New models for market access
Health economist Ulf Staginnus argues that pharma needs a lot more innovation—and a lot less outmoded market access discussionsBy Dec 12, 2011 on
I cannot resist writing one more time about the entire market access discussion currently ongoing everywhere, as I believe many of those numerous articles and reports are missing the point.
It is amusing, at least to me, to see the continued flood of articles, consultant presentations, blogs, congress announcements, workshops, summits, reorganizations, speeches, etc. all over the place, basically suggesting how the industry just needs to throw a few more people with fancy titles here and there, coupled with slight organizational changes, onto the problem and involve stakeholders and—guess what?!—actually talk to patients and perhaps even payers and all of a sudden, like Alice in Wonderland, everything will be good, after all.
The uncomfortable truth is, it won't be. All this “noise” is only good for one thing, paying the bills of the consultants, which is fine, too, as I have been one myself so I can understand. But it will not address the problem the research-based pharmaceutical industry and its employees are facing. Without a substantial increase in R&D productivity, the pharmaceutical industry's survival (let alone its continued growth prospects), at least in its current form, is in great jeopardy.
Of course, you need experience in areas such as HE, outcomes research, pricing, economics, policy, advocacy, etc. and all needs to work in sync and early on and with the payer in mind and, yes, most people have understood that by now. So the problem is essentially not in the capabilities, although some are more advanced than others, but rather in the company cultures.
In my view, and in order to get back into business, the industry needs to have a more critical look at itself. Some old-fashioned ways of doing things will have to be revisited, most processes are probably too slow, too bureaucratic, and several companies have cultivated a culture that is not suitable for mistakes or for trial and error. Nobody takes the smallest decision anymore without x t-cons and endless cc lists in the email distribution.
We also need to stop looking at the short-term financial results only. Investors need to be made to understand that this is a business model for the long run. In that regard, I speculate that some companies that are not registered at the stock exchange might have it easier.
The next important thing is a matter of greater transparency and honesty, internally. How often did you sit in meetings about value stories and value propositions and this and that, and you were thinking, ‘This product is actually not up for today’s challenges’ with the dataset you may have in front of you. But nobody wants to be the messenger. Sounds familiar? I thought so.
And let's face it, if you need a major workshop and intensive external “coaching” to help define the value of your product … well, there actually is little to none. If it was really good, it would have been obvious from the start. So maybe we ought to stop beating around the bush and move on if there is nothing to be done anymore. It hurts, understandably, as a lot of sunk cost is associated with it. But this is the same as subsidizing the brown coal in the Ruhrgebiet in Germany over decades; eventually, it was dead and all knew it was going to be an outdated model. The earlier they would have understood that, the better it would have been for all involved.
So how can we get that RD productivity up and bring out the desired and needed (think of cancer, Alzheimer’s, etc) next generation products with true distinctive medical benefits? Frankly, I don't know. Maybe we should ask the scientists. Is it that we have hit the wall with what we can scientifically achieve? Is our understanding of human biology and mechanisms simply not sufficient? Or did we organize ourselves in a way that hinders progress?
From my experience, I have at least some vague ideas in relation to the later. It comes again back to culture. Scientists, like all creative people, need an environment that encourages collaboration, which allows for trial and error, which lets you be different if you want to be, have the freedom to investigate, have the possibility of fast and flexible joint ventures with whoever is needed. Maybe we need looser and better partnerships, a closer link to universities, labs, startups etc …
But this all requires a lean, innovative can-do culture with an entrepreneurial spirit. However, what we often find is that scientists and others are bogged down by inefficiency, over-complication, paperwork, old-style autocratic leadership, wrong leaders and managers who micromanage every little move and piece of work and therefore will not allow science to flourish. Or as Steve Jobs put it once, “Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.”
We might also want to stop seeing our competitors only as that, but rather form intelligent partnerships, develop things together when appropriate, occasionally jointly understand which drug benefits patients, rather than only detailing each other out.
New breakthrough medicines are the challenge of the future and, as part of it, you need business, science, economics savvy, and pragmatic people who can understand the advantages and limitations of the science and the payers’ side in order to lead development and hence the market access strategy of such novel drugs. However, once you have a loser in your portfolio, it will stay a loser whatever resources you throw at it. That is the big change that has come around. Yet many people, to my sheer surprise, seem to have not yet fully understood that.
Discovery in human biology and medicine needs a flexible and open-minded environment. So why not work on that end first, talk to each other earlier, try to build frameworks of collaborations and organizations that foster scientific progress and find truly promising drug candidates (and be ready to kill those that are not delivering) rather than wasting time on these endless surface-based market access discussions that often mount the horse from the wrong end.
Let’s instead talk about how to become an agile, innovative and forward-looking industry that will be admired for its breakthrough products, an organization that fosters a culture of true innovation, evolution, entrepreneurship and with a focus on distinctive, head-to-head evidence generation. That is where I think the “market access” movement should be starting to put the focus on to begin with.
Ulf Staginnus, a health economist with more than 15 years of international experience in pricing and market access strategies, blogs at Health Economics.
For more on market access, join the sector’s other key players at Oncology Market Access USA on Feb. 14-15, 2012 in Boston, Sales & Marketing Excellence Turkey on Feb. 21-22 in Istanbul, Market Access Mexico on March 28-29 in Mexico City, and Market Access Europe in May of 2012.
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