Market access: the importance of understanding payers
Marcus Deans explains the necessity of knowing why and how payers make decisions.
By on Apr 20, 2010Marcus Deans explains the necessity of knowing why and how payers make decisions.
As the industry gets to grips with the shift in the customer landscape from prescribers to payers, there is an increased need to understand the nature of these new customers and particularly how they go about making decisions.
We all know that with the industry facing loss of exclusivity on a number of blockbuster drugs. The focus is now on new product development. These pipeline drugs have seen a focus on specialist and/or orphan drugs. Although patient numbers for these drugs will be small, it is likely that they will continue to face significant market access issues as markets become crowded and payers increasingly scrutinize the cost of these new entities.
Value assessments
The industry has responded by conducting a number of value assessments on these pipeline drugs, normally with a number of the following stated objectives:
- Evaluating the current and future payer environment;
- Determining key drivers of value;
- Value-based positioning and pricing;
- Developing value messages;
The overall aim of these assessments is to ultimately determine whether the said drug will be assessed favorably and hence given a green light for reimbursement at a price premium (the holy grail for the pharmaceutical industry). At the core of these value assessments is the need to thoroughly understand how payers will make their judgements.
Clinical data
Hence, the sort of questions often asked of the payers center around the strength of the clinical data, where to position the drugs versus competitors, and whether certain features of the drug (like its mode of action) will provide any differentiation to current offerings.
These questionnaires are often extremely detailed and expensive (as they are usually performed through a third party supplier) and aim to provide the market access or marketing team with some golden nuggets that they can ultimately use to plug any data gaps and ensure the drug is a commercial success.
This all sounds great, and the premise of asking your customers exactly what they want in order to ensure that your value proposition matches the customers needs is obviously a cornerstone of real marketing practice. However, Im afraid within this new environment it may well be flawed.
As previously discussed, many of pipeline drugs within the pharma armamentarium are now very specialist and/or orphan drugs. The very nature of these drugs means that they are designed for patients with rare (sometimes very rare) diseases, and hence the patient populations for these drugs tend to be small.
Assumptions about payers
What this also means is that the number of clinicians (normally specialists) able to accurately diagnose and treat these patients is also small and often quite a tight-knit community.
While this presents a number of great opportunities for the marketing team post launch, it does throw up a number of challenges for the market access and marketing team prior to launch. The problem is, these challenges are often not recognized.
Assumptions make an ass out of you and me, isnt that how the saying goes? Well, this saying couldnt be more appropriate in this instance. The critical mistake often made in these value assessments is the huge assumption that payers know the disease area, and have in-depth understanding of the treatments, and therefore how to make an appropriate assessment of commercial positioning, clinical data requirements, and, ultimately, price.
Challenging the customer
As we all know, in these turbulent times, the success or failure of our portfolio drugs can often determine the future of the companyand lets face it, our jobs! So why are we taking this leap of faith?
I think the answer is, unfortunately, something thats endemic within our industry: our inability or unwillingness to challenge our customers, whether they are payers or clinicians. The problem with this, however, if we continue down this road of passive indifference, is that the value assessments that we spend so much time and effort on are in danger of becoming meaningless.
The same old responses of requiring more head-to-head data, better safety data and more efficacy data are hardly the sort of golden nuggets that the commercial teams hope to elicit. More importantly, the answers may not even be credible.
No Assumptions!
So whats to be done? Well, as a first and easy step, assume nothing! A huge opportunity exists to educate groups of payers about how to assess these new molecules within our pipeline prior to asking them to participate in full value assessment market research programs.
Do not make the mistake of assuming that this new breed of customer is above reproach and is the font of all knowledge on everything from health economics to our clinical data.
Make marketing and market access work together
Secondly, ensure that both the marketing and market access departments work together in developing the questionnaires in such a way that facilitates some real insight.
Last, and perhaps most important, be very careful not to confuse payer positioning with the desired commercial positioning. Remember, how you position your products for payers and prescribers could and should be very different.
Far too many times have I witnessed arguments between the marketing and market access teams about the size of the target patient population, when, in actual fact, theyre both right.