This piece originally appeared in the October 2019 edition of O'Dwyers Magazine.
Communicating the value of one’s products to a variety of stakeholders (patients, payers, providers, policymakers, etc.) is nothing new. Biopharmaceutical companies have been doing this for decades through a variety of channels.
However, the obligation to communicate more openly and explicitly has grown substantially. Recent advances in medicine have led us to a new generation of therapies that have the potential to be curative. These treatments often fall into the category of cell and gene therapies and are revolutionary because they address not just the symptoms of the disease, but correct the underlying genetic basis of disease or the body’s ability to fight it at a cellular level. These new generation medicines also challenge traditional thinking around medicines because many of them may be effective after only a single administration, as opposed to the familiar model of ongoing therapy.
While the science is amazing, the price tag for these new medicines is such that many commentators have wondered if growing numbers of these therapies will create an unsustainable financial burden for the health care system. Part of addressing that critique is being willing to fully engage in the discussion around price and value.
For many companies, it may feel like they face two equally undesirable choices – engage in a fraught public conversation that is front and center in the political dialogue or leave it to others to define the value of their products.
While there are many nuances in the content and timing of communication, the fundamental choice about whether or not to communicate is no longer optional, particularly for this new generation of products.
There is no benefit in shying away from the discussion; companies need to lean in and make their case, which will be a benefit to them, but equally a benefit to informing the larger societal discussion. Ducking the discussion only furthers mistaken conclusions and puts at risk the substantial progress that is being made.
In thinking about communicating around value, companies need to address three complementary areas:
- The Value: The value of therapies can be expressed as the benefit to patients but also benefits to the system (offsets, etc.) and, more broadly, society. Some of the societal benefits may be economic, but we shouldn’t neglect recognizing the non-economic factors that may be equally or more meaningful to patients and families. Wherever possible, it is important to quantify these benefits and understand how the various stakeholders benefit. It is likewise important to actually engage with those stakeholders and have meaningful conversations about how these therapies can work within their structures.
- The Price. The price and the value are not the same. In fact, in many cases the value will exceed the price. The price of therapies needs to be based on understandable metrics that can be clearly communicated to payers and policymakers. That doesn’t mean that there should be a single metric or approach to govern pricing – that’s a flawed idea – but companies should be prepared to describe how they arrived at their price.
- The System. There are a number of important systemic questions to address about how to measure and pay for value that accrues from a single administration. However, we should acknowledge that the health care system already pays large amounts for singular events, like heart transplants, that may have less long-term benefit than some of these therapies. What has been less tested is the idea of paying for medicines on a singular rather than ongoing basis. Companies need to be engaged in this discussion, informing it, and working closely with payers and policymakers to develop solutions. Part of leadership in this area is helping lead the policy dialogue.
Of course, these communications need to be sequenced thoughtfully in the lead up to your product launch. Communicating either too early or too late may create headaches by sending unintended signals or failing to adequately prepare your stakeholders.
Despite the challenges, we should acknowledge that these are great “problems” to have. Increasingly, it appears that more and more serious genetic diseases may be in reach of a cure. Dr. Francis Collins, Director of the National Institutes of Health, speaking about gene therapy with 60 Minutes, said: “Here’s another dream. There are 7,000 genetic diseases for which we know the precise DNA misspelling. Couldn’t this same strategy, this same set of principles work for lots of those, maybe someday all of them?”
Most of us know someone whose life has been altered by a rare disease and understand that this kind of progress is cause for celebration.
The companies developing these potentially curative therapies are making a tremendous contribution to society – they can enhance that contribution by taking leadership in discussing the questions of value, price, and system reform.
Robert Schooling is the Founder and President of Reservoir Communications Group. He was formerly Chief Advocacy and Alliance Development Officer for WellPoint, Inc. (now Anthem, Inc.), and President, Americas for APCO Worldwide.