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Payers Determine Commercial Success of New Drugs, Says FirstWord

29 Oct 2012 • by Natalie Aster

A payer is a public or private sector organisation that assumes the risk of paying for medical treatments, including drugs. Payers can be uninsured patients, a government agency, a self-insured employer, a health care plan or health- maintenance organisation (HMO). Examples of government payers include the CMS in the US, the National Health Service (NHS) and National Institute for Health and Clinical Excellence (NICE) in England and Wales, and the National Authority for Health (HAS) in France.

Private insurers include insurance companies and HMOs, which provide or arrange managed care for employers, self-funded health-care benefit plans and individuals on a prepaid basis.

In the US, HMOs include Aetna, Blue Cross Blue Shield, Cigna, Kaiser Permanente, Humana, Health Net, WellPoint and UnitedHealth Group.

Other important players in the drugmaker- payer relationship are pharmacy benefit managers (PBMs). PBMs apply managed-care principles to drug benefit portions of healthcare plans offered by insurance companies.

Regardless of geographic location, the spiralling cost of healthcare is no longer sustainable.

More than ever before, payers—both public and private—are under mounting pressure to find ways to reduce the cost of care. They are also now in a unique position to influence market access to new medicines and ultimately to determine the commercial success or failure of these drugs.

According to the report “Pharma and Payers – Building Better Relationships” by FirstWord, as payers continue to gain influence, drugmakers must find ways to make their sometimes adversarial relationships with payers more collaborative. Central to this transition is the recognition by drugmakers that regulatory approval of new drugs is no longer sufficient to guarantee favourable pricing and formulary placement.

Report Details:

Pharma and Payers – Building Better Relationships
Published: September, 2012
Pages: 61
Price: US$ 895,00

Additional information, including health economics and outcomes research (HEOR) analyses and comparative effectiveness research (CER) data, may be required by payers to verify drugmakers’ clinical and cost- effectiveness claims, and to gain better understanding of the probable value and impact of new drugs and their contribution to the total cost of care for patients. Volume- driven contracts have given way to value-based pricing and arrangements in which drugmakers and payers share the risks of bringing new medicines to market.

More information can be found in the report “Pharma and Payers – Building Better Relationships” by FirstWord.

To order the report or ask for sample pages contact [email protected]


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