In the life of a prescription drug, success hinges on market access.
One of the biggest challenges pharmaceutical and biotechnology manufacturers face is ensuring they can bring the right treatments to the right patients for the right price. That process, known as market access, requires careful planning and execution. A sound market access strategy can bring it all into focus.
What Is Market Access Strategy?
Market access is a complex process that takes multiple steps and a large allocation of resources to properly navigate.
Market access strategy involves generating critical data, ranging from market information and pricing to patient utilization, and communicating that data to the appropriate parties, including both private payers and government programs.
For manufacturers, pricing and reimbursement rates are a vital component of any market access strategy, as they have a profound impact on revenue and, of course, profitability. Manufacturers must find the right balance in pricing, so that drugs are appealing to insurers, both public and private, while still remaining profitable throughout their lifecycle. Arguably, lower drug prices might mean greater adoption by insurers, while higher prices might prevent patients from being able to afford and purchase drugs.
Manufacturers can sometimes navigate the process on their own; the largest drug manufacturers typically have in-house teams dedicated entirely to the ins and outs of market access, determining drug pricing and reimbursement. Most small- and medium-sized drug manufacturers, however, need to work with a partner to ensure they have the necessary expertise to create a successful market access strategy.
Market access strategies have major long-term implications too. With a sound strategy in place, manufacturers can ensure successful market access and that patients have rapid, consistent and sustained access to the life-saving medicine they need.
The Impact of Public and Private Insurance
Manufacturers will be working with different markets, each with its own unique challenges to overcome. The federal market is one of the largest in the industry, covering more than 100 million Americans. But public insurance is ruled by federal guidelines, and it comes with stipulations. Take Medicaid rebate requirements: in order to introduce a product to the federal market, Medicaid mandates a rebate of 23.1% off the wholesale acquisition cost.
While Medicare and Medicaid services are covered by government health funds, commercial insurance is often distributed through employers and paid for in part, or entirely, by those being covered.
While ensuring that a drug will be covered by public insurance is critical to a drug’s commercial success, tailoring pricing and market access strategy to the needs of your target market (commercial, Medicare, Medicaid, etc.) should be a key priority.
The Complicated Process Behind Drug Prices
Before manufacturers approach insurers, they need to ask themselves the right questions. There are many steps involved in pricing and reimbursement, but strategically engaging payers is a pivotal aspect of successful market access, with questions that include:
- What is the unmet need?
- What is the potential for misuse/ inappropriate use?
- How does it compare to the current “gold standard (i.e., standard of care)” related to efficacy, safety and cost?
The ever-evolving nature of the health care and pharmaceutical industry can greatly affect a drug manufacturer’s approach to market access, too. Recent changes to Medicare under federal law include a historic rise in premiums, access to mental health services through telehealth and more affordable insulin options through prescription drug plans.
Understanding coverage policies, contracting strategies and the nuances of coverage tiers enables manufacturers to understand how to best negotiate drug prices. A proactive approach to market access strategy can ensure these new steps don’t delay go-to-market plans.
The Steps and Benefits of Market Access
A robust market access strategy starts long before the introduction of the product to the market and follows the product’s entire lifecycle. The goal is to create a smooth path to market and ensure long-term financial stability.
Entering the market for the first time can be challenging as there is a lot of preparation work. This is where enlisting an experienced, reputable partner to help with the market access process can be invaluable, as the partner can help the manufacturer connect with the right people and begin to form the necessary relationships with payers and influencers.
1. Meet Key Payers
The first step is to introduce the product to key payers in your market. Through a series of formal meetings, you can help payers understand your business and products. Be prepared to share a plethora of information, including clinical efficacy, what therapeutic option the new product replaces and if possible, what cost this product takes out of the system. In addition, be prepared to discuss the distribution model, the potential number of patients who will benefit from the therapy and the estimated timing of when the product is coming to market in addition to other key elements of your go-to-market strategy. A partner like D2 Solutions will simplify this process by helping to develop a targeted message while getting in front of the payer necessary to drive market access. While setting up these meetings can be difficult, the right partner opens doors and facilitates the conversations that seem out of reach.
2. Define the Burden of Disease
As you meet with payers, you’ll need to analyze the burden of disease for the product. Both parties will need to understand the disease state, the challenges faced by patients dealing with the illness, and how the product aims to alleviate these issues.
Your market access strategy should include a thorough review of the average price paid (APP) for comparable medications—and either the savings potential of the new product or the clear clinical benefit, along with specific local guidelines. For example, because Medicaid is administered by the states, the maximum allowable cost for drugs might differ from one state to the next.
3. Introduce the Product
Formally introducing the payer to the final product should include covering FDA studies and approvals, dosage, side effects and main applications. This process has become easier in recent years as the FDA has allowed more open discussions between manufacturers and payers.
Ideally, at this point in the process you can move forward without worry, especially if you are opting into the federal market where limitations are readily apparent, and pricing may be steeper and therefore represent more risk for the brand.
4. Define Clinical Advantage
When necessary, your market access partner will put payers in touch with clinical specialists. This can be a critical connection on the route to approval and formulary inclusion, particularly with specialty drugs. The ability to clearly define a clinical advantage can greatly accelerate payer acceptance and speed the process of attaining product coverage.
5. Determine Drug Cost Coverage
The final goal is to determine the lowest out-of-pocket costs for patients and cost to payers. Coverage will also impact how this product will affect the provider and patient experience.
The research conducted will be helpful in this step, as you may already have local and national coverage policies for comparable products from which to draw comparisons. In addition, data around the burden of disease and other important information will be important to support a positive coverage decision.
Drug Pricing Pitfalls
While these steps might seem straightforward, market access is usually anything but. While the country’s ongoing drug pricing debate keeps drug pricing in the public eye, the industry continues to shift. Ongoing market consolidation has meant fewer companies have more control over prices. Both of these factors make the relationships you build more important than ever.
Manufacturers have plenty of challenges to navigate in the market access journey. Instead of covering more expensive, brand-name prescription drugs, insurers might be looking to partner with pharmaceutical companies that manufacture generic (i.e., biosimilar) drugs, enabling potential lower patient out-of-pocket costs. As such, it is critical to have a strong message that creates a balance between clinical impact, unmet patient needs and competitive pricing.
A market access strategy will help you avoid these pitfalls by outlining what your product needs in order to succeed. And with the right partner, you can feel more confident you will have defined a successful strategy.
Navigating a Difficult Road
Pharmaceutical companies have a lot to consider during the lifecycle of a prescription drug: changes to the market, new product uses, new methods to control costs, ongoing competitive threats, evidence-based pricing and more—all in addition to considering patient demand and willingness to pay.
With these numerous considerations, having a market access consultancy to help determine, support and communicate the true value of a new prescription drug can increase a company’s chances of financial stability.
This is where D2 Solutions stands tall among the competition, integrating and understanding the needs of both payers and manufacturers. Our market access experts understand the needs of public and private insurers and can help you adapt to market changes along the way. D2 has helped hundreds of manufacturers with effective market access, product positioning, pricing and distribution strategies and has the payer relationships you need. If you need a partner to create the ideal market access strategy for your company or want assistance smoothing out your current process, D2 is here to help.