Last year, Archbow Consulting worked with Pharmaceutical Executive to highlight ten trends worth watching closely as we kicked off 2018. Before working on our 2019 Trends list that we will share in January, we decided to take a quick look back at how well we, and the industry, anticipated and prepared for the trends that shaped our year.
Of the ten trends we flagged as worth watching at the beginning of the year, five stand out as having been the most impactful to the industry:
The copay accumulator creep
As feared, copay accumulators are only growing stronger. Throughout 2018, more and more drugs were targeted by payers as a plethora of non-solutions hit the market. In a double-punch, an advocacy group is now questioning the legality of copay accumulators while studies that show copay accumulators are having an adverse effect on adherence rates. We’re still asked about it by clients daily and continue to work toward a true solution that balances all stakeholder concerns and expectations. This one is a slow-burn for sure. Read more here.
The realities of low-cost medications entering the specialty pharmacy channel
Manufacturers continued to launch specialty drugs that will put them in direct competition with relatively low-cost retail therapies. Is there any hope for commercial success in these situations? Watching classes of drugs that treat opioid addiction and MERSA, or even reduced-priced biosimilars, has taught us that the answer is yes, but a highly-organized and cost-conscious approach to program design is key. We explored how to overcome the fundamental complexities that may limit the financial success of a low-cost therapy in the specialty channel with Pharmaceutical Executive in the September 2018 issue. Read the article here.
The consolidation of patient access (and more!)
At the beginning of the year, we cautioned that the industry should actively prepare for the highs and lows of continued consolidation in the patient access space. That warning was fair, but we should have expanded it to include payers, PBMs, and even employers. Moves of note were:
Merger of CVS and Aetna
Cigna’s purchase of Express Scripts
The integration of Triplefin, Dohmen, and others under the Eversana brand
Amazon, Berkshire Hathaway, and JP Morgan joining forces to take aim at intermediaries in the healthcare system
UnitedHealth’s OptumRx’s purchase of Avella Specialty Pharmacy
Amazon’s acquisition of PillPack
The rise of Integrated Delivery models
HUBs becoming SPs and SPs becoming HUBs
The role of gene therapy as an economic change maker
Today’s healthcare system simply isn’t set up for a reimbursement model that can account for the expensive and curative nature of gene and cell therapies.When we wrote about this at the beginning of the year, we were hopeful that a unique collaboration between stakeholders might result in sustainable economic models built to improve access to these life-saving therapies. We’re happy to see progress, but the industry is far from a viable solution today. Read more about Value-Based Contracting.
The inevitable convergence of e-services
Growth in the continual automation of healthcare processes was universally expected, but the integration of those services into something tighter, faster, and more accurate was as much on our wish list as it was on our watch list. A focus within pharma brand teams on the digital customer experience, or PharmaDCX, is alive and real, and it’s improving everything from how patients think about their medicines to the data that fuels decision making in the c-suite. Notably, the “pioneers” in pharma digital transformation are currently outperforming their industry peers by an average of 26% in profitability. Enough said.
2018 was a year of more than a few surprises. While some of these were on our radar, we failed to predict how important they would become before the end of the year. Others, we never saw coming.
Everyone knew 340B was going to be somewhat of a factor, but it’s hard to know if anyone truly understood last year how much of a gamechanger it was going to be today. Unfortunately, it’s still a big negative for pharma, and there doesn’t seem to be a viable solution in scope.
What started in most minds as an internet currency technology has morphed into a real opportunity for healthcare. Recently, CVS/Aetna, along with UnitedHealthcare, Quest Diagnostics, and others, kicked off an initiative to use blockchain technology to improve data quality and lower administrative costs. We took time this year to educate ourselves on blockchain so we could best advise clients on the potential it holds for pharma. You can start making sense of the pharma blockchain hype here.
The Administration’s proposed big move against high U.S. drug prices, the International Pricing Index.
While we count ourselves among the pharma masses that never saw this one coming, we’re fortunate to be prepared. Our international pricing expert, Bertrand Tardivel, was poised to jump right in to help clients understand the potential impact of the IPI and start planning ways to mitigate their risk.
How many of these trends will still be top-of-mind in 2019? Stay tuned for our 2019 Pharma and Biotech Trends to Watch list in Pharmaceutical Executive and let us know if you agree with our choices.
Until then, Happy New Year to our friends, colleagues, and clients around the world!