Knocking on a difficult door

As payors gain increasing power over access to medicines, Justin van Gennep of Innovex examines their particular priorities and explores how to address their needs for the benefit of the patient.

The role of the payor in determining treatment paradigms for patients is growing globally. ‘Payors’ are those who manage the cost of healthcare, and they are under increasing pressure to balance the budgets in the long and short term. Their decisions are therefore influenced by a range of health economic arguments, which presents a more complex perspective of the cost: benefit ratio.

In the US healthcare system, the managed care market-place represents a key payor sector that wields a significant level of clout in the healthcare landscape and has changed the dynamic between care organizations and pharmaceutical suppliers. As the impact of managed care’s growth continues to unfold, questions about how pharmaceutical companies approach and sell to this channel have become increasingly important to drug companies’ bottom lines.

This phenomena is not new however. For years, however, drug companies around the world have struggled with exactly how best to approach payor audiences. With sustained pressure to moderate healthcare costs, payors, particularly those that manage large populations, remain a critical audience, if for no other reason than the potential for volume selling. For many drug makers, however, a number of factors are contributing to the unstable nature of selling to such groups. In the US, these factors include the second year of Medicare Part D programs in the US, rapid generic substitution rates and possible increased political pressure from the change of political control within the US Congress.

In the UK, with a 60-year history as the world’s largest nationalised healthcare system, the NHS provides a full-scale example of the reliance of payors on robust data and information when making decisions about access to drugs. The National Institute for Health and Clinical Excellence (NICE) determines what drugs will be funded by the NHS based on the same safety and efficacy information used by national health systems around the world, but with additional requirements to prove cost-effectiveness.

NICE guidance has indisputable power in determining which treatments the NHS ultimately includes in the formulary. Pharma companies selling to managed care organisations in the US and other payor groups across the globe will increasingly have to use similar standards of evidence. They must then ensure that their sales forces are equipped to succeed within a complex environment with multiple stakeholders, potentially with different roles being applied across the life cycle of a product.

A complex environment   
The increased presence of organisations charged with ‘gate keeping’ access to care is an example of the more complex selling environment that pharmaceutical sales reps can face. To make their decisions, payors are now demanding more robust information from pharma, including data of the long term cost impact of medicines and treatments, which highlight the health and cost benefits over the long term, rather than just considering the unit cost.

Also, evidence of disease prevention is being used, such as the prevention of co-morbidities in chronic diseases (diabetes, cardiovascular disease and obesity), and real-world data to support the safe and effective use of pharma products across the general population. Payers are also using ongoing product value demonstrations, so that following initial pricing approval, many regional and local payors will look for data to support continued availability of products on formulary.

The need for value   
Healthcare providers and payors are thus focusing increasingly on value and health outcomes, preferring to fund and prescribe medicines that are supported by a wealth of ‘real-life’ data. As a result, the pharmaceutical industry must ensure its offerings are closely aligned with these desires and needs; in short, to help gatekeepers allocate resources equitably and efficiently.

In Spain for example, it is a requirement of regulators that pharma companies prove the favourable economic profile of new drug treatments. In addition, they must deal with autonomous regional health authorities and it is therefore essential that they establish solid and transparent alliances with these regional governments and back up their claims with real data obtained with clinical practice.

Safety and efficacy data that supports new entrants into established product classes will need to be not only stronger, but more comprehensive – requiring developers to collate real world patient information for regulators on a continual basis. The influence over prescribing decisions of proven outcomes and established tolerability is set to surpass even the industry’s most powerful branding activities.

Health technology assessment too is developing, placing greater emphasis on the broader value contribution that a medicine makes to healthcare and society (i.e. evaluating its budgetary impact over the longer term and taking into account the benefits supplementary to direct treatment, such as reducing hospital admissions and preventing exacerbations).

In the UK, NICE is consulting over its future expansion – in size as well as in scope, giving more weight to a medicine’s broader value contribution. Many health authorities are looking to what is happening in the UK as they do develop methods of controlling and managing healthcare.

Key to success   
The key to successful pharmaceutical sales within the payor market is in the ability to offer something more than a volume discount on the product itself. Because pharmacy directors and medical directors often are responsible for both clinical and fiduciary responsibilities, pharmaceutical sales representatives increasingly seek new ways to bring additional value to the table. Of course, this requires a team of people who have good understanding of the market and the considerations that are important to payors.

For pharmaceutical sales organisations, the issue comes down in large part to the complex mechanisms used to determine the ultimate relationship between physician, payer, patient and product. For a pharmaceutical manufacturer, the ability to place a product in the first or second line of a payors formulary can mean the sales equivalent of life or death. However, in order to achieve this placement, a broader focus and more seasoned sales experience is usually required.

In some parts of Europe, payors are looking into new pricing strategies such as pay for performance or risk-sharing. In both cases, pharmaceutical companies will need to prove – in real-world scenarios – that their drug or treatment works effectively and efficiently, either to get a better price for the product or to continue to be listed on the formulary. Patient-centric programmes can be designed to both support the delivery of such information and help to better manage chronic diseases by identifying patients and treating risk factors early. Such programmes, managed by an independent organisation such as Innovex, can also provide the all-important real-world clinical data that – owing to strict regulations governing their relations with patients – pharma cannot collect on its own.

One example that can be used is in diabetes: programmes designed to identify uncontrolled diabetes patients can provide clear benefits to all. Patients benefit from improved understanding of the disease and its treatment, increasing therapy adherence and improving quality of life. Physicians gain improvements in their relationships with patients, better health outcomes for their patients, and a better understanding for practice staff in how to run patient identification programmes in the future. For payors, the benefit is in preventing the cost burden of treating co-morbidities associated with uncontrolled patients, whose symptoms are inevitably worse, and treatment therefore more expensive, when left undiagnosed or untreated.

With payors becoming such a significant stakeholder in determining what drugs patients’ can access, and their increasing reliance on data and real life evidence in decision making, the sales process for these organisations requires a more consultative sell. It is essential to have good understanding of and the ability to respond to the unique and complex concerns of payors to be successful in this new era of pharmaceutical sales.