In our case study for injectable Migraine medication, the higher patient persistency curve for patients with a lower co-pay increases drug utilization by 20%, while lowering payor price by 26% and payor total cost by 11%.
What is Market Access?
It’s the process that ensures that all patients, who would benefit from a drug therapy, are provided with rapid and maintained access to the therapy, for an affordable price or co-payment. It seems elementary, that as pharmaceutical companies and payors, it is paramount to provide access to all patients who suffer from that specific disease, to treatments and cures.
However, it is a lot easier said than done to be able to supply and maintain therapies to all patients, maintain that access to therapies at a fair price that doesn’t disadvantage the patient, payor or pharmaceutical company. it’s essentially a negotiation.
So how is it done? How are these companies able to work together to optimize market access? What makes this so difficult?
As a case study, let’s use the example of a newly approved $600/month injectable migraine medication, where there is also a much less expensive generic drug available as a substitute for patients.
A more traditional approach to Market Access is to have the pharmaceutical company and the insurance company agree upon a relatively high patient co-payment for the injection. The high co-payment acts not only as a qualifier for market access based on the therapy’s efficacy for the patients but also as a financial barrier to treatment.
In a patient population there naturally will be different categories of patients. In the real world we know that not all of the patients who take that drug will definitely benefit from it; there are levels to efficacy. Unlike during clinical trials where drugs are provided free of charge, all patients don’t have the same level of income or budgets for all the drugs they take.
A high and growing share of drug costs in the U.S. are claimed by just a small minority of drugs classified as Specialty Pharmacy drugs. The cost for these drugs on average are at least $600 a month. If market access was trying to be achieved through the traditional method for a specialty therapy, this is what happens:
If the co-payment is around $100/month, then for high income patients, if the therapy works in any positive manner, those patients will continue the therapy no matter the level of efficacy. For middle income patients who suffer from migraines, this preventative injection has to be significantly beneficial in alleviating migraine pains or the co-payment will act as a gatekeeper and those patients will continue just using the less effective generic. For low income patients, this injection would have to be a “game-changer” as in the difference would have to be “night and day” for these patients to continue therapy.
As you can imagine there are serious gaps in this approach to market access due to the co-pay amount keeping out a significant population of the migraine patients.
Another method to restrict market access is to require patients to receive prior authorization (PA) from their doctor to obtain a prescription. In order to obtain prior authorization, the physician would have to document that the patient had been on a generic medication for a specific period of time with treatment failure or drug intolerance.
Risk Sharing however is a method that some pharmaceutical companies have adopted in order to increase market access and bring down the overall cost for patients and payors. The pharmaceutical and insurance companies institute Risk Sharing programs that typically have two aspects, 1) the distribution of free samples of medication by doctor’s prescription and 2) co-payment assistance to bring the co-payment required by patients from the range of around $100/month level down to a more manageable $5-$30/month.
What this does is eliminate the initial high co-payment barrier that a traditional method would institute to achieve market access and the many months the patients would have to wait to obtain (PA) for the second line therapy.
This method however isn’t perfect; it’s called Risk Sharing for a reason. How can you optimally balance the risk between the insurance company, patient and pharmaceutical company? How can you be sure that lowering the co-payment by a specific amount or giving out a specific amount of prescribed free samples to patients will optimize utilization and lead to market access maximization?
Patient Persistency Modeling.
Figuring out what the optimal combination of Patient Co-Pay, Payor Total Cost, Payor Price Per Rx and Drug Utilization is the key to maximizing market access. The key to figuring out how many prescriptions to give out, how much assistance is required to optimize market access to as many patients as possible without bankrupting everyone involved is patient persistency modeling.
What is Patient Persistency?
The percentage of the population of patients that refill a given prescription on a timely basis is a good definition of persistency. Some patients will be late in refilling a prescription because they have a pending reauthorization or they may have not been 100% compliant with therapy, particularly if their symptoms by the season of the year. However, if they refill eventually, even if they are a week or a month late, they are still part of the patient population. Once they have gone more than a month after their expected refill date, they should be classified as discontinued patients. The persistency curve shows what percentage of patients will refill after 1 month, 6 months and through a year or beyond. For a given group of patients, this curve will be lower if they face a $100 co-pay vs. a $5 co-pay. It’s the persistency curve which ultimately drives the relative payback of risk sharing arrangements. In our case study, the higher patient persistency curve for patients with a lower co-pay increases drug utilization by 20%, while lowering payor price by 26% and payor total cost by 11%. Persistency curves are generated by big data analytics where millions of prescription records for hundreds of thousands of patients are modeled in order to find the key demographic, economic and clinical drivers of patient persistency.
High drug prices for specialty drugs and barriers to patient access are two of the most challenging issues in healthcare. Innovative risk-sharing arrangements between life science companies, payors and patients represent an innovative first step in bringing down costs and promoting patient access.