On May 14, 2015, 60 senior physician executives from the Boston area biotech and pharmaceutical industry gathered at Alnylam Pharmaceuticals in Cambridge to hear Julia Gaebler, Ph.D., Vice President, Health Advances and Troyen Brennan, MD., M.P.H. EVP & CMO, CVS Caremark, discuss Drug Pricing & Reimbursement. The event was moderated by Akshay Vaishnaw, EVP R&D & CMO of Alnylam.
Julia began by emphasizing three key messages for the audience:
- Global Health Technology Assessment (HTA) is proliferating and payers are gaining influence
- Payer evidence requirements have created a new ‘4th hurdle’ for manufacturers
- Biopharma and Global Medical Affairs (GMA) must respond to the new payer landscape
Market access issues are now the leading risk to the biopharma business model and companies should be reassessing their level of investment to influence payer audiences.
Comparative effectiveness in a real world setting is increasingly required. Julia noted that Germany not only asses cost-effectiveness relative to comparators, but also plays a large role in determining what the comparators will be. She cited an example where the reimbursement price of a new drug was based on the comparative benefit of a non-drug course of physical therapy.
Reimbursement agencies also seek to reduce the potential patient population to a subset of the patients studied in randomized clinical trials. In EU after EMA approval, each country has its own process of evaluation and determining the price of a new product; the more direct evidence of clinical benefit (versus the Standard of Care) that a company can put forth, the better the chance of a higher price. The United States is alone in using free market pricing among first world countries. in the US, payers control their budget via utilization restrictions, including formulary restrictions, prior authorizations, step therapy, and differential co-pays.
Today, failure to match price with value proposition and supporting evidence at launch will irreversibly restrict a product’s commercial and medical opportunity. The changing market access and reimbursement environment requires biopharma companies to make a number of operating changes:
- Companies need to invest ” boots on the ground” to reach regional payers in Europe and in numerous third party payers in the US.
- Manufacturers need to engage payers earlier in the development process, optimally prior to Phase III.
- Health Economics Outcomes Research (HEOR) teams need to be integrated into the Clinical Development Plan at a much earlier date to ensure that the payer-relevant data are collected, e.g., Quality-of-Life measures, impact on health care system resource allocation, cost-effectiveness data and patient centered outcomes.
Opinions expressed here are solely those of the authors and do not reflect the views of Health Advances LLC, its management, or affiliates