A growing number of innovative therapies are making their way through the drug development pipeline, ranging from CAR T-cell therapies that show promise in treating certain cancers, to novel therapies that offer new hope to patients struggling with neurologic diseases such as Alzheimer’s, epilepsy and multiple sclerosis. As these products move through the pipeline, there is significant focus on whether the clinical data will be compelling enough to achieve regulatory approval. However, there has been considerably less discussion about how these therapies will be adopted by patients, payers and the broader healthcare industry once they are approved.
According to a 2014 McKinsey report, approximately two-thirds of new drugs fail to meet prelaunch sales expectations in Year One, and those that fall short typically continue to under-deliver for the next two years.  As an increasing number of these often high-cost products come to market, worldwide efforts to contain healthcare spending are also gaining traction, as are efforts to drive patient adherence and reduce adverse events. In this environment, drug manufacturers who want their drug launches to meet or exceed sales expectations must develop robust commercialization plans that manage challenges related to market conditioning, provider education, reimbursement, patient access and support.
The complete patient experience
Because many of the innovative therapies in development target smaller patient populations, often at various phases in disease progression, it’s never been more important for manufacturers to understand the unique journey their patients are traveling.
Manufacturers should start by understanding patient experience: how they were diagnosed, their treatment history, the environment in which they receive treatment (on an inpatient or outpatient basis), and how all facets of the patient journey will impact a patient’s understanding of, and compliance with, a new therapy. It’s equally important to understand the ‘soft issues’ that patients might be facing. For example—does the therapy primarily target cancer patients who have been in remission but are now experiencing mutation and regrowth? Does it target patients who are receiving their second or third line of treatment? Understanding the answers to these questions is critical to successful product positioning and to developing services that address specific patient needs. For example, if an oncology product is going to be used primarily as a third or fourth line therapy, the manufacturer should consider offering services to help patients in an advanced stage of their disease, such as caregiver assistance and psychosocial support.
Market conditioning and education
Budgeting and planning for thorough, multifaceted market conditioning and provider education are also increasingly important.
If a product is first-to-market in a disease category where there have been no breakthroughs for a number of years, nuanced and targeted patient and provider education will likely be necessary. Consider, for example, if a patient population is accustomed to being treated with inexpensive medications, such as steroids to control the symptoms of a medical issue, is presented with a new product that will pinpoint and resolve that same medical issue—at a much higher cost. The manufacturer needs to allocate adequate resources for educating the physician, payer and patient about the true value of the therapy.
Similarly, if a physician has been accustomed to treating an inflammation with steroids for years (or even decades), the education plan must teach that physician a whole new mechanism of action in science. And, it must also take into account that educating a physician who has been in practice for 40 years is different than educating a physician who has just completed medical training.
If a product is second to market, it’s likely that an earlier competitor has already primed the market. The company must then find a way to differentiate—through its patient support services, pricing or distribution model. Its market conditioning and physician education programs then need to focus on raising awareness of that differentiation, and its benefits.
Today, pharmaceutical companies that are launching new products have less opportunity to ‘test, learn from and refine’ messages due to the rapid pace at which new therapies are entering the market. Even when the science and clinical results are in a product’s favor, getting a product’s messaging and services right—the first time—can make or break the success of its commercial launch.
That’s why it’s critical that product messaging is nuanced, and that it targets the appropriate healthcare providers, right out of the gate. For example, if a manufacturer is launching a new transplant drug that helps reduce the likelihood for transplant rejection, it’s key to understand that the transplant surgeon, not the nephrologist, writes the prescription. However, the nephrologist is also a stakeholder because he or she may provide follow-up care after the transplant. Targeted messaging needs to educate and appeal to both physicians.
All of these nuanced details must be incorporated into the product’s commercialization plan early on. Failure to do so may mean a lackluster launch for even the most clinically effective product, and it may give competitors an opening to move in and claim market share.
Tell the broader story
In today’s value-based care world, perhaps the most important element of any commercialization plan is an effective payer reimbursement strategy. It starts with collecting the clinical evidence and health economics outcomes data that clearly prove efficacy. It also means developing effective messages that communicate the broader value the product delivers, and being strategic about the people, tactics and channels used to communicate with patients and payers alike.
For years, the value of a product was directly correlated to the safety and efficacy data in its clinical trials. But today, even with compelling clinical evidence, payers may be slow to reimburse for a high-cost treatment that has only been tested with a relatively small number of patients. Consider the example of Provenge, Dendreon’s immuno-oncology drug for prostate cancer, which can cost more than $90K for a full course of treatment. In a pivotal trial called IMPACT,  the trial data demonstrated that Provenge extended median survival by 4.1 months. That was sufficient for FDA approval. But because it was among the first immunotherapy products to be approved, CMS and commercial payers initially labeled it “experimental.” It took 14 months before Medicare agreed to cover it on their formulary. 
