Gain reimbursement with a focus on value management

Value-based reimbursement is changing the way pharmaceutical companies determine which medicines will be available for patients and how care is organized by providers. Accenture maintains that if pharmaceutical companies are to address the challenges posed by a new focus on value, they must further emphasize total product value and real world, quality of life outcomes when determining which therapies to develop.

Meeting efficacy and safety thresholds doesn't always guarantee that a new therapy will succeed in the market. Patients, providers, payers and regulators want pharmaceutical companies to demonstrate that new therapies deliver distinctive value to gain support and justify reimbursement. To achieve this, pharmaceutical companies need to create a new operating model that puts value management at the core of both R&D and commercial decisions.

Proof of value is in demand

Globally, regulators are requiring pharmaceutical companies to demonstrate initial and long-term product value. For instance,

• In Germany, healthcare reform regulations now require demonstration of comparative efficacy.

• In the US, the landscape for reimbursement is being reshaped with risk and value management becoming more prominent.

In addition, national health services and insurers continue to deal with the impact of the global financial crisis and healthcare reform legislation, which have squeezed profit margins. Payers are consolidating. Bigger and more influential payers can exert stronger pricing pressure on pharmaceutical companies, and demand a demonstration of value-for-money and proof of positive outcomes to justify reimbursement.

Despite these changes, we find that many pharmaceutical companies use obsolete clinical trial plans and short-lived product commercialization strategies that don't emphasize value, which leads to conditional approvals, limited reimbursement, and poor overall market performance. The focus on value necessitates retooling corporate operating models so that processes and capabilities emphasize value management at an early stage.

Five tenets promote value management

I recommend five basic principles that pharmaceutical companies should harness to move away from a phase-based, sequential approach to securing regulatory and reimbursement approvals, and toward a value management-focused approach.

"...pharmaceutical companies need to create a new operating model that puts value management at the core of both R&D and commercial decisions."

• 1: Nurture a global, cross-functional focus on value

Value management involves cross-functional collaboration and external stakeholder input to proactively identify and demonstrate a drug's value drivers. A company must foster global adoption of this type of model across all levels of R&D, commercial senior leadership, managed markets and payer relations teams. There must be tighter collaboration between R&D, market access and commercial functions, including sales and marketing, all of which have close relationships with providers and customers who can provide feedback on which disease states warrant investment.

R&D should incorporate cross functional and local market input both to validate primary, secondary and exploratory end points across Phase III, IV and V trials, and also to verify that clinical and value measures matter to a global audience.

• 2: Evolve traditional commercial roles to focus on value

Today, most commercial functions focus almost exclusively on Phase III trial results to secure regulatory approval, gain market access, generate demand and drive sales. Now, pharmaceutical companies must change key commercial roles to emphasize value when dealing with internal colleagues and when collaborating with external stakeholders. For example, the marketing brand manager could be more of a value manager, focused on orchestrating value management for a product. Marketing could feed ongoing input into the clinical plan based on local regulation and market conditions.

Also, some US pharmaceutical companies have run early phase collaborative pilots in which payers and providers become "thought" partners with disease state knowledge relevant to Phase I and II activities.

• 3: Invest in information technology to help drive value

The primary focus of information technology (IT) is usually on clinical trial support. This focus has led to an IT function built on two core capabilities: clinical data management for Phases I – III and pharmacovigilance for tracking adverse events. But Electronic Medical Records (EMRs) are yielding unprecedented amounts of data to pharmaceutical companies, who must develop the data management and analytical capabilities needed to make cost efficient use of this data to improve outcomes.

"...many pharmaceutical companies use obsolete clinical trial plans and short-lived product commercialization strategies..."

Pharmaceutical companies are finding value in EMR-derived data that offer insight into individual patient medical history, prescription history, outcomes and costs. Because these in-depth data are generally collected in a care management context, they give companies a novel perspective on process and outcomes. Specifically, I recommend investing in clinical data management that can support clinical and value measures captured in Phase IV and V trials, and which can incorporate data globally. To collect value-driven data, organizations need to identify and integrate new data sources including pharmacy, patient advocacy and pre-profiled patient registry data. Pharmaceutical companies also should consider innovative technologies, such as report patient monitoring, which could strengthen the quality and quantity of data sources in support of value.

• 4: Embed value management as a continuous process

The Value Dossier contains all the relevant information provided by the pharmaceutical company to allow payers and regulators to make an informed decision. Today, payers usually are neither asked to provide input into the dossier, nor do they consider the output to be a major factor in negotiations. However, the Value Dossir can be re-tooled so that it documents value findings from Phase II through to Phase V, to provide better support in securing maximum reimbursement.

The Value Dossier thus needs to incorporate critical feedback from a broad range of external stakeholders, and should be developed by a cross-functional value team. A Value Dossier should position the brand to enhance sales, optimize patient outcomes and rationalize total healthcare costs.

• 5: Expand and redefine relationships with stakeholders

Because market access and adequate reimbursement build on demonstrating value throughout development and post launch, pharmaceutical companies must reorient their relationships with stakeholders such as payers, regulators, physicians, patients and patient associations to maintain an ongoing dialogue with many of them simultaneously. These partners can jointly assemble the data, insights, and analytics needed to achieve personalization and value.

"...pharmaceutical companies must change key commercial roles to emphasize value..."

Pharmaceutical companies should gather additional input and value measures from healthcare professionals, including regional and local thought leaders, pharmacy and therapy committee members, nurses and pharmacists. Companies should also expand their relationships with regulators to gather feedback on key value measures before trials are constructed.

Other efforts could include establishing relationships whereby payers work with the brand to develop value measures that are most important to them. Pharmaceutical companies also should develop ties within the patient advocate community to understand what value measures would have the biggest impact, and involve diagnostic partners early in clinical trial development to identify and validate potential biomarkers.

Conclusion

The biopharmaceutical industry has had to contend with seismic shocks in the last few years, from the economic downturn, to the 'patent cliff' and health care reform in both mature and emerging markets. Adopting a value management focus will require new role definitions and personnel responsibilities at the global, enterprise level and within individual markets. It is a significant corporate cultural change that will require process reengineering, a specific training program, and a comprehensive effort encompassing commercial and non-commercial functions alike. The shift to a value management focus is as critical as any of these changes, and if navigated successfully may result in better products, improved patient outcomes, and increased reimbursement and returns on investment.

Further information can be found here: Increasing Pharmaceutical Reimbursement through a Value Management Operating Model

About the author:

Jeff Elton is a managing director for Accenture's Life Sciences industry group. He has over 20 years of experience as a global executive and consultant in the biopharmaceutical and healthcare sectors. Within Accenture he has broad responsibility for Accenture's strategy and partnerships for new solutions enabled by clinical data and analytics.

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