The evolving healthcare landscape has had a profound impact on the pharmaceutical industry. In this post, the first in a series that will evaluate and analyze changes in healthcare and their effects on the pharmaceutical industry, we will be looking at the payer stakeholder.
Taking a look at the payer community, we can see a number of overarching trends. One important trend is the shift toward value-based care, which has an ever-increasing influence on the assessment and conversion process.
The impact of value-based care on the payer landscape has arrived.
Many of the trends associated with the payer landscape, such as quality care delivery, quality scores, coverage for higher-value services, and cost of care, are well established in our healthcare system. Value-based care decisions have also influenced pharmacy benefit design and drug formulary development. In addition, drug assessment and Pharmacy and Therapeutics (P&T) committees’ decision-making processes have evolved to incorporate quality and value. Historically, the P&T committee only evaluated the clinical value proposition of a compound. While clinical efficacy and safety data remain important, P&T committees now incorporate some level of pharmacoeconomic analysis, which often include the projected impact on the total cost of care. Although humanistic quality of life (QoL) outcomes have had a lesser impact on formulary decisions, patient reported outcomes (PROs) and QoL data may be influential for specific medical conditions.
One key aspect of the shift in awareness and assessment of new drugs is the change in P&T influencers. As transparency has become a key element of the evolving healthcare landscape, we anticipate a decrease in PBM (Pharmacy Benefit Manager) influence in certain market segments. PBM customers are demanding full transparency, which will decrease PBM profits previously hidden in complex and confusing “black box” pricing and reimbursement methodologies. Additionally, though many health plans use PBMs (for claims processing, a pharmacy network, rebate contracting and other services), health plans have their own P&T committees, make their own drug formulary decisions, and do not observe PBM formularies.
A second important element of these changes in new drug assessment is the emergence of new influencers that can influence P&T decisions. A drug’s economic value proposition is incorporated in the assessment in numerous ways, but many leading healthcare systems have implemented processes that incorporate the cost of care into P&T approval.
This new dynamic has led to a shift in P&T influencers – pharmacoeconomic expertise is now at a premium.
Among this new set of influencers is the Institute for Clinical and Economic Review (ICER), which creates a value-based price benchmark for new drugs. Resources and tools such as these provide great utility to cost-of-care projections that can significantly influence P&T decisions. We see many value frameworks and clinical pathways emerging – from both associations and leading institutions – which will have an impact on new drug assessment through cost-effectiveness analyses. Certain roles and responsibilities within payers and integrated delivery systems become much more influential in a value-based care environment, especially as providers receive bundled payments or quality-based incentives. Healthcare systems must become more cost-efficient in this increasingly competitive and cost-sensitive marketplace.
All of these changes create new opportunities for life science organizations to redefine customer-centricity through their engagements with payers and integrated delivery systems. To capitalize on these opportunities, account teams need proper planning to understand the best approach to raising awareness. It is important for account teams to understand: Who are the key influencers in a P&T decision? Has value-based care changed the set of influencers? What outcomes data are credible and influential in formulary decisions? Additionally, account teams need to understand the structure and focus of P&T committees. Has this structure changed to include the economic as well as the clinical value proposition of a new drug? Once these questions have been answered, account teams can approach customers efficiently and effectively, providing the drug’s value data and information that will be used.
Aside from account planning, there are a number of useful resources that are essential for effective payer engagement. Resources should reflect today’s healthcare landscape and include tools that can objectively project a drug’s impact on total cost of care. Such resources can complement traditional dossiers and product labeling information.
Finally, account teams must have a strong understanding of the changing healthcare landscape in order to establish credibility as a valued partner to a payer customer. With these considerations in mind, life science organizations will be well-positioned to drive market access in a payer environment in the midst of disruption.