As a unique mix of payers, providers, patients and industry executives prepare to convene for CBI’s first Commercialization and Market Access Congress in Orlando next month, Pharm Exec editor-in-chief William Looney sits down with Congress co-chair Sheri Dodd of Medtronic to review key themes and trends likely to dominate the two days of discussion.
William Looney: There appears to be a consensus that the commercial model for biopharmaceuticals has to adapt to stark changes in the external environment. Do you agree? What are the new benchmarks for superior performance?
Sheri Dodd: The business of developing and marketing pharmaceutical and device technologies has changed significantly in the past decade. The trend is led by growing consolidation in the payer , purchaser and provider base, increased public scrutiny and regulation of industry practices, global requirements for evidence and capability and capacity improvements in the collection and/or leveraging of information to build and support evidence of value determination. The faster companies recognize and respond to these changes, the better the competitive advantage they have in the global marketplace. No one questions that premise, even if individual companies pursue different strategies based on their distinct product portfolios.
What are the most important developments affecting the customer base in biopharmaceuticals?
Today, our customers are far more organized, connected and knowledgeable. They are very adept at analyzing the purchasing and funding environment and applying all the improvements in information technology to control their exposure in the marketplace. Diverse customers are also working more closely together and are not afraid to collaborate and take unified positions with mutually support their desire to build a strong, independent evidence base for making not only clinical decisions, but to establish the cost effectiveness of new medical technologies..
Isn’t the very definition of “customer” changing into something much broader?
Exactly. The institutions who purchase our products clearly still count, but a proactive approach to the market today requires we have an understanding of a much extensive community of what I call “key influencers.” For example, we must exhaustively study the patient, learning how they interact with the provider and their pressure points on willingness to pay. The quality movement – which now includes diverse groups ranging from the National Pharmaceutical Council [NPC] to the Leap Frog Coalition – is gaining more influence, with a stronger impact on creating a policy environment that links quality and payment. Finally, there is more government involvement in “value” discussions about medical technology – evaluating more closely who will benefit, at what time point in the care pathway , providing what type of benefit at what cost.. In Europe, this process is called health technology assessment [HTA] and it is a key market access control mechanism to technology introduction. In the US, this type of evaluation has been more prominent in the the private sector but we also now have a commitment under the stimulus and health reform legislation to scale up the federal government’s role in conducting studies to establish, through robust evidence, how effective these treatments are in managing disease.
What does this mean for the ability of companies to compete successfully for market share?
The trend is clear. Industry can only obtain market access by upgrading the evidence it provides to show value for investment. It follows that evidence of value has to be regarded as a key asset in the development and marketing plan. The most successful companies now use varied and extensive streams of data to compile a compelling narrative to reimbursement authorities. This narrative must focus on proving a clinical differentiation against existing therapies and at a cost that is appropriate to achieving a specific health outcome. Overall, what successful companies are doing is to demonstrate the ability to deliver a “total health solution,” instead of providing just the pill, the device or the diagnostic. This is what attracts the attention of the payer and the purchaser. The gain is that we get to associate with the broader quality agenda as well as re-positioning health as an investment to be encouraged rather than as a cost to be avoided. Not all companies have the same tools and capacity to do this, however. Those who do will carry the competitive advantage and I believe, better outcomes for patients and the health care system will be realized.
What actions are critical for companies in engaging around this new customer mindset?
You cannot take a piecemeal approach to the new customer. Interconnectivity that brings all elements of the organization behind serving the needs of each customer is the priority. One example is identifying the link between customer needs and the portfolio, at a very early stage of the development process – Phase II is not too soon. R&D, clinical development staff and the commercialization teams must work together. The former has to understand that trial studies and evidence must not be framed only from the perspective of what will secure a timely market authorization; there must be evidence applicable to the payer and purchaser too.
Doing all this well requires a real culture change, especially in ensuring the team executes effectively. The danger is complacency. Change is difficult, and, to be frank, some companies lack the urgency to move forward: targets are being met, customers seem happy, so why rock the boat internally? They are not looking further down the road than the next quarterly returns, which is a risky proposition given the turbulence shaking all players in this industry.
What do you think will be key to a successful Congress in Orlando next month?
I look forward to the networking opportunities. CMAC 2010 is one of the largest such events in attracting all parties with a stake in this new customer-led environment: payers, providers and patients combined with the people who drive our clinical development agendas. The diversity of perspectives will allow us to highlight “best practices” that help industry understand who the new stakeholders are, and what they need, along with ways to address the internal barriers to successful engagement.