Please login to the form below

Not currently logged in
Email:
Password:

Pharma 'struggling to prove value' as healthcare budgets tighten

But there are signs industry business models are adapting to cope with ‘value challenge’

The pharma industry is finding it increasingly difficult to prove the value of its products to payers, according to a new report.

The Value Challenge, published by the Economist Intelligence Unit and sponsored by Quintiles, claims pharma has been a victim of its own success, with the effectiveness of existing treatments making it hard to prove newer drugs are worth their cost.

Drawn from a global survey of 399 senior executives in the life sciences industry the report found that the issue of 'value challenge' was not just a temporary concern for companies during times of austerity, but rather a more long-term matter.

Although the financial climate has caused some governments to pay more attention to drug spending, according to the study, it says the demand for proof of value has been "evolving for decades", with 64 per cent of respondents declaring it a "significant" challenge.

The increasing number and influence of health technology assessment (HTA) bodies was cited by the report as one of the reasons behind the difficulty of proving value, as well as the range of different payers involved in the market access process.

Adrian Thomas, vice president for market access at Janssen, said in the report: “Payers are distributed across a variety of backgrounds—such as administrative, clinical or healthcare professionals, or healthcare economists—which can lead to different interactions.

“Market access functions [in biopharmaceutical companies] have to be able to communicate value messages to a diverse group of customers.”

Evolving government drug pricing schemes were also referenced in the report, with the implantation of a value-based pricing scheme in Germany, and a planned similar scheme in the UK, increasing the need to prove a treatment's superiority over existing alternatives.

To cope with such developments, many companies are adapting the way their business are run, with 68 per cent of life sciences respondents saying the growing demand to provide value has had an important impact on their business models.

Some 82 per cent said these considerations had influenced changes to their R&D strategy, and 78 per cent said their commercial strategy had been affected, but no single approach to improve business, commercial or R&D models stood out in the report.

The report also found that leading companies were more active in trying to address product value, often making "extensive, integrated" change across the company, particularly when it comes to how research is conducted, with R&D departments interacting more with their commercial colleagues.

7th February 2012

Share

Featured jobs

Subscribe to our email news alerts

PMHub

Add my company
infill healthcare communication

infill is a dynamic and innovative, international healthcare agency with >25 years' experience in delivering healthcare communication, medical education and...

Latest intelligence

What pharma marketers can learn from behavioural science
Pharma behavioural science and traditional emotional marketing create a powerful mix of techniques that have impact on real lives....
NEW EU DATA PROTECTION REGULATION POISED TO CHANGE DATA PRIVACY LANDSCAPE
NEW EU DATA PROTECTION REGULATION POISED TO CHANGE DATA PRIVACY LANDSCAPE The bold digital clock featured on the EUGDPR (EU General Data Protection Regulation)1 website indicates – to the second...
Health knowledge: Why is it so important?
Health knowledge plays an important role in population health, but by itself is rarely enough to prompt a change in the behaviours that cause the risks....

Infographics