Large healthcare conglomerates, or integrated delivery networks (IDNs), have long been fixtures in the market access landscape—a dynamic that has gone unchanged despite the disruption caused by COVID-19. While M&A activity slowed down during 2020, IDNs are seeing a bout of positive recognition: Many have received accolades on their ability to deliver quality coordinated care during a year of upheaval for healthcare. Partly thanks to this reputation boost, we expect that merger activity will start picking up where it left off pre-pandemic, but what will a surge of newly consolidated healthcare stakeholders mean for pharma manufacturers?
IDNs will no doubt continue to expand their reach and influence, further shifting the balance of power away from payers. While IDNs held sway over drug administration decisions before COVID-19, this trend accelerated during the early months of the pandemic as we saw large healthcare systems request that patients administer their own injections rather than risk infection at the hospital. While this might sound situational to the pandemic, consider what it might look like if IDNs continue flexing their muscles when it comes to drug administration.
For example, with a number of CAR-T therapies in the oncology pipeline, we expect to see many more IDNs invest in the skills and experience needed to administer these drugs instead of relying on external centers of excellence. While the IDNs shoulder the risk, they gain more control over site-of-care administration, and the reimbursement for administering expensive therapies like CAR-T could prove a worthy incentive. That said, in-patient reimbursement for CAR-T therapies is a complex process, so IDNs are also likely to explore the financial implications of outpatient administration.
As we can see with their increasing influence over provider-administered therapies, it’s no surprise that IDNs are looking to exert control where they face the highest level of financial risk. While administration is a large risk, so too is distribution, leading many IDNs to start their own specialty pharmacies to both increase revenue and improve patient care. Moreover, having their own specialty pharmacies allows IDNs to access EHR systems for tracking outcomes and adherence, and intervene when patients aren’t getting the full value of their medication. In fact, many IDNs that already own specialty pharmacies have been able to provide support services like product education, financial assistance and adherence tools.
However, IDNs that own or plan to own specialty pharmacies face challenges, too. Some manufacturers will leave them out of limited distribution networks in an effort to retain visibility into distribution. Others may require IDN-owned specialty pharmacies to have specific accreditations. One area where this scenario is currently playing out is in prostate cancer: We’re seeing that some IDNs are unable to access lifesaving drugs because they’re excluded from a manufacturer’s distribution network. But given the increasing scale of today’s IDNs, and the number of drugs that need to be administered in a healthcare setting, manufacturers would be smart to incorporate IDN specialty pharmacies into their distribution strategies—or risk losing out on a significant share of the market.
Ultimately, pharma can no longer be reticent to partnering with IDNs. These stakeholders have much to offer, including the opportunity to drive increased market share, greater control over contract terms, centralized communication and improved patient outcomes. Forward-looking manufacturers are adjusting their IDN commercial strategies to go beyond financial incentives. How can manufacturers engage IDNs in the clinical trials process? What can they do to improve patient support or education? How can they help operationalize care and improve efficiency?
Each IDN will have its own idea of what’s most valuable, so in addition to monitoring coverage, it’s critical that manufacturers have a strong understanding of their IDN customers’ business models, unique characteristics and evolving needs. After all, how can manufacturers meet IDNs’ unmet needs when they don’t know what they are?
Given the external factors that have positioned IDNs to continue growing in both size and scope, it’s time to rethink the one-size-fits-all approach to IDN engagement. A true strategic partnership—underpinned by robust customer data—isn’t just nice to have. Now, it’s mission critical.
Learn more about MMIT’s Pulse Analytics solution, which allows pharma manufacturers the ability to monitor drug coverage at the brand and IDN level, and offers insights into the structure, clinical pathway alignment and behaviors of more than 200 IDNs.
By: Dinesh Kabaleeswaran, Director, Advisory Services, MMIT, and John Griggs, Senior Solution Consultant, MMIT
This article was originally published on Drug Channels.