Need for Providing Better Drug Value Data to Payors

1 September, 2014, by ClinCaptureTeam

 I recently read an editorial by Roger Longman, CEO, Real Endpoints, LLC in the Aug. 4, 2014 issue of Biocentury. I’ve reread it several times and marked up the article because I believe it contains some really paradigm shifting thoughts and advice on pricing. Longman has been speaking about the need to better understand the shifting standards of value for drugs and this piece hits home the hardest—“Either Pharma helps its customers create the standards on which the full value of their drugs will be measured relative to their competitors—or they’ll have it done for them.”

Longman notes that historically pharma executives used to educate physicians (their focused customer in the past) to prefer their drug versus the competition based on advantage in their product’s label. But with the skyrocketing costs of specialty drugs, payers and PBMs who used to just push generics to increase their profits, now joined by risk-sharing physicians and institutional providers, are turning their attention to defining “their (drugs) relative value in new ways and with new energy, creating more restrictive coverage policies and ultimately limiting formulary choices.”

The advice is that biopharmas accept that they need to provide the information their customers want and need to compare the drugs more effectively or risk that they (the customers)  will just use net cost as basis for decisions about formulary acceptance. Longman suggests a “complete framework of value—one that takes into account most elements of value, and measuring each competitor on each of those elements.” Unfortunately, companies only have labeling for other companies’ products and lack in depth information beyond the label except for their own product. Achieving the goal of  “framework of value” would be extremely difficult without doing costly comparative trials which wouldn’t be possible without collaborative work across companies. I’ll be watching for new developments. Meanwhile, I expect we will be seeing more NICE-type decisions on acceptance of payment for these new high priced drugs.

Audrey

Reposted from Audrey Erbes’ blog: Audrey’s Network

Audrey’s Network includes Bay Area bioscience professionals from all sectors who are working in broad array of functions in the industry. The group originated, first, with members sourced from Audrey’s UC Extension intensive courses in Bioscience Business and Marketing (now numbering over former 1,250 students), the Syntex Syva Alumni Association, the Bio2Device Group (now has over 1,000 members) and other industry professional groups and individuals with whom Audrey has worked. The mission is to assist industry professionals continue to keep up-to-date in their fields through “sharpening the saw” regularly and building and maintaining a vibrant network.