Why commercialisation is the next frontier for digital innovation in pharma

In March, Cigna and its pharmacy benefit manager subsidiary Evernorth announced plans to limit spending increases on GLP-1 drugs at 15% per year. The goal is to expand access to the diabetes and weight-loss drugs, which have become wildly popular, but have caused many employers to restrict coverage because of their high costs and increasing utilization. Evernorth also struck related deals with Eli Lilly and Novo Nordisk, presumably to help contain costs, though details have been kept confidential.

For pharmaceutical companies, the deal represents a classic trade-off: forgo some revenue to gain access to as many patients as possible.

In market access deals like these, drugmakers need their teams aligned to develop and execute strategy and ensure success. Ideally, they’ll monitor their contract performance over time to determine whether the concessions they made were worth it or whether adjustments are needed when the next contracting window opens.

That’s easier said than done. Internal pharma teams — market access, pricing & contracting, commercial, finance, brand, and so forth — have siloed approaches and performance targets for spurring adoption of brand drugs.

Additionally, not every manufacturer has the deep resources of a Lilly or Novo Nordisk. Many turn to spreadsheets and business-intelligence tools to model access scenarios — an exacting, time-consuming process that is difficult to scale, not user-friendly for casual business users, and relies on point-in-time snapshots of market activity to make forecasts.

It highlights the critical need to embrace digital-first technology solutions that can integrate disparate datasets, run sophisticated analyses based on continuously updated information, bridge organisational silos, and generate actionable insights. It’s the only way to close the loop between pre-deal modelling for access strategy and post-deal performance analysis to align teams for success, carefully manage GTN pressure, and reduce revenue leakage.

The risks of disharmony

Market pressures raise the stakes of getting access strategies right and limiting revenue leakage. Payer-PBM consolidation has tilted the playing field. The three largest — CVS Health’s Caremark, Cigna’s Express Scripts, and Optum Rx of UnitedHealth Group — processed 79% of prescriptions in 2022, giving them tremendous power in access negotiations. The changes brought to Medicare by the Inflation Reduction Act will require more disciplined pricing strategies and increase scrutiny of copay burdens for patients; so will the shift to value-based payment models. Lastly, the life sciences industry faces some major looming patent cliffs amid a difficult lending environment.

These pressures underline the need for companies to develop holistic strategies that address a series of complicated questions: Will paying hefty rebates lead to more scripts? Will they benefit market share? Will they work better in certain territories than others, or with certain payers? How will they affect gross-to-net revenue?

Unfortunately, internal pharma teams are often siloed and disjointed, making them ill-prepared to answer these questions. Market access teams struggle to communicate with commercial field sales to understand how the contracts they’ve negotiated affect territories and the providers in them. Field sales sets goals measured by script volumes, while brand teams are also concerned with the number of new patients using the therapy, or NRx. Finance, meanwhile, is concerned with several metrics — NRx, TRx, patient acquisition costs (PAC), cost of goods, inventory, and so on.

This disharmony can increase a company’s GTN spread and revenue leakage. For example, imagine a company has a drug that is generating highly successful script volumes, thanks largely to the copay cards the commercial field sales team heavily promotes to hit their goals. The challenge is, if this is the overwhelming strategy used by field sales team, net revenue can suffer by not targeting script uptake with better access, and rebated, plans. In some cases, the scripts aren’t running through insurance and triggering the rebates the market access team has negotiated, so net revenue is impacted.

With better visibility into market access planning and strategy, the company would limit use of its copay assistance messaging to target HCPs with high plan mix with poor access, rather than using it broadly. Ultimately this allows more precise control of field sales targeting to choose the best access path that drives the best overall ROI — whether that be through rebated or copay-supported access, or both.

Same playbook

Using spreadsheets and business intelligence (BI) tools to tie together siloed data and develop market access strategies only takes you so far. It’s complicated to build formulas and unify and standardise different datasets, and the processes lack uniform workflows. Also, these models rely on historical transaction data that may be outdated, with few analogs from previous contracts to use in negotiating new and improved contract terms.

It’s also difficult to scale and share your models with the broader organisation, making it tough to get alignment on contracting strategy and ROI measurement.

Many companies have realised this and are investing in data lakes or data warehousing to pair with BI reporting software. But it takes highly specialised and hard-to-find skill sets to unify and standardise the datasets for use in modelling, since they often have different nomenclature and varying data fields. For example, invoice data may clearly outline the payer name, while specialty pharmacy data might only list big national plans, and not regional ones.

Pharma can no longer afford to cling to the status quo. The big players are increasingly touting their use of advanced data analytics — often powered by artificial intelligence — in areas including drug discovery and development, designing clinical trials, supply chain management, manufacturing, marketing, and patient and provider engagement.

Commercialisation is the next frontier. In a five-year study of 15 drugmakers, Accenture found those that invested in innovation in their commercial models generated on average $1 billion in additional annual revenue. The report also found that pharma executives see stronger adoption of data and analytics, and more sophisticated pricing and market access functions, among the most important contributors to future growth.

The best way to ensure that everyone is working from the same strategic playbook and uses common measures of success is by embracing digital technology that unifies in-house and third-party data with a purpose-built, precise payer spine. That way, teams can evaluate contract performance between payers, measure GTN, create actionable metrics to drive pull-through, identify strategic blind spots, understand PAC impact, and reduce costly errors and omissions.

Adopting digital-first technology solutions in this area will help companies strengthen their hand in negotiating with payers and PBMs and sharpen their access strategies over time. It will ensure they can deliver their products to more patients who need them, limit revenue leakage, and improve profitability, even as the healthcare market continues to become more complex and unpredictable.