Many pharma executive and marketing leaders actively monitor the pricing transparency conversation in search of the meaningful insights that can truly impact their business performance. And while much public attention has been paid to items such as “drug costs in TV commercials” and “CEO testimony before Congress,” little evidence exists that they have actually moved the needle one way or another. However, an important development may have just arrived in the form of “shoppable services” within new CMS guidance — which may be the moment we have been waiting for.

Issued on November 15, 2019, Final Rule CMS-1717-F2 requires that hospitals post their privately negotiated rates for a total of 300 “shoppable services,” of which 70 are universal, in a consumer-friendly manner. The rule goes into effect on January 1, 2021.

CMS-1717-F2 goes into effect on January 1, 2021.

CMS defines “shoppable service” as a service that can be scheduled by a healthcare consumer in advance and includes items such as common physician services, laboratory and pathology services, radiology services, and medical and surgical procedures. Additionally, hospitals are also required to maintain an internet-based price estimator tool to allow patients to make informed comparisons.

What It Means for Pharma
Here is what this will mean to pharmaceutical executives and what actions can be taken to drive performance:

Understand Immediate Implications: Educate yourself and your teams on what the 300 most common shoppable services are and determine if your treatments are used in conjunction with them. Consider all phases of treatment, including pre- and post- phases, as many of these services may be episodic. If your drug is included, you can expect its price to be included within the disclosures and more broadly available to the general public. This will have direct implications on the first wave of manufacturer offerings such as price transparency websites or HCP and consumer campaigns.

Employ Analytics to Identify Changes in Behavior and Business Flows: One level up is the identification and use of unique data sets that can help determine how, where and by whom behavior is truly changing and where dollars are now flowing/not flowing. As certain institutions gain or lose patients, there will be direct implications on product volume, sales forecasting and contracting ROI. Insights can also be used to optimize sales force targeting, non-personal promotion, product messaging and the development of new interactive tools.

Use AI to Uncover Unseen Patterns and Influence: The greatest ROI may potentially be achieved by employing advanced data science and network analysis to gain a differentiated competitive advantage. AI can empower you and your organization to make the big bets that are truly delivering the expediential returns that are separating winners and losers in today’s world of increased pricing pressure and margin contraction. Insights can directly impact business development and licensing decisions, clinical trial design, real-world evidence generation planning and corporate M&A activity.

The full implications of the larger pricing transparency debate are not likely to be truly known and understood for many years to come. However, the introduction of a price transparency mandate for “shoppable services” presents perhaps the first real opportunity to evaluate how the market is actually changing. The time is now to stand up capabilities that allow you to see the results and implications before your competitors do — and more importantly, make the changes that position you and your organization to win in these early stages of true healthcare consumerism.