No matter the type of organization you are in — from big pharma to virtual, small molecule to biologics, active ingredient to drug product — it is important to understand the cost structure of your program.
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.
Payer receptivity to high orphan drug (OD) prices and, hence, revenue, will almost certainly begin to wane as budgets are increasingly strained by new therapies and as payers increasingly scrutinize the value of ODs. Indeed, there are signals that payers are becoming increasingly sensitive to the cost of newly approved ODs, even those that confer a clear clinical benefit to patients.