Market Access: Challenges and the Quest for Talent
White Papers | April, 2019
By Theo de Roij
Market Access (MA) is the process that ensures all appropriate patients who would benefit get rapid and maintained access to (new) products at the right price. Qualified people, who can successfully take on an MA leadership role, are in high demand and there continues to be a shortage of talent.
DHR spoke with more than 50 MA leaders from a variety of (bio)pharmaceutical companies and geographies about the evolution of drug prices, value-based drug pricing and the challenges that individuals managing market access activities may face. Finally, we asked them for their views on the competencies and skills that are required to be an effective market access leader.
Insights gained from these interviews are summarized and used as the basis for this report.
Drug Prices and Consumption
The USA is the biggest market for pharmaceutical products and spends $335 billion annually on drugs. Japan holds the second place with $94 billion, closely followed by China with $87 billion annual spend. Together, the EU countries spend around $180 billion on pharmaceutical products.
Much has been said and written about the disparity between the (high) drug prices in the USA and those in other developed nations. For some time now, consecutive US presidential administrations have announced they would take initiatives to address this issue. Whilst it is generally expected that US drug prices will eventually come down it will take time.
Although drugs represent a relatively small fraction of total healthcare cost (between 10 and 15%), drug prices have come under ever closer scrutiny in every country. The need to reduce the cost of pharmaceutical products has been exacerbated by the economic crisis that started in 2008. Apart from some recent high-profile cases of exorbitant price increases of older drugs in the USA, an important catalyst for this scrutiny are the high prices of new, innovative drugs such as immune-oncology and gene therapy products that offer significant therapeutic benefits compared to existing products or even a potential cure where no effective treatment exists today. The combination of budgetary limitations and the arrival of truly innovative but high-priced products is forcing all stakeholders to think about strategies surrounding pricing, availability and reimbursement of pharmaceutical products and the longer-term sustainability of existing systems. Factors such as an ageing population and the global exponential rise of life style-related diseases, especially obesity and type-2 diabetes, which lead to an increased demand of pharmaceutical products, put further financial pressure on the systems.
Price Versus Value or Value-Based Pricing
While much of the public debate focuses on drug prices, the real focus should be firstly on a product’s value and secondly on how this value can be translated into an acceptable and sustainable price.
A product’s value is based on clinical data of the product’s benefits compared to existing alternative treatments, if available. The various stakeholders need to reach a consensus on how the data can and should be interpreted using health economic modelling. Stakeholders include originating company, payers such as insurance companies and public health organizations, regulatory authorities and patient organizations. Questions such as “what is the value of extending the symptom-free life of a cancer patient by x months or years”, need to be discussed and agreed on.
The clinical data collected during a product’s development are – almost by definition – only partly indicative of what can be achieved by treatment in a real-world setting. Hence the need for real-world evidence (RWE) post-approval. However, before such data is available an agreement, if only preliminary, needs to be reached on benefit, value, pricing and reimbursement. As an example, the EU has implemented a system of “adaptive pathways” which is an approach to maximize the positive impact of new medicines on public health through a staggered approval process (and conditional reimbursement) ensuring early availability for those in the biggest need.
Reaching consensus on a product’s value and acceptable price is a much more difficult issue; one where the interests of several of the stakeholders are diametrically opposed: companies want their products to be as widely available as possible as quickly as possible at the highest possible price. Payers with limited budgets and their own profit goals in case of private insurers have a completely different view on acceptable and affordable prices. Reaching consensus on the value of one additional year of healthy life, for example, requires negotiations that are often complicated by a lack of mutual trust.
The advent of revolutionary gene therapy products with the promise to be a real cure for diseases that currently lead to severe loss of quality of life or death at a young age has taken the issue of a product’s value and sustainable price to yet another level. Prices proposed for such products run into millions of dollars. If they fulfil their promise, only a single administration may be required for the entire life of the patient, potentially extending disease-free life by decades. So, a long-term approach to value and pricing is required whereas the budgets of payers have a much shorter horizon. Several potential solutions are being discussed such as risk-sharing schemes. We’ve also seen the emergence of certain companies working together to help develop new health systems to deal with the above issues.
Challenges Facing the Market Access Leader in the Value-Based Pricing and Reimbursement Landscape
A Market Access Leader is confronted with challenges, both internal and external, that require great skills to ensure that every product is available for treatment of the largest possible group of appropriate patients in a timely manner.
One of the major internal challenges is the lack of understanding in parts of the company of how to arrive at establishing a product’s value and, based thereon, what price is right. In many companies, the MA Leader must spend a considerable amount of time explaining to management and to development and commercial colleagues the framework within which to operate imposed by regulatory requirements, reimbursement restrictions and the competitive landscape. At the same time, the external world often moves faster than the corporate world leading to a widening of the disconnect between the internal environment and external world.
The Leader needs to devise a product-specific strategy that starts at the early stages of product development throughout to commercialization and get all parts of the organization aligned with this strategy. Obviously, it is essential that a company’s financial strategy and objectives dovetail with market access strategies.
The MA Leader interacts and negotiates with external parties: regulatory authorities and public and private payer organizations and patient organizations. A deep understanding of the regulatory framework and of the payer and reimbursement organizations’ goals and objectives is critical. As said, these goals and objectives are often diametrically opposed to a company’s objectives. Forging good relationships with these stakeholders that are based on mutual trust and respect is a formidable task but one that is worth the time and effort. Engagement early in the process will be beneficial too.
Someone with corporate responsibility needs to be sensitive to and aware of the differences between countries in local policies and financial constraints.
Competencies and Skills of Market Access Leaders
- An effective MA leader must understand how the data on which decisions are made on a product’s value and suggested pricing are derived and should be interpreted.
Understanding the technicalities does not mean he or she has to be a health economy expert him/herself.
Some interviewees commented that having solely a health economy background can lead to a narrow view on matters which may get in the way of seeing the big picture. This may stem from too big a focus on data generation and processing.
- In addition to the ability to understand the technicalities driving MA decisions, the following competencies and skills are considered by all interviewees to be critical:
- Business acumen
- Negotiation/persuasion/relationship management, to lead and steer discussions with both internal (management, colleagues, subordinates…) and external interlocutors
- Leadership skills – build and steer/direct diversified teams representing different disciplines – often also leading teams in a matrix structure without direct line management responsibility
- Project management
- Strategic thinking
- Big picture thinking/overview
- Communication skills
Qualified people, who can successfully take on a MA leadership role, are in high demand and there continues to be a shortage of them. However, there is a growing appetite to consider a MA career, mostly from people with a business background or a mixed medical/business background.