With the healthcare industry’s rising focus on value-based care, it is more important than ever for life sciences brands to engage payers early in the product development process. It’s no longer enough to prove efficacy and safety through clinical trials alone.
Now, payers expect biopharmaceutical manufacturers to prove their value based on real-world outcomes — both clinical and economic — and to demonstrate a commitment to facilitating them.
Based upon our experiences and conversations with payers, we have developed a series of best practices for demonstrating value in the current market.
Why It’s Important: Direct and Indirect Effects of the Shift to Value-Based Care
The shift toward value-based care puts pressure on healthcare providers and payers alike to demonstrate outcomes that address the triple aims of improving population health, reducing per capita costs, and improving patient experience. Providers need to know the drugs they prescribe will help achieve the outcomes by which their performance is being measured and that payers will be more reluctant to cover products that don’t.
One medical director for a pharmacy benefits manager put it bluntly when we asked them how biopharmaceutical manufacturers need to engage payers and gain favorable market access:
“Right now, payers are focused on shifting costs away from hospitals to primary care because hospitals are the biggest cost center. But next, they are going to look at the second biggest cost center: pharmaceutical costs…So now they will start thinking, ‘How can we start forcing the pharmaceutical manufacturers to play the game of value-based care?’”
Given this dynamic, biopharmaceutical manufacturers that have robust programs for analyzing real-world data (and are willing to be more transparent by sharing the data with payers) are at an advantage because they tend to be better prepared to demonstrate value.
Biopharmaceutical manufacturers need to leverage their real-world evidence analytic capabilities to report on the evidence that matters most to payers in different therapeutic areas. Payers value different outcomes for treatments of widespread chronic conditions (e.g., heart failure, asthma/COPD, diabetes) versus oncology or other specialty treatments. For one condition, value may be measured by the reduction in ER visits. For another, it might be the delay of more expensive treatments or the minimization of surgical interventions.
Payers are often willing to grant more favorable access for products that demonstrate both clinical and economic outcomes that speak to population health, patient experience, and cost of care. For example:
- A chronic kidney disease treatment that has been shown in-market to delay progression to expensive dialysis, minimizes the need for kidney transplantation, and allows patients to be treated at home with the support of specialty pharmacy and remote patient monitoring tools is likely to be preferred over one that simply provides clinical improvement in kidney function.
- An asthma or COPD treatment used to pilot additional services or provide patient assistance in underserved areas may see a knock-on effect in terms of market access in largely commercially-insured, affluent areas.
As referenced in the asthma example above, payers value patient-level (de-identified) data that they can match to their own populations to identify areas for intervention (e.g., certain patient characteristics or very localized geographic areas where programs might be needed).
Another way biopharmaceutical manufacturers strive to gain an edge is by providing more wrap-around services such as patient support programs and companion apps. Such programs are meant to ensure better outcomes, improve patient experience, help physicians provide better care, and lower costs by minimizing higher-cost interactions with the healthcare system.
So, in theory, payers should value these services. But they often struggle to assign value to such programs in the absence of clear data. Hence, the burden of proof falls on manufacturers to show both a commitment to supporting the best possible outcomes with their treatments and to demonstrate the benefits of wrap-around services.
Bottom line: To gain favorable market access in a value-based care world, biopharmaceutical manufacturers need to demonstrate the health and economic outcomes of their products (that matter to payers in their therapeutic area) prior to launch. Once the products are on the market, they need to demonstrate a commitment to furthering those outcomes. And finally, they need to provide ongoing proof that their products and any wrap-around services are achieving the promised outcomes.
Best Practices for Engaging Payers
Three overarching best practices we’ve identified for developing and maintaining strong payer relationships include:
- Collaborating with payers: Long-term collaboration will facilitate a culture of trust.
- Understanding payer needs: Only a proper understanding of payer needs will allow you to align your goals.
- Focusing on provider experience: Creating a positive provider experience will both guarantee pull-through and align with payers’ goals of decreasing the burden on their provider networks.
