• Refine economic incentives to encourage integrated care and quality improvement• Engage employers, UWV and participative care in diabetes care• Engage the patient’s social network to support self management• Introduce conditional market access models for new therapies and medication to assess behavioural impactAppendix: list of sources26

Diabetes care clearly improved in the Netherlands – Values froma selected group of care providersDiabetes care clearly improved in the Netherlands – Values from a7.5%HbA1c values (target value 7% - 53 mmol/mol)HbA1c < 7% / 53 mmol/mol% of patientsILLUSTRATIVE7.1%66.5%69.0%6.7%6.8%60.6%63.0%NA19962000-20072008201019962003200420082010Systolic blood pressuremmHgCholesterol levelmmol/l1556.01455.11381384.54.719962000-20072008201019962000-20072008 2010Note: 1996 data based on 5 networks of GP’s; 2000-2007 data based on all publications from GP’s; 2003 and 2004 hbA1c values < 7% based on study with 7,893 patients spread of NL; 2008 data based on studywith 14,156 patients from 8 networks and cholesterol voor level from met DiabetesZorgBeter diabetes mellitus type networks; 2 in de 2010 1e lijn, data Interview based on Prof. 52,630 G.E.H.M patients Rutten, in 6 Julius networks Center, Booz & Company analysisSource: Diabeteszorggroepen en de keten-DBC, Zorg voor patienten met diabetes mellitus type 2 in de 1e lijn, Interview Prof. G.E.H.M Rutten, Julius Center, Booz & Company analysisBooz & Company 14 November 2011Prepared for Novo Nordisk2027

High quality care leads to excellent outcome values and to fewercomplicationsCASE EXAMPLESDiabetesZorgBeter 1 st line protocolreduces risk of major complicationsFrequency of diabetic complications(2008)PoZoB achieves HbA1c objectives with~70% of the patients – also improvementsin blood pressure and cholesterol levelsIndicators DM (2007 -2010)Through personalized coaching Kaiserpermanente reduces HbA1c by 1.2%Change HbA1c values (1999)ChronicheartfailureAcute 0.7%heartfailure 0.3%2.1%1.0%HbA1c < 7% (

Better compliance can be stimulated and leads to fewerhospitalizationsBetter compliance can be stimulated and leads to fewerCASE EXAMPLESMedical cost of fully compliant patients up to half ofnon-compliant patientsAverage Expenditure per year (USD, 2005)44% reduction in hospitalizations atKaiser permanente programHospitalization/1000 persons -months (1999)$8,878-49%$7,124$6,522$6,29127-44%$4,571151-19%20-39%40-59%60-79%Compliance Levels (% Days Supply / 1 Year)80-100%ControlgroupKaiserpermanenteMain interventions• Compliance to treatment plan:- Medication- Doctor’s visits- Lifestyle advice (quit smoking, etc.)Main interventions• Focus on poorly managed diabetespatients• Personalized coaching• Patient networks on- and off-lineSource: Sokol M et al. Impact of Medication Adherence on Hospitalization Risk and Healthcare cost, Kaiser permanente, Booz & Company analysisBooz & Company 14 November 2011Prepared for Novo Nordisk2229

Clear potential in in high quality treatment implementation and andcompliance improvementILLUSTRATIVEPrimary care protocol canbring life expectancy of Type2 patients to normal levelsRegional variances in care patterns arestill high% of Type 2 insulin patient in first line (2008 )Non-compliance significant asdifferent studies indicateArticle:Life expectancy in a largecohort of type 2 diabetespatients treated in primarycareLutgers LH, Gerrits EG,Sluiter WJ, Ubink-VeltmaatLJ, Landman GWD, LinksTP, Gans ROB, Smit AJ,Bilo HJG; (ZODIAC-10).PlosOne 2009;% of insulin patientsZwolle Region Region RegionRegion19 %Region Region% of patients with HbA1c < 7% per health care group in2009 & 201068%68%67%63%61%59%Studies of therapy adherence on theDutch diabetes Type 2 patientsPaes e.a.; 1998:Therapy adherence related to:• Frequency of dosage 66-99%• Prescribed doses 38-79%Cramer; 2004:General Therapy adherence• Type 2 diabetes 36-93%56%Selected care groups in The NetherlandsProfessionals and DVN are developing national primary carebenchmark for diabetes for more insight in practice variationsSource: DiabetesZorgBeter Prof H. Bilo, PoZoB, Kaiser permanente , Diabeteszorg Zorggroepen Nederlandse Huisartspraktijken - van Rutten, Booz & Company analysisSource: DiabetesZorgBeter - Prof H. Bilo, PoZoB, Kaiser permanente, Diabeteszorg Zorggroepen Nederlandse Huisartspraktijken - van Rutten, Booz & Company analysisBooz & Company 14 November 2011Prepared for Novo Nordisk3023

