Pharmaceutical Executive Europe - January 2008 - (Page 27) Pharmaceutical Executive Europe January 2008 Pricing and Reimbursement 27 The resultant pressure on companies to lower their prices to get listing for reimbursement is immense, and even once listed they face massive marketing costs to gain some ‘noise’ in the cancer area and may have only a very few experts in the area on their side. In the same vein, experts may not agree on the listing and positioning, which will delay listing and produce confusion within the oncologist community. And once they gain a small share of the cancer treatment markets, the companies have to continue their large marketing spend to maintain that share. Unfortunately, that market position may only be temporary, as other compounds in development will have powered their studies to show a statistical improvement over the marketed products and will look to displace one or more of the marketed products as part of their strategic entry to the market. Luckily, the ‘niche’ treatments, by the very fact that they are in a niche area, will face very few if any challenges from follow-on treatments for a very large part, if not all of, their patent protected life. Defining value One other critical key issue that senior managers in companies need to address is that of defining value. Many payers state that they are frustrated when companies only provide evidence of the product value that is statistically different on the primary end point to a comparative product. The choice of comparator is one issue that concerns payers, as it seems common practice that an older product tends to be chosen that may not be the one considered to be either the market leader and or the gold standard at that time. The second area is that the choice of end points, often, does not reflect clinically important outcomes. The clear message is that if companies want to have their products priced and reimbursed appropriately in any therapeutic area, they need to determine what the payers, providers, prescribers and patients consider to be clinically significant markers of value. They must then convert this knowledge into relevant markers and end points. Only when detailed consultation with payers, clinical experts and prescribers across the major markets has taken place can a valid comparator or comparators be selected. This due dilligence will ensure that, once successfully approved, the product value package will be acceptable and reflect the true value of the product at that stage. The company will then be rewarded with an appropriate comparative price and reimbursement. In addition, the clarity of product value will avoid the degree of disagreement between the industry and others over the product’s relative value. This market access-driven approach is not a new concept; however, it is one that needs to be central to the industry’s future strategies. No longer will it be acceptable to have the R&D functions focused only on gaining marketing approval — they should see that step as only one part of a comprehensive market access strategy. Market access success includes obtaining pricing and reimbursement approvals at appropriate pricing and reimbursement levels, along with successful guideline and formulary listing, and support of local physicians. This integrated development process, directly linked to the market process, relies on management accepting that it is only the key customers in the market that can define key elements. Internal discussions on what defines innovation and value may be interesting, but only the naive would base their investment and market adoption strategy on these discussions without external validation. Unfortunately some still rely on internal management input! Consider the fact that many payers, providers and, especially, prescribers report that when they are consulted by market research agencies they are only rarely asked open questions or given sufficient information. In some cases they aren’t even given the indication that they should give full, detailed or honest input. So how can the information be of any value to any company? Today, major shareholders are taking a greater look at their investments and are more knowledgeable about the market place than ever before. They look to the market place options and select companies who appear clearly to know and react appropriately to the market changes; companies who fail to demonstrate an understanding of the market pay the price, as was seen recently with a very dramatic market withdrawal of a newly-launched product with the very significant associated massive drop in market value. Senior management needs to ensure that the development market access team understands in great detail at least the top seven world markets, and that they know and understand their top 100 customers in these markets. How many today could even list the top 10? Reference 1. Graham Lewis, “Riding the Wave,” Focus on Oncology, Pharmaceutical Executive Europe, September 2007, p. 3. 2. DrugResearcher.com, December 2007 About the Author Brian Lovatt spent 25 years in the pharmaceutical industry, working in clinical research and development, sales and marketing, and senior management and international management positions. Brian now runs the international consultancy practice, Vision Healthcare. He has developed and maintained an extensive network of payers, providers and key opinion leaders in over 25 markets for over 20 years. To contact Brian, tel. +44 (0)1883 330334 or email brianlovatt.vision@btinternet.com. http://www.drugreseacher.com
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Europe - January 2008 Pharmaceutical Executive Europe - January 2008 Contents From the Editor News and Analysis Calendar Corporate Strategy: Walking the Line Executive Profile: The Pharmacist’s Friend Q&A: An End to Drug Counterfeiting Healthcare Cost Assessment: Ready to Make NICE? Pricing and Reimbursement: Through the Reimbursement Barriers Generics: India Inc. The Mix: New Models of Excellence Last Word: Mid-size Matters Pharmaceutical Executive Europe - January 2008 Pharmaceutical Executive Europe - January 2008 - Pharmaceutical Executive Europe - January 2008 (Page 1) Pharmaceutical Executive Europe - January 2008 - Pharmaceutical Executive Europe - January 2008 (Page 2) Pharmaceutical Executive Europe - January 2008 - Contents (Page 3) Pharmaceutical Executive Europe - January 2008 - From the Editor (Page 4) Pharmaceutical Executive Europe - January 2008 - From the Editor (Page 5) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 6) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 7) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 8) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 9) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 10) Pharmaceutical Executive Europe - January 2008 - News and Analysis (Page 11) Pharmaceutical Executive Europe - January 2008 - Calendar (Page 12) Pharmaceutical Executive Europe - January 2008 - Calendar (Page 13) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 14) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 15) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 16) Pharmaceutical Executive Europe - January 2008 - Corporate Strategy: Walking the Line (Page 17) Pharmaceutical Executive Europe - January 2008 - Executive Profile: The Pharmacist’s Friend (Page 18) Pharmaceutical Executive Europe - January 2008 - Executive Profile: The Pharmacist’s Friend (Page 19) Pharmaceutical Executive Europe - January 2008 - Q&A: An End to Drug Counterfeiting (Page 20) Pharmaceutical Executive Europe - January 2008 - Q&A: An End to Drug Counterfeiting (Page 21) Pharmaceutical Executive Europe - January 2008 - Healthcare Cost Assessment: Ready to Make NICE? (Page 22) Pharmaceutical Executive Europe - January 2008 - Healthcare Cost Assessment: Ready to Make NICE? (Page 23) Pharmaceutical Executive Europe - January 2008 - Healthcare Cost Assessment: Ready to Make NICE? (Page 24) Pharmaceutical Executive Europe - January 2008 - Pricing and Reimbursement: Through the Reimbursement Barriers (Page 25) Pharmaceutical Executive Europe - January 2008 - Pricing and Reimbursement: Through the Reimbursement Barriers (Page 26) Pharmaceutical Executive Europe - January 2008 - Pricing and Reimbursement: Through the Reimbursement Barriers (Page 27) Pharmaceutical Executive Europe - January 2008 - Generics: India Inc. (Page 28) Pharmaceutical Executive Europe - January 2008 - Generics: India Inc. (Page 29) Pharmaceutical Executive Europe - January 2008 - Generics: India Inc. (Page 30) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 31) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 32) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 33) Pharmaceutical Executive Europe - January 2008 - The Mix: New Models of Excellence (Page 34) Pharmaceutical Executive Europe - January 2008 - Last Word: Mid-size Matters (Page 35)
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