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How do companies prepare for reimbursement?

Valid Insight explore how to optimise your market access strategy during new product development, how to address payer concerns and prepare for reimbursement.

Market Access functions have one major objective: to achieve rapid reimbursement (coverage, funding) at an acceptable price for their products. Over the last 10 years, we have witnessed how companies – from very small ones to large top ten corporations – try to handle this. We are certain that most companies believe they do it right. However, there are some substantial differences in their approach. While there are “more ways to reach Rome,” some differences may impact quality and results.

The start of the market access process

What would be the logical starting point of the market access process for a new product? It should be very early, sometimes even before embarking on the billion US$ development program. Indeed, in some therapeutic areas the payer requirements for approving funding for a new product that is priced at a premium – compared to an existing, more affordable comparator – can be very limiting, such that a company should think twice about launching products in that area. For instance, if you were the decision maker on whether to start the development for new compounds, would you support the development of a new ß-blocker (for reducing blood pressure)? What kind of new antidepressant would gain your attention? Is there room for new moderate to severe pain treatments? The same applies to many more therapeutic areas. Moreover, even when a substantial clinical benefit is proven, payers will tend to position the product in second line, to be used when cheaper first line drugs fail.

Other issues that play a role in product selection are also within the remit of the market access functions. For example, mixed treatment analysis will help to understand current clinical unmet need. The burden of the disease is another key element of product opportunity. It will also pay off to understand what type and magnitude of differentiation will be relevant to payers. Understanding these elements will help in selecting the projects that are most likely to be successful.

Early into development, companies are requesting an International Non-proprietary Name (INN). What seems like routine may, however, impact strongly on market access. Indeed, the WHO Committee that decides on INN will search for analogues. When found, the new INN will be in line with these older products. As a result, payers will likely see these products as comparators. And it may also lead to classification into the same Anatomical Therapeutic Chemical, which already sets price expectations in many geographic locations.

When a payer is asked about the importance of the mechanism of action, the stereotypical reaction is that a new mechanism of action is not relevant to them. However, without a differentiated mechanism of action it will prove even more difficult to convince payers the product is offering new therapeutic options. During development, companies frequently discover other aspects of the mechanism of action of the new product. However, payers are likely to perceive a “new” story as a marketing ploy. Therefore, it makes sense to control all communications until an understanding regarding mechanism of action is mature. Market access seems the logical function to take on this role. Market access in the heart of development.

Market access in the heart of development

Some companies believe market access is something they can approach sideways in development, rather than as part of the core strategy. However, as has been shown many times, a regulatory strategy may be too narrow for market access success. Indeed, regulatory bodies are interested in the efficacy of the product – how it works in clinical trials. In contrast, payers have a vivid interest in how the product will compare in the real world to the current standards of choice. The slightest doubt that the clinical trial results can be transferred to the real world will fuel their scepticism. For example, patient recruitment in clinical trials is always more narrow than in the real world due to the exclusion of certain comorbidities, involving patients of a certain age, and including only diagnosed patients.

A marketing strategy directed to prescribers is worthless if the product fails to clear the payer hurdle. For a breakthrough product to reach its target patients, it needs to be supported by all stakeholders; otherwise there will be long delays that will be disadvantageous for patients. We could name products where the marketing strategy illustrated ‘how not to do it,’ but as we risk joining a polemic, we only refer to all pricing and reimbursement discussions that have come into public attention – involving either lengthy delays in reimbursement or prices that were perceived to be outrageously high. These elements are clear markers of discrepancies between commercial and market access strategies.

So, what would be the ideal role of market access in product development? Defining very early the most probable payer hurdles and addressing these with a development plan seems to be the minimum. In some cases, for instance, when it will be essential to show substantial clinical benefit over standard of care, it may make sense to scale Phase II so that this assumption can be (dis)proved before embarking on Phase III.

New benefits may need new measuring tools, such as new patient-reported outcome instruments, and ideally they should be defined in Phase II - early enough to be developed and validated before entering Phase III.

Many of the choices that are made before commencing pivotal trials should be checked for their impact on market access, including:

* Recruitment criteria need to be adequately broad.