ContentsSummarized findings and recommendationsThe opportunity• Diabetes is a major and underestimated source of medical costs and lost productivity• Diabetes care in The Netherlands has reached a high level of quality, but there is still opportunity for further improvement• Further improving health of patients may lead to EUR 1.5-2 B of economic benefits in 2020The road• Refine economic incentives to encourage integrated care and quality improvement• Engage employers, UWV and participative care in diabetes care• Engage the patient’s social network to support self management• Introduce conditional market access models for new therapies and medication to assess behavioural impactAppendix: list of sources31

FurtherFurtherimprovingimprovinghealthhealth ofofpatientspatientsmaymayleadleadtotoEUREUR1.51.5-2-2 B ofB ofeconomic benefits in 2020economic benefits in 2020Reduction in cost ofcomplications:~ EUR 0.5 B• Estimated based on a combination of improved compliance and an increased reachof high quality care. Two high-level approaches result in a similar estimate– A Kaiser Permanente study shows that total medical cost of 80-100% compliantpatients are ~25 -30% lower than of patients who are 60-80% compliant– If the national average would show the same relative risk of complications as inthe DiabetesZorgBeter study, this would reduce cost of complications by morethan 30%• The combination of improved care and improved compliance may have higherpotential~ EUR 1.5 – 2 BReduction of lostproductivity:~ EUR 1.2 B• Absenteeism and presenteeism and the related cost decline in line with theexpected decline in the number of complications• Assumption is that 50% of the inflow of disabled in the workforce with diabetes,would have been able to remain active in the workforce if there would not havebeen diabetes complications• Estimate is that 50% inflow can be reduced in line with the assumed reduction inthe number of complications (~30%)Source:CBS, CBS, DiabetesZorg Beter study, UWV, UWV, Booz Booz & Company & AnalysisBooz & Company 14 November 201132Prepared for Novo Nordisk25

ContentsSummarized findings and recommendationsThe opportunity• Diabetes is a major and underestimated source of medical costs and lost productivity• Diabetes care in The Netherlands has reached a high level of quality, but there is still opportunity for further improvement• Further improving health of patients may lead to EUR 1.5-2 B of economic benefits in 2020The road• Refine economic incentives to encourage integrated care and quality improvement• Engage employers, UWV and participative care in diabetes care• Engage the patient’s social network to support self management• Introduce conditional market access models for new therapies and medication to assess behavioural impactAppendix: list of sources33

Insurers are supporting quality improvement, but they areconfrontedInsurers arewithsupporting(perceived)qualityfinancialimprovement,disincentivesbut they areconfronted with (perceived) financial disincentivesPerception that investing in diabetes care is only delaying and noteliminating complications and therefore not generating revenues• This perception is invalide but will need to be addressed specificallyLowDifferences in risk exposure to primary care and specialist• The risk and budget allocation mechanism lead to a lower risk burden for theinsurer for hospital care versus primary careImpactHigh quality diabetes care may attract more than fair-share diabetespatients• Diabetes patients seem to be on average loss-making even after budgetallocation corrections(Hospital) capacity that is freed up by quality improvements, tends to fillup with other patients (leading to double cost)• Cost benefits on the patient-level often lost due to extra volume from otherpatientsHighInsurers do invest in initiatives – but they tend to see it as a qualitydifferentiator with no or modest economic benefitsSource:Booz & Company analysisBooz & Company 14 November 201134Prepared for Novo Nordisk27

Delaying complications saves medical costs – despite occasionalskepticismILLUSTRATIVE16.3NPV12.4Illustration: calculation, the value of 3year delay of complicationsNPV, annual costs EUR ‘000-24%42Illustration is for a 60 yearold male patient alreadydiagnosed060 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75AgePatient of 60 years old diagnosed with Type 2 diabetes.assuming complications will occur after 5 yearsCost if we would be able to delay complications with3 years with an intervention, less complications occurringafter 8 yearsCost per year (based on average costs oftreatment and complications, excl. other medical costsEUR ‘000105010%5%0%10%5%0%60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75AgeAttrition%60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75AgeMortality%60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75AgeDetails• Given that patient is aliveand remains withininsurance plan• Complications assumedto occur after 5 years• Assumed thatintervention can delaycomplications for 3 years• Attrition level assumedconstant at 5%• Mortality % of diabetespatients estimated 2.2times as high as personwithout diabetes (sourceinterview medicalspecialist)Booz Source: & Company Booz 14 & November Company 2011 analysisPrepared for Novo Nordisk2835

