Specialty Care Medicines: Managing the Impact of US Health Reform - Pharmaceutical Executive

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Specialty Care Medicines: Managing the Impact of US Health Reform


Pharmaceutical Executive


Intellectual Integration of PCORI and IPAB

The combination of credible data from PCORI on cost effectiveness with a powerful IPAB could dramatically alter prescribing behavior. The anti-TNF class of biologics, for example, will receive immediate scrutiny. These medicines have provided huge benefits to patients suffering from rheumatoid arthritis, psoriasis, and other serious ailments, but their dispensing and administration together represent one of the largest and fastest-growing cost centers. The opportunity might go to the oral medicines being developed for these indications. They may provide equivalent safety and efficacy—and could be less expensive to manufacture, store, and distribute—thus entering at a price that encourages a positive review from PCORI. This, plus a powerful IPAB, could fundamentally alter the adoption and ultimate market penetration of new therapies—driven by existing tools such as prior authorization or "fail-first" strategies.

What to Do Now

First, continue to support advocacy at the federal and state levels to ensure that the rules that are implemented going forward are pro-patient, pro-innovation, and not anti-industry. This requires teams to become more sophisticated about the implications of healthcare reform on their business so that they can articulate a lobbying strategy that supports it. For example, pay particular attention to IPAB membership. Can you support the appointment of a physician who understands the therapeutic area of interest to you? What about the PCORI—can you engage? Drafting guidance is complicated and highly technical. What support can you provide? AHRQ has been open to input from industry in developing methods for comparative effectiveness studies. Industry has tremendous intellectual resources that can be very influential—for all the right reasons—in shaping the rules under which we will operate.

Second, put together a small team of individuals to conduct scenario planning. This team should include commercial, policy, strategy, finance, and public affairs colleagues. They should look at impacts from three perspectives:

1. What are the known impacts on sales over the planning horizon, for each key product? What steps, if any, could be taken to minimize these impacts? What is the medium to long-term impact, again by product? What do follow-on biologics, comparative effectiveness, and IPAB mean for your development portfolio? Given that there are more people with health insurance, estimate potential new patients by therapeutic area.

2. What are the implications for your prescribing community? For example, how will specialty physicians fare in this new system? If primary care physician rates are increased and hospitals held harmless, then which specialty practices are most at risk? Talk to the key specialty groups and engage their policy specialists in this analysis.

3. How will these changes impact the overall business environment for industry? What lessons have we learned from Europe? Work with EU colleagues to do scenario planning and propose specific estimates on impacts to sales, IBA, etc. These observations should then be integrated in the long-range forecast as well as the strategic plan for the business.

Finally, healthcare reform represents a golden opportunity for the pharmaceutical industry to reconnect with physicians, patients, and managed care customers—to work collectively to make the case to patients on the importance of innovation. The new healthcare legislation includes very few elements that pit industry squarely against doctors, patients, or other key constituents. If the reform plan is implemented as presently constituted, the "bad guy" in the room will be the IPAB, which will be responsible for controlling costs across the entire system. Developing partnerships to make a collective case—working with physicians, for example—can be a win-win situation. The faster the start on building these coalitions, the better positioned the industry will be when the real cost pressures are applied in 2015.

John Swen is Vice President of Public Affairs for Pfizer's Specialty Care Business Unit. He can be reached at


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