Talking about reimbursement early and often is critical to the success of a new product, said Randi Tillman, senior director, pricing and reimbursement strategies at Elan.
“Reimbursement drives sales. Revenue will depend on reimbursement decisions and customer behavior is shaped by reimbursement,” explained Tillman at the Center for Business Intelligence's 3rd Annual Pharmaceutical Market Research Summit in Philadelphia on April 28.
Tillman noted the shift to a majority of government payers, and said that even though Medicare, as opposed to Medicaid, isn't the largest payer for prescription drugs, it can be tremendously influential. Medicare is a “thought leader,” and commercial carriers tend to follow suit in deciding which products to reimburse, she said.
Healthcare Common Procedure Coding Systems (HCPCS) applications can take up to 21 months to complete, and require cumbersome pharmacoeconomic data. Products in the market without assigned HCPCS J Codes are given a “miscellaneous code,” which may hurt reimbursement. “A miscellaneous code can almost be a kiss of death [for a drug],” says Tillman. “A miscellaneous code isn't paid by the computer automatically, so it's kicked out and reviewed on an individual basis,” she said.
Individual review caused by miscellaneous coding typically leads to increased reimbursement scrutiny, which could be avoided. Sometimes new products can “use the same code of like drugs,” said Tillman.
Other suggestions for optimal reimbursement include the establishment of a reimbursement hotline, and techniques for billing payers. “A reimbursement hotline is almost required now with a new launch, especially with biologics. Do it 18 months before the launch,” said Tillman.
With payers and expensive biologics, it's best to position a product on the medical side of the budget, rather than the pharmaceutical side. “In the medical budget, the price is less conspicuous,” said Tillman.