Pricing and reimbursement are at the core of market access – what need does this product meet and who is going to pay for it? Yet with financial pressure on payers increasing and evidence-based pricing moving up the agenda in pharma, access has become one of the most challenging areas for drug developers.
It is no surprise that, in our latest U.S. survey 92% of pharma executives cited price pressure as their biggest external access challenge.
Going forward, the information revolution wrought by the emergence of Big Data is going to have an increasing impact on market access activity. Most (76%) pharma leaders think demonstrating real-world value is their main market access priority, and they want better sources of data – as well as clearer external guidelines by payers – going forward. As a logical extension of this, nearly half (46%) expect the budget for HEOR data collection to jump over the next two years.
But there are other issues. Misreading signals from payers, or mistaking their likely approach to a costly new product, can play havoc with the bottom line. This means embedding the voice of market access into drug development has never been more important – so it is worrying that nearly two thirds (62%) of pharma execs believe their companies are not paying enough attention to reimbursement questions as they go along.
There are certainly signs that market access considerations are not being addressed early enough, with just 15% of execs saying they think about them in either pre-clinical or Phase I. It is not until Phase II that the majority (46%) move access to front of mind – and it may well be too late for nearly a quarter (23%) of respondents by the time a product gets to Phase III.
Our 66 industry participants come from the leading 20 pharmaceutical manufacturers. Most have responsibilities in Market Access (72%, including Managed Markets, Payer Strategy), with smaller representation of HEOR (22%) and Policy, Public/ Government Affairs roles (6%). Within their company, the respondents interact with a range of teams outside of the core market access field, such as Marketing, Brand, Sales, Clinical, Medical Affairs, Pharmacovigilance and others, while the engagement seems to be slightly higher with colleagues on the commercial side (64%) over functions in Medical Affairs and Clinical Development (32%).
While the results presented in this summary are meant to speak for themselves, I sat down with a panel of five colleagues with varied backgrounds in industry and healthcare to share a few of their interpretations: Matt Portch, Vice President of Managed Markets at Sunovion Pharmaceuticals; John Cai, Director of Medical Informatics at Celgene; and Stacy Woeppel, Deputy Director of Regulatory Affairs at Sanofi-Pasteur.
Valuable feedback was also offered by healthcare executives Leonard M. Fromer, Executive Medical Director at Group Practice Forum and John Walker, Senior Strategic Advisor at The Kinetix Group and Former Chief Medical Officer of Cornerstone Healthcare.
The below reflections were made possible by the work of my colleagues transcribing the conversation we had.
The majority of respondents says that market access considerations only come into play during the later stages of clinical development, with 46% saying they thought about these issues at Phase II and 23% saying they did so in Phase III. Just 15% say their company considers market access at the preclinical stage, while another 15% said Phase I is when they are first taken into account.
Portch is not in agreement with the majority of respondents who take reimbursement and market access into consideration during the later stages of clinical drug development. “We think that reimbursement should be thought about either in preclinical or Phase 1.” Celgene’s Cai says these results largely tie in with his own experience, but admits that he finds it surprising just 15% have considered these issues at the preclinical stages. “This is a little surprising to me, because when you think about reimbursement, and the value proposition, and our payer interactions, at a preclinical stage you should have a good idea of your market size, of the unmet medical need, and your product profile claims.”
Is the industry market access timing up to speed? The healthcare stakeholders at the table, Frommer and Walker, clearly don’t think so. “Pharma is not thinking of endpoints around market access – and how this needs to be built into comparative effectiveness, safety, and cost effectiveness”, says Walker. Frommer agrees that Phase II isn’t early enough: “Researchers developing a new product are often isolated from the rest of the company until it is too late in the development process.”
Woeppel clarifies that her role in regulatory affairs involves drawing up a strategy for achieving FDA approval in the most efficient manner possible, which generally means coverage by Medicaid and Medicare. But she adds that even though she isn’t a market access expert, the issue of the value proposition still strikes her and recalls attending a recent meeting on the issue of the approval of a new drug that did not have additional benefit compared to the current standard therapy on the market. Given the considerations around evidence, the question arises whether the HTA model is ultimately on the horizon for US healthcare. “Going forward, I’d expect the FDA to become more interested in assessing value propositions in terms of regulatory approval”, says Woeppel.
The finding that 38% of respondents feel they were giving reimbursement questions the right amount of consideration, while 62% feel they did not give enough was an eye-opener for our panel.
“Regarding reimbursement, Pharma seems to realize that they are not giving it enough thought, and early on. So they seem to be aware that it’s an issue, but some of the other answers may indicate that they have the wrong focus”, says Walker.
Portch admits he thought the proportion who felt they were giving this topic the right amount of focus during the development process would be even lower; “perhaps this shows people are truly moving forward”.
