Dr. Chitra Lele, Chief Scientific Officer, Sciformix

Market Access and the Importance of Value Based Pricing

Dr. Chitra Lele

[This is the second post in a three part series that discusses and to a certain extent demystifies the phenomenon that is Real World Evidence (RWE) and its influence on the product lifecycle. This post focuses on Market Access and its scope, which includes pricing and reimbursement, Health Technology assessment (HTA), and formulary inclusions.]

Market access is the process of ensuring that patients who can benefit from a particular drug have easy and consistent access to that drug/brand at the right price. A key requirement for market access is evidence of clinical effectiveness and cost effectiveness of the product. Market access is no longer about simply gaining marketing authorization for the product.

Healthcare payers and a variety of stakeholders are now demanding more convincing value data. They expect that real life evidence match the projected performance at launch, and that new evidence will become available as the competitive landscape and the environment evolves. Both the clinical and economic effectiveness of a product must be proven to be admitted to and succeed in the market. This is now accepted as a key element in commercialization of pharmaceuticals, beyond authorization by regulatory bodies.

The scope of market access includes pricing, reimbursement, Health Technology Assessment (HTA) authority recommendations and formulary references on a local and national level. Value based pricing is now a key consideration when marketing a product. This means that the price should reflect the value of the drug. Purchasers will base their assessment of value for money on competitors’ prices and historical prices. Real World Evidence (RWE) can provide support to back up pricing after a product launch; this is illustrated in the WellPoint guidelines. The guidelines state that any claims made by manufacturers on product performance must be justified, specifically those on cost-effectiveness. The RWE is expected to reflect the claims made at launch and confirm that performance is in line with those claims.

HTA is a systematic approach used to evaluate the properties, effects, and impacts of health technologies or interventions. The main drivers of the HTA decisions are comparative effectiveness and cost-effectiveness. Another consideration is the effect the product will have on the healthcare budget, including at the regional level. These decisions are comprised of the inclusion of formularies and the negotiation of price discounts.

The right market access strategy can help pharmaceutical companies set their products apart and perhaps realize a preferred position on payer formularies at desired prices and reimbursement levels. Pharmaceutical companies that want to build a smart and robust market access strategy are now beginning to see the value of partnering with service providers with deep domain knowledge, experience in a variety of therapeutic areas and regulatory environments, and an understanding of highly complex and dynamic healthcare systems.

Want to read the first part in the series? Click here.
Want to read Dr. Chitra’s full article on RWE? Click here.
To learn more about our end-to-end RWE and MA services. Click here.