Higher quality diabetes care may attract more loss-makingpatients for the insurer• Diabetes patients typically have high per patient health care cost (cost that are assumed to be caused by diabetes plus otherhealth care expenditures). Total costs EUR 4,500 per diabetes patient versus EUR 1,650 average– ‘Diabetes patients typically have a wide range of health problems, not necessarily related to diabetes’– ‘Diabetes Type 2 is a lifestyle disease, but an unhealthy lifestyle can lead to a lot more problems than just diabetes’– ‘Diabetes is a disease of the system. It deteriorates your overall health to a wider extent than the regular diabetes complications’• Still a suspicion that the risk equalization scheme does not sufficiently compensate– Diabetes patients have historically been loss making (2006 EUR 74 per person loss after equalization; 2007 EUR 140 per personloss after ex-ante compensation – but differences not statistically different from zero)– The 2011 risk equalization proposal indicates a EUR 3,409 loss per self reported diabetic, which is equalized to a loss of EUR 235(which is statistically not significantly different from zero). (source: Prof. Van der Ven)– The classification criteria for diabetes within the risk equalization scheme are strict. As a result, the insurer does not receive ex-anterisk compensation for all its diabetes patients• Hence, there is a downside in offering higher quality, since insurers offering high quality would be likely to attract morepatientsSource:Booz & Company analysis. Expert interviews. Expert interview with Prof. van der Ven – Erasmus University36

LimitedLimitedcollaborationcollaborationincentiveincentiveforforprimaryprimarycarecareandandspecialistspecialistcarecarePrimary CarePOHGPObjectives Resource Constraints Practice that would resultfrom objectives, resourcesand constraints• Provide completeand comprehensivecare• Realize income• Applying the GPdiabetes protocol• Referring tospecialist• Lack of time fordedicated diabetesservice• Lack of specialistdiabetesknowledge• No control on whatis happening in thehospital• Most patients areeffectively treated• But some patientsmay be unnecessarilyreferred to medicalspecialists• Some patients mayreceive late referralsto specialistsRelatively little interactionand collaborationHospital careDiabetic nurseMedicalspecialist••Provide the bestdiabetes careRealize revenuesfor the hospital andhimself/herself• Applying hospitalservices• Applying Specialistknowledge• No information onpatients in primarycare• No influence onpatients in primary•‘Tends to keeppatients in thehospitalcareDespite limited collaboration incentives, care groups haveachieved much progress in quality of diabetes careOnce they have been here,surrounded by diabeticspecialist, it is hard to sendthem back to the first line’Medical SpecialistBooz & Company 14 November 2011Prepared for Novo Nordisk3037

Quality improvement initiatives are frustrated by fragmentedbudgeting (and ad hoc budget cuts)ProblemProvidersInsurerNo full cyclebusiness caseunderpinnedFragmentationNo scalability• Ambitions are often only qualitative(whereas investments are quantified)• Initiatives often optimized for a singleprovider in the chain• High quality may lead to budgetoverruns and consequently budget cuts• Initiatives are often fully dependent onthe passion and intrinsic motivation ofthe initiators• Initiatives with cost saving potential,may be interpreted more as qualitydifferentiators than cost savers– Insurer support for lean initiatives hospitals, antismokingprograms etc .• Initiatives may be evaluated from asingle funding compartment (e.g.AWBZ/ZFW), instead of full value chain• Limited tools to stimulate initiativesoutside the group of passionateinitiatorsFill-up effects• Resulting behaviour from other playersin the value chain is not anticipated normitigated• Cost benefits on the patient-level oftenlost due to extra volume with otherpatients• Frustration that great ideas for care arenot always embraced by the insurer• Wary of investments in care, sincebenefits are not guaranteed tomaterializeBooz & Company 14 November 2011Prepared for Novo Nordisk3138

Individual quality incentives are lacking for primary care,specialistsspecialistsandandpatientspatientsKeten-DBC is related to number of contacts, no quality commitment• No incentives for monitoring of therapy adherencePrimary careSpecialistSpecialist is paid for volume rather than quality input or outcome• No financial incentive to critically review necessity of treatment• No payment for quality outcomes and monitoring of therapy adherence• No incentive to refer back to primary careNo short-term financial incentive to comply• E.g. reduction of deductible, bonus pointsPatientBooz & Company 14 November 2011Prepared for Novo Nordisk3239

Significant Significant evidence evidence gaps gaps in in basic basic statistics statistics and and in in treatment treatmentevidence suggest insufficient supporting incentivesEXAMPLESDescriptivestatistics• How many patients are there?• How many Type 1 patients are there?• In what stages of the disease are they?• In which regions and which groups is therapy adherence high?• How often do complications really occur?• What is the impact of labour productivity of the different complications?• What is the average cost of treatment Type 1 and 2 per stage of diabetes?• What is the relationship between cost of complications and the progression of the disease?• What are cost of treatment differences per region?Effect oftreatment• How often do which diabetic complications lead to working disability?• What is the impact of therapy adherence?• What is the life expectancy of Type 1 and Type 2 patients?• What is the impact of prescribing insulin when currently SU-pills are prescribed?• How would GLP -1 contribute to therapy adherence?Booz & Company 14 November 2011 Prepared for Novo Nordisk3340

