In determining the value equation for patient access to medications, payers ostensibly possess a disproportionate share of control in the current environment. Payers’ actions are hardly surprising given the trajectory of the payer landscape over the past 10 years. In the court of public opinion, pharmaceutical manufacturers are far too often battered over pricing while payers face relentless budget pressures. In light of the current environment, questions remain about whether or not the “next wave” of policy changes is real, and if the proposals will actually curb costs or deliver value.
Now is the time to re-balance the value equation conversation to ensure greater engagement across the commercial continuum. In doing so, we strengthen our nation’s healthcare system.
FDA approval used to mean entry for access, but not anymore. While the FDA continues to set the first bar for medications being available for the market, that doesn’t mean patients are getting meaningful access to these approved medications. Payers impose barriers to patient access in the form of costs, rebates and positioning, thereby, setting the patient access bar much higher.
Again, not a surprise. Payers’ actions reflect a host of factors such as the number of FDA-approved drugs; prices of those products; downward pricing pressure given budget constraints; and the labels of these assets compared to the market reference benchmark. The impact is clear: manufacturers face an increasingly high bar to get market access for their product while balancing the issue of patient access based on best practice protocol.
Payers are feeling more power in the current pricing environment
In the current healthcare marketplace, payers exert unprecedented power over pricing and reimbursement. They’re asking for real world data in addition to clinical trial data. They’re aggressively expanding their toolbox of strategies to manage and restrict patient access to medications – tools such as step therapies, step edits and tiered formularies. As one result of costly lessons learned, payers are taking actions to minimize the volume of patients on more expensive therapies.
We should expect payers to continue their relentless drive for new ways to throw some of the price pressures back onto the manufacturers, while minimizing the cost shift to the patient.
A balanced approach is needed
As has long been the case, efforts to shape the healthcare value equation to the advantage of any one particular player are going to foster a natural tension within the healthcare system.
As such, it’s time to pursue a productive path forward to better balance the interests of the healthcare system’s traditional triad of payers, patients and advocates, and key opinion leader providers. Simultaneously, we can productively reward manufacturers’ incentives to continue innovative, yet costly research. Thankfully, we have the means and, I believe, the will to shape a more productive path forward.
Given market access concerns on all fronts, in the past five to seven years, we’ve also seen pharma investors increasingly ask about the likelihood of reimbursement for a product earlier in the development process. They are interested in understanding the reimbursement dynamics and the shifts occurring across product classes making reimbursement more challenging. And when investors ask, manufacturers are forced to undertake the necessary due diligence to address those and other concerns.
To help address those investor concerns, especially for manufacturers with an asset in Phase 1 or Phase 2, companies must better understand the market access environment in which their product will be placed – ultimately better understanding the commercial continuum in which they will launch and play. Among issues that influence that assessment: the competitiveness of the environment; how payers have treated analogs in the past; identification of the appropriate patient population; and determination of segment and channel of those patients.
In its work with manufacturers, Syneos Health promotes the importance of manufacturers asking payers critical questions early in the drug development process. The good news: payers are giving us feedback to such questions. Payers are telling us the meaningful real world evidence that manufacturers need to show to get optimal access for a product in a particular therapeutic class. Such conversations not only establish productive, trusting relationships, but they also enable manufacturers to more effectively shape the data that’s collected in their clinical trials and make sure the information they’re collecting meets payer expectations.
For manufacturers, having a real world evidence plan is essential as they think about commercializing a product.
Because the healthcare market has been so dynamic with regard to pharma pricing and access issues, at Syneos Health we’re delivering a clear message to manufacturers: If you’re not thinking about these issues, rest assured that someone else is. The urgency for action is that if you don’t define how you want your product to be treated, then someone else will. You’re then left in a reactive state.
While lots of dialogue and transparency between manufacturers and payers is vital, it’s not sufficient in and of itself. We must establish a balance among payers, patient advocates and key opinion leaders. We need to forge an agreement on which outcomes represent value for our healthcare system as a whole and on the evidence needed to demonstrate such value. That’s going to take all of us coming together.
About The Author
Sr. Managing Director – Head of Value, Access and HEOR, Syneos Health Consulting
Erin Mistry brings 15 years experience in helping manufacturers evaluate their pricing, value and access portfolio strategies across global markets. She is currently Sr. Managing Director Pricing and Access at Syneos Health, a 23,000 + global organization that combines both clinical trial and commercial development services. Erin spent many years working with healthcare systems establishing quality metrics and leading clinical teams that feed into value-based care initiatives and patient engagement strategies while finding the pricing and access niche at Medimmune. She has worked extensively across a variety of therapeutic areas and global markets to build value messaging and demonstration, evidence requirements, pricing strategies, contracting opportunities, and stakeholder engagement plans across the commercial development spectrum. Erin enjoys the dynamic policy environment and the direct interaction with Payer decision makers that influence today’s access decisions.