Pharma needs to lead discussion about reimbursement

The rules governing reimbursement and market access for new products are changing around the world, but one thing remains constant: to get your drug on the formulary, you need to demonstrate value. What’s new is that now pharma needs to take a lead in the discussion.

The expectation for the industry is to build a data collection infrastructure, which will inform different decision-makers at various stages of the decision-making process, helping to align priorities of all involved stakeholders. Moving into the future of “beyond the pill”, this alignment is particularly important if services are to play a role in the decisions about payment.

Context is everything

Coming to a payer, pharma should have information about the context of disease. They should have a thorough understanding of the environment in which they’re trying to locate their product, meaning they need to see the big picture of risks and opportunities that exist independently of the asset.

“We have to bring the data and/or the analytics to inform payers about what drives the outcomes in given conditions. They need to know what the patient archetypes are, what patients need, and what the options are to effectively address a disease. We’re expected to inform the decision making process for effective and efficient healthcare delivery and disease management. That’s what payers want,” said Florian Turk, Vice President, Head Global Market Access & Healthcare Solutions at GSK, speaking ahead of his presentation at Payers' Forum Europe.

The role for Real World Data

Less than a decade ago, most pharmaceutical manufacturers considered market access the last step in the commercialization process, an attitude that is unacceptable in light of ongoing economic challenges. Now, in order to successfully launch a new product, it is necessary to demonstrate that it addresses particular payers' needs, both commercial and clinical. Those can be, for example, hitting the operating margin per patient, or improving patient satisfaction. The role of Real World Data (RWD) in this process is invaluable.

“RWD collected in parallel with pivotal study programs, will allow us to partner with payers, be it insurers or hospitals, to understand their current performance in healthcare delivery, respectively disease management in a particular disease, how they compare to peers, and how they can perform better,” Turk explained. “Understanding and creating value is always an evidence-based process in partnership.”

Each decision-maker has a large portfolio of patients to serve, so they need to make trade-offs, and you have to find a way to facilitate those trade-off decisions".

Doing so entails thorough understanding of the disease area. For example, with pulmonary diseases, it is important to know what the mortality rates are and how those can be contained; which patients return frequently to hospitals and why, and how to support those “frequent fliers”; what is their quality of life, and how to improve it; how those indicators compare to other diseases. RWD can provide data to answer these questions, but the real challenge is creating an evidence-generating system that informs decisions beyond the standard registration program.

“A lot of focus is on late-phase research, but this is too late. RWD becomes a true opportunity if it’s available earlier, it doesn’t exclude decision makers, and it’s not purely driven by hypothesis-testing,” Turk added, stressing that this is the best way to inform budget allocation and purchasing decisions. “Budgets [in healthcare] are flat, and spending more on something means spending less on something else. Each decision-maker has a large portfolio of patients to serve, so they need to make trade-offs, and you have to find a way to facilitate those trade-off decisions.” 

Payers want value-added services but interests need to be aligned

Trade-off decisions can be facilitated by value-added services. Payers are open to considering what goes “beyond the pill”, as long as the service improves patient outcomes in a way that helps payers. The problem is that most patient-oriented services do not serve payers in any way. Despite the fact that the main goal for all the healthcare stakeholders is in improving patient outcomes, it should be noted that not all patient goals are congruent with those of payers.

“Payers and patients have partially different interests,” Turk asserted. “While everyone is wishing the patient better health, for payers it’s only manageable up to a certain level. Sometimes what the patient is doing is not good for the payer. For example, in cases of treatment compliance, where, as a payer, I only get a reasonable return on the health investment when a patient is taking their medication for a specific time period, so I would be interested in behavioral incentives that aligns patient interest and thus secures benefit of the health investments.”

The key message

In this difficult economic climate and ever-changing pharma landscape, it is important to realize the role the industry needs to play in the discussion about reimbursement. To lead the conversation, pharma needs to become thoroughly aware of the context in which their products operate, which can only be accomplished with the help of real world data. Going forward, RWD will be instrumental in the development of value-added services that speak to the needs of patients and payers putting all stakeholders on the same course toward better outcomes.

Florian Turk will be presenting at Payers' Forum Europe, 1-2 October, 2014. For more information on his presentation, click here.

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