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Paywatch and the market access waters

Understanding and responding to payers’ needs has become priority number one for pharma
Paywatch beach

When Pamela Anderson took to Instagram late last year to reveal she'd finally been cured of hepatitis C, the concept of life imitating art struck new gold. The Baywatch lifeguard had found her own lifesaver: Sovaldi, Gilead's revolutionary but pricey specialist drug. Welcome to Paywatch - a global drama drawing huge audiences.

In this episode, however, there are no famous swimsuits or slow-motion sequences. And the only shark is the pharmaceutical industry. In a real-world narrative laced with irony, critics argue that Pamela Anderson's saviour - one of the most expensive medicines on the planet - could cripple healthcare budgets the world over. In the process, Sovaldi has become a beautiful oxymoron: a destructive lifesaver. It may rescue countless individuals but, according to health economists, its high price drowns the opportunity to treat patients with other life-threatening diseases. Whatever your viewpoint, the long-running soap opera around high-cost speciality drugs has taken the market access challenge into uncharted waters. The question is: how can pharma give its old approach the mouth-to-mouth it needs to survive?

Gilead's success with Sovaldi and Harvoni, whose total sales exceed $20bn, shows that a high price does not necessarily prevent market access. But it also demonstrates the lengths that payers will travel to get the best deal. In 2015, regulators in Germany, France, the UK and other European markets finally recommended the use of Sovaldi. But the deals depended on Gilead agreeing to hefty discounts and innovative patient access schemes. The episode once again shone a light on companies' pricing and reimbursement strategies and the whole argument around 'cost versus value'. It's a debate that will run and run. But until the industry develops a new R&D/access model that works in the new economy, payer negotiations will almost always result in discounted prices and their associated impact on shareholder value. At present, that's the ultimate cost of suboptimal market access strategies. And it's why the industry needs to consider an alternative approach.

The drivers for change are clear. Healthcare systems are under intolerable strain and now routinely rely on payers to manage budgets and allocate resources effectively. In turn, the pharmaceutical industry invests heavily in R&D to bring through new innovations to curb disease - but the traditional ways in which companies typically develop treatments are often misaligned with payers' needs. Pharma's model tends to fixate on getting indications licensed, and that generally means proving a medicine is safe, effective and cheap enough to secure reimbursement. Although companies understand the need to demonstrate real-world effectiveness, they too often default to tried-and-tested RCTs to generate their evidence-base. “The current approach generally falls short of where we need to be,” says Dennis O'Brien, CEO, Lucid. “It provides the requisite evidence to secure a licence but it doesn't do enough to illustrate the most effective real-world use of a therapy. We need to be clearer in communicating which patients get the optimal benefit from a particular treatment. If we really are going to meet the needs of our budget holders, we need to help them understand what the 'effective use of a medicine' is - rather than demonstrating that it's 'effective in some patients'. It's a subtle but important nuance. It's about optimising medicines rather than just launching effective ones.”

[We need to] show how therapies work in the real-world setting with the appropriate patients

There is, of course, much talk nowadays about the nuances of real-world data and real-world evidence. Likewise, there are increasing examples of pharmaceutical companies redesigning their pricing models and introducing access schemes that link price to outcomes. In the UK, for example, NICE guidelines to use Sovaldi are based on a 'pay if you clear' deal. But, says Dennis, perhaps we can do more. “These innovative agreements are positive steps forward in terms of helping budget holders to approve medicine use. But wouldn't it be nice if we actually designed studies that helped demonstrate appropriate patient selection? And then showed how therapies work in the real-world setting with the appropriate patients, rather than demonstrating how they work in a clinical trial setting against a placebo? In the US, the FDA is increasingly asking pharma to demonstrate 'real-world effectiveness', believing it to be a better indicator of whether or not a medicine should be approved. It's something we need to work towards in Europe too. This will require a mindset shift in how we approach studies - and better engagement with payers to determine what sort of evidence they want to see in real-world data.”

