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Thought Leadership

Our leading subject matter experts share their insightful analysis and points of view to help you stay abreast of industry trends

What’s Ahead for Market Access in 2024?

By Diane Watson

Last year was a period of adjustment for the U.S. pharma industry, as the combination of increased financial pressures and the Inflation Reduction Act (IRA) meant adjustments to resource allocation. While concerns about macro trends like inflation and interest rates are still top of mind for manufacturers, we expect a renewed focus on efficient pipeline performance, portfolio growth, and innovative technology.

To better understand what 2024 might bring, I asked three of my colleagues to weigh in on upcoming shifts in market access. Their answers provide key insights into the year ahead.

Q: What’s the biggest challenge for manufacturers launching new products this year?

Jayne Hornung, Chief Clinical Officer: The pharmaceutical landscape is rockier than ever before. As regulatory requirements increase the cost and time required to develop new products, manufacturers will want to pass those costs on to payers and patients. However, payers have been restricting access to new products, especially those that have been fast-tracked through the FDA approval process.

The old model—where manufacturers only needed physicians to prescribe a new product for the product to do well—has almost been eradicated. The launch of the Mark Cuban Cost Plus Drug company has advanced the public’s distrust of the PBM industry, and government investigations into PBMs have reached new heights. Collectively, these factors will have significant implications for commercial strategies as manufacturers bring new products to market.

Dinesh Kabaleeswaran, Senior Vice President, Consulting and Advisory Services: From a market access research standpoint, increasing R&D expenditures are great for bringing new therapies to the market. However, cost increases also mean that a percentage of these costs will be passed on to patients through payers imposing higher premiums and stricter restrictions in access. As costs increase, we should not lose sight of the most important stakeholder in the industry: the patient.

Wade Carter, Vice President, Product Innovation:  Ultimately, I think the challenge will be answering the question of “where do we put our effort and resources?” while the game is still evolving. In the next few years, manufacturers’ spend will most likely start shifting away from more traditional visibility and placement efforts, such as rebates and incentives, toward more patient- and prescriber-driven outreach.

While traditional methods of engaging HCPs will still be in play, pharma companies must also prepare for the new horizon. Sales reps will have less in-person time with physicians, which means an increase in new types of direct-to-physician messaging. The disruption of the traditional PBM models, coupled with the increase in more empowered patients, means that consumer transparency will become an even bigger issue in the near future.

Manufacturers will likely focus more of their resources on arming patients and providers with the tools they need to make more informed treatment decisions. During this shift, I imagine manufacturers will be using the old “throw spaghetti at the wall” mentality for a bit. As they gain more ability to track and measure their efforts and correlate spend to actual results, then they’ll be even more able to focus their approach.

Q: Do you foresee any major shakeups in health plan offerings and/or enrollment?

Jayne Hornung: We always see year-over-year movement with respect to enrollment, and this year will be no different—although the shifts may surprise some. With the end of the Public Health Emergency (PHE) and Medicaid redeterminations, last year was especially volatile.

The Families First Coronavirus Response Act (FFCRA) provided states with additional federal funding to continue Medicaid coverage during the pandemic. While the 2023 Consolidated Appropriations Act (CAA) amended FFCRA to remove the link between continuous Medicaid and the end of the PHE, the moratorium on redeterminations ended in March 2023.

This has had a significant effect on normal enrollment fluctuations. For example, here in Florida, the state began reviewing the eligibility of approximately 4.9 million Floridians currently on the Medicaid program, a process which is expected to conclude this March.

In the meantime, the Inflation Reduction Act extended subsidies for health insurance exchange plans, making them a much more attractive option for many. Until 2025, premium subsidies for these plans will be available to those with an income four times the federal poverty level. We will likely see many people who were dis-enrolled from Medicaid plans subsequently enrolling in health insurance exchange (HIX) plans.

Dinesh Kabaleeswaran: My expectation is that some of the impact of COVID on health system and health plan costs and premiums might just begin to flat line as we step in 2024.

Q: How will last year’s focus on drug affordability impact the market this year?

Jayne Hornung: The IRA victory has forced manufacturers to re-examine their approach to research and development, portfolio pricing, market access, budgets and underlying costs. With respect to the IRA, companies are waking up to a hard new reality–one in which the IRA will have broad, downstream impacts on their portfolios.

Manufacturers have begun to re-evaluate what market access means and how much it will cost them for patients to truly have access to their products. While most products will not be subject to the IRA in the near term, many will eventually, as additional products will be added each year. Having a successful launch may mean that a company’s product will be scrutinized that much sooner in the future.

While some manufacturers have filed court challenges, the industry must brace for further pushback from lawmakers, regulators, and the general public who continually like to blame and restrain big pharma.

Dinesh Kabaleeswaran: In a recent ruling, a federal judge struck down a policy where payers don’t count manufacturers’ copay assistance towards a beneficiary’s out of pocket costs. Over the last five years, copay accumulators and maximizers have silently been impacting the patient’s out-of-pocket costs. Many patients do not realize this until it hits them, and their drug adherence is impacted. With several states moving against copay accumulators over the last couple of years, I’m optimistic about their potentially minimized impact on patient costs in 2024.  

Q: What do you expect might happen with PBM reform in 2024?  

