New Developments in Pharma Market Access in the US Aptitude Health

Although clinicians and drug manufacturers have always touted the value of certain treatments, cost-effectiveness hasn’t always been an integral part of the pharma market. However, priorities have shifted in recent years and value-based pricing has begun to dominate the US pharma market. As market access shifts, pharma companies must change their business model or risk being left behind.
Adapting to these market shifts isn’t easy. But robust data-collection and strategic decision-making can protect your company in the decades ahead.

Increasing Demand and Rising Medical Costs
Although global demographics vary, most 21st century governments face a similar challenge: their populations are aging and each year the demand for medical care increases. Yet many regions still haven’t fully recovered from the 2007 recession. Patients may have lost some or all of their savings. Tax revenue has faltered, while personal debt has exploded.

The United States is no exception to these trends and many US citizens rely on private insurance plans. These plans often carry a high deductible or steep out-of-pocket costs. As a result, healthcare spending in the United States has skyrocketed.

Both government agencies and private payors are now under heavy pressure to control medical costs. Value-based pricing has emerged as a promising solution, but the move toward it hasn’t been seamless.
Many pharma companies have tried riding out these changes by making minor alterations to their marketing strategies. However, adapting to value-based pricing cannot be an afterthought. Instead, companies must alter their business models to emphasize the growing importance of payors within the industry.

The Rise of Payors
Today, payors exert tremendous influence over the pharma market, and pharma executives must revolutionize the way they develop and market drugs. In the past, executives might have focused on quickly getting drugs approved and marketing them directly to physicians.

But in recent years, the market influence held by physicians has plunged. KOLs and payors have become the key decision-makers. As their authority grows, payors have begun to realize that costly new treatments don’t always deliver improved results.

Under previous business models, many companies sought to demonstrate that their drug was effective and safe for patients. This approach worked well when marketing to physicians, but payors have a different set of motives. To thrive in the current marketplace, pharma companies must understand what drives decision-making for payors.

Payor-focused market access planning reflects a significant change in perspective and priorities. Modern payors require pharma companies to justify the value of their drug compared with currently available therapies. They also expect robust data to be gathered at every stage of the development process.
This approach may not come naturally for some pharma companies. Considering the payor’s perspective throughout the decision-making process helps your company avoid expensive roadblocks.

The Challenge for Pharma Companies
With value-based pricing, companies must prove that each new candidate represents a significant improvement over existing agents. Alternately, they must demonstrate that their drug tackles “a greater burden of illness.” The days when a company could generate a safe, useful drug and jump straight into marketing are over. Now, companies face increased competition as they strive to show that their products are superior to their competitors’.

Pharma companies also grapple with the burden of demonstrating efficacy and cost-effectiveness in a real-life setting. The industry-wide shift toward real-life data represents a dramatic change for many established companies. Controlled clinical trials are no longer enough to persuade payors. Instead, they want data from uncontrolled studies and real-life patient groups.

To succeed in this changing marketplace, pharma companies must understand how stakeholders responsible for market access define value. They also need to understand what types of data support their value claims.

Consider the following strategies for success:

Pick the Right Opportunity
With the new approach to market access, companies must be selective about research and development. Choosing to develop a drug for an already saturated market can be a tremendous waste of time and money. Pharma companies may have better luck focusing on treatments with fewer competitors.

Collect Economic Outcomes Data
Payors often reject treatments that use expensive clinical trials to justify their price. New drugs may also be ignored if they fail to demonstrate an impact on patients’ quality of life. Real-life data are indispensable for this part of the process.

Effectively Communicate Value
Often, multiple groups within a company are responsible for communicating with payors. These groups may send conflicting data or provide inconsistent responses. Poor communication can discourage payors from covering certain drugs. However, clear and consistent reports help pharma companies justify their drugs’ value.

Case Study – Controversies Over Rising Prices
In 2016, Mylan Pharmaceuticals sparked national controversy over the cost of its life-saving EpiPen®. Prices rose from $103.50 in 2009 to over $600 in 2016. Public outrage ensued and the debate eventually led to a congressional investigation.

This firestorm of criticism reflects a change in the way payors view prescription drug prices. Individuals and organizations are increasingly wary of price-gouging. Pharma companies face growing scrutiny. If they can’t provide evidence of their drug’s value, they risk public outcry and dire financial consequences. Mylan Pharmaceuticals learned this lesson the hard way, facing a $465 million settlement with the US Justice Department.

Case Study – Building Partnerships
In 2019, AstraZeneca and UPMC Health Plan announced that they had signed a value-based pharmaceutical contract for AstraZeneca’s cardiovascular drug BRILINTA®. The novel agreement incorporated dual-sided risk into the payor’s reimbursement algorithm.
AstraZeneca agreed to shoulder some of the risks associated with the drug, with reimbursements determined by outcomes in targeted populations. The contract also lowered out-of-pocket costs for BRILINTA for many UPMC patients.

The announcement received general praise from payors and industry experts. Harvard Pilgrim Health Care’s Chief Medical Officer noted that AstraZeneca had taken an exciting step in promoting value-based reimbursements. UPMC also expressed enthusiasm, pointing out that the contract would improve patients’ access to drugs and help remove cost as a potential barrier.

These dual-sided risk agreements are still somewhat controversial within the pharmaceutical industry. AstraZeneca’s approach reveals that perspectives on this issue are gradually changing.

Today, payors expect pharma companies to shoulder some of the risks associated with new treatments. Without such agreements in place, payors may be increasingly reluctant to approve coverage. Pharma companies will need to be willing to follow AstraZeneca’s example to adapt to a changing marketplace.

The Road Ahead
Although today’s pharma companies face some critical challenges, the situation is far from hopeless. However, organizations must make structural changes and rebuild their drug-commercialization process. Executives can lead the fight by integrating market access strategy with brand strategy. By considering payors’ motivations and priorities, pharma companies can streamline their decision-making processes. Market access can become a central part of how modern pharma companies function.