By Chance Scott
With all the product innovations and reimbursement policy shifts, life sciences companies need to anticipate and adjust to survive and thrive in the new ecosystem. This requires creating customized, cross-functional ways-of-working to minimize and overcome current and potential reimbursement barriers.
Yet, most companies continue to relegate their reimbursement policy practice to the sidelines as information-gatherers tasked with securing new product codes and keeping up to date on the Centers for Medicare & Medicaid Services (CMS) coverage rules and guidelines. However, with increasingly complex therapies hitting the market that do not easily fit into the traditional coding and payment systems, coupled with pending legislative changes that could significantly impact access and drug pricing, this long-established function is primed for an elevated role.
This article shares insights on the benefits of evolving the role and integration of your reimbursement policy team to serve as market access partners and propellants, as well as the best practices for how to do so.
Mitigating commercial challenges
To be more agile, life sciences companies need to elevate and integrate the role of reimbursement policy to be thought leader policy experts for the organization and asset-level stewards of strategy. By digging deeper into current issues and trends, along with their potential impacts and related trade-offs, the reimbursement policy team could provide critical insights to help counterparts across functions shape the short-, mid- and long-term product and market development strategies.
But, to do so, they need to be given access and agency.
Currently, for new products, most companies keep reimbursement policy team members on the sidelines until Phase III of clinical trials, or, even worse, six months before launch. This has worked for a product that fits neatly into a standard reimbursement approach, such as a physician-administered drug with an existing ICD-10 diagnosis code, existing CPT code for administration, and the typical HCPCS coding applications. However, for a novel product or products in challenging reimbursement ecosystems, this approach sets the organization up for a frenetic launch and a potential failure to establish reimbursement, which could stifle adoption and/or negatively impact net price potential.
It would be far better to bring reimbursement in during Phase II as a thought partner, so they can know in real time the potential challenges a product faces and begin identifying prudent solutions. This role also empowers them with foresight to help navigate and, where possible, influence policy proposal discussions and decisions, many of which may take years to implement through the slow turn of CMS, the American Medical Association (AMA,) and other entities.
Furthermore, involving the reimbursement policy team earlier in the process will help prevent product launch teams from missing important market dynamics and considerations related to reimbursement. These can be forward looking, such as the likelihood and impact of the H.R.3 bill, or static, like standard questions on site-of-care payment policy and drug administration coding.
Without earlier access to information and the authority to help inform decisions, the reimbursement policy team cannot help head off and proactively address these kinds of potential issues. Consequently, your commercial organization may not be prepared to address critical questions related to policy issues.
Enhancing commercial success cross-functionally
It is important to note that reimbursement policies effect many sectors of a life science’s commercial organization. And, while it remains true that innovative companies with more complex and novel pipelines will continue to face greater challenges in crafting and implementing evolved reimbursement strategies, it is also true that companies of all types and product portfolios will need to prepare and adjust as national health care system reforms take form.
That being the case, enabling the reimbursement policy team as thought partners offers advantages across business functions. For example, reimbursement policy dynamics and their subsequent policy strategies differ by site of care, route of administration, channel mix, and benefit assignment. By working with the reimbursement policy team to better understand the current and future environment, they can anticipate existing and potential reforms, enabling a more nimble and less reactive organization.
Proactive and early identification of these dynamics help brand and marketing teams identify and create differential go-to-market strategies accordingly. Likewise, sales teams can engage their reimbursement counterparts to inform how to “upskill” the field in its ability to address objections around reimbursement in a compliant way, as well as how policy changes might impact targeting and selling to customers.
For market access and pricing, reimbursement policies can create challenges in predicting how to set and defend list price, and the subsequent gross-to-net across channels. These issues range from the role of ICER, international price index, Medicaid best price calculations for value-based contracting, competitive acquisition program (CAP), and many others. Trade and distribution teams can be equally impacted by these policies as financial risk and inventory management are shifted across distributors, group purchasing organizations (GPOs,) and providers.
Evolving to persist
In the United States, healthcare will only become more complex. Organizational design should evolve to address these complexities, including reconsidering when, how, and with what authorization your reimbursement policy teams function. It also assumes the brand, marketing, sales and other business teams will be receptive to their input. To that end, for many companies, evolving the role of reimbursement will also require a cultural shift and, in some cases, recasting key players and influencers within the organization to meet the new ecosystem’s needs. Your best bet is to work with your reimbursement policy team early, often, and bring them into the fold as strategists – not just keepers of precedent.
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