The future of innovative contracting in pharma
Francesca Boggio talks about the future of innovative contracting. She reveals critical success factors and gives valuable recommendations for local roll-out and implementation.
Interview: Insights on Innovative Contracting
What do we mean by innovative contracting?
Innovative contracts are agreements with payers that grant market access under certain financial, performance or service conditions. They are also often called managed entry agreements or patient access schemes or risk sharing agreements.
What is the future of the agreements?
With changes in the drug assessment methodology there was a moment when people doubted about the longevity of innovative contracting. Nowadays we have all evidence to say that innovative contracting is becoming an integral part of market access strategies.
For example, in a recent survey, 89% of respondents see themselves using contracts in the future.
What are the critical success factors of innovative contracting?
Well, there are several factors playing a role here, but I would like to boil them down to three:
- Early stakeholder engagement
- Designing the appropriate contracting framework
- Ensuring a successful local rollout
How can payers be involved in the process?
First of all, negotiation of agreements does not have to be conceived as a single event, but rather as part of a broader patient engagement and relationship building program. This program starts by integrating payers' needs into clinical trial design, establishing differential pricing programs when possible, and also ends up by developing for example IT solutions to move from volume-based to value-based pricing.
How to identify the most adequate contract for a product?
We definitely see a correlation between the type of uncertainty and the choice of agreement. Uncertainties about response, adherence and in general real life efficacy call for outcome-based agreements, like those based on response or also free initiation programs or covered with evidence development.
Concerns on over-prescription and in general affordability require more financial-based agreements like capping and price-volume agreements.
Finally, when a service is considered of value for a disease, it can also become the object of a contract. I am thinking for example of nurse services for multiple sclerosis patients.
We observe that often, it is a mix of the above that is finally implemented. Another factor to consider is continuous adjustment. There are at least three events that trigger adaptation:
- Competitor market entry
- Loss of exclusivity
- Payer reassessment.
What do you recommend for local roll-out and implementation?
So once the global framework is defined and contracts have been shortlisted, there should be room left for local adjustments. There are in fact some country-specific preferences that need to be considered.
Italy likes to mix capping agreements with performance-based agreements, while for example England prefers discounts that match the 30'000 per QALY threshold.
Another recommendation is to ensure the agreement is practical and manageable by stakeholders directly involved. We know that often the contracts are perceived as difficult to implement and very cumbersome from an administration point of view.
Here, companies can really come in help by for example contributing to the cost of the registries needed to monitor outcomes or proposing a web platform to manage refunds.
What is the best approach to follow?
Our innovative contracting excellence program supports companies in all aspects mentioned above, with different approaches and methodologies. We start with qualitative interviews or multiple stakeholders deepdives® to understand the needs of payers.
The payers really appreciate these sessions, because they have the chance to directly interface with physicians, policy-makers, and sometimes even patients, using the patient journey as a common framework.
We developed business cases that evaluate the feasibility and return on investment of different agreements for both the company and the payer. We also take care of the governance of the contract, clarifying roles and responsibilities of global, regional and local organisations.
And finally, we support to enhance capabilities on the field with guidance documents and highly interactive training sessions that include simulation of negotiations with real payers.