Dinesh Kabaleeswaran: The intentions of PBM reform are great, and in the long haul, legislation will be a boon to the independent pharmacies if execution is smooth. However, I’m concerned about the impact on independent pharmacies in Q1 and Q2 of 2024 especially, because they will be charged for retroactive direct and indirect renumeration (DIR) fees from 2023 and will be impacted by point-of-sale DIR fees in 2024.

I’m cautiously optimistic about the long-term impact of PBM reform, but it will all boil down to how PBMs adapt—how will they decide to operate in a model where more transparency is required of them?

Jayne Hornung: Lawmakers have been calling for PBM reform for decades, but the cries have gotten louder and louder over the years with increasing out-of-pocket costs and the overall strain of the cost of pharmaceuticals on the healthcare industry. Price transparency is always at the crux of the issues.

Three House committees unveiled new legislation in September 2023 to lower costs and increase transparency for patients. The Lower Costs, More Transparency Act includes provisions from the House Energy and Commerce Committee, the Ways and Means Committee and the Education and the Workforce Committee. It’s designed to help patients be more informed when making healthcare decisions regarding cost of care, treatment and services. But this only works if patients become more involved in their healthcare decision-making process.

The act requires hospitals, payers, labs, imaging providers and ambulatory surgical centers to list prices they will charge patients through machine-readable files; it also mandates that insurers and pharmacy benefit managers disclose drug rebates and discounts. It would require PBMs to provide employers with semiannual prescription drug spending data, such as total out-of-pocket spending and formulary placement rationale. Medicare Advantage plans would need to report to the Department of Health and Human Services when they share common ownership with providers, PBMs and/or pharmacies. 

Q: What industry innovation are you most excited about? Which therapeutic areas will become more competitive this year?

Wade Carter:  If I didn’t answer AI to this question, I’d likely be run out of the room! However, I want to see AI move past the initial buzz phase and start providing real value across the spectrum. While there is currently next-level excitement around AI at the moment, organizations will need to ensure they’re taking the right approach to AI, applying this technology to the right need and use case while keeping in mind the level of trust necessary for that particular use case.

Companies should focus first on those areas where AI can increase efficiencies and make them more efficient and effective at answering queries or performing certain tasks. It’s too early yet to use AI as a wholesale replacement for a human-driven process, as we still need to establish the right experience, alignment, compliance, and trust.

Dinesh Kabaleeswaran: We’re still keenly watching the biosimilar space across immunology, ophthalmology, and oncology. With 2024 updates to formularies, it will be interesting to see how payers evolve their management of immunology biosimilars over time with respect to preferential and parity treatment of the biosimilars in the category.

Jayne Hornung:  In addition to what Dinesh already mentioned, there have been major advancements in hemophilia and sickle cell disease with respect to gene and cell therapy.  I expect we will see more competition in those therapeutic areas. Oncology is always a competitive landscape as manufacturers look to develop first-line therapies to treat the earliest stages of a disease.

Q: What’s the most important thing healthcare organizations should be focusing on to prepare for the future? 

Dinesh Kabaleeswaran: Pharma is continuing to embrace the concept of big data insights. Manufacturers are integrating market access data with claims and lab data assets, and developing holistic insights that validate their market access strategies. Optimizing market share is more and more dependent upon having a real-world picture of how access functions, particularly in competitive therapeutic areas like immunology and oncology.

Other trends include increased medical benefit management driven by vertical integration. As health systems, IDNs and payers continue to acquire provider practices, we’re seeing an environment in which there’s stronger pull-through for payer policies and preferences. As a result, providers are implementing new pathways and protocols to better guide the patient experience, and even hiring new staff to focus on payer relationships and revenue cycle management.

Omni-channel marketing is also a trend to prepare for. Before COVID-19, manufacturers and HCPs would try to meet in person or at conferences. But now, pharma companies are practicing more targeted engagement over multiple channels, including professional social media platforms. The trend is driven by the fact that patient journeys are more complex, and HCP targeting needs to be more precise within a narrow time window.

Jayne Hornung: As Dinesh said, pharma companies are integrating claims, lab and other real-world datasets to track, analyze, simulate, and predict market access and disease outcomes. HCOs should approach the market with advanced meta data and statistics, large language models, epidemiology, and dynamic machine learning solutions to understand true disease management drivers that impact patient access to life-saving medications.

Wade Carter: A couple of things come to mind here. Organizations should be taking advantage of the fast-paced evolution of AI and newly enabled capabilities, but they must also remain aware of the need for responsible use, especially as you get into sensitive data assets. Trust and transparency will be key themes here.

The second trend to watch is the increased demand for healthcare transparency across the continuum of care. All healthcare stakeholders—from patients to physicians, payers to employers—want more access to nuances of the supply chain that previously functioned without understanding. They want to understand how each player in the typical pharmaceutical supply chain adds cost, and they want to ensure that every component actually provides value and is worth the expense.

Understanding the influence that each organization has on a drug’s ultimate cost and prescribability is critical for manufacturers. This industry-wide drive for greater transparency is not going away, although it remains to be seen if organizations will respond with continued pushback or move toward acceptance, alignment, and recognition.

Diane Watson

Diane Watson

Diane Watson is MMIT’s Chief Executive Officer.

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