Pharmaceutical reimbursement historically has largely been a process of first determining the efficacy and safety profile of a therapy and then deciding its ultimate coverage level based on its price. But now, payers are taking a cue from their European peers and beginning to do the sophisticated number-crunching and cost-effectiveness studies to take a more holistic approach to drug coverage.
Pharmaceutical companies face many challenges: developing life-changing products that meet the needs of patients, physicians, and payers; adhering to regulatory standards; and managing health technology and payer scrutiny, all while trying to satisfy investors. As drug prices seem to be continually rising, many health plans are shifting more of the cost-sharing burden to patients. As a result, the patient is becoming more of a “consumer” in the traditional sense.
Integrated delivery networks (IDNs) were among the earliest adopters of Medicare accountable care organization (ACO) programs. The Centers for Medicare and Medicaid Services (CMS) releases results specific to these programs on an annual basis, creating opportunities for new drug development.
In the last decade, the healthcare industry has witnessed significant changes, some of which present important challenges to how pharmaceutical companies develop drugs. One such challenge is the shift in influence from the physician to the payer in the adoption of new interventions. This article discusses threats to the traditional model of drug development posed by the increasing influence of payers and considers ways for industry to embrace “value-focused development” to simultaneously adapt to the evolving market and de-risk drug development.