Finally it’s a reality that EU Pricing is contagious – and the US market is already showing some early symptoms including cold sweats, bouts of litigiousness, and the kind of migraine that can only be brought on by Risk Sharing Agreements.
Let’s get serious. Oncology is about as serious as it gets.
The halcyon days of virtually assured coverage and reimbursement for approved indications are coming to an end. Not that on-label indications are subject to more control than they ever were, or that off-label is taking the lead. But the landscape is becoming more complex, more like the EU in fact.
Payers are demanding data from pharma manufacturers that demonstrate economic and clinical value – and can and will limit use and distribution if this hurdle isn’t jumped. Risk Sharing Agreements, such as those already in use in the EU, are one such instrument. Linking Pricing to script volume or dosage gives Payers budget certainty, requiring evidence of efficacy provides clinical outcomes data, a payment by result approach.
Here in the EU we are all familiar with Pay As You Go phones. Burn Phones as US TV drama likes to call them. Maybe we are entering the era of Pay As You Improve.
Biosimilars are just starting to enter the US market, and will further complicate matters – how much will depend on how quickly Payers move to meet the opportunity, and whether the FDA can respond quickly enough on approvals processes to maintain their inherently lower cost per dose. If Payers start preferencing Biosimilars rather than Reference products, assuming comparable clinical outcomes for patients, FBA models with a volume based cap look tempting. Except the Providers, under scrutiny of evidence based care paths in accountable care organisations, and now under pressure from biosimilar pushing Payers, get caught in the middle. If they can collaborate and share data, they have an opportunity to link economic and clinical data setting the stage for optimal risk/outcome sharing models of Pricing. If your pricing strategy isn’t also a shared solution, achieving market access will prove difficult.
My burn phone’s ringing – someone wants to talk about an annuity model.
I’m not taking that call, sounds contagious.
Written by Kevin A'Court - Head of Healthcare and Life Science Practice at Consulting Point
Payers are demanding data from pharma manufacturers that demonstrate economic and clinical value – and can and will limit use and distribution if this hurdle isn’t jumped. Risk Sharing Agreements, such as those already in use in the EU, are one such instrument. Linking Pricing to script volume or dosage gives Payers budget certainty, requiring evidence of efficacy provides clinical outcomes data, a payment by result approach.
Here in the EU we are all familiar with Pay As You Go phones. Burn Phones as US TV drama likes to call them. Maybe we are entering the era of Pay As You Improve.
Biosimilars are just starting to enter the US market, and will further complicate matters – how much will depend on how quickly Payers move to meet the opportunity, and whether the FDA can respond quickly enough on approvals processes to maintain their inherently lower cost per dose. If Payers start preferencing Biosimilars rather than Reference products, assuming comparable clinical outcomes for patients, FBA models with a volume based cap look tempting. Except the Providers, under scrutiny of evidence based care paths in accountable care organisations, and now under pressure from biosimilar pushing Payers, get caught in the middle. If they can collaborate and share data, they have an opportunity to link economic and clinical data setting the stage for optimal risk/outcome sharing models of Pricing. If your pricing strategy isn’t also a shared solution, achieving market access will prove difficult.
My burn phone’s ringing – someone wants to talk about an annuity model.
I’m not taking that call, sounds contagious.
Written by Kevin Acourt - Head of Healthcare and Life Sciences Practice