Recommendation 1: Insurer should integrate contracting of ofprimary care and specialist care in networksprimary care and specialist care in networksIntegration contracting ofprimary care and specialistcare• Gain sharing for primary care• Expected impact of substitutionin volume agreements withhospital• Specialist can charge standardhour tariff for support toprimary care• Support IT infrastructurePOHGPPrimary careObjectives Resource Constraints Resultingbehaviour• Providecomplete andcomprehensivecare• Realize income• Protocol• Income relatedto quality gains• Access tospecialist adviceResource fromintegrated care• Lack of time fordedicateddiabetes serviceInteraction and collaboration• High qualityprimary care incollaborationswith thespecialistImpactIntegrated careInsurer• Provide the bestcare• Realizerevenues for thehospital andhimself/herself• Periodic reviewswith GP onpatients in theGP practice• Enabling ITsupport• (Largely) fixedincome fordiabetespatients• Supports GPsin providingbetter care• Serves patientswho really needspecialist careDiabetic nurseSpecialist careResource fromintegrated careConstraint fromintegrated careImpactIntegrated careBooz & Company 14 November 2011 Prepared for Novo Nordisk3441

Recommendation 1: 1: Other refinements in in economic incentivesPatient• Provide incentives to patient for compliance by reducing own riskInsurerResearch funding• Enable research funding from normal budget– Fund trials to increase the evidence base of regular medical treatmentsRisk equalizationscheme• Incorporate small profit margin for insurers in the risk equalization schemeso that insurers will compete for diabetes patients– E.g. 5 -10% marginGovernmentIntegrated funding• Create an integrated funding model for primary care and specialist care– E.g. incorporating specialist care in keten-DBCs• Avoid fragmented budgeting and ad hoc budget cost (these frustrateinnovations that are effective over the full cycle of care)Booz & Company 14 November 2011Prepared for Novo Nordisk3542

ContentsSummarized findings and recommendationsThe opportunity• Diabetes is a major and underestimated source of medical costs and lost productivity• Diabetes care in The Netherlands has reached a high level of quality, but there is still opportunity for further improvement• Further improving health of patients may lead to EUR 1.5-2 B of economic benefits in 2020The road• Refine economic incentives to encourage integrated care and quality improvement• Engage employers, UWV and participative care in diabetes care• Engage the patient’s social network to support self management• Introduce conditional market access models for new therapies and medication to assess behavioural impactAppendix: list of sources43

Ageing will create an an extremely tight labour market over thecoming decadeLabour market is ageing rapidlyEmployees x 1.000Leading to enormous shortagesE.g. 450.000 projected vacant employment positions in health care100%2803309402101090155153060 125 1410530580470.00020.000450.00090%80%70%>45y60%50%40%30%20%27y-45y10%0%Trans/Tel Industry TradeHoreca BuildingFS

Labour shortage from late nineties illustrates the risk of tightlabour markets for our economyCompetitive Power Based on Labor Cost 1)(Index, 1995 = 100); 1995–20045%4%3%2%1%0%-1%1995 1996 1997 1998 1999 2000 2001 2002 2003 200411511010510095901995 1996 1997 1998 1999 2000 2001 2002 2003 20045%4%3%2%1%0%EU Netherlands USEuro competitors All competitors-1%1995 1996 1997 1998 1999 2000 2001 2002 2003 2004Productivity (left axis)Development of Productivity: 1995–2004AIQ (right axis)6%5%4%3%2%1%0%-1%1995 1996 1997 1998 1999 2000 2001 2002 2003 2004NetherlandsEUInflation differenceBooz & Company 14 November 2011 Prepared for Novo Nordisk3845

DiabetesDiabeteshashasa highhighpreventionpreventionpotentialpotentialforforlostlostproductivityproductivityDiabetes is a common condition in workforce15 – 65 years of age, 2009, ‘000, %Good treatment increases participation substantially26112.7%• Quality of primary care is really good. The vastmajority of patients have excellent values and canlive active lives’Prof. dr. Guy Rutten; Julius Center923.3%• The life expectancy in our treatment program ofType 2 patients is the same as the generalpopulation due to earlier diagnostics and highquality care’Prof. dr. Henk Bilo; VUMCWorkgroupagediabeticsDisabledwith diabetics% diabetics % diabeticsof workforce ofdisabled• ‘Type 1 patients, when adhering to the medication,are able to have a relative normal life and performwell in most types of jobs’Prof. dr. Cees Tack, UMC St RadboudLimited insight in the reasons why diabetes patients obtainworking disabilitiesSource: CBS CBS Statline, UWV, Booz Booz & & Company AnalysisBooz & Company 14 November 201146Prepared for Novo Nordisk39

