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10 trends

To support local market access, biopharma companies must supplement real-world, large-scale demographic and pharmacoepidemiological information with data reflecting local nuances. The types of data needed in the U.S., England and Germany – markets that have seen transformative changes – are discussed below.

The United States

In the U.S., the 2010 Affordable Care Act (ACA) has had major implications for the cost structure of the health care market, with rising numbers of Accountable Care Organizations (ACOs) and increased linkage of reimbursements to quality metrics and reductions in total cost of care.

Health care reform led to development of health insurance exchanges. The ACA’s Medicaid expansion resulted in record increases in Medicaid enrollment and spending nationally in fiscal year 2015, with both increasing an average of almost 14%. The 29 states that expanded Medicaid in fiscal 2015 reported enrollment and total Medicaid spending growth nearly three times the rate recorded in non-expansion states. The number of ACOs has also risen from fewer than 100 to more than 700 in the past five years, now providing care for over 23 million people across all 50 states. However, analysis by the Brookings Institution indicate that while most ACOs realize quality improvements, reducing costs is proving more difficult.

Quality metrics between payer and provider

With the aim of improving outcomes, the CMS is linking quality metrics to hospital reimbursement under the In-patient Prospective Payment System (IPPS), with penalties for non-participation in quality measures. Since implementing a financial penalty, participation among hospitals paid under IPPS has increased to over 99%. In addition, the Medicare Shared Savings Program for ACOs involves 33 quality measures for the 2015 quality-reporting year.

Commercial payers are also beginning to influence quality of care through risk sharing contracts with providers. The Alternative Quality Contract (AQC) is the largest commercial payment reform in the U.S. This is used in some 75% of contracts within the BCBS of MA physician network; under the contract, providers have a fixed budget for their patient population. The AQC has improved quality of care, with providers achieving a 10% savings on medical spending in the fourth year of the program.

England and Germany

In England, redesign of the English National Health Service in 2013 created 211 local purchasers of products and services, the Clinical Commissioning Groups (CCGs). Each covers a geographic area, and focuses on long-term conditions and common diseases. The new NHS also has Commissioning Support Units to advise CCGs, and networks to inform clinicians and payers on best practices. Negotiations can continue to the level of pharmacists, and more fragmentation is possible.

And in Germany, the statutory health insurance (SHI) system has 131 competing SHI insurers (‘sickness funds’ in a national exchange). The Act on the Reform of the Market for Medicinal Products (AMNOG) in 2011 created a scoring system for incremental benefit associated with newly approved drugs. Companies have one year to prove value over existing drugs to sustain price premium and stave off discounting. This has altered the paradigm for market access in Germany, reducing the government’s pharmaceutical spending.

Regionally, fragmentation of the payer landscape is a Europe-wide trend, with market access teams facing multiple local, regional and national decision-makers.  The rapid growth of health technology assessments (HTA) by some 100 worldwide HTA bodies is also impacting value positioning across Europe. The confluence of fragmentation and proliferation of HTAs leads to increasingly local demands for evidence of value for new healthcare interventions.

What does this mean for biopharma?

Securing and sustaining optimal market access hinges on successfully engineering a value and outcomes ‘evidence generation cycle’.

Traditional approaches such as crafting an international value message campaign, developing a global value dossier, and creating multinational registries can inform pivotal discussion with national and sub-national payer bodies. This macro view is necessary but insufficient for achieving market access in an increasingly fragmented global marketplace. Locally sourced real-world data should also be obtained through a value and outcomes audit, including a range of patient-centric data illustrating the patient journey and various healthcare system stakeholder influence patterns impacting that journey.

Global teams who are developing the overarching value and outcomes strategies need to consider commonalities and differences across the world. Archetyping markets based on healthcare system designs, supply considerations, demand drivers, regulatory climate and other macro factors is a useful technique to segment the markets for strategic pathways. These pathways need to be further customized, however, to address the local system dynamics, such as payer and provider contracting in order to ensure relevance on the ground. Accordingly, two-way information exchange between local market segments and global headquarters is paramount in order to provide nimble, flexible and adaptive approaches to markets.