Pharma Payer Partnerships - Rhetoric or Reality?
“Progress is impossible without change, and those who cannot change their minds cannot change anything” George Bernard Shaw
Successful Pharma Payer Partnerships require a change in the mindset of participants from their current comfort zones - payers from a fixed focus on purely budgetary matters and pharma from providing medicines on a volume based, benefits selling basis. A consideration of the complete patient treatment journey will require fresh thinking from both stakeholders. External factors, such as a realization by Pharma that the era of the blockbuster is over, an increased patient empowerment fuelled by the Internet and the current austerity measures sweeping Western Europe, are accelerating the need for mutually beneficial partnerships.
Recently in the United Kingdom the Health and Social Care Bill 1 provided a framework to promote joint working between the NHS and the pharmaceutical industry. Its aim is to improve the innovation and delivery of healthcare through improved collaboration between the NHS and Industry. At a European level, the Innovative Medicines Initiative Joint Undertaking (IMI)2, a public private partnership between the EU and EFPIA (European Federation of Pharma Industries & associations) has a budget of €2 billion to support joint projects in areas such as safety, education and training. This initiative includes not only payers and industry but crucially patient organizations, academia, regulatory agencies and other industry partners (e.g., IT / Technology).
Clearly there is significant movement from the payer side to embrace industry but is the industry ready to respond? The pharmaceutical industry is a typically conservative, highly regulated, vertical that responds to regulatory bodies (FDA/EMA) but is rarely proactive and an initiator of change in its business vertical.
So what are payers looking for? What are their needs? Pharma has categorized their needs under the term the “4th Hurdle”, which typifies their attitude to payers as barriers to prescribing. These “needs” cover three areas - a demonstration of “real world” value of medicines, assistance with budgets and participation in non zero sum game partnerships. Payer partnerships fall into two categories; “Price and Reimbursement” (risk sharing agreements/patient access schemes) and “Value Add” (provision of services beyond the pill). Patient Access schemes have been around for several years (in the UK the first being instituted in 2002 for MS drugs) but have their critics and are perceived as being of more value to the industry than to payers3.
Trust is not commonly associated with the pharma industry and it tends to be described in the same category as the tobacco and oil industries. Recent publications such as Ben Goldacre’s Bad 4tend to reinforce this image. For partnerships to truly work the participants will need to move out of their comfort zones and pharma will need to embrace more “Value Add” forms of partnerships. These forms of partnerships will be quite challenging and will question the limits pharma will go to beyond just being a Pill provider. The recent introduction of the NOAC class of medicines (Novel oral anti coagulants) is a case in point. The class is likely to replace the current standard of care (Warfarin) which has been around for over 50 years. Despite being considered a “dirty” drug Warfarin has spawned the development of complex blood monitoring clinics and associated medical and administrative staffing. Value Add partnerships here will need to address the consequences of the closure of these clinics and associated service redesign issues that payers will have to address.
Challenging times lie ahead but I believe we will see the emergence of quality Value Add partnerships which will be mutually beneficial and ultimately improve patient quality of life.
- Raftery, BMJ 2010;340:c1672 Multiple Sclerosis risk sharing scheme: a costly failure
- Ben Goldacre, Bad Pharma, Fourth Estate, 2012