However, curative and participative care are still two differentworldsCurative CareParticipative CareCompanyGPDiabetic nursePatientSpecialistDieticianArbo-medicCompanymedicEmbedded in private lifeRole• How to prevent complications• No advice on participationInsurancemedicEmbedded in professional lifeRole• How to improve participation in society• How to change working environment• No advice on treatmentSource: Booz & Company AnalysisSource: Booz & Company AnalysisBooz & Company 14 November 2011Prepared for Novo Nordisk4047

Recommendation 2: Increasing participation of of diabetes patientsshould be a priority for employers and governmentOffer supplementarycollective diabetes caremodules for employers• Offer collective insurance modules for diabetes forincreasing the participation of diabetes patients– Specific intensive coaching, services by non-curative caremedics (‘ bedrijfsarts ’ or ‘arbo arts’ ) if neededInsurerIntegrate contracting ofparticipative and curativecare• Integrate collaboration models• Align funding incentives for curative and participative care– Bonus fee on top of keten DBC for GP to align with non -curative care medics– Negotiated tariff for non-curative care medicsCurativecareParticipativecareUWV /CompaniesCompanies and UWV toinvest• Companies and UWV to invest in collective insurance foremployees and welfare recipients (directly or via collectivesupplementary modules)– Such arranges could be part of central labour agreementsParticipativecareEnsure a positive workingenvironment• Encourage compliance– Supporting treatment recommended by curative care• Encourage working environment that motivates to work aslong as possibleBooz & Company 14 November 2011 Prepared for Novo Nordisk4148

ContentsSummarized findings and recommendationsThe opportunity• Diabetes is a major and underestimated source of medical costs and lost productivity• Diabetes care in The Netherlands has reached a high level of quality, but there is still opportunity for further improvement• Further improving health of patients may lead to EUR 1.5-2 B of economic benefits in 2020The road• Refine economic incentives to encourage integrated care and quality improvement• Engage employers, UWV and participative care in diabetes care• Engage the patient’s social network to support self management• Introduce conditional market access models for new therapies and medication to assess behavioural impactAppendix: list of sources49

Medical treatments for Diabetes Type 1 and Type 2 can beeffective, however compliance is a huge challengeIt is possible to live a very good lifewith diabetes……But this requires compliance to a demandingtreatment scheme…Type 1 treatment:‘Living a pleasant life with diabetes is possible! But youneed to put an effort in it. Watch your blood levels,carbohydrate intake, treatment schedule; actuallyeverything you do. Every day again. That takes up energy,but is worthwhile. Because a healthy lifestyle makes youfeel good.’Type 2 treatment‘People with diabetes can eat everything that healthypeople enjoy, but the key to a safe diet is to limit intake ofunhealthy food’Stages ofprogressionActivitiesApplicabletoLifestyle Metformin SUD Insulin• Changinglifestyle;• Diet• Exercise• Intake ofpills 1 to 4times aday of met• Intake ofpills 1 to 4times aday of metand SUD• Injection of insulin 1to 4 times a day (withuse of pump Type 1)• Self measurement 3to 4 times a day• Adjusting insulinintake to lifestyle• Type 1 & 2 • Type 2 • Type 2 • Type 1 & 2Studies indicate non-compliance can be up to 65%Source:Beterlevenmetdiabetes.nl, diabetesfonds.nl, Booz && Company AnalysisBooz & Company 14 November 201150Prepared for Novo Nordisk43

Non-compliance leads to severe complications - - Diabetes affectsthe whole organismStroke(cerebrovascular disease)Heart disease(cardiovascular disease)Bacterial and fungalinfections of the skinSevere hardening ofthe arteries (atherosclerosis)SexualdysfunctionVisual impairment:diabetic retinopathy,cataract andglaucomaKidney disease(diabetic nephropathy)Autonomic neuropathy(including slow emptyingof the stomach and diarrhea)Poor blood supply to lower limbs(peripheral vascular disease)Necrobiosis lipidoicaGangreneSensory impairment(peripheral neuropathy)UlcerationSource: World Health Organization, American Diabetes Association, NIDDK, National Diabetes Statistics fact sheet. HHS, NIHBooz & Company 14 November 2011 Prepared for Novo Nordisk4451