Trials and tribulations
The tribulations of market access can indeed be reduced if the industry reevaluates traditional trial methodology. “Investment in the right trials is essential if a company is to be confident it will be able to set a good price and have no clinical, reimbursement or funding challenges to market access,” says James Eaton, principal, health economics, ICON Commercialisation & Outcomes. “The battle is to prove, beyond challenge, that a new product is a significant improvement on key outcomes over what is already available. Ensuring that a company truly understands what the right data support looks like for a particular disease or product is therefore key. So investment in getting expert advice to predict the changing payer environment, explore the most meaningful endpoints and trial designs and to explore the best ways to optimise pricing and market access success is critical.”

“A good partner can predict exactly how payers will react to particular trial designs or product profiles,” says Catherine Beecher, principal, pricing & market access, ICON Commercialisation & Outcomes. “However, I'm often surprised when our clients are surprised by the negative feedback from payers! But that's because we speak with payers all the time and hear their views across countless different diseases and situations. We hear their reasoning and the pressures they face. We hear what their minimum expectations are on data, and what solutions and collaborations they have found most effective in situations in the past where data was not all it could be. That's why companies need to ensure they are as tuned in to the payer perspective as possible. However, sometimes payer expectations for trial designs are too difficult to deliver on and that's when additional investment is needed either to gather real-world evidence to fill gaps or to develop appropriate solutions to overcome pricing and market access challenges.”

Best practice
So what does best practice look like? “Companies who have joined-up thinking between the HEOR, P&MA and clinical development teams from an early stage - and regularly explore the external payer perspective - tend to make better decisions,” says Catherine. “Identifying gaps or risks early can enable these to addressed, either through clinical trials or through other data gathering or modelling approaches. In addition, conducting early rough assessments of likely cost-effectiveness as an iterative input to the development of the P&MA strategy can ensure that placeholder pricing strategies are valid and additional data can be gathered.

We [need to] move towards collaborative models where we share the cost of improving care

“But it's important to recognise that a product, while interesting and providing value to patients, may never provide enough value over what is already available for evidence-based payers to make the tough decisions about dividing limited resources across all disease areas. Companies who are willing to recognise the limitations of some of their products and either halt development, or continue to develop, but with a realistic view on the ultimate P&MA potential, have the best successes. They will also have the best relationships with payers as they'll be seen as genuine and credible. Building trust and credibility with payers by providing the strongest evidence possible, as well as a clear vision of how the product impacts the payer's environment and a realistic P&MA strategy that's aligned with the product's value, is extremely important.”

Breaking the old mould
To progress, the industry may need to move to a new level of thinking. “Companies need to be engaging with payers at the local level to identify where there is unmet patient need, and trying to build partnerships that set about improving care,” says Dennis O'Brien. “If we establish the areas where patients aren't being treated well and talk to payers and other HCPs to work out what optimal treatment looks like, we can move towards collaborative models where we share the cost of improving care. Our approach should be much more than sending in the salesforce or negotiating discounts to get on formulary. We should be demonstrating that we understand the global issues and can see where patients aren't getting the right medicines - and then working with all stakeholders to help them make the right decisions to change it.

“The smartest companies are those that are repurposing their organisational drive to focus on delivering outcomes rather than selling drugs - and their R&D models and commercial infrastructure are being anchored to that new focus. There's a growing determination to break the old mould and provide budget holders with better evidence to demonstrate not only the value of a medicine but also the patients best suited to taking it. The companies that approach it in this way will benefit from a point of differentiation in their studies that can be carried through into all their subsequent communications interventions.”

Lifesaving intervention
It's clear that to survive in a healthcare environment bedeviled by financial constraints, pharma can no longer rely on an old model that's seen better days. If that seems like a neat segue back to Pamela Anderson, the metaphor is purely coincidental. But as the Baywatch star becomes the highest profile celebrity to benefit from a high-cost speciality drug, perhaps Solvaldi's legacy will be the role it played in intensifying the debate around rational drug pricing. If the industry is to avoid drowning, it needs to perform a rescue of CJ Parker-like proportions - and rethink the way it does business.

Article by
Chris Ross

is a freelance writer specialising in the pharmaceutical and healthcare industry

2nd May 2016

From: Sales



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