Drugmakers realise they need to demonstrate the value of their new treatments to payers, but many are concerned about their ability to do so.
That is one of the key findings from a new report from the Economist Intelligence Unit, sponsored by Quintiles. The analysis, called 'The Value Challenge', is based on findings of a survey of 399 senior executives from the life sciences industry, and it states that the situation is "further complicated by a shift in the balance of power among industry stakeholders, each of which may require different evidence to be convinced of a product’s value".
The EIU report argues that the value challenge is "not just a temporary symptom of current economic conditions, but a long-term issue that is a leading concern for a majority of drug companies worldwide". Moreover, although deteriorating financial circumstances are prompting some payers —particularly governments —to focus more closely on reducing pharmaceutical spending, "the demand for proof of value has been evolving for decades".
However, many stakeholders, especially biopharma companies, "lack confidence in the industry’s ability to respond to the value challenge", the report claims. Only about one-half of survey respondents say that the pharmaceutical sector is adjusting well to increasing demands for proof of value.
All respondents are harsher about biopharmaceutical companies’ ability to demonstrate value and, among payers and regulators, only 25% are confident about the broader claims of value made by these firms. However, 68% of life sciences respondents saw the growing demand to provide value has had an important impact on their business models; 85% have made at least one change to their model for this reason, 82% to their R&D strategy, and 78% to their commercial plans.
The EIU survey also notes that biopharmaceutical companies see their market power decreasing, but others still regard them as dominant players. The report quotes Ed Pezalla, national medical director for pharmaceutical policy and strategy at US insurance major Aetna, as saying that “the industry is still making decisions about what drugs come to market and what they can charge. It is just beginning to pay attention to payer sensitivity.”
Tuesday, February 07, 2012
Pharma fears it is not up to demands of 'value challenge' - EIU