Linking Health Economics and Policy Part 1

Transforming Market Access

In the face of rising healthcare costs and the rapid development of more innovative and expensive medical technologies, there is a growing recognition of the bearing cost-effectiveness has on the decision-making process of healthcare payers.
To gain further insight into the specific issues and key success factors which impact market access, Alliance conducted a global survey with key global and local stakeholders in the pharmaceutical industry.
The clear standout results from the survey highlighted 1) the importance of identifying and prioritizing the most appropriate stakeholder. Getting this first step right is critical to the success of pharmaceutical product. 2) Equally as important is ensuring sufficient evidence generation to provide support for products. And finally, 3) a clear strategic pathway for access to a product must be established by a manufacturer.

Stretching government boundaries or seeking true value?

As the US and EU economies struggle to bounce back after exiting the financial recession, healthcare budgets face constant restrictions and containment measures. Increased scrutiny is placed on pharmaceutical manufacturers regarding the manner in which they price their products. The trend for cost containment is very much alive today, with certain classes such as antibiotics, being publicly undervalued and under-priced.

Cheaper prices have led to global over-prescription by GPs and other healthcare professionals. This heavy overuse of antibiotics has gradually contributed to the prevalence of antimicrobial resistance. The number of antibiotics coming to market has dropped consistently since the 1980s, and with no clear market leaders forthcoming, the public may now realize we have hit a ceiling in our development of this class of drugs.

Newer, more expensive antibiotics such as Durata’s Dalvance, will test the current price-conscious healthcare environment. Dalvance, indicated in patients with skin infections, has a better administration profile than generic vancomycin, and may also lead to reduced length of hospital stays. The value of Dalvance lies in the vastly improved patient quality of life and reduction in healthcare resource utilization, albeit at a higher unit cost per treatment than generic vancomycin.

The recent furor surrounding Gilead’s US launch of their Hepatitis C drug, Sovaldi, has shown how a seemingly high price can be politicized and criticized without a clear understanding of the lack of effective treatments within the Hepatitis C treatment landscape. Sovaldi has managed to show a 90% cure rate for patients in a therapeutic area where rates historically have been ~50%. Interferon is the primary alternative agent which is effective in these patients, but with high relapse rates and poor tolerability, the launch of Sovaldi was highly anticipated.

Gilead managed to secure a treatment course price of up to $84,000 in the US, as a result of their solid evidence generation and the clear unmet need for Hepatitis C patients. Sovaldi, however, became a target for politicians as well as insurance companies, with the advent of the Affordable Care Act also driving negative opinions. Add to this, Gilead offering Sovaldi at heavily discounted prices in markets such as India, has led to US stakeholders and key opinion leaders campaigning against the company and its perceived greed.

Historically, pharmaceutical companies have been dogged by severe criticism around ethical standard and an emphasis on business-driven goals as opposed to a patient-focused approach. Health is often seen as a right rather than privilege, and pharma’s close interaction with healthcare systems have often deflected away from inefficient governmental and poorly regulated private systems. Furthermore, a lack of clarity over the true cost of bringing a product to launch, with the manufacturer’s themselves often unable to confirm exact values, has contributed to a lack of understanding around prices which pharma wish to set for their products.

Companies such as AstraZeneca have reported an average spend of ~$12bn on research for each new drug. Healthcare will always remain a controversial discussion point, and the fact that financial gains or potential losses may shape a pharmaceutical company’s strategic directions will always ensure a somewhat negative perception. Avoiding sensationalist media campaigns and a greater clarity around the ultimate goals of pharma will allow for a closer relationship between the public and the pharmaceutical industry.

The Alliance Market Access Survey

As we have seen, market access is the ultimate goal for medical device and pharmaceutical companies, yet it remains one of the biggest current and future challenges for the industry. To uncover the specifics on the challenges and key success factors, we recently conducted a survey with global and local stakeholders to find out more.

We asked the stakeholders two main questions:

  1. What do you consider to be the top three challenges from a price, reimbursement or market access perspective of launching a new drug?
  2. From your experience, what have been the top three key success factors related to price, reimbursement or market access, of launching a new drug?

In our next post we will discuss the results and findings from the Market Access Survey.

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