Words by Roger Dobson.
Ever-rising healthcare costs are resulting in governments and other payers exerting a more profound influence over pharmaceutical markets than ever before. Alongside this, pharma companies are facing the challenge of generating improved outcomes while keeping spending in check. These competing pressures are causing both sides to increasingly look for evidence of safety, cost-effectiveness, and value.
As a result, over the past decade, global pharma market access has undergone a significant transition. Karthaveerya Juluru, Senior Project Manager, Phamax Analytical Resources, explains: “This is primarily due to the healthcare reforms promulgated by governments across the globe to contain their burgeoning healthcare expenditures.”
These vast healthcare expenditures have not arisen apropos of nothing. Today’s evolving market access landscape has emerged due to the convergence of both epidemiological and financial factors: “Escalating healthcare costs have resulted from the growing prevalence of chronic diseases, increases in the geriatric population, and higher prices of new therapies”, Juluru states.
Resultantly, these changes have seen a shift from volume to value: from paying for pills to paying for performance. Healthcare payers are now seeking medicines that prove their value through improved outcomes, reduced cost, and outperformance of competition.
To compensate, companies should re-evaluate the significance of market access planning in their marketing approach. According to Big Pharma’s Market Access Mission, Deloitte University Press: “Executives should consider revamping the way they develop and market drugs — making market access planning an integral part of their organisation — and balancing clinical and economic value in product development and commercialisation decisions.”
“Pharma companies are facing the challenge of generating improved outcomes while keeping spending in check”
To aid this newfound approach, the report suggests companies must reallocate resources on a grand scale: “It is not simply a question of determining how much payers will pay, but the value of and economic justification for a given drug.” The report goes on to warn that if this remodelling of resources is neglected or not implemented properly, the consequences will be financially apparent, with poor strategic market access decisions leading to missed opportunities and, consequently, a catastrophic impact on a product’s financial returns.
A major aspect of remodelling is cross-team collaboration, which will prove essential when bringing future innovations to market; the efforts of just one individual or team shouldn’t be relied upon. More specifically, “Companies should increasingly combine medical and marketing expertise when they launch a new medicine”, explains Paul Catchpole, Value & Access Director, Association of the British Pharmaceutical Industry.
Companies are already taking heed and combining medical and marketing expertise to gain access to markets — a process that has brought innovative ideas. One such concept is conditional reimbursement, where companies are reimbursed if specified conditions are met. These conditions may include data from use in real-world settings rather than from clinical trials. The problem here is that real-world evidence is not immediately available for a new product, so, in effect, the drug is on probation. This will lead to greater difficulty in financial forecasting, which further reinforces the need for collaboration between departments — finance will increasingly seek to leverage information from medical affairs to make more accurate predictions about expected returns from drugs.
In addition to innovative ideas, the development of a synergistic company structure will provide further benefits to pharma. As Catchpole notes: “Companies benefit when they can demonstrate the positive impact of their new treatment in a clear and succinct way.” This ambition can be realised through increased collaboration and sharing of information between medical affairs and marketing leading to more tightly focussed communication with stakeholders, which will result in improved market access and patient benefit — two undisputedly desirable outcomes.