Private payers, such as HMOs or insurance companies, have emerged in recent years as a formidable force in the complex arrangements
that determine market access to prescription drugs. Formulary inclusion, rates of reimbursement, copays, and other coverage
decisions have long played a critical role in the fate of a new treatment, especially when pharma was running its assembly
line of primary-care me-too products. Now, as the cost-containment and quality-improvement promises of the US Affordable Care
Act (ACA) begin to be tested, the influence of payers—in particular, the 800-pound gorillas, Medicare and Medicaid—is likely
Value-based pricing is the new regime under which pharma must labor—whether through outcomes data, economic models, or other
tools—to make the case that a new product delivers not only clinical benefits but also real-world advantages that improve
the management of a particular disease. Nowhere will this pressure to show the value be more intense than in the increasingly
crowded oncology and biologics space in which most of Big Pharma has placed substantial R&D bets in recent years. Experience
in other markets outside the US also shows what is ahead in the domestic arena.
Addressing the challenges of collaborating with the US healthcare system's immensely fragmented web of private payers remains
a work in progress for the pharma industry. Pharm Exec asked two experts on the payer/pharma interface, the Arcas Group's Jan Heybroek and PriceSpective's Ted Sweeney, to have
a wide-ranging (albeit oncology-focused) conversation about where these two stakeholders stand at the current moment of great
uncertainty in the healthcare industry and what new trends and strategies are in the offing. — Walter Armstrong, Senior Editor
Pharm Exec: To start off with broad strokes, what's the big story about pharma's hopes and fears regarding the growing power of payers?
Jan Heybroek: There has been a significant increase in efforts by US commercial teams in pharma and biotech to understand the interaction
between physicians and payers, especially in the oncology space, which is not surprising given the high value or high cost
of these drugs. We see a similar trend toward a deeper understanding of the whole payer side of the business—and not just
to understand but to impact it.
Ted Sweeney: Absolutely. Over the past five years, the recognition that payers are one of the ultimate market stakeholders has gained
traction, and you see that reflected even in the organizational structure of pharma companies: the focus on market access
and payer landscapes. Its reach is really quite remarkable—that information is used as input even into decision making about
drug development and clinical trial structure. But there's also the recognition that the payer isn't necessarily the clinical
expert. Payers rely on the physician community and other external expertise, especially in rapidly evolving, specialty disease
states, like oncology.