Value Based – Impact on Pharma

Kip has a good posting about the impact of value-based benefit design on the manufacturers.  He doesn’t allow comments so I will post some thoughts here.

For many firms, this will require a significant, even scary change in thinking and tactics; payor-centric communications; comfort with a massive increase in transparency; and a greater willingness to partner. Therefore, while the financial risks of moving to a value-based world are daunting, ultimately the greatest challenges are intellectual.

Value-based drug benefit designs will pose the greatest challenges to manufacturers with product lines (or pipelines) dominated “me too” drugs; rigid, risk-adverse organizational silos; and out-dated, prescriber-centric communications.

While I certainly think the industry has been tip-toeing towards value based benefits for a while, it still will beg several key questions:  [Note: When I think about value based, I think about a grid showing outcomes mapped out versus costs similar to a quality over price analysis.]

1. How do you value certain things – less pain, convenience, minor variations in outcomes, extension of life?
2. How does genomics play in here when you realize that a drug may be better for one patient but worse for another?
3. How do you communicate this to patients without making benefits more difficult to understand?
4. Can patients “buy-up” to pay the difference to allow them to get an alternative that keeps the company neutral?
5. Will we ever get standards and clean data?  We can’t even agree about whether anti-depressants work.

I agree it’s a key trend and one to watch, but I think the implemented reality will be radically different than the solutions out there.