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Are we running fast enough?

Value propositions – the first move is commercialisation

Close-up of a runner's legsAs we move inexorably towards value-based pricing, R&D efforts are increasingly focused on disease areas where improved patient outcomes are desperately needed. This means that pipelines are full of complex, highly innovative agents, which need to deliver clinical outcomes valued by payers at a price that is financially viable for innovators. Developing complex value propositions should place pricing and reimbursement at the heart of early commercialisation efforts, alongside thought leader engagement and clinical trial planning, but such moves are not yet widely evident.

New customers, new focus
In contrast, there are strong indications that in order to connect with payer audiences, in tandem with existing clinical customers, pharma companies are re-engineering their marketing functions, in many cases centralising or regionalising them. In many companies this has given rise to new market access teams and departments – many of whom work in isolation. But engaging and anticipating the information needs of all means isolation is no longer an option; the entire sales and marketing function will need to understand and work in new ways in order to engage with non-clinical customers.

But are these the biggest challenges? The European market access environment is clearly in a state of flux. Centralisation of value assessment components is underway – eg, EUnetHTA – to deliver information for HTAs to member countries in a reliable, timely, transparent and transferable way. Yet, despite this, decision-making power rests locally, in systems that are increasingly fragmented, creating real challenges for pharma teams in identifying who their new customers are.

This is evident across Europe. The four separate budgetary regions in the UK (England, Wales, Scotland and Northern Ireland), are further fragmented into Strategic Health Authorities and ≈150 Primary Care Trusts that have decision-making autonomy and can independently deem a treatment of 'value' or not and consequently if it is reimbursable. Decentralisation is similarly gaining acceptance across Europe's Big Five markets.

Understanding 'value'
Knowing who payers are is important, but providing them with compelling 'value' evidence is crucial, and yet there are fundamental differences across Europe in how 'value' is measured, eg, QALY, incremental benefit, etc. The only commonality is the increasingly hardening attitude to pricing.

Value assessments and outcomes are inextricably linked. Payers will contemplate higher price premiums for treatments associated with an improved outcome. We believe this is one area where the industry can provide support beyond just providing the medicine.

Optimising outcome is crucial to innovators and payers. Research partnerships and pharma investment in diagnostic technologies are already helping to identify sub-populations of patients whose treatment outcomes can be optimised with particular medication – personalised medicine. The emergence of risk share/conditional reimbursement models also clearly indicates that the requirement to prove value/outcome in real world practice populations is becoming important to both parties in price negotiation.

The means to collect real-world outcomes data to support the rationale for a price premium is already available to the industry and now tantalisingly close to payers through e-prescribing and e-records. The industry also has the means to optimise outcomes in the real world, by bringing their expertise and experience in clinical trial retention, adherence support and patient communication to the table. Thinking differently about the outcome/value challenge and collaborating with payers on data collection could enable pharma to keep pace with the fast evolving payer environment.

What now for the industry?
There is clearly scope for the industry to innovate – not only pipelines but also approaches to engage with new customers in a changing landscape. Market access programmes focused on outcomes and personalised medicine can reach payers while being fair to innovators. With treatment appraisals becoming tougher, and rejection more likely, pharma needs to be nimble – keeping pace through innovation and integration – and partner with payers to benefit everyone, including patients.

Lois HallJean-Marc MosselmansThe Author
Lois Hall is CEO at Ogilvy Healthworld and Jean-Marc Mosselmans is president at Ogilvy Healthworld Paris.
They can be contacted at lois.hall@ogilvyhealthworld.com and jeanmarc.mosselmans@ogilvy.com respectively.


This article was first published in PME July/August 2010 as part of the Thought Leader series.

To comment on this article, email pme@pmlive.com

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23rd July 2010

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