Novartis – Owning Responsibility for Payer Relations
eyeforpharma speaks to Andras Fehervary, Novartis’s Head of Government Affairs and Public Policy on the importance of a consolidated European payer engagement strategy, and how pharma can ensure increasing cost containment works for them.
In Andras’ view, pharma has previously been slow to understand the importance of a professional governmental affairs function and how this engagement at this level is paramount for a strong market access department. “The pharmaceutical industry has been relatively late to understand how important this function is. There’s a need to develop this function and make sure it’s integrated into basic business processes, in particular that of market access. I still think that as an industry there are things we need to improve, but the learning curve is pretty steep.”
To say Andras is an expert in this area is perhaps underselling it. He is a seasoned public affairs professional with over 20 years of experience in both Brussels and Washington, D.C. His expertise in pricing and market access have led him to head up the European Government & Public Affairs department at Novartis International, with responsibility for numerous areas including primary care, specialty and oncology. For years now, payer engagement and government affairs haven’t just been a passion for him, they serve as the focal point of his career.
When quizzed on the key lessons for pharma should learn, Andras pointed to a number of simple yet highly effective strategies. “It’s related to the basics of how government and public affairs should be used in any industry. The senior management of a company needs to realize that they own the responsibility for governmental relations and engaging with the most high-level stakeholders. There needs to be a feeling of empowerment at the top levels of a company. What’s very important is that government and public affairs must always be present, and participate in meetings where the big decisions are being made. Moreover, we need an iterative process where business informs governmental affairs about their own risks, and their own priorities. Conversely, governmental affairs must have a heavy input in strategic planning.”
In a short space of time, we’ve all had to become experts on health economics
Andras believes that the industry is starting to see the results of these strategies, with better overall engagement being a key barometer for improvement. However, the challenges in Europe are many, particularly for expensive therapeutic areas such as oncology. “There are a number of trends which actually predate the crisis of 2008, but they have all been accelerated by the European economic climate. One trend is clearly towards the rationalization of healthcare expenditure – in a short space of time, we’ve all had to become experts on health economics. Pharma now needs a better understanding of where the funds will come from to pay for innovation and for the reimbursement of their portfolio.” Furthermore, Andras predicts that the European economic crisis’s ultimate effect in the next 5 years will be the imposition of pharma expenditure thresholds similar to those across the rest of the Eurozone economy – meaning healthcare financing will become more complex for pharma.”
“Other trends relate to evidence requirements – again, there’s nothing really new here but these demands are increasing all the time, for significant additional evidence to prove the value proposition behind a product. Some of this is related to new pharmacovigilance requirements in Europe, but other aspects simply towards demonstrating value in a real world setting.”
The vantage point that Andras has across the European public affairs landscape enables him to offer clarity on the additional infrastructure that must be in place to guarantee market access, clarity that he’s happy to share. “Market access must be involved much earlier in the development process. Most companies are now embedding some kind of health economics and outcomes research function as certainly no later than phase two, after proof of concept.”
“Another structural necessity is improved alignment between medical marketing and market access – these two departments must work towards an integrated value proposition. Essentially, this relates to the need to understand far earlier how payer evidence requirements will make themselves felt with regard to primary and secondary end points, in choice of comparator, in key aspects of clinical trial design, and in defining the specific patient population. I believe this is something all companies are working to address.”
Reinforcing this growing belief in the necessity of functional integration, Omar Ali of NICE recently stated at an eyeforpharma payer panel that company engagement with payers is far too fragmented. Omar stated, “Companies are sending medical managers, they’re sending market access, they’re sending managers with pricing responsibilities – but payers only feel they have the time to make an appointment with one representative.”
We might be starting to see less of a separation between those responsible for evidence generation and those who actually engage with the payers
This perspective comes of no surprise to Andras. “You need to send someone – a team – to address multiple requirements and speak the same languages as the payers themselves. You need somebody who has a strong understanding of clinical trial results, of health economics and outcomes and above all, of the value proposition. We might be starting to see less of a separation between those responsible for evidence generation and those who actually engage with the payers.” However, he affirms that in a perfect world, payers would have an advanced understanding of the differences between clinical assessment and economic assessment – something he believes would make payer engagement considerably easier for pharma.
Payer engagement is undeniably a significant stumbling block on both sides of the Atlantic, but, as Andras illustrates, Europe represents the bigger challenge in terms of reimbursement and pricing. “Since 2009 we’ve seen a number of trends in Europe that suggest countries are actually diverging rather than converging economically. This is creating wider differences in the ability and willingness of companies to pay for innovative medicines. It also means it’s becoming increasingly challenging to manage a relatively narrow pricing band, and a relatively tight launch envelope, in a Europe of 27 countries. We’re also expecting the increasing use of net reference pricing and therapeutic reference pricing.”
International reference pricing is regularly highlighted by pharma as its biggest headache – particularly when therapeutic areas such as oncology have such a high development cost, the necessity for country-by-country cannot be stressed enough. What does Andras predict for the future of oncology in the difficult European economic climate? “Hopefully, what we’d like to see in the future is a little more convergence around common criteria. This will make it easier to design clinical trials and to design a launch strategy to fit the majority of Europe. Also, I expect cost containment to lead to a gradual move from primary care and retail to a more hospital-based, specialty focus.”
To listen to the audio recording of the full interview, please follow this link http://www.eyeforpharma.com/oncology/content3.php
Novartis will be joining Bayer, Pfizer and a host of pharma and payers to discuss the future of oncology pricing, access and outcomes in Europe at Oncology Market Access Europe in November. For more details on the agenda and confirmed speakers, visit the official website.