What do payers want?
Richard Stefanacci, University of the Sciences and the Access Group: Through my work as chief medical officer for a number of Medicare Advantage plans as well as membership on a national P&T
committee, I can say there are only two things that drive payers on market access. The first is return on investment—not just
what do we get by listing your drug, but, more important, how soon? No longer do payers want to be told about savings over
a 10-year time span. Their fallback position is to eschew any immediate decision on coverage, in favor of "watchful waiting."
If manufacturers want to avoid this outcome, being able to make that case for ROI is critical. The second driver for payers
is regulation. If we are told we must cover a drug, we do it. Academic judgments about cost effectiveness have little, if
any, impact on the decision.
I am intrigued that in the survey, respondents from both the manufacturer and managed care side seemed to downplay the role
of the patient. In this new healthcare environment, manufacturers must position value from the point of view of the patient,
not just the provider. As patients will be forced to bear more of the cost burden, their adherence will be based more on how
they perceive value.
Smeeding: As costs for drugs mount, particularly for life-threatening conditions like cancer, patient access programs will become a
critical ethical issue. There are a lot of uninsured and under-insured people where the pressure will be intense to get them
on therapy. Such programs are predominantly company-sponsored but I predict we will see more government involvement in how
these programs work, and for whom.
Parks: Europe is already there. In contrast to the United States, national authorities have to reconcile two conflicting commitments:
first, to offer the broadest access possible to all citizens, and, second, to contain costs within a fixed annual budget.
Their response offers a precedent for the United States: It requires some people—those with more assets—to pay a bigger portion
of their health costs out-of-pocket. Overall insurance cover is important, but patient share of costs is going to be right
up there too.
Stefanacci: The trade-off for patients from the Affordable Care Act is lower plan premiums through government programs like the Health
Insurance Marketplace plans and Medicaid, partly as a result from restricted access to providers and certain types of care,
including drugs as well as higher patient cost sharing.
Clinton: Payers are interested in data on how biopharma technologies improve outcomes for a defined population relative to the current
treatment standard. In oncology, with rapidly changing treatment standards, this can be a significant practical challenge
for companies. Traditional Phase III trials have protocols and standards that are approved by regulators years in advance
of the trial completion. By the time results come, the standards can evolve and the relevance of the data can be challenged.
There are efforts with regulators to address this issue, but it is a current risk that biopharma must take as a given in the
McLellan: Payers need to provide industry a feasible way to develop the evidence they are asking us for, so that it is not a constantly
moving target. Right now they are not doing this. The non-binding consultations we have with them do not allow us to agree
on what will constitute a data package to ensure access for drugs that have a meaningful benefit, including what should be
the right comparator. This is going to discourage future innovation. I submit that it is in the payer interest to play this
game, and it starts with a fair playing field to help us work through the payers' fear of the budget impact of true innovation,
in areas of unmet medical need, because these innovations do not always carry a cost saving or cost offset.
Innovation—the moving target
Shah: The cost challenge is compounded by the lack of consensus on how to decide which innovation creates value. Not every player
in healthcare shares our view of what we would characterize as innovative. I recall inviting a senior executive from Humana
to participate in a payer advisory board for a J&J compound we were developing for diabetes. He noted that, at his company,
innovation was rarely described as coming from a bottle. Instead, innovation came in a Nike shoe box, because it motivated
employees with diabetes to exercise.
What’s Next for Market Access?
McLellan: It is commonly assumed that it is up to the payer to define innovation. Not true: their first responsibility is to allocate
a fixed budget. You cannot pay for things with money you do not have. The concern is how payers are managing the process.
It is not a coincidence that virtually every preliminary benefit assessment of oncology products by NICE in the United Kingdom
is negative, regardless of the clinical data presented or the patient access scheme we present upfront. Another new trend
I find alarming is the separation of the benefit assessment [the value] and reimbursement negotiations [the price] in countries
like Germany. This puts manufacturers in a difficult position and allows the payer to gain the higher ground, stating "we
think your product falls short...so let's now talk about price." In the new payer environment, providing the clinical data
that payers are asking for, such as showing clinical superiority in a head-to-head trial, or developing molecularly targeted
drugs that identify for treatment only those patients most likely to respond, isn't producing the expected response. This
is because the payer is so focused on cost relative to any clinical value. I have heard it said that the only thing a payer
dislikes more than a product without good data is a product with good data. Understanding this perception is a first step in defining what motivates payers in a price controlled market.
Their benefit assessments seem to stray from the consensus in the medical community and any request by companies for even
a small price premium over comparator products—based on data demonstrating significant statistical superiority over those
comparators—will likely lead to prolonged negotiations. This challenge is further compounded when the comparators are generics.
In some cases, payers are now settling limits on how much they will pay, per patient, per year. To remedy this, there is going
to have to be some give on both sides, but unless society is satisfied with only having the treatments of today, more alignment
must be made on the incentives to advance medicines ability to improve population health.
Parks: Industry still has some leverage in that we can decide where we choose to launch—or not launch. As some of the emerging markets
become bigger over the next five to 10 years, there will be more options to pursue a launch strategy beyond the budget-constrained
countries. I believe the biggest threat is the erosion of support for so-called incremental innovations. These are the products
with clinical attributes that are quite meaningful to patients and whose success has always fueled the next round of first-in-class
breakthroughs. These products are in wide disfavor now, with some companies reconsidering plans to advance next generation