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Smart Thinking blog

Insights and expert advice on the key issues facing today’s pharma marketer

The definition of value

Aligning the thoughts of biopharma and other healthcare stakeholders
Definition of value

In a perfect world, biopharma executives and payers would be precisely aligned. They would be in total agreement about what constitutes an excellent product, agree on pricing, and on how success should be measured. Out of this would stem a shared definition of value that enabled them to proactively improve outcomes for patients in the local healthcare economy.

Yet as these stakeholders are all too aware, that is simply not the case. And this disparity not only makes market access a hugely complex field, but it can ultimately have a long-term negative impact on patient outcomes.

But it doesn't have to be that way. There is much work to do, but a genuine step-change in the way biopharma and payers co-exist could greatly improve innovation, and consequently the value delivered by products that truly satisfy unmet need and increase quality of life.

Shifting definitions in a new climate of healthcare
From a market access perspective, the healthcare landscape in the UK is almost unrecognisable since the NHS reforms. With the creation of clinical commissioning groups (CCGs) the needs of budget holders have become more acute. Each payer requires biopharma to demonstrate the real-world value of their products, yet they may all have widely different views on what this value actually means. The accepted challenge therefore is for biopharma to fully grasp the value requirements of each of the different payers, then adapt their processes to match these priorities. But what of the drugs that are to be commercialised imminently that have already completed the development journey?

Regardless of perspective and the data sets available, a robust definition of value must begin with the 'triple aim': improving population outcomes, enhancing quality of life and lowering healthcare costs. But from that solid foundation, there is still much scope for individual interpretation, as confirmed by a Quintiles survey of hundreds of payers, providers and biopharma executives. Payers' definitions are heavily influenced by the unique needs of their specific local population, so understanding and responding to this variation is essential.

Payer vs. biopharma disconnect
The findings of the survey published in the Quintiles' Value is the Target report include some vital insights about value. The survey reveals that not only do payers and biopharma disagree on the most important definition of value, but also they are also wrong about each other's priorities. Furthermore, many payers are highly skeptical about the claims biopharma make around this crucial issue.

The survey found that when selecting from seven value definitions, the top choice for European payers was 'improved clinical efficacy' (37 per cent). But biopharma disagreed, citing 'addressing unmet need' as their top priority (32 per cent). Efficacy was their third choice (20 per cent).

Yet when asked about the other's value definition, EU payers wrongly assumed biopharma to be focused on 'potential number of patients', while biopharma mistakenly believed payers prioritised 'cost compared with existing products'.

This picture is complicated further by the fact that over half EU payers are either 'not at all' or 'not very confident' in biopharma's claims about value, and similarly skeptical about the completeness, transparency and reliability of the information these companies provide to demonstrate value. Put all these findings together, and it seems imperative that these stakeholders find common ground and dispel the atmosphere of mistrust that hangs in the air.

The demands of individual therapeutic areas
Adding further substance to the biopharma/payer disconnect is the fact that they have very different perspectives when it comes to rating the relative ease or difficulty of demonstrating value in specific therapeutic areas. Both stakeholders agree that proving the value of treatments for Alzheimer's is the most difficult, with 70 per cent of biopharma and 69 per cent of EU payers stating it was 'difficult' or 'very difficult' in our survey.

However, that was the only point of agreement, suggesting that payers may not be satisfied with biopharma's approach when focusing on certain diseases. Around 60 per cent of payers said that proving the value of rare disease treatments is 'difficult' or 'very difficult', yet only 26 per cent of biopharma felt the same. At the other extreme, 60 per cent of payers said it was 'easy' or 'very easy' to define diabetes treatment value, compared to 29 per cent of biopharma. In fact, the majority of the latter felt that when asked about everything from oncology and central nervous system diseases (CNS) to diabetes and rare diseases, proving treatment value was 'neither difficult nor easy'. Once again, this belief that it is unnecessary to differentiate by disease further broadens the gap between the biopharma and payer perspectives.

Building relationships and trust
With such diverging attitudes to value, there can be no doubt that both parties should work more closely together. But that means far more than dialogue. And it certainly means more than simply telling people what they want to hear. Biopharma cannot and should not force industry payers and providers to change the way they think overnight, so they must change perceptions through actions that demonstrate an interest in value as it relates to the entire healthcare economy. Yet if they embrace transparency, share information, and crucially, work closely with payers to find clear definitions of value coupled with programmes that work for all stakeholders, it will lead to innovative drugs, reaching the right patients at the right time, increasing adherence, and improving clinical outcomes. This in turn required biopharma to question it's approach to market access and the internal processes and programmes for launching new medicines.

Frank discussion between stakeholders
This need for stronger partnership working is exactly why Quintiles is taking part in the UK Market Access Payer Perspectives Webinar Series on PMLiVE. By bringing biopharma and payers together to present both sides of this complex relationship, we hope to explode the myths that are potentially holding back up-take of innovative medicines, and through honest, constructive debate, aim to pave the way for a new collaborative approach to market access, and move on from the rhetoric of partnership and collaboration. 

The series of three webinars begins on September 24 when I will be discussing these key issues alongside Dr Junaid Bajwa a GP and Board member for Greenwich CCG, who will be presenting the evolution of the local value story from a payer's perspective. We will also be chairing a discussion that we hope will act as a barometer to highlight the very latest attitudes within the industry.

Find out more about the webinar

Article by
Ryan Wooller

Ryan is director of market access and service innovation with responsibility for a number of Quintiles market access teams in the UK. In his role Ryan is responsible for working closely with biopharma customers to support the development and execution of their market access strategies.  

12th September 2014

From: Sales, Marketing



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