Traditionally, the U.S. pharma managed care marketer role—payer marketers—focused on articulating the payer value proposition and negotiating terms of trade when cost didn’t match value or competition forced concessions. Today, payer marketing is becoming more focused in some ways and more challenging in others.
First, pharma has gotten the message that managed market inputs must be more robust and provided earlier in the process of pipeline and M&A decision-making, forecasting and clinical trial design. Payer marketers are often responsible for providing these critical assumptions and inputs, in addition to their day job working on launch and in-line products.
In addition, the market has changed. Payers themselves are consolidating power across diversified business lines. Both direct and indirect access influencers are expanding, including organized customers, advocacy and professional organizations, new clinical stakeholders such as clinical coordinators and quality directors, and patients themselves (due to increased cost sharing). Competition is increasing, including in therapeutic areas previously off limits to payer management (such as HIV and oncology). There is growing attention to value and outcomes, serving both “real” and PR-driven purposes on both sides. Payers can now be engaged well ahead of launch (based on the 2016 clarification of FDAMA114 guidance on use of health care economic information). And of course, there is the never-ending public and political scrutiny of drug prices and value, fueled on a regular cadence by election cycles.
These complexities are further compounded in a world rapidly changing due to COVID-19. At the time of writing, U.S. payer activities are largely business as usual, and the major national payer/PBMs expect to weather the storm without major changes to their ways of doing business. However, engaging payers and other access influencers in a completely virtual setting presents new challenges, and the pandemic is likely to highlight capability gaps against the market dynamics mentioned above.
Even in a normal state, payer marketers across our client organizations often struggle to adequately address shifting payer/access dynamics at launch and at other critical points in the product life cycle. We observe several barriers that commonly present challenges to even very capable, experienced payer marketing teams:
1. Driving timely decision-making: Pre-launch payer engagement requires making key product decisions early (list price, contracting strategy, value proposition) and arming the account management team well in advance of launch. Many pharma companies do not have the appropriate cross-functional coordination and leadership governance in place to enable early decisions, and do not appropriately equip payer marketers to drive a coordinated approach to strategy development. On a similar note, many organizations have been ill-equipped to quickly make decisions regarding appropriate access strategies and communications to reassure patients and providers during acute phases of the COVID-19 pandemic. An opportunity may be missed to demonstrate our empathy and commitment to patients.
2. Decoding customer complexity: The "big three" mega-payer organizations now incorporate payer, PBM, trade, data/analytics and other business lines. The size of these organizations gives them tremendous leverage (the big three now account for around 76% of pharmacy drug claims). In addition, the market is shifting focus to value and outcomes in payment models, contracting, reimbursement and beyond. This intensifies the complexity of marketing and account management with these players, and requires a highly coordinated, strategic approach to access marketing and customer engagement. It also requires an evolved, more customer-centric context for articulating a value proposition (considering payer needs and portfolio considerations vs. focusing on product attributes).
“What mega-payers care about has expanded. PBMs cared about customers, rebates, driving generic utilization. Now add SP, retail, physician networks … Conglomerate interests are broader and more varied. Difficult for pharma to engage in some ways because some of those things are supposed to be firewalled, but also more opportunities if [we] understand where payer priorities are.” -Vice president of value and access for a top 10 pharma company
3. Provider as payer: Large consolidated health systems can and do demonstrate formulary control in specific markets and therapeutic classes, particularly if payer coverage is under the same organizational umbrella or if the market has fragmented payer coverage. This is particularly true for large community oncology clinics, though the oncology business model may be shifting away from buy-and-bill due to the emergence of biosimilars, the acceptance of consensus pathways, and payment models driving use of contracted infusion centers. A comprehensive market access strategy must address provider organizations that have the structure, intent and ability to control utilization.
“The discussion around access and value is broader than payers. We need to expand to include value to physicians, value assessors, advocacy and other non-traditional stakeholders.” -Vice president of value and access for a top 10 pharma company
Addressing these issues may encompass changing organizational structures or improving operations, empowering decision-making or clarifying governance, and upskilling current roles or adding new roles. Regardless of the solution, the payer marketer is often uniquely positioned to quarterback important coordination and decision-making and to drive strategy. However, pharma companies would be wise to think of this as a capability rather than a role, as the required scope and breadth are typically beyond one person.
“Payer marketing of the future” requires developing strong payer value propositions for brands and thinking above-brand to help drive corporate strategy with complex customers. It requires deploying messages and tools to arm account managers and incorporating a range of HEOR and value inputs to develop tailored offerings for different customer segments. Further, most of this must be done earlier than ever before (and currently it must be done virtually). Payer marketers often cannot wait for the brand strategy to be ready for launch; they must drive earlier decisions to enable pre-launch information exchange with payers (particularly in competitive classes requiring early contract negotiations or in markets with complex reimbursement issues).
Getting it right, particularly at launch, has never been more important. Positive examples include the Novartis launch of Entresto into a very crowded and genericized chronic heart failure market. The launch was flawless from a market access perspective: addressing and communicating comprehensive coverage, outcomes aimed at reimbursement considerations (hospital readmissions) and robust access services. In a very different, high-priced gene therapy market, Spark Therapeutics set the bar for best-in-class by working with payers ahead of launch to develop appropriate payment models and thoroughly addressing value and access concerns in launch communications.
Conversely, failing to address comprehensive access considerations shows the potential impact on long-term success. For example, Pfizer likely over-estimated on the ability of Xeljanz to disrupt rheumatoid arthritis treatment modalities and the highly contracted inflammation market. Xeljanz was priced at par with biologics, failed to achieve meaningful formulary access until around five years post-launch, and took several years to break even on marketing spend. In oncology, complex combinations of issues related to value, reimbursement and provider/hospital economics have constrained the launch trajectory for products like Provenge and the early CAR-Ts, despite compelling clinical innovation. And the next generation of innovative cell and gene therapies may require entirely new business or payment models.
Pharma should consider the breadth of capabilities required for effective payer marketing and determine the appropriate balance of upskilling payer marketers with modifying organizational design. Success means enabling excellence in payer strategy and communications in an increasingly consolidated and complex market. Payer marketers should also take the onus on themselves to build a breadth of expertise and influence appropriate to the task. Sophisticated market access organizations go beyond value messaging and transactional rebating to position the value of their whole company as a disease area leader and develop a relationship that engages multiple facets of a mega-payer’s business to create greater mutual value. Jedi mind tricks are optional.