Non-compliance is challenge of distant benefits and largerequiredNon-compliancebehaviouralis a challengechangeof distant benefits and largeWeak motivation tocomply• Motivation to change is typically limited: no sense of urgency– No feeling of illness (especially in early stages)– Acceptance of illness– Benefits of compliance are distant• Compliance creates a short–term risk of side effects– e.g. especially hyposExtensivebehavioural changerequired• Far reaching change in daily routines– Sleep times,– Diet– Exercising• Requires an adjustment in social life– Social pressure to engage in social activities not congruent with treatment– Environment may perceive the distance as an ‘excuse’ to avoid participation• Requires an advanced understanding of the disease– Complex intake schemes that are dependent on the context of daily activities– Need to develop a optimized personal routineSource:Apotheke und krankenhaus Ursachhen der Non-Compiance, Booz Booz && Company AnalysisBooz & Company 14 November 201152Prepared for Novo Nordisk45

Facilitated patient networks are successful in other distantdistant benefits benefits – high behavioural – high behavioural change conditions change conditionsChronic quadrangleConsequences versus behavior/technology dependencyMotivation to comply withbest known therapyWeakStrongTechnology dependent diseasesParkinson’sHIVPatients willprobably adhereChronic hepatitis BEpilepsyPatients will adhereDiseases with deferred consequencesAllergiesDisease ManagementNetworksDepressionAsthmaType 1diabetesAlzheimer’sDiseases with immediate consequencesType 2diabetesChronic back painAddiction:Smoking,alcohol etc.ObesityFacilitated PatientNetworksPatients will probably notadhere but participate at theirown volition in networksBehaviour dependent / influenced diseasesPatients are likely tohave relatively lowadherence rates andneed to bemotivatedto participate innetworksMinimalDegree to which behaviour change is requiredExtensiveSource: The Innovator’s prescription, Christensen, Booz & Company AnalysisBooz & Company 14 November 2011 Prepared for Novo Nordisk4653

Integrated behavioural interventions have have been been successful in inimproving complianceExample: Diabetes Population Management Program of Kaiser Permanente (2003)Level 3Intensive Care• Complex medical issues• Psycho -social barriers toself-managementEndocrinologist / Diabetologist• Confirms diagnosis• Identifies comorbidities• Optimizes medication regimen• Mentors case and care managersCase Manager•Coaches members in crisis•Manages access to specialtyand ED care•Coordinates care across continuumLevel 2• ED visits• Hospitalization• HgA1c > 8.5%• Microalbumin > 30Any of the above WITH• HTN . DyslipidemiaCare ManagementOutreach and Triage•Prioritize CV risk factors:•HTN Dyslipidemia (LDL > 100)•Treatment according to protocols•Behavior change / motivation•Reinforce self-management•Patient returns to Level 1Week 1Intake Visit•One-to-one•Office visit•Risk reduction•Goal settingWeek 2Group Appointment•Assessment•Care Manager•Behaviorist•DietitianMonthlyGroup Appointment• Clinical / behavioralinterventions• Care Manager• Behaviorist• Dietitian2-6 MonthsTelephoneFollow-up Visits•(1:1 office visit asneeded)Level 1Self-Care• Diabetes is well controlled• Member practices effectiveself-careLiving Well with Diabetes Class• ,,, and othersAs NeededEducational Resources• Healthwise Handbook• KP onlinePrimary Care Team• Reviews, adjustmedications• Regular screening• Reinforcesself-managementSource:Kaiser permanente, Booz & Company AnalysisBooz Source: & Company Kaiser 14 November permanente, 2011Booz & Company AnalysisPrepared for Novo Nordisk4855

Recommendation 3:Facilitate network solution around the patientRecommendation 3: Facilitate network solution around thepatient to support to support better diabetes better diabetes care careSuggestedinitiatorsRecommendationInclude behavioraldimension in medicalguidelinesDescription• If appropriate, include family andfriends in standard treatment(e.g. family present at keydoctors visits)• Add checklist for aligningtreatment with personal life(mass customization; checkliston lifestyle before therapy starts)Impact• Actively engage family members tosupport treatment• No need for patient to remembereverything alone (extra ear from familymember)• Stimulate early discussion on how tocombine treatment with personal lifeScale-up use of socialmedia• Scale-up diabetes healthcommunities with patients, theirfamilies and their professionals(mijnzorgnet)• Participation of professionals iskey• Lower barrier to ask questions• Shared experiences, tips and tricksbetween GPs and patients• Family members / friends can engagefor patients without access• Unities patients and health careproviders so that they can shareexperiences‘You shouldn’tbe alone in selfmanagement’Amateur andprofessional coachingfor non-adherentpatients• Develop coach select screeninginstrument (who should receive acoach for what)• Educate amateur coaches• Select an amateur coach; andselect a professional coach fordifficult patients• Encourages disease knowledge withpatients• Encourages adhere to therapyE l i o nBooz & Company 14 November 2011Prepared for Novo Nordisk4956

