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A value management operating model can help pharmaceutical companies provide better patient outcomes and increase regulatory approvals, reimbursements and ROI.
Many pharmaceutical, biopharmaceutical and other life sciences companies have outdated operating models that primarily demonstrate efficacy and safety to the regulators and payer organizations that control reimbursement rates. However, these models are inadequate to meet today’s stringent requirements of providing distinctive value and improving real-life outcomes.
Pharmaceutical, biopharmaceutical and other life sciences companies need to adopt an operating model that puts value management at the heart of research and development (R&D) and commercial decisions.
In this paper, Accenture outlines five tenets that can help companies build a value management-focused capability to help secure regulatory and reimbursement approvals.
Across the globe, stringent regulations are putting pressure on pharmaceutical, biopharmaceutical and other life sciences companies to demonstrate both initial and long-term product value. The Food and Drug Administration (FDA) and European Medicines Agency (EMA) are challenging the value dossier in a more aggressive way and are sensitive to the holistic effects of a drug.
Regulators and payers are more frequently using value-based reimbursement criteria when evaluating new therapies, something that most companies have not yet incorporated into their own operating models. . In our experience, many companies continue to use narrow clinical trial plans and short-term product commercialization strategies that fall short of meeting higher value standards required to verify maximum reimbursement.
Adopting a value management operating model requires new ways of working. It also requires new role definitions and responsibilities for personnel at both the global enterprise level and within individual markets.
The shift represents a significant cultural change that will require process reengineering, a specific training program, investment and a comprehensive effort encompassing commercial and noncommercial functions alike.
The pharmaceutical and biopharmaceutical industries have had to contend with seismic shocks in the last few years—from the economic downturn, to the ‘patent cliff’, to health care reforms in both mature and emerging markets. Shifting to a value management focus can help companies successfully navigate marketplace challenges.
Done well, a value management approach can result in enhanced products leading to better patient outcomes, and subsequently to improved reimbursement with better returns on investment.
Five ways to migrate to a value-based operating model:
Nurture a highly collaborative, interconnected value team: The value management model should be adopted across all levels of R&D and commercial senior leadership, as well as the managed markets and payer relations teams. For example, companies should develop and refresh business cases for all future therapies so that the probability of success is monitored and understood, thus preventing any late-stage surprises.
Evolve traditional commercial roles to focus on value: Companies and functional leaders need to evolve the key commercial roles to emphasize value not only when dealing with internal colleagues, but also when collaborating with external stakeholders.
Invest in information technology (IT) to help drive value: The traditional role of IT must be expanded to successfully compete in a value-based environment. For instance, IT can play a critical role in developing the data management and analytical capabilities needed for cost effective use of data to improve outcomes.
Embed value management as a continuous process: The value dossier can be retooled and evolved to provide better support in securing maximum reimbursement, as payers work with the company to help define clinical and value measures with trial results at the center of negotiations. For example, companies should look at evolving the value dossier so that it incorporates critical feedback from a broad range of external stakeholders.
Expand and redefine relationships with stakeholders: More collaborative relationships with a broader set of stakeholders can help in quicker, smoother reviews with regulators; constructive, transparent negotiations with payers; and higher acceptance among the health care professional and patient communities.
January 16, 2013
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