Failure to launch?

By Brian Corvino, managing director, Deloitte Consulting, LLP

Developing a new drug and bringing it to market can cost more than $2 billion, according to our report, Measuring the return from pharmaceutical innovation. Despite the enormous expense, there is no guarantee that a new product will succeed once it reaches the market. To help ensure market access, pharmaceutical manufacturers should be able to demonstrate the clinical and economic value of a new product. They also should negotiate prices and fulfillment requirements with health plans and government payers.

Our latest report, Rethinking market access, explores the impact market access has in the success (or failure) of new product launches. I recently moderated a webinar where we discussed the report and market-access strategies drug manufacturers should consider. Sandeep Duttagupta, Ph.D., vice president of Global Pricing and Market Access at Cambridge, Mass.-based Alnylam Pharmaceuticals, says his company tries to partner with payers early in the clinical-development plan. He told attendees that payers are starting to show more interest in the drug-development process, especially when it involves innovative technologies.

Lovena Chaput, senior vice president, Americas & Asia Pacific Commercial, at Astellas Gene Therapies, agreed with that strategy. Depending on the size of the payer, and the type of product being developed, relationship-building should begin anywhere from 12 months to 36 months before the launch, she said. It is also important to identify the most appropriate people within the payer organization. It is important to keep in mind that the most appropriate person isn’t necessarily the pharmacy director or the Pharmacy and Therapeutics committee, she said. “If you're going to have a medical benefit product, you probably need to be meeting with people from the medical side,” she said. “They're a bit more difficult to get to, but that's where those relationships play a key part.”

Four strategies to help improve market access

Here are four strategies the panel suggested to help improve market access:

• Educate payers about rare diseases, new therapies: Payers are hungry for information about the newest innovations, especially cell and gene therapies and high-end orphan products, Lovena said. But a health plan’s medical thought leaders might not know much about certain disease states, how many of their members might be affected by a rare disease, or the therapies that can treat those diseases. “Cell or gene therapy is something few medical professionals studied in medical school,” she explained. She suggested manufacturers try to serve as educational partners. You should expect payers to do their homework and ask questions. They will likely want to know about the key opinion leaders (KOLs), the type of clinician that is likely to prescribe the product, and the typical site of care. They might also want to know if a new therapy is a specialty pharmacy product or a buy-and-bill, she added.
• Be agile and flexible: Lovena said that payers are increasingly trying to partner with pharmaceutical companies in an effort to control costs. With rapidly changing market dynamics, manufacturers should be agile and flexible when discussing new products with payers. She suggested that mocking up an indication statement could help payers determine how they might create a policy. Some payers might ask for a proposed policy. “That never used to happen,” she said. Over the long-term, she predicted that payers could become more restrictive around high-cost therapies for rare diseases and the use of some orphan drugs.
• Highlight what the product delivers…not what it doesn’t: Pharmaceutical manufacturing might be the only industry that openly explains what its products don't do, Sandeep, said. “When you get on an airplane, the airline doesn’t talk about what is not available on the flight. They tell you what is available…whether it's free drinks, meals, movies, or Wi-Fi.” Similarly, drug manufacturers should focus on what the product delivers when talking with payers, he said. Lovena agreed and suggested discussions about new products should focus on value. “If we have the right value proposition, the payer is more likely to cover the cost,” she said. “We should always, always be speaking about value.”
• Consider innovative contracting: In late 2020, the US Centers for Medicare and Medicaid Services (CMS) finalized a rule meant to make it easier for Medicaid programs, commercial insurers, and drug manufacturers to enter value-based arrangements that tie payments to clinical outcomes. While there is growing interest in innovative payment models, those contracts depend on the number of potential patients covered by a health plan.

Of the drugs launched between 2012 and 2017, 36% of them fell short of their launch forecast. Market access challenges caused or contributed to about half of those failed launches, according to our research. About 70% of products that fail to meet early expectations continue doing so in subsequent years. By contrast, about 80% products that meet or beat expectations at launch continue to do so afterward. Rethinking market access could help pharmaceutical manufacturers deliver on the promise of therapeutic innovation.

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Deloitte shall not be responsible for any loss sustained by any person who relies on this publication.

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