Transforming Market Access
In the face of rising healthcare costs and the rapid development of more innovative and expensive medical technologies, there is a growing recognition of the bearing cost-effectiveness has on the decision-making process of healthcare payers.
To gain further insight into the specific issues and key success factors which impact market access, Alliance conducted a global survey with key global and local stakeholders in the pharmaceutical industry.
The clear standout results from the survey highlighted 1) the importance of identifying and prioritizing the most appropriate stakeholder. Getting this first step right is critical to the success of pharmaceutical product. 2) Equally as important is ensuring sufficient evidence generation to provide support for products. And finally, 3) a clear strategic pathway for access to a product must be established by a manufacturer.
Stretching government boundaries or seeking true value?
As the US and EU economies struggle to bounce back after exiting the financial recession, healthcare budgets face constant restrictions and containment measures. Increased scrutiny is placed on pharmaceutical manufacturers regarding the manner in which they price their products. The trend for cost containment is very much alive today, with certain classes such as antibiotics, being publicly undervalued and under-priced.
Cheaper prices have led to global over-prescription by GPs and other healthcare professionals. This heavy overuse of antibiotics has gradually contributed to the prevalence of antimicrobial resistance. The number of antibiotics coming to market has dropped consistently since the 1980s, and with no clear market leaders forthcoming, the public may now realize we have hit a ceiling in our development of this class of drugs.
Newer, more expensive antibiotics such as Durata’s Dalvance, will test the current price-conscious healthcare environment. Dalvance, indicated in patients with skin infections, has a better administration profile than generic vancomycin, and may also lead to reduced length of hospital stays. The value of Dalvance lies in the vastly improved patient quality of life and reduction in healthcare resource utilization, albeit at a higher unit cost per treatment than generic vancomycin.
The recent furor surrounding Gilead’s US launch of their Hepatitis C drug, Sovaldi, has shown how a seemingly high price can be politicized and criticized without a clear understanding of the lack of effective treatments within the Hepatitis C treatment landscape. Sovaldi has managed to show a 90% cure rate for patients in a therapeutic area where rates historically have been ~50%. Interferon is the primary alternative agent which is effective in these patients, but with high relapse rates and poor tolerability, the launch of Sovaldi was highly anticipated.
Gilead managed to secure a treatment course price of up to $84,000 in the US, as a result of their solid evidence generation and the clear unmet need for Hepatitis C patients. Sovaldi, however, became a target for politicians as well as insurance companies, with the advent of the Affordable Care Act also driving negative opinions. Add to this, Gilead offering Sovaldi at heavily discounted prices in markets such as India, has led to US stakeholders and key opinion leaders campaigning against the company and its perceived greed.
Historically, pharmaceutical companies have been dogged by severe criticism around ethical standard and an emphasis on business-driven goals as opposed to a patient-focused approach. Health is often seen as a right rather than privilege, and pharma’s close interaction with healthcare systems have often deflected away from inefficient governmental and poorly regulated private systems. Furthermore, a lack of clarity over the true cost of bringing a product to launch, with the manufacturer’s themselves often unable to confirm exact values, has contributed to a lack of understanding around prices which pharma wish to set for their products.
Companies such as AstraZeneca have reported an average spend of ~$12bn on research for each new drug. Healthcare will always remain a controversial discussion point, and the fact that financial gains or potential losses may shape a pharmaceutical company’s strategic directions will always ensure a somewhat negative perception. Avoiding sensationalist media campaigns and a greater clarity around the ultimate goals of pharma will allow for a closer relationship between the public and the pharmaceutical industry.
The Alliance Market Access Survey
As we have seen, market access is the ultimate goal for medical device and pharmaceutical companies, yet it remains one of the biggest current and future challenges for the industry. To uncover the specifics on the challenges and key success factors, we recently conducted a survey with global and local stakeholders to find out more.
We asked the stakeholders two main questions:
- What do you consider to be the top three challenges from a price, reimbursement or market access perspective of launching a new drug?
- From your experience, what have been the top three key success factors related to price, reimbursement or market access, of launching a new drug?
The biggest challenge perceived by stakeholders is demonstrating the ‘right’ evidence. Specifically, evidence generation, demonstrating value and insufficient internal experience are the biggest factors playing into this.
This mainly stems from demonstrating value in a way that is meaningful to
payers. This is best summed up by a Brand Director that participated in the
survey: “Showing value (is the biggest challenge). Is value based pricing a
reality? I’m not convinced yet myself.”
Add to that a lack of experience and expertise internally, which was the
largest output from the people category, and the headache turns into a
migraine. These two factors play into each other, as in order to generate the
right evidence, you need the right resources to plan and execute.
Results – Part 1
Nearly half of the KSFs from the survey respondents relate to the process
and people category. More specifically external and internal communication
and alignment are considered most important. This implies that having a
truly innovative offering/product is not enough on its own to optimize
Surprisingly, having an innovative product does not even score high on the
KSF list, only 11%. Does this mean that pharma accepts that revolutionary
product changes are truly rare, and it’s the expertise of their resources that
truly make the difference?
Having evidence to justify the value of the drug in a format that
stakeholders want is what is important, and this requires the internal
expertise to demonstrate that value. Once again, this is best summed up by
a respondent from the survey. The Head of Global HEOR from one of the
companies said, “Clinical data that truly differentiates your drug from its
competition (is the most important KSF). That is still #1”.
What makes a successful launch is a robust understanding of your internal
and external stakeholders. Connecting directly with your customer is
considered essential. Having the experience to efficiently ‘sift through the
weeds’ and find what is truly meaningful to stakeholders’ matters, and
communication internally is as important as externally.
Based on the results we tabulated the top 3 learnings that enable
transformational market access:
- Know your customer: You must identify and prioritize your
customers. You must understand their values and beliefs.
Understand their constraints and limitations. Understand what
motivates them to take action.
- Develop your evidence: What truly makes an impact on their
values and beliefs? What trial design and endpoints will help them
move into action? What data design and evaluations best support
the evidence? What format should the data be in to be most
relevant to them?
- Be crystal clear internally on strategy and execution: What is
your plan? Who has the experience to execute them? When will they do it? How will they do it? What’s the contingency plan when something goes wrong?
Looking back at the Sovaldi case, how do those success factors apply to Gilead? The company confirmed sales for the first half of the year have exceeded expectations at $5.75bn, which now accounts for nearly 50% of the company’s turnover. These sales suggest the company clearly understood the market environment, and indeed the differential pricing in emerging markets, such as India. Furthermore, the evidence generation was certainly strong enough to warrant access without excessive restrictions. Perhaps a clear internal process and experienced staff also helped drive the process. So despite the continuing political debate over pharmaceutical manufacturers’ profitability, Sovaldi is a clear example of how Gilead has transformed market access.
In summary, market access is a complicated process with many moving parts and many obstacles to consider along the way. Understanding the strengths and shortcomings in your people, processes and evidence are going to be the keys to your success. Planning around these key factors will enable increased market share and ultimately enhanced revenue for your organization.