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Improving payer engagement

Efforts to gain payer insight are usually too little and too late, with detrimental consequences

A Euro sign in a crystal ballThere is no doubt that the pharmaceutical industry is aware of the growing importance of payers, but thus far companies have, for the most part, failed to commit to the organisational and cultural changes that are required to meet the needs of this critical stakeholder group.

In many markets, national, regional and/or local payer organisations dominate the market access process, while the influence of prescribers on both access and uptake has been significantly eroded. Yet industry continues to invest heavily in clinician-based pricing, target product profile and value messaging research, not to mention the vast sums needed to support sales and marketing organisations, whose principal targets remain the prescribing physicians.

Efforts made on gaining payer insight, in the form of payer landscape assessments, pricing, value driver and message testing, very often have a 'too little too late' feel to them. This is particularly evident in cases where such research is being conducted on products which in clinical development have failed to demonstrate even marginal clinical benefits versus current standard of care.

Any amount of payer research at this stage is not going to change the basic payer position: "Failure to prove incremental benefit will generally result in reimbursement under the condition that cost is lower than the comparator." (M. Noel Renaudin, chairman, Comité Economique des Produits de Santé, ISPOR Connections, September/October 2010)

But how many major pharmaceutical corporations are investing in development programmes where this is the inevitable outcome? Market access and payer insight need to be built into portfolio, business development, licensing and development strategies. Otherwise, the economically justifiable price, from the payer perspective, will continue to fall short of the commercially desirable price and the expectations of senior executives, seeking a return on investment and on what they perceive to be innovation.

Commercial success requires broad patient access, which in turn requires funding, and public and private payers are not willing to fund innovations in healthcare unless they deliver better outcomes. Even then, any incremental costs need to be justified on the basis of incremental benefits. 

Industry has to engage with payers to understand not simply what they are willing to pay for a new technology but how they will come to that decision, against what comparator, in which patient population and how any incremental benefits are likely to be valued.

Early payer insight should help to sensitise cross-functional teams as to the minimal and optimal requirements for the development of a reimbursable asset and on-going engagement should seek to shape clinical development programmes to deliver end-points and outcomes that are consistent with the needs and expectations of payers and other market access gatekeepers.

Not an easy task, since different payer stakeholders, even in the same market, will be looking for very different things, and one made even more difficult by the fact that data available at launch will, not surprisingly, have been generated to meet the needs of regulators.

Nonetheless, if we do not set out to deliver a payer value proposition based on incremental clinical benefit, incremental cost-effectiveness (or cost utility) and manageable and/or predictable budget impact, we are unlikely to deliver value to patients, payers or shareholders.

Timothy Fitzgerald

The AuthorBridgehead
Timothy A J Fitzgerald
is CEO, Bridgehead International
Email him at:


29th April 2011


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