Value-based contracts (VBC) are firmly on the market access agenda across Europe and there are converging views on what is needed in this space. The pharmaceutical and biotech industry, patients, payers, regulators and HTA agencies gathered at the Global Evidence, Pricing and Access Congress in March to discuss challenges and potential solutions. Hannover hosted a discussion on VBC’s experiences and where changes are needed. We explored whether a global archetype approach could support negotiation agreements in countries. In their latest blog, Hanover Health’s Emma Eatwell and Josie Godfrey explore what the future of VBC might look like.
The pharmaceutical and biotechnology industry, patients, payers, regulators and HTA agencies gathered at the World Congress on Proof, Pricing and Access in March 2022, to discuss potential solutions to healthcare access challenges. market. Although they were separated for two years, which made it more difficult to exchange ideas, there was clearly a shared interest in value-based contracts (VBC).
While we recognize that many access negotiations take place at the regional or local level, this article focuses on the national level and engagement with national payers.
Most pharmaceutical and biotech companies seem eager to adopt VBC and other forms of innovative contracts. Some have developed global frameworks to drive ACVs for their products. However, this enthusiasm is not always shared by payers. In general, payers seem to prefer simple discounts to more complex risk-sharing or VBC systems.
Payers are increasingly open to considering ACVs in exceptional circumstances. For this reason, there is a risk that pharmaceutical and biotech companies will push for complex ACVs even when there is no appetite for them from payers, and no ACVs are needed for ensure a successful commercial launch.
Agreeing on a VBC can be a time-consuming and costly process for all parties. Their implementation is likely to increase the clinical and administrative burden on healthcare providers and place additional demands on company resources. As such, they are not always necessary to guarantee reimbursed access to patients. The effort required to agree and implement a VBC should only be undertaken when there is a clear patient need and a good chance of success. Understanding when a product may be a suitable candidate for a VBC is important and will allow market access teams to focus their energies on the deals that are most likely to succeed and have a significant impact.
A structured approach to assessing the likely barriers to entry and the willingness of markets to consider ACVs (along with the alternatives to ACVs they may prefer) is an important first step in preparing for product launch. A clear framework for identifying when a VBC is appropriate for different treatments in different markets will help companies engage with payers and ensure they are focusing on the most effective access strategies in each market.
Companies need to be close to payers to understand what they need and their desire to enter into a complex agreement. Every interaction with payers matters. Companies should seek advice as soon as possible and maintain an ongoing dialogue. Negotiations are a process that can take many years, with multiple company representatives engaging with payers. It should be remembered that every interaction is part of the negotiation: every ETS submission, every payer interaction, and every conference discussion.
Along with this early engagement, companies should critically assess their product, the evidence they have, the need for a VBC, and the demand from payers to enter into a complex contract. Hannover has developed a clear access framework to help companies undertake this process. The framework guides companies through a series of steps, covering an initial assessment to determine if a VBC is necessary and if the asset in question is suitable for such a contract. It lays the groundwork for considering the product at the archetype level and then examines individual markets in more detail, helping companies move towards a successful commercial launch for their product.
Different companies are working on their own frameworks to develop VBCs. Some are determined to have ACVs as their default position. In our view, this is unnecessary in many cases and payers do not support the widespread use of ACVs. If a product is about to be launched, it is essential to assess whether a VBC is appropriate before investing time and money in this type of trading. Only then can companies be sure they have the right asset in the right place for the right contract.