Market Access: Looking Back, Looking Ahead
Denise Woltemath, HSG’s VP of Custom Access Insights
Few barriers to market access existed in the early 1990s. Over time, however, securing market access has become significantly more challenging for pharma marketers. To that end, it's worth noting and highlighting key events that have influenced market access over the years.
1. PBM Influence Evolved
For decades, the pharma industry focused its marketing strategies on physicians, but by the 1990s PBMs had landed squarely on the industry's radar.
“PBMs were claiming they could control access to patients, although many were demanding rebates for more lives than they could truly control,” said Dee Prince, co-founder of Health Strategies Group.
Although their true impact on access had yet to be proved, PBMs did demonstrate they could influence market share through mail-order programs, which led several pharma companies to buy PBMs. Later, companies reshuffled their priorities and divested these assets, and PBMs became stand-alone entities once again.
Some of the lessons learned from the industry's experience with PBMs in the 1990s continue to resonate today. In recent years PBMs have become more powerful and have demonstrated their willingness to exclude products from their formularies.
2. Managed Care Gained Power
At the same time PBMs gained influence, managed care plans overtook traditional indemnity insurance. Insurers tested various managed-care models with their employer customers and, by the end of the decade, preferred provider organizations supplanted health maintenance organizations as the model of choice. Many managed care plans implemented preferred drug lists and open or closed formularies to control access. In response to managed care plans' growing influence, the industry began assigning account managers to these organized customers although sales, marketing and managed markets functions remained rather siloed.
Today, consolidation among health plans has become a significant market access challenge. In 2015 the top eight plans controlled half of all insured lives in the US. “In the '90s, if a major health plan booted your product off the formulary, you might lose 0.5% to 1% market share in one region. But today, if a major health plan does the same, you could stand to lose 7% to 10% of the entire marketplace,” said Rod Cavin, HSG's managing director.
As a result, pharma marketers have become more aggressive in their pricing strategies to be sure that their products get on plans' formularies.
3. MMA Spurred Opportunity and Experimentation
Pharma marketers faced new challenges and opportunities when the Medicare Modernization Act of 2003 established a voluntary outpatient prescription drug benefit, known as Medicare Part D. “On one hand, pharma marketers recognized the expansion of the market was an opportunity,” Cavin said. “On the other hand, they didn't know how seniors' behavior would change.”
During this era, payers began to experiment with more innovative access management strategies, such as tiered co-pay models, according to Rayna Herman, HSG's SVP of sales and marketing. “This changed the goal from getting on formulary to ensuring coverage and affordability,” she said. “Using co-pay cards to get patients motivated became part of the access strategy.”
Health plans also began to lean upon tools like prior authorization and step edits. “They were still rudimentary because they weren't managed electronically, but the adoption of those barriers so broadly across so many lives quickly changed how marketers positioned their products,” Cavin explained. “No longer were marketers focused on becoming the preferred product but rather on achieving parity with competitive products and removing barriers to access, such as changing tier status and removing prior authorization requirements.”
4. Specialty Pharmacy Courted Payers
Over the past two decades the industry has seen the influence of specialty pharmacy management companies increase significantly. Originally started as a way to support manufacturers by distributing specialty products, these companies now also support payers by helping control their drug spend.
“The specialty pharmacy management market is still fairly fractured but it will likely see consolidation in the near future,” Cavin said.
Payers also have become more motivated to move certain specialty products (like injectable oncology drugs) from the medical benefit to the pharmacy benefit, allowing for greater management of outpatient costs.
In recent years brand marketing has become more sophisticated as well. “Today the whole idea of access is more integrated into the sales and marketing fabric of companies,” Prince noted. “Now brand teams have people who are responsible for access. It's evolved from small, siloed groups to team-based awareness and action across the company.”
5. Providers Sought Greater Control
In the 1990s hospitals and health systems across the country scurried to form networks, purchase physician practices and create physician/hospital organizations to improve their contracting power with payers. In the mid-2000s that trend reversed and many integrated systems dissolved, shifting control of access back to payers.
Since the passage of the Affordable Care Act, in 2010, providers have been consolidating and integrating once again, forming integrated delivery systems and accountable care organizations. Their goal is to gain greater control over the entire continuum of care as they face risk-based payment models.
“It's clear that there is more risk flowing to organized providers, such as health systems and well-funded medical groups,” said David Rees, HSG's VP of new business strategy. “This is fueling more provider consolidation, and we will likely see more horizontal integration between physician practices as well as vertical integration with hospitals acquiring more practices.”
One challenge for marketers is determining how quickly these institutional customers will flip the switch from fee-for-service models to risk-sharing arrangements. “Timing the transition is critical,” Rees continued. “As a pharma company, you don't want to completely redo your customer engagement model before you and your customer can reap the benefits.”
6. Healthcare Reform Shifted Focus to Outcomes and Value
Until recently, pharma marketers' primary concern was ensuring that their products could reach the desired number of patients. Today, marketing teams are just as focused on making sure their product achieves the desired outcomes.
“As health systems move into population health management, they are beginning to look a lot like health plans with their focus on outcomes,” Rees said. “What drug companies need to do is show these providers how their drugs can benefit the patient populations that are most at risk. In this scenario, access is not only about price but about having the right patient outcomes.”
Such outcomes need to be demonstrated in clinical trials as well as in the real world. Even small venture-backed companies now recognize the connection between meaningful outcomes and a product's reimbursability. Companies are thus designing clinical studies to include the endpoints that matter most to payers as early as Phase II or III.
Since 2010 providers, payers and marketers alike have been trying to assess the impact of key aspects of healthcare reform—namely, the expansion of Medicaid, the creation of a new insurance channel through the exchanges and the emphasis on value-based care.
“From an access perspective, the ACA has demonstrated the need for marketers to differentiate their products on a value platform, even potentially beyond net price of product to impact the total cost of care,” says Bob Shewbrooks, HSG's practice leader. “As a result, we'll continue to see an evolution of health economics and outcomes research.”
More performance-based contracting approaches are also likely down the road.
“Companies are increasingly willing to put their toe in the water and test this type of approach,” Shewbrooks adds. One recent example is Amgen's risk-based contract with Harvard Pilgrim Health Care to pay rebates if cholesterol-lowering drug Repatha does not perform as well as it did during clinical trials.
7. The Future May Provide More Power for Providers
Looking ahead, Shewbrooks believes that providers will continue to adopt more care pathways in patient populations that were once considered untouchable or unmanaged, including some cancers and cardiovascular diseases. Providers also will continue to engage in care delivery models, such as patient-centered medical homes.
“The coordinated-care delivery model is still evolving and could move accountability for product selection back to the provider, which would present opportunities for industry,” Shewbrooks said.
Although the future is somewhat uncertain, it is clear that engaging with a payer or provider will become much more strategic than simply securing access for a product. Shewbrooks said, “Companies will need to look beyond the pill and consider true partnership opportunities with their customers.”
Denise Woltemath is HSG's VP of Custom Access Insights.