Delivering on Comparative Value Expectations for the Healthcare Market
Pharmaceutical and biotech company marketers have always appreciated the impact they could have with pharmacoeconomic data to support the advertising and promotion of their products. Unfortunately, it was rarely a prerequisite for commercial success and more often than not, done after product launch using retrospective database analysis and speculative modeling. In the evolving new healthcare market that will change. In an increasingly managed and cost conscious market, even innovative products with meaningful clinical differentiations from other therapeutic alternatives will be expected to substantiate the value of that differentiation. So how do you deliver on those expectations? You start early in development.
Pipeline project evaluation:
- What are the target product profile value drivers? Specifically, what are the points of differentiation; the reasons why this product will be better than what is currently available or that might be available at the time of product launch?
- What are the plans for proving that these points of differentiation are clinically real and meaningful?
- Will it be possible to include these points of differentiation in regulatory labeling (package insert) so they can be used in marketing programs?
- Can marketing ascribe a quantitative value (cost benefit) to these points of differentiation? What are they worth to the patient, to healthcare providers, and to the payer?
- Have you modeled the potential value of the differentiation and the minimum comparative value that is going to be meaningful to payers? At what point, does the differentiation no longer have meaningful value?
- Are trials designed to deliver data to prove the points of differentiation?
- Are the trials designed to capture the quantitative value of the differentiation? Have credible, valid pharmacoeconomic metrics been used?
- Have you eliminated bias from the quantitative design elements?
- Have you built in conservative pricing assumptions and options? Are they sufficient to allow for valid sensitivity analysis?
- Will the value assessment be reproducible in the real world?
This approach relies heavily on the marketing team understanding the value expectations of the market, the competitive value propositions, and the impact of pricing on the value proposition model.
The research teams must look at not only trial designs from a regulatory perspective but also must be accountable for delivering the definitive proof of differentiation and the data to support the quantitative comparative value (pharmacoeconomics).
Many pharmaceutical marketers do a series of market research studies and then typically set a price based on competition and “what the market will bear”. They then try to justify the value when they go to market. Now, marketers will need to appreciate, very early on, the relationship between the price they set and the value they can prove based on that pricing and the available clinical and pharmacoeconomic data. Comparative value assessments by payers will be data driven and will not be influenced by marketing hype.
I’m certain that some who have read this post will think that this process is idealistic, impractical, and some might even argue it is not necessary. That is might be true until they realize their competitors who are developing comparative value data are creating a substantial competitive advantage and increasing the probability for more ready access to drug formularies at premium prices.