Social media examplesSocial media examplesBACK -UPMijn zorgpaginaMijn zorgnetSource:Source:mijnzorgnet.nl, Booz & Company Analysismijnzorgnet.nl, Booz & Company AnalysisBooz & Company 14 November 2011Prepared for Novo Nordisk5057

ContentsSummarized findings and recommendationsThe opportunity• Diabetes is a major and underestimated source of medical costs and lost productivity• Diabetes care in The Netherlands has reached a high level of quality, but there is still opportunity for further improvement• Further improving health of patients may lead to EUR 1.5-2 B of economic benefits in 2020The road• Refine economic incentives to encourage integrated care and quality improvement• Engage employers, UWV and participative care in diabetes care• Engage the patient’s social network to support self management• Introduce conditional market access models for new therapies and medication to assess behavioural impactAppendix: list of sources58

OptimalOptimaltreatmenttreatmentwithwithcurrentcurrentgenerationgenerationofofdiabetesdiabetesmedicationmedicationis therapeutically highly effective if the patient is compliantis therapeutically highly effective if the patient is compliant109Diet andexerciseOADMonotherapyOADcombinationOADuptitrationOAD +basal insulinOAD + multipledaily insulininjectionsComplicationsstandardtreatment 2HbA 1c (%) 18Average HbA1cstandard treatment7Average HbA1coptimal treatment6Duration of diabetesOAD = oral anti-diabetic Del Prato S Del et al. Prato Int S J et Clin al. Pract Int J Clin 2005; Pract 2005; 59:1345–1355.OAD = oral anti -diabetic2Stratton IM 2Stratton et al. IM BMJ et al. 2000; BMJ 2000; 321:405–412.Booz & Company 14 November 2011 Prepared for Novo Nordisk5259

But new medication could add a lot of value in boostingcomplianceMotivationBehaviouralchangeReasons of non -compliance• Motivation to change is typically limited: no sense of urgency– No feeling of illness (especially in early stages)– Acceptance of illness– Benefits of compliance are distant• Compliance creates a short–term risk of side effects– e.g. especially hypos• Far reaching change in daily routines– Sleep times,– Diet– Exercising• Requires an adjustment in social life– Social pressure to engage in social activities not congruent withtreatment– Environment may perceive the distance as an ‘excuse’ to avoidparticipation• Requires an advanced understanding of the disease– Complex intake schemes that are dependent on the context ofdaily activities– Need to develop a optimized personal routinePotential impact of easier-touse-medication• Inherent property of thedisease• Potentially less invasivetreatment schemes• Potentially less invasivetreatments schemes• Therapy may be easier andless time consuming-Source: Apotheke und krankenhaus Ursachen der Non-Compiance, Booz & Company AnalysisBooz & Company 14 November 2011Prepared for Novo Nordisk5360

CFH access criteria evaluate impact on compliance, howeverevidence is usually not generated by trialsCategory Argument MetricsCFHcriteriaCFH DocumentType of evidencefrom trialWould extracompliance lead tohigher score?CharacteristicsComposition, type ofadministration, dosage,Operational areaFarmacotherapeutischdossierNoMedicalImprovement vs currentmedicationSide effects vs currentmedicationRelevant end points interm of morbidity andmortality. Report utilitiesand survivalFarmacotherapeutischdossierFarmacotherapeutischdossierNoYesEase of use / ease ofadministrationQALY’sFarmacotherapeutischdossier?YesPatientQuality of lifeQALY’sFarmaco -economischdossier?YesLife expectancyIncrease in yearsFarmacotherapeutischdossierYesDirect treatment costper yearEURFarmacotherapeutischdossierNoEconomicsIndirect cost per yearLong term cost effect(medical)EUR?Farmacotherapeutischdossier?NoNoLoss of productivity??NoBooz & Company 14 November 2011Prepared for Novo Nordisk5461

ContentsSummarized findings and recommendationsThe opportunity• Diabetes is a major and underestimated source of medical costs and lost productivity• Diabetes care in The Netherlands has reached a high level of quality, but there is still opportunity for further improvement• Further improving health of patients may lead to EUR 1.5-2 B of economic benefits in 2020The road• Refine economic incentives to encourage integrated care and quality improvement• Engage employers, UWV and participative care in diabetes care• Engage the patient’s social network to support self management• Introduce conditional market access models for new therapies and medication to assess behavioural impactAppendix: list of sources62

