Embracing transparency

While policy changes like the amended safe harbor regulations are likely harbingers of greater pricing reform to come, compliance shouldn’t be pharma manufacturers’ only motivation for evolving their pricing practices.  More significant may be public perception of so called inflated and arbitrary pricing, as well as concern that pharmacy benefit manager-driven discounts rarely trickle down to the consumer.

This white paper offers pharmaceutical manufacturers some short- and longer-term strategies for shifting their business models to stay afloat as pricing reform takes hold.  For example, in the present pharma companies should:

• Invest in robust clinical datasets that support the advantages of innovative drugs over previous standards of care
• Take advantage of payers’ openness to newer forms of outcomes-based contracting based on longitudinal real-world evidence
• Look for consolidation plays across disease areas and mechanisms of action

For the longer term, consider starting discussions around:

• What it would look like if manufacturers increased their focus on direct-to-consumer strategies
• What data and technology tools would be needed to start measuring value across interventions that involve both drug treatment and clinical care
• How pricing would work if manufacturers pursued vertical integration with payers and/or PBMs

Or course there will be challenges arising from a more stringent regulatory environment and public scrutiny.  However, drug makers that given thoughtful attention to the issue of pricing will almost certainly open up opportunities for meaningful and sustainable transformation.