More Americans take prescription pharmaceuticals than ever before. Some of these medications treat common diseases and health conditions where drug accessibility rarely matters; however, highly managed classes can require an intricate balance of access and cost. As a method to control costs, payers implement restrictive utilization management policies. Depending on the therapeutic class, these restrictions massively impact pharma marketing success and drug script volume.
Historically, three factors, efficacy, safety and quality, determined the level of reimbursement a product would receive. Growing healthcare costs, specifically around pharmaceutical products, adds more variability into that once-stable model. To control escalating costs for patients who desperately need treatment, payers restrict the reimbursement of products for many therapeutic classes. The most common restrictions include prior authorizations, step edits and quantity limits, but could range to an individual’s characteristics, such as age or gender.
A case study of the recent news about cholesterol-lowering PCSK9 products demonstrates the strategies implemented by payers and pharmacy benefit managers to control costs. The nation’s largest PBM, Express Scripts, plans to cover the two entrants in this class for their 2016 formularies with the use of restrictions and discounts. The potentially massive patient population for this class warrants restricted access from payers for the two new PCSK9 products, Praluent and Repatha. ESI ensures that patients meet detailed utilization management criteria in order for providers to prescribe the products.
In highly managed classes, reimbursement restrictions greatly impact physician habits at the point of care. According to some providers, restricting their ability to prescribe certain medications could compromise an ethical obligation to provide the best help for patients. Restrictive utilization management further burdens HCPs with more paperwork and complexities in drug prescribing. Although one product may have the most efficacies from a clinical perspective, the affordability and accessibility of that drug can prevent prescription in certain cases.
Strategic negotiations between pharmaceutical manufacturers and payers, known in the pharma world as payer contracting, play a massive role in the prescribing habits for a particular product. Due to the definition of restricted access to a medication, an increase in restrictions normally translates to a decrease in script volumes. Manufacturers first negotiate the best possible access with payers to reduce the amount of restrictions. However, for some classes, restrictions are unavoidable. Effective pharma promotion to providers becomes a crucial task to either identify advantages in market access against the competition or promote a product based on added clinical value. As an example, over half of the largest U.S. payers require prior authorizations for the multiple sclerosis class of treatments. With upcoming market events, like Copaxone’s shift to generic, manufacturers have the opportunity to replace favorable payer contracts in this landscape.
The hepatitis C market also provides a great example of how much weight payer restrictions carry in the competitive landscape. A review of the third quarter for 2015 highlights a gap between the number of scripts written and number of medications filled for Gilead’s Harvoni and Sovaldi. This discrepancy reveals the payer resistance and challenging benefit restrictions faced by these two products. Within this class, Abbvie provides ample competition with its Viekira Pak product. By securing exclusive contracts with some heavyweight payers through aggressive contracting, Abbvie removes some of the obstacles in restricted access that competitors deal with in hep c. Recent reports suggest that Gilead could change the tide through clinical efficacy and the support of patient advocacy groups. This should indicate how well raw pharma marketing can overcome reimbursement restrictions in this space.
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