List of sources usedSources Used• Alcoholics Anonymous, www.aa-nederland.nl• American Diabetes Association (ADA), Economic Costs of Diabetesin the U.S. in 2007• Apotheke und krankenhaus Ursachen der Non-Compliance• Beter leven met diabetes, www.beterlevenmetdiabetes.nl• CBS, Statline: http://statline.cbs.nl/StatWeb/publication/?DM=SLNL&PA=81173NED&D1=2-4&D2=0-13,32-37,68-74&D3=0&D4=l&VW=T http://statline.cbs.nl/StatWeb/publication/?DM=SLNL&PA=70084NED&D1=a&D2=1&D3=a&HDR=T&STB=G1,G2&VW=T• CMR Nijmegen, http://www.nationaalkompas.nl/gezondheiden-ziekte/ziekten-en-aandoeningen/endocriene-voedings-enstofwisselingsziekten-en-immuniteitsstoornissen/diabetes-mellitus/omvang/• DBC pricelist 2011• De Opluchting, www.stoppenmetroken.nl• DVN, http://www.dvn.nl/diabetes/in-cijfers• DiabetesZorgBeter, Prof H. Bilo• Diabetesfonds, www.diabetesfonds.nl• Health and Human Services (HHS)• Impact of Medication Adherence on Hospitalization Risk andHealthcare cost, Sokol et al.• International Diabetes Federation, http://www.idf.org/types-diabetes• Kaiser permanente• MijnZorgnet.nl• National Diabetes Statistics Fact Sheet• National Institute of Diabetes and Digestive and KidneyDiseases (NIDDK)• National Institutes of Health (NIH)• NDF Richtlijnen, http://www.diabetesfederatie.nl/downloadendocumenten/richtlijnen.html• Nederlandse Patiënten Consumenten Federatie (NPCF) Eindrapportage2007• PoZoB• RIVM, Diabetes tot 2025, C.A. Baan & C.G. Schoemaker• RIVM, Kostenvanziekten.nl, http://www.kostenvanziekten.nl/kvz2005/cijfers/start-tabellen-grafieken-volgens-zorgrek-eningen/Default.aspx?ref=kvz_v2l1b1p4r0c4i0t1j0o3y4a-1g0d25s54z0f0w2• Screening study: Low yield of population-based screening for Type 2diabetes in the Netherlands: the ADDITION NL study, Janssen et al.• SFK, http://www.sfk.nl/publicaties/2011denf.pdfm• The Innovator’s prescription, Christensen• UWV provided, data available on Statline, http://statline.cbs.nl/StatWeb/publication/?DM=SLNL&PA=70084NED&D1=0,2-3&D2=79&D3=6&HDR=T&STB=G1,G2&VW=T• UWV provided, data available on Statline http://statline.cbs.nl/StatWeb/publication/?DM=SLNL&PA=70087NED&D1=0-3&D2=31&D3=6&VW=T• Weight Watchers, www.weightwatchers.nl• World Health Organization63

Booz & Company is a global management and strategy consulting firm, helpingthe world’s top businesses, governments and organizations. With morethan 3,300 people in 60 offices around the world, Booz & Company bringsforesight and knowledge, deep functional expertise, and a practicalapproach to building capabilities and delivering real impact. Booz & Companyis ranked the #1 management consultancy firm by clients in the annualDutch Incompany 100 Survey of 2011.Former minister of Healthcare, Ab Klink, works at Booz & Company inAmsterdam. Ab Klink combines this job with his position as Professor ofHealthcare, Labour and Political Direction at the Vrije Universiteit in Amsterdam.His extensive knowledge and insight in the healthcare sector contribute tohigh quality strategic advice on urgent issues in Dutch healthcare.www.booz.comAs a world leader in diabetes care Novo Nordisk’s aspiration is to defeatdiabetes by finding better methods of diabetes prevention, detection andtreatment. This includes initiatives contributing to activities to reduce thegrowth of diabetes related costs for society. The Changing Diabetes programhas been developed to support these initiatives. The program entails variousnational and international initiatives, focussing on communication with andproviding information to people with diabetes, their families, friends,educators, politicians, health care professionals, healthcare insurancecompanies, and other stakeholders. With the Changing Diabetes programNovo Nordisk wants to change and improve the way diabetes is treated andmanaged by society.Novo Nordisk is a global pharmaceutical company with almost 90 years ofexperience in the field of diabetes care. The company offers innovativemedicines, advanced administration systems as well as services to optimisethe treatment of people with diabetes. Furthermore, Novo Nordisk sets thestandard in the areas of haemostasis, growth hormone therapy andhormone substitution therapy.Novo Nordisk has more than 30.000 employees in 76 countries, bringingproducts to patients in 179 countries. Novo Nordisk B.V. holds the thirdposition in the 2011 Great Place to Work listing and is 16 th on the Europeanlist of the 25 Best Multinational Workplaces in Europe 2011. This makesNovo Nordisk one of the best employers in The Netherlands in 2011.www.novonordisk.nlwww.changingdiabetes.nl9 789081 787741