When I consider the current state of global healthcare systems and stakeholder engagement, I get a strong sense that there’s huge confusion surrounding the fundamental definition of ‘value’ in market access. This disparity in perception amongst stakeholders surely hinders the effectiveness of the industry’s market access machinery.
In order to fully understand the problem, I recently analysed the process by which value is created and communicated in the pharmaceutical industry. Based on my research, I’ve developed a four-point roadmap to help the industry bridge this value gap across stakeholder groups.
But first let’s look at the reality of the pharmaceutical market space…..
Evolving Pharmaceutical Markets
Only a decade ago market access was typically gained by demonstrating clinical effectiveness evidence to prescribers and regulators, influencing and gaining credibility from Key opinion leaders (KOL), and aggressively pushing the product via a large sales force.
However, in the new pharmaceutical business landscape, apart from robust clinical effectiveness there is also a requirement to clearly demonstrate economic effectiveness of a product throughout its life-cycle. This change has created a shift in power dynamics from prescribers to payers in the industry.
"Securing and maintaining market access has become an ever moving target for a company."
On top of this shift in decision-making power, there’s also a progressive devolution of decision making. Regional and local players are exercising greater control over funding decisions for hospital and regional markets, thereby increasing the number of economic stakeholders in the decision-making process.
The Pharma Value Chain
Value means different things to different stakeholder groups within the industry, and this challenge is compounded by a lack of information on the relative positioning of market access stakeholders and their internal working environment.
Value is created in each successive stage (highlighted in the diagram below) of the pharmaceutical supply chain, starting from the very first identification of the compound, all the way to the patent expiry of the product.
Seems straightforward, right? Yet pharmaceutical companies have been very slow in recognising the importance of value creation process. They have often let others — mostly regulators and payers — decide the value of the product, rather than creating their own internal value definition around a product, and developing a strategy to communicate its value.
It is in the best interest of pharmaceutical companies to define and communicate product value at each successive stage, in order to create a coherent process towards securing market access.
Here’s my four-point plan to identify, re-align, and maximise value in the pharmaceutical market access chain:
1. Assess structural changes in the external market environment The first thing pharmaceutical companies need to do is fully access the external market environment and look at how their own internal capabilities will play out in the field. A thorough knowledge of the strengths, weaknesses, opportunities and threats in each individual market environment will help pharmaceutical companies identify roadblocks towards value creation.
2. Determine stakeholder relationships and scenarios According to a survey conducted by Cegedim Research in 2011, one of the barriers to market access is the difficulty in identifying the market access stakeholder position in the commissioning network. Pharmaceutical companies must invest time and resources in understanding the power clout of stakeholders in each regional market and develop detailed ROI-driven matrices or scenarios, so as to develop an integrated strategy. A one-size-fits-all approach no longer works in the new pharmaceutical environment, where scientific rationale must be supported by economics of healthcare.
3. Realign internal processes and functions A 2011 study conducted by Monitor Group highlighted the need for organisational transformation in identifying and elevating the role of market access at the heart of product strategy. This means pharmaceutical companies will have to realign departments, functions, processes and structures so as fully decipher value within a quantitatively-driven economic model. The idea of economic value has to penetrate deep in the core of the corporate fabric to fully develop a sustainable pharmaceutical business.
4. Communicate value In my complimentary eBook published last year (which focused on the cardiovascular and metabolic space), I highlighted the importance of developing insights, and recommended pharmaceutical companies to move from data generation to insight development. Only with actionable insights on the drivers of value can pharmaceuticals companies build an integrated value communications strategy. Every step should be taken to avoid value leakage within the engagement, and an integrated approach should be adopted towards value communication.
An Opportunity for the Industry
I believe the shift towards a more value-driven business model is the most positive development for the industry in a long time. It is forcing all the industry participants to think about the future and develop a sustainable business built on quantifiable economic value. The time to act is now!