* Dosing needs to be clear, with rules for increasing/stopping the drug.

* A comparator for regulatory purposes may not be suitable for market access.

* Combination therapy choices need to be close enough to current practice.

* Primary and secondary outcome measures should be acceptable for payers.

Substantiation of real-world effectiveness is more complicated. Most authorities and ethical committees will require proof of efficacy before embarking on a pragmatic trial. Hence, companies try to achieve the second-best outcome: real-world data as soon as possible after marketing authorisation.

Setting the price for a new product is perhaps the most contested element of the market access strategy. Smaller companies seem to stick to “entrepreneurial” pricing – or “whatever we can get.” Many companies assume that if payers are willing to pay X amount for a comparator, then they must be willing to pay the same amount for their product. This line of thinking is not beneficial for patients, as it implies that price should not be correlating with outcome. It is also potentially detrimental to the sustainability of business – payers may turn this reasoning around and refuse higher prices for better products. Moreover, the exact scope of product value often becomes clear at regulatory approval as label content will support or deny product differentiation. Some companies define price too early, and may miss opportunities for both higher and lower pricing.

What is the best way to convince authorities?

After a top-class market access strategy during the development of a new product, its success will be reflected in the final price and reimbursement/coverage negotiations. A market access strategy will never be perfect as data will be missing, and agile payers will find the weaknesses and uncertainties. Therefore, an increasing number of companies will pro-actively try to elucidate these payer “concerns.” Valid Insight offers these insights using payer surveys or – in the case of technically difficult products – mini-groups with participation of clinical experts.

The market access strategy culminates in several building blocks:

* The Value Dossier, which explains and substantiates the value proposition for the new product.

* Cost-effectiveness model(s) that simulate how HTA authorities will appraise the new product.

* An objection handler that formulates the best possible reactions to specific payer concerns.

* The pricing and reimbursement strategy, which formulates the pricing target(s), and reviews the arguments that should allow fast reimbursement at these prices.

More companies are adding another building block to the more common ones listed above: the market access negotiation strategy. We have seen these in very different forms, from some simple paragraphs in the Value Dossier to extensive negotiation scenario guides that pretend to cover most negotiation scenarios for the different payer archetypes.

Valid Insight has developed several approaches that help in testing and validating these market access negotiation strategies. The quickest and most cost-effective approach is the market access challenge workshop. In this type of workshop market access experts from the company will try to convince payers to reimburse/fund the product at the target price. The questions and concerns of the payers are demonstrated in role-play situations. By using an iterative approach, the market access experts will fine tune their negotiation strategy and update their objection handler. Typically, the outcomes of this workshop include a best possible negotiation strategy, a more comprehensive objection handler, and an action plan to mitigate remaining payer concerns. The approach also allows for the introduction of variants such as changes in competitive pricing and labelling.

Companies may opt for larger and more complicated workshops once their market access negotiation strategy is fine-tuned. Participants are now selected for their role in real-world negotiations for pricing and reimbursement. In parallel sessions, participants learn and test the market access negotiation strategies for their specific payer archetype. The outcome of the workshops is a well-prepared negotiations approach on the local level.

The selection of payers for these types of workshops is a function of company compliance policies. Most companies prefer former payers or people that have the same expertise as payers. Some companies dare to involve current “real” payers, where this is possible by regulations. This may sometimes lead to strange outcomes; we have witnessed how a local team struck a deal with their real payer during the workshop! Valid Insight is flexible for covering whatever the client wishes, and participating “mock” or “real” payers are approved by the client and covered by secrecy agreements.

Finally, when requested by the client company, Valid Insight also trains relevant company personnel on the philosophies and techniques for successful market access negotiations. This may go beyond the pricing and reimbursement negotiation, and include pre-tender and contract negotiations and negotiations of patient access schemes. This facilitates the workshops and yields stronger overall market access performance.

If you have questions about reimbursement preparation or our workshops, call us on: +44(0) 203 750 9833 or email us at: discover@validinsight.com

17th January 2020

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