The Price Of Access
With tight purse strings right across the world, innovative pricing schemes are a crucial step in delivering affordable healthcare
Drug prices are never far from headlines and social media streams nowadays, with everyone from campaigning politicians to late-night TV show hosts speaking out on the topic. Yet, the pricing process for drugs remains, largely, shrouded in mystery and misunderstanding.
Every time the media prints a story about high drugs prices, pharma companies are quick to point to the high cost of R&D and their need to recoup their investment and, in the US at least, to highlight the inefficiencies in the systems and the actions of middleman sucking cash from the system and escalating costs.
However, amid the misinformation and murky transparency is a new willingness by many to bring the cost of drugs into the light, a movement driven by a powerful force – patient access. For many companies right across the industry, patient access has become their number one focus.
One such company is Takeda, says Simone Wyss, Head EUCan GI Market Access, Global Market Access. “For us at Takeda, the main driver is to secure patient access. Of course, there’s a need for the company itself, but we are focused on getting treatments to the patient – that’s the reason why we have our business,” she says.
Through strong partnerships with payers, a central part of the company’s focus on improving patient access and ensuring “healthcare sustainability” is the use of innovative pricing scheme.
“These schemes can act as an accelerator to move our healthcare systems to become more outcome-based as well as truly help pharmaceutical companies to position themselves as best-in-class partners to support payers faced with affordability issues,” says Wyss.
Takeda launched various innovative schemes in 2017, and will continue to move in this direction, she says. “We try to put the patient pathway in the centre and then assess what the key needs are for our customers – payers, providers, and patients.”
Preparing innovative pricing schemes is part of the firm’s standard pricing policy. Innovative pricing schemes encompass anything where prices are not fixed, including outcome-based schemes or managed-entry agreements. Such value-based contracts, or pay for performance, offer customers security that medicines deliver on their promises.
BRIDGING THE GAP
A patient focus can help to minimize any differences between the goals of payers and pharma, says Wyss. “Payers and budget holders – governments, insurers, hospitals – care about the optimal care and health of their population, but they also have a limited amount of resources and so want to invest them in an optimal way. What they ask for is best value for money, which is quite a legitimate ask.”
Pharma’s goals are sometimes slightly different, she says. “We make massive investments so we need some return on those investments. While payers looked at getting the best value for money, in the past, pharma tried to get the best money for value. The different objectives can lead to significant barriers; to overcome these, we must focus on our shared interests, and that’s the patients.”
With the average cost of developing a new drug at more than $2.5billion, it is essential that both parties secure the best deals.
Wyss says: “Innovative pricing helps us to address the needs of affordability and value for money while maximizing patient access. Real-world evidence goes hand in hand with innovative pricing and clinical evidence. If you do outcome-based schemes, you need to know what offering your product can make, so you build schemes that can address the needs of your customers while leveraging your product’s benefits.”
Adaptive pricing schemes offer new ways to engage with payers, from patient-level paid per performance schemes often seen in hospitals, through to national conditional reimbursement schemes linked to population-wide registry studies, demanding proof that the value promised is delivered in the real world. Pricing schemes can be performance-led, or finance-led, all tailored to the needs of the customer and profile of the drug.
Pairing customer need and the benefits of a medicine is of particular relevance with chronic diseases, which carry the heaviest cost burden. “90% of healthcare costs here can be managed through prevention and ensuring that the right patients get the right treatment at the right time,” she says.
However, such changes in patient access are not inevitable, says Wyss. “You have to trigger interest – it’s easier to go for a discount. If a payer approaches you and asks for a better deal, be ready to come with proposals that are potential win-win. Innovative pricing can be one of them.”
She compares it to the consumer goods industry. “If you have a new product, no one wants to buy it so you have to create the need. When you start talking about outcome-based medicine and getting value for money, if you do it well, you can catch payers’ interest. You have to show what’s in it for them.”
Here, early planning is crucial, especially including support for pricing options in the evidence generation plan years before launch, she says. “Make sure that you run the studies you need to develop innovative pricing schemes or you run huge risks.”
At launch, a selection of targeted value-based pricing schemes should be ready for roll-out, with sign-off complete ahead of negotiation, and teams primed to turn around priority requests quickly, to ensure agility in the field.
It’s also important to understand the customer’s needs. “Their attitudes and needs can be very, very different,” says Wyss. “Where there are affordability issues, you can offer both finance and outcome-based schemes. We have payers who have affordability issues but want outcome-based schemes, so don’t just think affordability automatically equals finance-based schemes. Don’t just go in with one solution; give your customers a choice.”
Plus, you must remember that innovative pricing is just “one out of several solutions which can help you address your customer needs. If you’re faced with an access barrier, just don’t only focus on innovative pricing. Look at the whole pie, discuss what are the issues and try to really expand the pie before you start slicing it.”
TAKING OWNERSHIP OF DATA
The scant availability of data has often been cited as a key barrier to an outcome-based healthcare system, however, the situation varies considerably from country to country, says Wyss, comparing “perfect” places like Sweden, with registries going back 30 years, to Switzerland, where different people own different subsets of data. In countries with solid data sources, such as Italy and Nordic countries, conditional reimbursement is common.
“In those countries where you have good registries, it’s not a big administrative burden,” says Wyss. “In a perfect world, it would be great if all authorities had registries on a national level as the normal element. Then, conditional pricing and reimbursement – you pay and reimburse conditioned on a pre-defined real-world performance of the product – could become the standard for payers and pharma to ensure best value for money.”
Pushing ahead with innovative pricing requires a little innovation on the part of pharma. This can include going into partnership with other companies to sponsor registries, running pilots to demonstrate value or developing digital tools prior to launch to collect the necessary key performance indicators, or for hospitals to collect data themselves.
“We have a responsibility to shape the market, so if there is no interest, we need to engage and go and create it,” says Wyss. “If there is a fear of outcome-based schemes, maybe you invest with payers in a pilot so you can see if it works nicely.
“The approach we take is finding a way that we can get reasonable prices while securing patient access and helping with sustainability. I truly believe that innovative pricing can be a real driver in moving our healthcare systems forward.”
Simone Wyss will be joing a roster of industry leaders at the Real-World Evidence & Access Europe 2018 in April. Check out the line-up here.
Since you're here...
... and value our content, you should sign-up to our newsletter. Sign up here