Establishing a Successful Pharma-Payer Relationship in 2022

If a life sciences company wants to start their relationship with a payer off on the right foot, then they better be prepared to deliver them some PIE. No, we don’t mean a delicious pastry, but pre-approval information exchange (PIE). Today’s payers want more information about a product sooner than ever.

According to an Xcenda survey of its Managed Care Network, 80% of payers preferred to receive information, such as study results, product pricing, indication, and patient utilization projections, up to 12 months prior to FDA approval. And a different survey from Xcenda of healthcare decision makers (HCDMs)—which includes pharmacy benefit managers (PBMs), health plans, academic institutions or medical centers, independent practice associations or medical groups, integrated delivery networks (IDNs), and self-funded Employers—revealed that 74% are using PIE in their formulary decision-making.

“To facilitate more robust communication, including PIE, payers and manufacturers are connecting via secure, online platforms—a trend that has accelerated amid the pandemic,” explains Tom Martin, VP, Market Access Commercialization, Xcenda. “In fact, use of AmerisourceBergen’s FormularyDecisions platform—which supports bi-directional information exchange between manufacturers and HCDMs—has increased in activity more than seven-fold over the past five years. Looking ahead, I anticipate more manufacturers will turn to online platforms to engage payers and share product information at the pre-, peri-, and post-approval stage.”

But even as communication between manufacturers and payers increases via online platforms, that doesn’t mean in-person meetings are becoming less important. HCDMs prefer in-person meetings as their No. 1 communication option when sharing PIE with manufacturers followed by web-based meetings, Academy of Managed Care Pharmacy (AMCP) pre-approval dossiers, medical information requests, and closed HCDM platforms, according to yet another Xcenda survey with HCDMs. Additionally, HCDMs find medical sciences liaisons to be the most credible source to deliver PIE, with account managers ranking next.

Getting Into the Negotiations

PIE can be especially helpful to really smooth pricing negotiations when launching a new product, according to John Guarino, President and Managing Partner, Peregrine Market Access.

“In addition to PIE dialogue for new products, a willingness to offer something goes a long way with everyone,” Guarino says. “It can speed review times and help you arrive at a better coverage policy. In a crowded space, there are frequently minimum levels of contracting that are required to even get in the game. Ultimately, what payers value from pharma is information, a strong understanding of their business and the class of your brand is competing in, and a willingness to offer something.”

But Darren Jones, Principal, Life Sciences Consulting Practice Leader, Baker Tilly, says the most successful negotiations are not just what info you can offer to payers upfront, but a long-term commitment by pharma companies to ongoing real-world evidence (RWE) generation/studies.

“Comparative outcomes data is rarely robust enough at the launch of a product to fundamentally alter treatment paradigms, especially for specialty markets and small molecular innovations,” Jones says. “Because of this and the fact that payers are continuing to demand more compelling RWE, pharmaceutical companies must commit early to measuring outcomes, provide continuously enriched evidence to payers, and align planning for RWE with the product lifecycle at the earliest possible time.”

If that is what payers want, then what can hold up or derail negotiations? Bharat Chudasama, VP, Syneos One, Syneos Health, says “the most common hurdles to negotiation include agreeing on what is deemed as fair market value; demonstrating the burden of illness (for patients and caregivers); assisting HCPs in identifying the right patients that will benefit from the new intervention (eg, biomarkers) to maximize the patient benefit and optimize resource utilization; and alignment on the right commercial structure to optimize and expedite patient access. To reach an optimal contract, it is best to engage with all stakeholders proactively to understand the holistic picture (eg, patient groups, caregivers, HCPs, treatment delivery experts, payers) and dissect robust patient, competitive, and therapeutic insights to understand common threads and bespoke market needs.”

What is Value?

Determining what value means to manufacturers and payers is even more important as the Affordable Care Act has been shifting our healthcare system from payment based to one focused on the value of care. While several forms of value-based pricing models have cropped up in recent years, Rishi Agarwal, Principal, Axtria, says no single paradigm-changing solution has emerged thus far and these models continue to face headwinds for a few reasons.

“First and foremost is the loose and complex definition of ‘value’ and the associated metrics, especially in diseases that require long treatment cycles,” Agarwal explains. “This is further clouded by challenges like the lack of common belief among providers whether it is their responsibility to control waste in healthcare spending, lack of observed correlation between quality and varied cost of care, an unclear (and as a result,) understanding of the impact of value-based pricing models on the use of new treatments, and the effect on profitability.”

Ilene Auerbach, PhD, GVP, Scientific Services, Market Access, The Lockwood Group, agrees that these models certainly still face challenges due to lack of consensus or standardization in care, but she sees their potential.

“Collaborative or multi-disciplinary care models maintain patient centricity in value-based care, while still offsetting unpredictable high costs that contribute to total cost of care,” Dr. Auerbach says. “Equity-based payment approaches may also complement more traditional approaches to incentivize health equity while addressing health disparities where gaps exist. From a manufacturer perspective, this opens the door for new collaborations across stakeholders to optimize patient outcomes while minimizing financial risk. Rare disease indications, in particular, will continue to require a balance of innovative models with collaborative approaches to managing spend.”

Collaboration is exactly what Jen Norton, VP and Head, US Value and Access, Amgen, feels necessary to truly achieve success for patients in 2022.

“While working to ensure access to innovation, pharmaceutical companies must recognize that the payer environment is highly competitive; payers face constant pressure from plan members and employer-customers to lower premiums,” Norton says. “At Amgen, we see this as an opportunity to create meaningful business-to-business connectivity with payers built on data sharing to reduce long-term uncertainty and risk associated with novel medicines and access approaches. Applying critical insights from RWE, Amgen is partnering with payers to support commercial adoption of novel value models and provide patients greater visibility into outcomes in support of the payer’s value proposition, as well as that of our medicines. Amgen believes the pharma-payer relationship should go beyond being focused on transactions and instead look for new ways to collaborate around the shared goal of building a resilient health system while improving patient outcomes.”

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