William Looney, Pharm Exec:
The biopharmaceutical industry confronts a strategic dilemma: just as the genomics revolution is yielding a rich harvest of biologically-based medicines that promise to raise the standard of treatment for patients, its ability to price these medicines at will is eroding. In response, the drug majors are redefining the traditional one-to-one relationship to payers through messaging with appeal to a broader set of stakeholders as well as detailed evidence to document the medicine's clinical and economic value. The industry calls the new strategy "market access"—is it working, how is the function likely to evolve over the next few years, and what are the key considerations for companies?
Kevin Barnett, Promidian Consulting: My firm has completed a new study that provides insight around this question. Extensive surveys and interviews were conducted with more than 50 leaders from managed care, employers, Medicaid, other institutions, as well as the biopharma industry. Our focus was on elucidating how market access dynamics will evolve over the next five years and defining implications for biopharma companies. We found that there is a very high expectation of change, in 12 relevant areas ranging from the role of biomarkers, IT and comparative effectiveness standards to formulary design, management, and contracting. Interestingly, payers and manufacturers were aligned on the future direction and import of most of these issues. The notable exceptions were in the management of specialty drugs, where payers expect increased scrutiny, and on the role of comparative effectiveness, where payers are more bullish than manufacturers in thinking that use of this particular tool will increasingly drive pricing and access decisions.
With specific reference to the 12 "change drivers" we identified, the growth of personalized medicine through biomarkers and companion diagnostics scored the highest in terms of the expected degree of change over the next three to five years. Both groups understand that this is a positive trend because all these tools have a common objective: to improve outcomes and avoid inappropriate utilization by getting the right medicine to the right patient at the right time. This is the essence of "managed" care, one where the patient is the chief beneficiary.
Right behind this as a change driver is IT and how it will shape prescribing patterns, particularly as incentives for EHR and other integrated systems are implemented, at the practice level. IT is a key enabler of the third highest degree of expected change, which is the role of emerging models of care like the ACO, where the "episode of care" approach depends on having information systems that can talk seamlessly to each other.
We spoke with managed care firms and other payers about whether these new models would succeed in saving money while improving quality. The consensus is the jury is still out, largely because earlier efforts to integrate care failed to take root; these are in many ways a pilot effort. Ultimately, ACOs may prove an interim step in what is likely to be a lengthy journey toward a common delivery platform—one that binds patients, providers, and payers around a more efficient approach to treatment.
Benefit design issues came next as a change driver. Clearly, the structures by which patients access care are in flux. There is a great deal of exploration underway—focused on coinsurance, deductibles, and preferred/non-preferred tiering of formulary access—to find the right balance between quality of outcomes and containment of costs. One issue from our discussions is how the insurance benefit offered under the Affordable Care Act's insurance exchanges will influence private insurance plans. The exchanges are likely to offer drug benefits less robust than what is currently offered on the private commercial side—will we see a spillover of that trend to the private market? That's an important question for both manufacturers and payers.
List of Participants
Next on the list of expected changes is the management of specialty drugs. Most of the drugs being approved by the FDA are specialty, and Express Scripts forecasts that only five years from now this category will account for half of total drug prescription expenditures, up from 25 percent today. The price tag for these therapies is a major pain point for payers, of which manufacturers are all too aware.