How to Maintain Payer Access in Oncology and Build a Strategic Advantage

Howard Deutsch, Associate Principal

Oncology companies have really had their own individual spaces for each of their products, so you commonly hear about products in oncology being "first in class, best in class.” And when there’s only one drug available that works in a certain way to treat a really severe disease state, that uniqueness of each of the molecules coming to market for a long time has really enabled manufacturers to have significant pricing power and to be able—once the manufacturers work through the logistical details—to get really good market access and oncology reimbursement for their products.

Pipelines are very heavy in oncology [research] right now. It’s the largest general area for the pharmaceutical industry pipelines right now. The overall spend in oncology is growing dramatically, so a lot of drugs are going to come to market that are going to be directly competing with other drugs that have similar mechanisms of action, similar clinical benefits. And meanwhile, payers and large hospital systems are becoming more and more focused on managing the growth in spend in oncology.

Manufacturers that maybe a few years ago were able to largely take their market access for granted, with all their new molecules, are going to have a much more challenging climb. We’re seeing with our [oncology pipelines] having many more products that are competing with one another very directly, [and] we’re expecting that payers are going to really gain the leverage to start limiting the usage of certain products that are very high-priced and that maybe aren’t necessarily really big improvements over the current standard of care.

So one thing that they’ll need to do is to really build the strategic and operational [oncology marketing] competencies to evaluate and actually execute on pricing and contracting and discounting strategies with different stakeholders within the oncology space. Additionally, manufacturers are starting to really take a look at their market access organizations and trying to evaluate whether the current field-facing market access organizations are going to the right stakeholders and focusing on the right stakeholders for the future, not just for today.

So as payers grow in their power, as large hospital systems are growing in their ability to manage the overall cost of care and the access of oncology therapies, manufacturer and market access organizations are going to also have to start focusing on those stakeholders, where maybe in some cases, they haven’t in the past so much.

The manufacturers that are able to really build those partnerships and also, of course, at the same time, [are] maintaining good relationships with those growing, powerful, integrated hospital systems are going to be able to build and sustain a competitive advantage.