As this anecdote illustrates, being labeled as an experimental therapy by payers is a substantial threat to orphan products that are coming to market through an FDA “fast track” approval process, not only because these therapies tend to come with a high price tag, but also because their clinical trials may involve a smaller number of patients.
Another key question in reimbursement planning is how the patient experience impacts value. Historically, patient outcomes were defined only by quantifiable metrics, such as extended life expectancy or fewer ER visits. But, as more ‘like’ drugs come to market, and as more brand-name drugs are developed to provide better treatment options, patients, providers and even payers are increasingly focused on the value of improved quality of life.
Does the product enable patients to get out of their wheelchair and walk six steps further, on average, than before they took the medication? Does it dramatically reduce treatment side effects such as hair loss, nausea, vomiting or exhaustion? These additional, quality-of-life benefits matter very much to patients and can serve as a real differentiator—particularly when they can be measured through patient-reported outcomes studies.
Advocacy groups are actively seeking this kind of data and, together with patients, they are pushing payers to take these additional benefits into consideration when determining reimbursement.
Innovative reimbursement models
As a record number of highly targeted, high-price medications are entering the market, payers are increasingly seeking new approaches to reimbursement, including pay-for-performance models. In 2015, Novartis came to an agreement with Cigna and Aetna on a performance-based price for its heart failure drug Entresto, which competes against several older and less expensive medications.  The agreements use heart failure hospitalization as an outcome measure, based on the FDA-approved label. Novartis agreed to reduce the price of Entresto to payers when the rate of heart failure hospitalization among patients on Entresto exceeds a pre-specified threshold.
As manufacturers bring more innovative, high-priced therapies to market, they should consider whether performance-based reimbursement models could be helpful in negotiations with payers. One thing is for certain: reimbursement models will continue to evolve, and manufacturers, providers, patient advocacy groups and payers will need to collaborate to manage costs while also providing patients with access to novel medications.
Overcoming access hurdles
As medications grow more targeted and therefore more costly, patient access is also growing exponentially more complicated. Prior authorization is often mandated; prescribing physicians are often required to provide specific patient information (which usually varies by payer, further complicating the process) before writing the prescription; and payers are increasingly requiring evidence that less expensive medications have failed before authorizing a patient to receive more costly and targeted ones. Many of these prescriptions are initially denied, leading the provider to file an appeal, resulting in more administrative work for the practice.
Adding to this complexity is the fact that physicians receive no reimbursement for the administrative burden created by these hurdles, which cost practices an average of $60,000–$90,000 per year to administer. Some practices pass these costs onto the patient, creating additional financial burden. And regardless of who covers the cost of these hurdles, they almost always lead to delays in treatment and added anxiety for the patient. Manufacturers can help ease prior authorization and other administrative burdens for their products by providing a single location for physicians’ offices to find the right forms and processes, per indication and per disease.
Similarly, as patient out-of-pocket expenses and deductibles continue to rise, manufacturers may opt to have a program in place to help patients with copay assistance and other financial obstacles to access. This may mean educating physicians and patients about how to obtain financial assistance available via coupons, patient advocacy groups or other support services, and helping to connect them with these resources. These patient assistance programs are often best (and most cost effectively) managed through a third-party hub services provider that specializes in designing, implementing and measuring these services.
Manufacturers need to connect patients with wrap-around services that will help drive utilization and support compliance, particularly when medications are targeted toward small patient populations. And, because many of these treatments are approved with a Risk Evaluation and Mitigation Strategy (REMS), manufacturers are required to maintain patient registries, collect data on patients who experience adverse events, and report that data back to FDA. These requirements vary by therapy—in some cases manufacturers may need to collect patient data for as long as 10 years after treatment. Successful commercialization plans support patients in improving compliance and managing side effects, while also collecting the related REMS data.
Even without a REMS, manufacturers may need to educate patients about potential adverse events and side effects and how to best manage them. Or they may need to coordinate in-home visits to provide patients with injection or infusion training. In other cases, they may need to call patients to verify that they’ve received their medications from a specialty pharmacy or collect information about (and help patients reduce the impact of) side effects. These important services are key to ensuring optimal patient outcomes, and to gaining reimbursement.
Innovative therapies are breaking new ground and offering hope to patients struggling with serious illnesses. Although these therapies demonstrate incredible promise, they also have inherent challenges. The global trend toward value-based care and the pressure to deliver on sales expectations have created a difficult environment for commercialization, requiring companies to rethink their old formulas for a successful launch. Companies that want to ensure their product meets expectations need to understand the complete patient journey and implement robust commercialization plans that address the changing reimbursement and access landscape.
- The Secret of Successful Drug Launches; Hemant Ahlawat, Giulia Chierchia, and Paul van Arkel; McKinsey; 2014
- Pivotal Phase 3 IMPACT study results of PROVENGE published in New England Journal of Medicine, News-Medical.net, July 29, 2010
- Medicare Will Pay for Prostate Cancer Drug, The New York Times, June 30, 2011
- Novartis Signs on to Value-based Pricing for Entresto, Managed Healthcare Executive, May 4, 2016