Our business at AX’S Consulting in 2017 confirms our impression of the previous years: “value stories” are no longer fashionable! Global market access is no longer interested in value stories.
This is a remarkable phenomenon, considering that for a decade AX’S was asked to develop value messages and test value stories. "Does it resonate?" was the key question.
Frankly speaking, this question quickly started to embarrass us because it irritated payers. "That’s not how we work” they usually objected. Talking to payers daily, we coped with their objections and started to “re-phrase” the question as: “What evidence do you need to make you accept this value statement” or “what is the benefit you need to see?” Clearly, something didn’t resonate between pharma companies and payers.
As a good salesperson needs to understand the client’s need, so does the pharma industry need to understand the buyer, the payer or whoever the stakeholder is. The industry is learning its lesson.
Payers set the rules of the game, not the industry. Payers decide what should be paid for and what is affordable. This “new” game first became apparent in the so-called “smaller" countries, far away from US-based companies. But US payers have started to play the same game and US companies are adapting to this new situation.
Therefore, the core business question that dominated our work in 2017 was "which patients do payers want to pay for"?
Subgroup analyses is back! Not only for patient populations that are statistically pre-defined in pivotal studies. Payers have become pragmatic and look at subgroups even retrospectively. The marketing way of “Torturing the data until they confess the unique selling point" has now become for payers to "torture the evidence until we are willing to pay”.
"Place in therapy" and "place in patient journey" is what payers want to know before accepting access and while considering restrictions in use. It’s all about affordability and best use of limited health care resources! "What can we afford" has become the key issue ... not "what resonates". Things have changed.
All this has had major implications on pricing. Not surprisingly, while we noticed the decline of value story testing, our business largely became “smart pricing research”.
More than ever, pharma companies set high list prices as they expect payers to nibble off the price in many ways: “Double pricing” in other words. Payers have a vast range of ways to render soaring prices affordable: confidential rebates, volume capping, claw backs, patient access schemes, register-based outcome paybacks and many other forms of managed entry agreements. At the same time, the management of list prices remains a top priority as external reference pricing and parallel trade are, more than ever, a major threat to the industry.
During the coming years, pricing will become even more complex as prices increasingly become “conditional” as more high-cost therapies will become available through the EMA’s PRIME or the FDA’s breakthrough/fast track.
The complex world of pricing, affordability and value of additional benefit has, rightly, become the new vogue in market access.
Not surprisingly, as the demand for value story testing declined, our clients increasingly needed us for “smart pricing research”. Understanding pricing is extremely interesting because of its complexity. We have since expanded our pricing expertise in Eastern European countries.
Investing in pricing and affordability research is not only critical for the success of a drug. It is also vital to the pharma company to be a reliable and reasonable partner during price negotiations with payers.
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