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
Finding common ground
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.
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 email@example.com
Author's Note: Statements attributed to participants in this roundtable do not necessarily represent the official views or positions of
their affiliated companies.