Cai’s experience is that reimbursement is forgotten until it is too late to make any impact. He says that when reimbursement is finally seriously considered, it is invariably too late to incorporate the issues it raises into the development process. Speaking about the changing market access landscape, he warns: “We have to act early enough, to embed the value proposition, embed the patient reported outcome question measurement into the trials. Considering reimbursement in phase III is often just that – consideration. It is a risk if we don’t really integrate it into clinical trials.”
National payers remain the first port of call for pharma executives working in market access. Yet Portch tells eyeforpharma that he would place CMS firmly at the top of this list. “What CMS is doing with payment reform is driving behaviors, even at the national payers and the PBMs,” he says, adding that in term of regulations, the ones “making the most difference” are emanating from CMS.
Portch adds that integrated health systems should have been highlighted by the survey respondents as critical to their market access work. To Portch, these responses point towards a traditional industry perspective on market access. “These appear to illustrate a very traditional viewpoint that, in my opinion, is more backward-looking than forward-looking.”
This is echoed by our healthcare experts, who offer more context. “Pharma’s focus is on the payers, which is obviously important, but they don’t get to KOLs until the 5th spot. These are very important stakeholders, and folks like the CMO and CEO are making some decisions at this local level that will directly impact Pharma”, says Frommer. Walker is not surprised that the market is completely driven by the insurance industry and PBMs. “In America, there are 4 PBMs that control 92% of the market. Within any other industry, that would be a violation of anti-trust, oligopoly - but not in healthcare. However, as we move into value-based healthcare, there are opportunities for providers to take on risk or share risk in pharmaceutical areas with manufacturers, leading to some control on the formulary and market access.”
Partnerships with healthcare networks and individual healthcare systems are a growing trend; with their vast quantities of long-term de-identifiable data, these are an untapped goldmine for pharma. Can there by direct partnerships? Cai points to transparency issues and the long-established “firewall” on the payer side that he does not see coming down any time soon.
In the long-term, the panel agrees that patients will become a much more important market access stakeholder for pharma and, indeed, for all healthcare providers and stakeholders. As the consumerization of healthcare progresses and the evolution of the empowered patient continues, their decision-making will carry ever more weight. “There is a lot of emphasis, even now, talking about patient preference and patient-prioritized outcomes, in both operational studies and clinical trials. That is something that even though patients are currently ranked low, they will be ranked even higher in the future” says Cai.
Portch also thinks patients should be ranked above prescribing physicians, citing the loss of physician autonomy, and the rise of the empowered and informed patient. “Patients are now more informed, they now have more responsivity in terms of cost, and they are making more decisions than ever.” Woeppel largely agrees with the ranking by market access respondents which reiterates her earlier point that, thus far, regulatory bodies are not concerned with value propositions or the economic assessment, explaining the lowest ranking.
In a previous whitepaper, we analyzed the emerging value frameworks of ASCO, NCCN and ICER in more detail. The results in this survey are a timely reflection of the industry understanding of each framework across a set of important dimensions. Maybe most notably, across the range of qualitative criteria nearly half of all respondents believe that none of the most defined frameworks to date add much benefit. As far as industry is concerned, the practical relevance of these frameworks is viewed rather skeptically.
Overall, respondents who believe frameworks can capture value from the pharma perspective are divided as to which is most appropriate. With the highest score at only 16% per framework, pharma’s lack of confidence is apparent. Frommer echoes the sentiment: “There clearly seems to be high uncertainty around value frameworks.”
Each framework scores differently across the spectrum of potential benefits. From the manufacturer’s point of view, Drug Abacus is mainly relevant for a discussion about affordability while ranking low on any other dimension. Similarly, ICER’s relevance is largely seen in measuring budget impact and guiding reimbursement discussion with payers. ASCO leads in improvement of healthcare practice at side of care, while NCCN is more broadly seen in terms of its potential to improve healthcare decision making. Only ASCO scores relatively high on the integration of patient preferences, pointing to the widespread industry concern that the patient focus hasn’t been adequately captured in the framework development processes as of yet.
Our feedback panelists discuss the need for better stakeholder involvement, clearer definition of each frameworks’ intended audience and benefits and inclusions of both healthcare and offsets costs in the model that address cost concerns. Recent research is debated that features a comparative analysis of multiple myeloma treatment assessments from each framework, finding highly variable determinations of value for the same treatment, depending what framework is considered. This adds to the current debate about the danger of defining value through aggregates and generalizations.
Panelists believe it to be more realistic to assess value in terms of a broader array of benefits to the patient in the real world, allowing for sufficient heterogeneity of treatment responses over a time horizon that adequately captures long-term care. Looking ahead, Cai suggests that this data be combined with a similar survey of physicians as well as patients. Others agree that tracking these insights over time would prove very insightful, as all value frameworks are currently in a process of ongoing adaption and update.
