Shifts in drug pricing and market access policies around the world have caused an “earthquake” that will reverberate for years to come, a survey of industry leaders found.
Healthcare consultancy Numerof & Associates generated the insights in a survey of 175 executives from 67 pharmaceutical companies. The qualitative survey revealed the belief that the current era of policy change is unlike anything that the industry has experienced before. After going through a period of fast change, the industry is braced for more upheaval in the coming years.
“While there has always been change throughout the industry, the past 24 to 36 months have felt more exponentially transformative than anything I have seen over the last 30 years,” an executive said. “What we may experience over the next five years could exceed the cumulative level of change we saw over the previous several decades.”
Another executive characterized the policy environment as an “earthquake” that is “not going to settle down soon,” while a third person predicted that the need for politicians to try to address the cost of healthcare will ensure ongoing change.
The executives were talking after a succession of policy changes in key markets. Medicare gained the authority to directly negotiate prices for some drugs, and the most-favored-nation (MFN) policy tied U.S. prices to overseas markets.
MFN has made global prices increasingly interconnected at a time when companies are grappling with drug pricing and market access reforms in the European Union and Japan. The changes are forcing pharma companies to consider new trade-offs when planning global commercialization strategies.
“Take Product X: Do I go in with just one orphan drug designation? But what if it works with a second indication—do I delay? Do I wait for the bigger indication versus a smaller orphan indication? Is there a potential pricing game that I can play? How do you overlay MFN on top of this? What is the value I’m going to get from the ex-U.S. market?” the executive said.
Against that backdrop, companies are bringing market access teams into discussions from early R&D onward. One executive went as far as to advocate for making phases 1 and 2 the most critical stage of commercialization, arguing that “if you get that foundation right, the backend of the process will be much more streamlined.”