As the shift to value-based care changes how healthcare is delivered in the U.S., provider organizations are realizing that strong internal collaboration helps to ensure that patients receive high-quality, cost-effective care. This trend also creates opportunities for pharma companies to partner with provider organizations to help doctors unlock more value from the medicines that they prescribe and to improve patient care. However, in some cases, pharma companies still struggle to convince providers of the value of “beyond the pill” offerings. And as the state of California’s lawsuit demonstrates, increased regulatory scrutiny presents yet another hurdle for these partnerships.
Through ZS’s review of academic literature, media announcements on recent partnerships, and primary research with provider executives, we’ve found that pharma companies’ “beyond the pill” activities at IDNs fall into five categories:
1. Care efficiency and operations (occurring at 82% of IDNs): Pharma companies engage with providers to help them operate more effectively and deliver better care to patients. Examples range from programs like Novo Nordisk’s acclaimed diabetes education program to more complex collaborations like Merck’s partnership with Practice Fusion.
2. Patient management (occurring at 66% of IDNs): Pharma companies work directly with patients to ensure that drugs are used properly and that patients have the right tools and resources at their disposal. Examples include adherence programs like J&J’s Care4Today or at-home nurse support services offered by brands like Amgen’s Repatha or AbbVie’s Humira.
3. Reimbursement support (occurring at 63% of IDNs): Most major pharma brands have programs to help facilitate patients’ reimbursement paperwork, communicate payers’ policies and advocate for policy change. Examples include “reimbursement hubs,” or call centers to which providers can refer their patients for help with prior authorization, etc.
4. Evidence development (occurring at 37% of IDNs): A partnership between a pharma company and a provider leads to the generation or analysis of real-world data. This can be in the context of research and development, such as Boehringer Ingelheim’s partnership with Sutter Health, or done in conjunction with other programs, such as AbbVie’s clinical study of its nurse assistance offering.
5. Innovative contracting (occurring at 61% of IDNs): Providers purchase drugs from pharma companies in a new way, such as when the price is tied to outcomes or other sharing of risk, or when drugs are purchased on a capitated basis. Examples with payers abound such as Novartis’s performance-based contract for Entresto. As provider’s payments also become value based and/or capitated through value-based payments or captive health plans, there is an opportunity for providers to participate more. We’re already seeing a few examples such as Biogen’s value-based contracts with Intermountain Healthcare’s SelectHealth for multiple sclerosis patients.
My colleagues and I recently conducted some research on what executives at integrated delivery networks care about, and how well pharma companies’ engagement efforts are connecting with IDNs’ goals and needs, and we found that, while certain “beyond the pill” offerings have been well received, others have fallen flat. For our Provider Organization Partnership Tracker, we spoke with 89 vice presidents and directors from 67 integrated delivery networks across the U.S., and we found that programs that help deliver care to patients are the most attractive to providers.
Of the 18 specific program types that we tested, “tracking patient outcomes,” “reimbursement support” and “adherence programs” earned the top three spots in terms of the value perceived by providers, even among IDN executives who are skeptical of partnering with pharma. As one pharmacy director from a community health system in North Carolina noted, “Patients can’t afford their copay for things that are trying to sustain their life, so we do use those copay assistance programs … [but] we have balked at any of the other offerings.”
Respondents’ interest in certain support services from pharma companies was contrasted by their lukewarm response to other “beyond the pill” offerings, indicating that pharma companies have a chance to double down on what’s working while doing away with their wasted effort. Education programs, a common pharma offering, have received a much cooler reaction from IDNs. Although many providers said that it was nice when a pharma program presents new information that they didn’t know, they were skeptical about pharma serving as the source of this information—and there was the perception that pharma sales reps often are the organizers of such programs. The CEO of a regional hospital in the South told us: “[Education] is mostly self-serving initiatives just to pump up a new high-cost drug that they have for increased volume. I don’t think they’re largely patient-focused or in the patient’s interest.”
Based on this information, pharma companies have an opportunity to reposition their educational offerings to better align with what is of value to their IDN partners. For example, alternative approaches such as unbranded and co-created materials brought in by account executives, key account managers and field medical reps have the potential to gain more acceptance but aren’t as widely used.
Despite the challenge of finding the right “beyond the pill” offerings to strengthen any given IDN engagement, pharma companies should find that it’s worth their while. For example, our research shows that IDN executives are interested in exploring innovative contracting with drug manufacturers to better align costs with value. As IDNs have consolidated and are working to standardize care delivery, they’ve also invested heavily in patient data collection, opening up new opportunities for this type of agreement. One pharmacy director from a large Midwestern health system told us that his IDN is now well-positioned for innovative contracting: “It’s a general interest I have and something I’d like to learn more about.”
The pharma companies that get it right have cultivated a deep understanding of providers’ business models and know how to effectively engage with provider administrators, and these different types of partnerships show clear benefits for provider organizations and patients. However, current regulations were written at a time when provider organizations were smaller, and healthcare was delivered on a fee-for-service basis. It’s high time we revisit regulations in light of today’s needs.
This should be of keen interest to drug manufacturers, and we’ve already seen groups like PhRMA propose revisions to the anti-kickback statute to make it easier to execute this type of contract, although that isn’t the only barrier, of course. For example, we’ve recently watched as CMS touted and then canceled its plans to pay for Novartis’ new CAR-T therapy Kymriah, which suggests just how difficult it is to execute this type of contract. Additionally, the Trump administration may be considering eliminating rebates altogether, which certainly makes the future of innovative contracting unclear.
As regulators take aim at some of the support services offered by pharma, the industry should pay close attention. We hope that the recent legal action will conclude in a way that enables pharma companies and providers to continue to partner. After all, both parties are aligned and focused on improving patients’ care after the medicine has been prescribed. As the healthcare ecosystem’s evolution is teaching us, healthcare players often can have a greater impact when working together than they can apart.