Key factors for market access
Ed Schoonfeld of ZS Associates offers tips for market access success, from scenario analysis to risk sharing.
By on Feb 25, 2010Ed Schoonfeld of ZS Associates offers tips for market access success, from scenario analysis to risk sharing.
Four key factors determine access to pharmaceutical markets today, according to Ed Schoonfeld of ZS Associates. The first of these is to consider the needs of payers early, especially in terms of phase III clinical data. If you don't, you are doomed to fail, says Schoonfeld.
The problem is that the dossiers normally submitted to regulators are conservative, including those for non-inferiority trials or placebo-controlled trials. These are not going to get payers excited. This means that you will need a good value story for payers, which is the second success factor.
Next, you need to ensure that research and analytics are integrated; there is little point in manipulating numbers if you don't know enough about the market. Finally, Schoonfeld strongly recommends working closely with affiliates, because local market knowledge is vital.
Rising costs, expiring patents
Access to markets these days can look very gloomy, especially in the US, where reform is on the horizon. There is also a lot of uncertainty in Europe, with regionalization in countries such as Germany, Spain and Italy presenting additional hurdles. Payers everywhere are demanding more evidence of effectiveness, and co-payments are rising in the US.
At the same time, drug costs are rising. Forty percent of drugs in development are expensive compounds, such as biologics, with a lot of them in oncology. Payers are going to have to find a way to manage that, observes Schoonfeld. Competition is always present, patent expiries loom large, and bio-similars are emerging.
So what do we do to address this scenario? Schoonfeld advises that when change is expected, scenario analysis is essential. You have to understand the landscape and you have to plan far enough ahead. Certainly, you need to have a good understanding of payer attitudes before you get into phase III, or even phase I if there are particular concerns. But much of the value from this effort will be lost without integration into the overall plan market access should not gravitate into its own silo. Neither should emerging markets be neglected.
Payer categories
How can payers be categorized? Although Schoonfeld is clear that it is not possible to fit all payers into a particular box, they do fall into four main management philosophies. Those driven by health economicslike the UK and Canada, where cost-effectiveness is everythingare perhaps the most obvious. Emerging cash systems are typified by India and China, where there is less healthcare coverage and a lot of cash payments.
The US is, of course, insurance based. Therapeutic referencing is growing in Europe, where a new drug's value is assessed in relation to the existing competition. Of these four, emerging cash systems are the fastest growing. Schoonfeld feels they are the markets of the future. He is not enamoured of health economics-based systems, which he considers make more noise than they are really worth. If oncology drugs were always priced on NICE, I don't think anything would be in development, he declares.
Risk sharing
Market access considerations are influencing drug development in many ways, but Schoonfeld warns against basing a strategy entirely on payer requirements; they might be unrealistic or not commercially viable. Another problem with planning is defining incentive milestones for R&D. They should really be value based, but value might not be realized for ten years. And value is one of the three elements needed when dealing with payers, expressed as benefit. The other two are the evidence for the benefit, and the story tying it all together.
There is a lot of debate about risk sharing at present, but many of them are just disguised price cuts or opportunistic competitive moves. Such schemes are popular with some groups, such as health economics researchers, but not many are true risk sharing deals, says Schoonfeld: A really win-win deal needs to be good for the payer and for the company.
Schoonfeld identifies three main reasons for going into a risk-sharing deal: to negotiate a price reduction, to gain market access where there are data gaps, and to find common ground where value varies in different indications. In practice, the last one is very hard to do, and the only one that is genuinely risk sharing is the second.