Pharm Exec Roundtable on Market Access - Pharmaceutical Executive


Pharm Exec Roundtable on Market Access

Pharmaceutical Executive

Coupons conflict

Looney: A source of tension between payers and manufacturers today is the latter's use of co-pay offsets and discount coupons to maintain brand loyalty and discourage patients from switching to the lower cost generics mandated by provider formulary programs. How is this debate likely to shake out, particularly as the pool of insured patients grows with implementation of the individual mandate under the Affordable Care Act?

Stefanacci: The consensus among payers—including the Center for Medicare and Medicaid Services [CMS], where I served as Health Policy Scholar—is that these offsets have a distortive effect on the effort to manage drug utilization. It contravenes the spirit of the Medicare Part D drug benefit, where the so-called "doughnut hole" was introduced to ensure patients are motivated to choose the lowest-cost generic option to avoid full liability for the cost of higher priced branded medications. Payers prefer that companies support patient assistance programs [PAP] that don't circumvent their utilization management protocols.

Smeeding: Co-pay offsets and discount cards exist because of the tiering of formulary access. Manufacturers want to defend brand share and argue that these incentives reduce costs to patients and thus promote better adherence and fewer hospital stays. Payers say in return they have made very careful assessments that some products are preferred to others; on efficiency grounds, their covered population should adhere to that judgment and not be influenced by outsiders with a vested interest in promoting an alternative. Both parties are defensive and are reluctant to put their case directly to the public. And a growing volume of data indicates that co-pays in general are a disincentive to adherence, can lead to poor health choices, and thus don't make much sense economically.

Stefanacci: This presents a tough balancing act for payers. They realize that patients are primarily driven into plans by the premium; in fact, rich benefits typically attract high utilizers. So one balancing act is between premiums and benefits. Another is between patient out-of-pocket charges and outcomes. While high out-of-pocket reduces a plan's Rx expenses, it could actually cost a plan in poorer health outcomes, tipping the balance. We will see how plans fare in accommodating these conflicting forces.

Finding common ground

Looney: Can you identify areas where payers are making constructive contributions to the dialogue that all sides seem to want?

Smeeding: We are seeing increased alignment of incentives between manufacturers and payers, resulting in coordinated management of pharmacy benefits. And adherence is finally being taken seriously by both parties, with much productive work taking place in the neglected specialty segment. Data is being shared for use in specific applications linked to outcomes. For example, there is exciting work underway in Medicare on medication therapy management where reimbursement will be based on star ratings covering how well you are following patients after treatment and avoiding adverse events linked to the inappropriate use of drugs. This is encouraging the development of patient registries, where payers and drug firms can both contribute to the generation of real-world data that leads to savings system-wide.

Clinton: United Healthcare and Aetna are conducting numerous pilot experiments with the industry focused on oncology medicines. They do not put price at the center of the discussion but instead consider how to eliminate inappropriate financial barriers to positive patient outcomes.

Parks: Data is not always pristine. There is a difference between the careful, well-controlled population of a clinical trial monitored by regulators and the observational data taken from clinical settings and patient registries. Once a drug gets used in the real world, the "confounders" on data rise exponentially. These are difficult to scrub to obtain a clean result. We'd like more support from payers and regulators in finding ways to reconcile the confounders and get at least some semblance of a pure data set—one that is useful for decision-making.

Looney: Any final comments about the pace of change affecting market access?

Stefanacci: The US healthcare system is facing a revolutionary shift away from employer-based insurance. We will see movement toward the new Health Insurance Marketplace [HIM] exchanges, led by a gradual mass exodus from employer-sponsored plans. The Obama Administration has actually given a boost to this trend by delaying the penalty on employers for not providing coverage. The other shift is in care delivery, specifically where physicians like myself practice. This is different than the physician hospital organization model of the 1990s that failed, forcing physicians back into private practice. Physicians today are accepting these new care models as they tend to be more comfortable with being salaried, committed to normal work hours, and handing the administrative burdens over to someone else. This new "organized customer" is here to stay. With the shift of physicians toward these new care delivery models, treatment decisions will be decided not by physician "pull through" but instead in the "c suites" of these new provider groups. Decisions on drugs are no longer in the hands of the physician. Access determinations will be made at a much higher level, based on the delivery of outcomes that these new provider groups are being held accountable for.

Parks: Information is equally transformative. Apple recently unveiled a new digital product it calls Life Tracker that is primarily designed for athletes interested in evaluating their training progress. But imagine how payers could use this technology to follow the routine lifestyles of their insured populations and make coverage and treatment assessments around that data. Whoever can find commercially advantageous uses from this rising tide of information technology will get to the top of the market first. Just think of what this data retrieval could mean for managing Type 2 diabetes.

William Looney is Pharma Exec's Editor-in-Chief. He can be reached at

Author's Note: Statements attributed to participants in this roundtable do not necessarily represent the official views or positions of their affiliated companies.


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