Cai’s experience is that reimbursement is forgotten until it is too late to make any impact. He says that when reimbursement is finally seriously considered, it is invariably too late to incorporate the issues it raises into the development process. Speaking about the changing market access landscape, he warns: “We have to act early enough, to embed the value proposition, embed the patient reported outcome question measurement into the trials. Considering reimbursement in phase III is often just that – consideration. It is a risk if we don’t really integrate it into clinical trials.”
The vast majority of respondents view increasing payer pressure on drug pricing and utilization as their most pertinent challenge. Portch largely agrees, but goes even further. “It is increasing pressure from everyone, it goes further than payers. There are also providers, health systems, the Federal Government – the pressure is increasing from all angles.”
He agrees with the importance given to the uncertainty around new value frameworks, stating that understanding what value means to customers is critical. Ultimately, Portch sees the continuing uncertainty around healthcare evolution as the biggest challenge facing those currently working in market access.
“We are still trying to figure out who is the customer. Is it the payer, is it the health system, is it the Government, or a combination of those? That is a big external challenge for us – there is a lot of uncertainty and fluidity right now.”
Notably, the growing shift towards specialty medicine concerns just one-fifth of survey respondents. Does this, yet again, illustrate the mindset of an industry still hoping for the next blockbuster drug? Portch believes it does. It also raised questions as to the sustainability of pricing and affordability in this new environment. “It looks like people haven’t fully shifted into what the new world of drug development is going to look like, and how you actually commercialize these product in the new world”, says Portch.
Portch says his priorities are largely aligned with the responses given to this question but asserts that securing access to payers is not an issue once value and outcomes are clearly demonstrated. He also notes that the shifting policy environment is the driver of value demonstration.
“Your ability to demonstrate data in the real world is probably not going to be done in your own office, but with real world data in the marketplace so it is interesting that demonstrating value in the real world and monitoring it are polar opposites. What we have seen is that customers want you to demonstrate value with real world analytics, which means you have to monitor real world data to be able to mine and extract what exactly customer want to see out of it.” Portch also notes that demonstration of value through real world data has become so difficult due to limitations with current data, that the establishment of risk-sharing agreements has been necessary in order to make that demonstration. Only 16% of respondents consider this their top priority.
In terms of proving value in the real world, Woeppel says she can already see the pressure for this being heaped on the medical devices industry, yet she doesn’t quite see it affecting pharma in the US just yet, despite the move in Europe to methods of health technology assessment. “I think that would be a hard sell. At the moment, the way the US is structured, with its various systems, until we change the whole system, I don’t see that happening.” Especially as some have openly criticized the FDA for approving products with no apparent additional value, there could be change. “I think they will be more pressured to justify decisions in terms of economics, yes. But for approval, it will remain about safety and efficacy”, explains Woeppel.
HEOR data collection is overwhelmingly seen as the major priority for respondents when it comes to budget increases. Higher budgets are also expected in patient access, forecasting and economic modelling. Pragmatic trials and launch squeezing optimization rank low in turn.
In terms of growing importance, many often point to the emergence of data and analytics. In this context, Cai describes that his role in medical informatics is in its infancy, often confused with bioinformatics. He is, instead, concerned with secondary use of healthcare data in late stage clinical development and commercialization. Cai goes on to explain where pharma’s data can come from. “We have many different ways to do it. We can form partnerships with healthcare networks, we can form partnerships with data and technology companies, or we can even partner with a payer. Those collaborations will mean a budget increase because I think pharma has realized, we cannot do this alone. This partnership still has a way to go, and is completely different from data licensing where you buy data from data vendor, where you don’t really know the upstream data sources, you don’t know the context, sometimes you don’t even know where the patient population come from.”
Others agree that most data sources deliver only a partial view of a particular population and are thus not integratable. Yet with partnership comes the possibility of truly integrated data from a wide range of sources.
It is evident that pharma market access execs are still looking towards the payer for guidance, as they place emphasis on the need for clearer external guidelines. The question of Big Data crops up, however, as the need for better sources of real world data is another priority. The concern around interoperability isn’t high on today’s pharma agenda – a likely representation of the adoption curve. Walker isn’t surprised that market access strategy is being primarily driven by insurance plans.
“In today’s environment, it is essential to pick a condition with a strong portfolio and take on shared risk in pilot studies for outcomes. This will lead to increased market access and for manufacturers to have more opportunities and control to have a say, if they have great products.” The panel agrees that the lack of guidance on what is clearly reimbursable is a source of discontent among those working in market access; pharma thinks that missing clarity is a continuing problem that needs to be addressed. Portch sees these answers as proof that pharma still holds the traditional mindset where payer is king. “Overall, the survey answers show how current thinking collides with the need for serious change going forward.”
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