A Better Path to Payer Insights

May 14, 2020

Payers have transformed the competitive marketplace, and biopharma companies need to regain their position as the authority on their products. To do this, they must establish new ways to anticipate, identify, and react to payer impressions of relevant evidence as they occur.

Last year, a marketer with two decades of big pharma experience joined one of the healthcare industry’s many emerging biotech startups. With a promising new drug in Phase III and venture capital funding well in hand, he embraced this opportunity as his career capstone.    The payer launch plan he inherited appeared comprehensive, but the primary source of that research looked all too familiar; the research was the same tired approach his prior company had moved away from. He realized his current product’s formulary access strategy hinged on just two live advisory boards, each with only seven payer panelists, many of whom were retired or only loosely affiliated with a payer. In other words, patient access to the medicine that cost his company a billion dollars to develop, came down to 14 advisors, many of whom hadn't participated in a P&T decision in years.   He immediately seized the opportunity to elevate their payer research practices, telling his team, “When we rely on insights from panelists who have been retired even six months, the strategies they generate are outdated at the time of their creation, never mind their execution.” And in a moment, his company’s better path to payer insights came into focus.   

Who owns the product narrative?

There was a time not long ago, when pharmaceutical manufacturers tightly controlled the narrative of their products. The supportive clinical evidence was mass produced and mass marketed to physicians, and only competing manufacturers offered a substantial challenge to their claims.    Payers have since transformed the competitive marketplace. They’ve effectively installed pharmacy directors and P&T committees as judges and juries who determine winners and losers in every drug category with every review. Manufacturer efforts to address this challenge are stymied by the guarded nature of these P&T processes.  The ASHP Guidelines on the Pharmacy and Therapeutics Committee and the Formulary System cautions P&T committees to consider content “prepared by pharmaceutical manufacturers with the utmost caution,” openly calling into question their objectivity.    Despite this transformation, biopharma companies still seek to control both the generation and dissemination of product information. But payers, and the online information sources they utilize, have severely weakened that control. In order to regain their position as the authority on their products, biopharma companies must establish new ways to anticipate, identify and rapidly react to payer impressions of relevant evidence as they occur.   

How manufacturers are taking back the narrative

As Jim Collins famously captured in his well-researched best seller,

Good To Great,

every business must “confront the brutal facts” in order to make a sustainable transition to breakthrough results.    A brutal fact for biopharma is that the majority of inputs for payer formulary decisions are actually unknown by manufacturers. They don’t know who participates in the P&T meetings; they don’t know what evidence was included in, or excluded from, the written drug evaluation prepared for the P&T; and they don’t know how such evidence was assessed. Furthermore, payers rarely share the timing of their drug class reviews, reducing efforts to gain formulary access into a high-stakes match of blindfolded chess.    As a direct result of these many blind spots, payer research, the cornerstone of payer marketing, has never been more important to, nor faced more skepticism from, those who commission it. There is good news, however. 

  While P&T processes will remain unseen for the long-run, their sources are not a secret. They are a combination of public and private online libraries, databases and software applications. One such source, FormularyAcademy.com, specifically serves as an online facilitator of P&T drug evaluations and has over a thousand users across the United States. Its platform attracts active P&T participants who make current formulary decisions.    Biopharma companies need to position themselves to collaborate with these types of online platforms or risk being locked out of yet another critical source of insights. Now that payers have digitized their drug evaluation processes, progressive biopharmaceutical manufacturers are adjusting their research methodologies to ensure a sustained relevance.     For those manufacturers already capitalizing on this dynamic by digitizing their payer research, the benefits are transformative: higher volumes of data points, real-world drug evaluation inputs and timelines, better qualified and much larger panels, and the mitigation of common advisory board biases are all prominent advantages. This enhanced vantage point allows them to adapt their payer value propositions in near real-time, for current P&T participants, ahead of real-world drug reviews; all of which results in more favorable formulary decisions and better access for patients.    Biopharmaceutical manufacturers and their marketers fully appreciate the importance of statistical significance, having always relied on it for their promotional claims, yet their standards for sufficiently powered payer market research were historically low. In the defense of many, the better sample sizes and demographic representations made available via digital resources only just recently became a reality.    As one biopharma executive described the progression, “The digitally sourced research is a giant leap from case studies to statistical significance.”  

Breakthrough approaches deliver breakout performance

Returning to our introductory case study, it is abundantly clear how early limitations or errors found in underpowered research are propagated into common misperceptions and the many vulnerabilities of group thinking. Even a small error compounded can serve to misinform billion-dollar strategies.    As is the case with the onset of every breakthrough, a sudden disparity in its application becomes the critical differentiator. The ensuing window of adoption reflects a race for a competitive advantage wherein the most nimble players realize their aspirations for breakout performance.     Patient and provider research was digitized years ago, dramatically increasing their reliability for business leaders. The current trends to do the same with payer research have been inevitable ever since. Those manufacturers who build a digitally sourced capability to more quickly read and react to payer impressions will be the winners.   

John Fox, MBA, Ph.D, is Chief Solutions Officer at Formulary Insights. He has over 20 years experience helping businesses better leverage online resources. Mark O’Neill, MBA is an independent consultant with 18 years marketing experience at a top 5 global pharmaceutical company.