The healthcare ecosystem has undergone a profound transformation that biotech companies cannot afford to ignore. Major insurers now control provider networks, pharmacy benefit managers, and care delivery platforms, while leading health systems have developed their own health plans and risk-bearing entities. This vertical integration has fundamentally altered how therapeutic decisions are made, creating a complex decision matrix that directly impacts product adoption and commercial success.
Main Takeaways
- Research confirms what most market leaders have come to accept: both payers and health systems now exert influence over therapeutic adoption.
- Beneath formal coverage decisions exists a powerful layer of "shadow formulary" tactics that often exert greater influence on prescribing behavior than official payer policies.
- Biopharma manufacturers launching novel therapeutics must build receptive environments well before approval by simultaneously addressing both payer and health system influences.
The traditional biopharma approach focused primarily on physician detailing and securing favorable payer contracts, has become inadequate in this new reality. Today's market access challenges require a sophisticated understanding of the critical interplay between payers and health systems, particularly how their parallel influence mechanisms shape prescribing patterns for medical benefit and specialty pharmacy products. Those who master this strategic nexus gain significant competitive advantages; those who don't face increasingly insurmountable market access barriers.
Dual decision-makers: Why both stakeholders drive adoption
Research confirms what most market leaders have come to accept: both payers and health systems now exert influence over therapeutic adoption. Across specialty areas, particularly oncology, 70% of healthcare professionals believe health systems wield as much influence as payers in prescribing decisions. This dual influence stems from the rising willingness and ability of health systems to steer utilization in ways payers are not.1
Payers continue to exert traditional control through formulary placement and other utilization management criteria via prior authorization requirements and step therapy protocols. Their focus remains primarily on clinical efficacy reviews, rebate negotiations, and policy implementation heavily focused on the initial product use.
Health systems have developed concurrent yet divergent influence levers that determine whether approved therapies reach patients. Health systems impact utilization through a variety of tactics such as: custom formularies, clinical pathways, order sets, electronic health record (EHR) steerage mechanisms and direct influence over affiliated provider networks. They customize formularies to reflect local preferences, implement physician performance metrics tied to adherence, and conduct system-led education with institutional authority.2
Within the pharmacy benefit, payer controls reign supreme; but for the medical benefit, health systems often create the largest obstacle to commercial success.
When payer and health system product coverage and preferences align, therapeutic adoption accelerates. When they conflict, even products with excellent payer coverage face significant adoption barriers.3 The result is a complex ecosystem where favorable placement on payer formularies provides product coverage but doesn't guarantee utilization, while health system implementation decisions become crucial in determining real-world adoption and can sway the use of one product over another when two products are placed similarly on payer benefit designs.
The hidden mechanisms driving product selection
Beneath formal coverage decisions exists a powerful layer of "shadow formulary" tactics that often exert greater influence on prescribing behavior than official payer policies. These steerage mechanisms create an invisible infrastructure that determines real-world product adoption, frequently explaining why competing products with identical payer positioning achieve dramatically different market shares. These less visible influence channels often remain undetected by manufacturers as their impact shapes behavior before prescriptions are submitted, rendering claims analyses ineffective for this purpose. These blind spots require primary market research with health system stakeholders in order to reveal the powerful undercurrents that ultimately determine whether innovative therapies reach patients in spite of favorable payer coverage.1
Illustrating the concept of shadow formulary tactics, the EHR represent a potent control point for product steerage. In a revealing example, a health systems oncology pathway program included only one PD-1 inhibitor treatment option, despite multiple inhibitors meeting NCCN guidelines that typically drive payer coverage decisions.4 Within the EHR interface, the preferred treatments appear prominently while alternatives have barriers like keeping products hidden or their selection may require multiple additional clicks, creating digital friction that effectively redirects prescribing patterns without explicit restrictions. This architectural influence operates silently but transforms theoretical access to less preferred products into practical barriers reducing market use.
In addition to using the EHR to steer product selection, health systems will deploy additional control mechanisms with remarkable effectiveness. Some additional areas include provider compensation structures that directly reward prescribing to support formulary adherence, pharmacy system steerage that channels prescriptions to institution-owned dispensing operations, protocol automation that embeds preferred choices into standard workflows reducing friction, and outlier reporting that leverages peer benchmarking to enforce compliance. Our own proprietary research confirms these tactics have impact: 60% of prescribers reported that treatment decisions are made based on the perceived health system barriers rather than actual payer coverage policies.1
Strategic engagement: Taking action
Navigating today's complex healthcare ecosystem requires a new approach. Biopharma manufacturers launching novel therapeutics must build receptive environments well before approval by simultaneously addressing both payer and health system influences. Success at this nexus requires a comprehensive launch and expanding indication strategy designed for payers with clinical differentiation tactics and a contracting strategy. For health systems, a successful launch with growing product utilization will include expanded features like how the product may be used across a patient journey and folded into existing workflows. Bringing these pieces together, market access plans should include example components below from the lens of both payer and health system stakeholders.5
This strategic approach addresses the full spectrum of influences on prescribing behavior while aligning payer and health system dynamics. Successful market access requires expertise in navigating both environments for effective product positioning, adoption, and growth. This comprehensive approach enables manufacturers to plan for future market events such as competitor launches and adapt to evolving guidelines and regulatory changes. When payer and health systems are properly aligned, the results deliver better patient outcomes, reduce healthcare system friction, and improve stakeholder experiences. This ultimately strengthens the manufacturer relationships and supports future growth and innovation.
The evolving healthcare landscape has triggered a fundamental shift in biopharma commercialization. Forward-thinking organizations now pursue simultaneous engagement with payers and health systems through distinct yet complementary strategies that remove barriers to therapeutic adoption. By developing these ecosystem approaches, biotech companies create environments where their innovations can thrive. Those who master this integrated approach will lead in our complex healthcare environment, creating value across all stakeholders while ensuring life-changing therapies reach the patients who need them most.
About the Authors
Market access authorities from Petauri—Shana Gunderson Hua and Pete Vaccaro (payer & PBM thought leaders) alongside Lauren Nestor and John Strapp (health system experts)—provide unparalleled insights into creating integrated access strategies across today's complex healthcare ecosystem
Sources
- www.pharmexec.com/view/biopharma-health-system-strategy-secure-optimal-market-access
- www.pharmexec.com/view/how-to-overcome-market-access-hurdles-for-inpatient-drug-launches
- Levine, D.S., Drossman, D.A. Addressing misalignments to improve the US health care system by integrating patient-centred care, patient-centred real-world data, and knowledge-sharing: a review and approaches to system alignment. Discov Health Systems 1, 8.
- www.mmitnetwork.com/thought-leadership/pathway-or-perish-the-two-pronged-hurdle-to-ensuring-access-in-oncology/
- https://cms.thekinetixgroup.com/wp-content/uploads/2025/04/20250224_Petauri_Optimizing-Health-System-Adoption_FINAL.pdf
