How Better Patient Adherence Serves as a Competitive Differentiator

Rita Numerof examines the link between an increased focus on patient adherence, and improved results with industry payers.

Patient non-adherence to treatment regimens is a well-known and costly problem for the healthcare industry. The World Health Organization estimates as many as half of patients with chronic conditions fail to adhere to treatment recommendations. Now, as payers look to get medical costs under control, the priceof non-adherence is garnering increasing interest. Some estimates place the cost of non-adherence in developed countries as high as $100 billion each year spent on avoidable hospitalizations. While pharmaceutical companies have considered adherence programs in the past, they’ve largely focused on how to sell these programs to physicians. To compete in an environment increasingly focused on getting costs under control, drug makers will need to adjust their approach, and consider how to make adherence information part of a value story capable of persuading an increasingly diverse set of stakeholders -- especially payers.

Context: Payers and Adherence

After decades of spiraling cost increases, payers are looking for ways to get more value for their healthcare dollar and move costs toward more sustainable levels. Payers of all types are demanding economic and clinical value data to justify products’ use. 

Internally, as they work to get costs under control, payers have also developed sophisticated adherence programs on their own. These efforts range from PBM-outreach to encourage refills, to nurse case managers who monitor medication use, to electronic programs that record medication data in electronic medical records.

Well-known integrated healthcare delivery systems such as Geisinger Health System, Group Health Cooperative, and Community Care of North Carolina (CCNC) have all made adherence a priority and are addressing it through multi-dimensional approaches. For example, CCNC, GlaxoSmithKline, the State Health Plan of North Carolina, pharmacy chain KERR DRUG, and Blue Cross Blue Shield of North Carolina have joined forces to promote medical homes, change the way care is delivered, and demonstrate that increasing the focus on managing chronic diseases (including adherence) can improve outcomes and hold down costs.

Outside the US, payers increasingly point to the need for pharmaceutical companies to move “beyond the pill

What efforts like these demonstrate is that payers and PBMs have invested significant time and resources into looking at ways to improve adherence to ultimately lower costs. In this context, it’s not enough to develop a program and attempt to sell it to physicians who are writing prescriptions, many of whom have little knowledge of whether their patients are compliant or not. Pharmaceutical companies will have to consider adherence a part of their value proposition to payers, and they’ll need to demonstrate that their program really does improve adherence.

Payers around the globe are increasingly expecting that drug companies think more broadly than creating pills/drugs. Outside the US, payers increasingly point to the need for pharmaceutical companies to move “beyond the pill.”  One payer described this move as key to success in the long term, explaining that if they continue to manufacture medicines, they are making a commodity. But if they move into services, it’s possible for them to develop a much deeper understanding of value. We’ve heard similar sentiments from payers we’ve worked with around the globe. Without real world data on medication adherence and differentiated outcomes, payers will choose generics.

A New Paradigm for Patient Adherence

In response to increasing pressures from payers on the economic and clinical value of their products, some pharmaceutical companies have begun to refocus on “solution” sales -- that is, move into the services space -- but it’s largely still been in the current paradigm of reps selling to docs who are writing the scripts. In order to succeed in this increasingly strained environment, pharmaceutical companies will need to move away from this model, which is essentially still product-focused, and toward a continuum of care model that will address payer needs, especially as providers and payers experiment with new partnerships like accountable care organizations. What this will mean is a core focus on prevention, diagnosis and treatment of the range of conditions within a therapeutic area, taking into account the needs of specific markets around the globe.

The central imperative of the continuum of care model is delivering real value to critical stakeholders – payers, regulators, physicians, providers, patients, and employers. This requires companies to develop tools and capabilities to communicate data on adherence to each of these groups in terms that will matter to them.

They also need to generate real world data on key products that address adherence as part of the economic and clinical value of key therapeutic area products at launch. This will require new processes and capabilities that integrate payer concerns into clinical study design.

There may be more opportunities for collaboration around adherence data, such as the one mentioned above in North Carolina. Payers have an interest in working with manufacturers in data mining and understanding the real world potential cost and health benefits of an adherence program.

Finally, a continuum of care approach may mean weighing different considerations in evaluating a drug earlier in development. Beyond developing an adherence program, pharmaceutical companies should look for ways their drug, by itself, could improve adherence. Is the treatment regimen less complicated than competitors? Are fewer negative side effects deterring patients from continuing their use? Companies need to understand how a drug’s characteristics impact patient behavior, and communicate information about how those characteristics can impact outcomes and costs to payers.

To succeed in the future, understanding and recognizing opportunities to differentiate based on patient adherence will be critical

For example, a company we worked with had a drug that had demonstrated clinical equivalence to current standard of care in controlled trials, but had a much less complicated treatment regimen. The company was aware that the simpler regimen could improve adherence and therefore reduce downstream costs, but hadn’t considered how much payers would value this improvement and hadn’t incorporated this information into their value story. To succeed in the future, understanding and recognizing opportunities to differentiate based on patient adherence will be critical.

Moving Forward

In an economically strained environment, it’s critical that pharmaceutical companies take every opportunity to differentiate themselves.  To that end, understanding how payers are thinking about and valuing drug characteristics such as patient adherence and communicating a value proposition that addresses their concerns will be key to success moving forward. This requires a more nuanced approach to developing a product’s value message and tailoring that message to each stakeholder group.

Pharmaceutical companies need to be doing more than supplying a “deck” to payers on adherence. They’ll need to collaborate with payers on adherence programs and demonstrate evidence that these programs work, and that they work better than what payers may have developed on their own. If companies fail to think about drug adherence in terms of the economic and clinical value to each stakeholder group, they’ll find their products increasingly seen as commodities, and their drugs will be treated as such. By ensuring that economic and clinical value is demonstrated and includes adherence, they’ll be well positioned to succeed, even as they face pressure on reimbursement and access.

Value Added Services Europe

Sep 17, 2013 - Sep 18, 2013, London

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