The Learning Curve - Pharmaceutical Executive


The Learning Curve

Pharmaceutical Executive

Robins: I think that is changing, at least in the big companies. We can't build a value proposition solely on the basis of achieving high margins. Society is expecting a lot more from us.

Professor George Sillup, St. Joseph's Business School: Evidence is good but your customers are going to want it in ways that are hard to deliver—or around metrics that will tend to diminish the gloss. I know this keeps many CEOs in the industry up at night, especially as we move closer to a day when the FDA will start looking at cost effectiveness as well as clinical safety and efficacy. It's not here yet but some of us think it's coming. When I worked at Roche I produced a large number of economic studies on products. Payers were inherently skeptical about using them to make formulary decisions, asking if they could reproduce the study with their own data, or if we could explain how to translate our randomized data against placebo—a perfect depiction of illness—into what happens under routine clinical practice. Presenting evidence that meets the demand of the payer for certainty at low cost is going to be a challenge.

Collins: Ultimately wellness is where the value sits in healthcare. This is why industry has to think beyond the pill and contribute with services that position us as integral to promoting good behavior throughout the system, not just the 10 percent we represent of total spending. Diabetes is a good example. Although we have the pharmacotherapy and the primary care intervenors, no one is connecting the dots back to the patient. Couldn't our sales reps do this? It's worth thinking about.

Jarmuz: It's true that value is a function of good scientific information that physicians and patients can act on. But there is a disconnect, because the industry is increasingly handcuffed and muzzled in terms of just what it can say. Right now the lawyers are running the show to minimize risk. Marketers' promotional options are being limited due to REMs and the Sunshine Act requirements. And there is a lot of push back from regulators, professional advocates, and the public as to what value a therapy is bringing to patients and the healthcare system.

Looney: Can't the service model evidence better outcomes simply by example? Isn't the better metric a satisfied customer who likes to work with you?

Truitt: A good distribution partner can perform miracles in the relationship with payers. You need a partner who can monitor the whole transaction with the patient. This by itself tends to foster positive outcomes because it enhances the patient experience. We've worked with a number of big distributors who provided "hub services" that track the contact with the patient from the initial visit to a physician and the prescription. They coordinate specialty pharmacy outreach to make sure the patient adheres to therapy. Although the service is expensive and reduces our margins, it is worthwhile because the payers are happy and we raised our positive profile with patients. We demonstrated improved outcomes—increasing the volume of scrip as patients stay on therapy longer.

Bedford: Having patients advocate for you is priceless. They like to be engaged and educated—and a compliant patient is a customer for life. It matters little for profitability in the long run that margins might be slightly lower. These programs are really about protecting and differentiating the brand while improving patient outcomes.


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