These best practices are described in greater detail below. The earlier biopharmaceutical manufacturers begin implementing them the better, because great provider and patient marketing will matter little if a product does not achieve adequate access.
1. Collaborating with Payers
According to payers we’ve spoken to, collaboration can go a long way. Some key elements of successful collaboration include:
- Willingness to share data, including clinical trial and real-world. This obviously helps manufacturers and payers track outcomes, but data that includes sub-populations also helps payers stratify risk
- Collaboration on wrap-around services, especially those that impact the “holy grail” of adherence
- Pilot new programs that don’t have a proven ROI (e.g., digital health initiatives without clear attribution) to demonstrate the specific value to payers, providers, and/or patients
For example, biopharmaceutical manufacturers that offer treatments paired with connected health devices such as smart inhalers or continuous glucose monitoring could hit all three “collaboration” best practices. A steady stream of data on inhaler use not only could help payers pinpoint subpopulations whose cost of care might decrease with earlier intervention, but it also could result in targeted services for those at greatest risk and provide needed data on the added value of digital health.
2. Understanding Payer Needs
Understanding what drives the triple aim in a particular therapeutic area enables manufacturers to align their goals with the needs of both payers and providers. For instance:
- Learn which quality measures drive ROI for a specific therapeutic area
- Understand how payers think about and measure the health of their covered populations
- Understand the desire to move towards out-patient and at-home treatments
- Use data to identify high-risk patients for treatable conditions
This approach paid off for one manufacturer, as they set out to promote earlier intervention for a chronic illness for which they were developing a treatment. They knew they needed to identify the building blocks of a payer value proposition that would demonstrate the positive health and economic outcomes of screening for, diagnosing and treating the condition earlier than is standard practice today.
The manufacturer engaged payers to identify the current perceptions and practices, and identified payer segments that would be most receptive to encouraging early screening and making the treatment accessible for a larger portion of their population. They were also able to identify gaps in existing health economics and outcomes research (HEOR) – including the scarcity of data linking early intervention with long-term cost savings for payers.
To fill that gap, the manufacturer partnered with a leading integrated delivery network (IDN) to collaborate on a long-term outcomes study among a segment of their patient population with the illness. In partnership with the IDN, they plan to use the results of the study to publish an evidence-based article in a popular journal to convince other payers of the benefits of early screening, diagnosis and treatment of the chronic condition.
3. Focusing on Provider Experience
Healthcare providers are central to the “experience of care” element of the triple aim, but the fact that so many are burnt out and overburdened makes it difficult for them to focus on patient experience.
Hence, when manufacturers do what they can to make providers’ lives easier, this not only has a direct effect on prescribing, but also has an indirect effect in aligning with payers’ need to ensure a healthy provider network and workforce that can attend to patients’ needs.
Some areas where payers feel manufacturers can make a difference (beyond providing safe and efficacious products) are:
- Understand the impact that ease of prescribing has on demand
- Provide resources or services (when possible) that alleviate the administrative burden
- Consider tie-ins to electronic medical records (especially Epic) that make formulary status and patient out-of-pocket cost checks easy
On the last point, most payers with whom we spoke acknowledge that EMR tie-ins are few and far between, and that the countless plans, all with ever-changing coverage, make ease of prescribing from a benefit standpoint a tall order. However, they do see this as one obvious (if difficult) way to address key pain points related to benefits checks and denials that could otherwise be avoidable.
It’s never been more important for pharmaceutical brands to gain a greater understanding of what value means to payers. This can be achieved through a variety of methods, whether establishing better lines of communication and insights gathering between Market Access and Marketing, by developing payer ad boards, attending key payer conferences, or by conducting individual interviews with payers.
Regardless of how payer insights are gathered, earlier and more intentional efforts to do so are likely to put pharmaceutical products in the position for other marketing efforts (targeting providers, patients, caregivers, administrators, etc.) to have the best chance of success.
Because when we know exactly what value looks like, we can more effectively deliver it!