//Pricing Pressure in Pharma and Value-Based Care
May 22, 2018

Pricing Pressure in Pharma and Value-Based Care

By Sarah Morgan | Category: Data/Analytics |

Controversy over drug pricing isn’t going anywhere, and neither is the attendant potential hit to the industry’s reputation. Outside of Capitol Hill, managed care continues to gain importance, as the slow but steady evolution continues from fee-for-service to value-based care.

While healthcare remains in the political spotlight in the United States and around the world, the pharmaceutical and life-sciences industry has not yet faced many of the legislative repercussions that had been prophesied in recent years.

However, as the standard investing disclaimer says, “Past performance is no guarantee of future results.” Politics is unpredictable, never more so than today. It would be unwise to assume that a quieter-than-expected 2017, drug-legislation-wise, means that inevitable legislative repercussions won’t happen sooner or later.

Recently, in “How Railroads Changed Healthcare — And Why It’s Happening Again, we looked at the evolution of American healthcare. Our country’s geographic expansion led to the creation of employer-provided health insurance – and, eventually, to our current managed-care paradigm. Today, we’re specifically seeing providers, payers, and other types of healthcare organizations merging to find cost efficiencies.

This cost-consciousness is one of the trends we highlighted in “The Health and Tech Trends That Will Shape Pharma Marketing in 2018.” Like political pressure, value-based care is another effort to find cost efficiencies. This is the evolution toward models of healthcare that measure the results of interventional efforts, rather than their quantity, when reimbursing.

We’re also beginning to see evolution on this front, from the mere introduction of value-based care programs, to efforts to tweak and improve them. Recently, the Centers for Medicare and Medicaid Services told the annual meeting of the American Hospital Association that they’re prioritizing reducing administrative burden in value-based care models that are not yet producing results.

Pricing pressure is nothing new for pharma marketers. But these changes mark a fundamental shift that we should remain conscious of, as Intouch Vice President of Market Access Peter Weissberg sums up:

“Healthcare success will increasingly hinge upon market access. You need to be working with a market access team that’s rooted in mobile technologies. Traditional channels are still vital. But you need a team that can understand how they all fit together: one that can help you develop the strategies to win in this new world, regardless of who merges with who, or which new player enters the field.”

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