Unemployment claims are at 22 million and climbing due to the COVID-19 pandemic, and like the great recession of 2008, rising unemployment means that patients will shift from employer-sponsored coverage to ACA health exchange plans or Medicaid, or become uninsured. In addition, the financial constraints on payers and providers due to this event are unprecedented, all with the backdrop of upcoming elections and other reforms already being planned. Given this seismic impact on the healthcare landscape, U.S. market access organizations will need to start thinking about the lasting impact of COVID-19 on market access analytics, contracting and gross-to-net (GTN).


The rise in unemployment affects three areas, which can make revenue estimation difficult:

  1. Channel mix: Pharma’s top and bottom line will be affected as Americans lose their employer-sponsored health coverage. More restrictive access in Medicaid or health exchange plans than commercial plans would drive patient switching to other brands and impact the top line. Higher discounts due to “best price” and mandated rebates in Medicaid, or different contract terms in health exchange plans, may have a material impact on total discounts. Similar dynamics on the top and bottom line would happen on the provider side as we’ve started to see a shift in utilization by site of care. CMS has temporarily suspended enforcing coverage determinations related to home infusions, which should increase who can access those services in these times. While these shifts are all but certain, the key questions are to what extent these channels will grow and over what time.
  2. Contract negotiations: The financial burdens that payers and providers are facing as a result of COVID-19 will have a lasting impact. Insurance companies, which have been the mainstay of healthcare payments, will likely consolidate and increase premiums as a way to manage rising costs. Furthermore, Medicaid and Medicare will see cost constraints due to scarce state and federal government resources. Taken together, this translates to more pressure on pharma to lower list prices or increase rebates and discounts in future contract negotiations. Based on a recent ZS survey on the impact of COVID-19, payers are signaling a business-as-usual approach to commercial bid cycles, with regional payers in particular signaling a tightening of formulary control and shifting away from open benefit designs. Payers may also choose to favor incumbent/covered brands and extract more rebates as opposed to risking fluctuations in their rebate streams.
  3. Co-pay card programs: The rise of unemployment and the uninsured population will also mean that many Americans will face higher out-of-pocket costs and become more sensitive to drug prices. Several pharma companies, including BMS and Lilly, have already expanded their co-pay card and patient assistance programs. This is undoubtedly the right thing to do for patients but will have an additive impact on a manufacturer’s GTN on top of the changes in payer and provider discounts. Identification of script-level profitability becomes even more critical to understand in the near term and long term due to these additive effects on the GTN. As the acute effects of COVID-19 begin to subside, manufacturers should think through the interplay between patient assistance programs and payer access decisions, as more controlling payers will force pharma to make more trade-off decisions.

To address these dynamics in the short and long term, organizations need to stay agile and leverage data and analytics to make rapid decisions.

  • Monitor existing contracts: Leverage the trends emerging in the data and expectations for shifts in channel and site-of-care usage to recalibrate overall GTN and account-level forecasts. Reassess the impact to customer contracts, particularly those that are volume-based or performance-based, and the impact on recent contracting wins where field sales were expected to help drive pull-through.
  • Know when to trust data trends: The drastic changes occurring as a result of COVID-19 will mean that the past may be a poor predictor of the future. Historical data will have some false signals. Payers are relaxing prior authorization requirements, such as quantity limits, and shifting to 90-day fills. Leveraging up-to-date data to help drive decisions, including refreshing analytics and keeping an eye on assumptions and relevant analogs, is important.
  • Prepare for negotiations: Start thinking about how to tackle the upcoming bid cycles and negotiations with payers and providers. Knowing which customers are disproportionately impacted by COVID, such as regional payers in harder-hit states, could help predict who will be the most aggressive during negotiations. This will require a greater emphasis on strategic activities and response planning such as war-gaming, considering more innovative approaches, and evaluating a wider range of key assumptions and unknowns to assess sensitivity.
  • Rethink pull-through to maximize contract investments: With these mounting pressures on GTN and the lasting changes from the current disruptions to pharma’s in-person sales model, realizing the full potential of access investments will require a more expansive version of pull-through. Track patients as they go from Rx to fill to identify gaps and determine how to intervene to maximize their access investments. By being more patient-centric in pull-through, you’ll gain a competitive advantage and possibly secure access at a lower price.

Given the significant short- and long-term implications of COVID-19 on pharma’s top and bottom line, being nimble and adaptable in your approach to market access analytics and contracting is critical. Decisions made during this period of “business unusual” will have a lasting effect on GTN, and data-driven decision-making will be more important than ever before. Spending more time on scenario planning and strategic thinking as opposed to collecting and organizing data to run analyses is also crucial. By following these tactics, your organization will fare much better now and in the future.