Giving Voice to Value


How pharma can demonstrate product value effectively in new therapeutic areas.

As Senior Vice President of Commercial Consulting for market access consulting firm Xcenda, Matt Sarnes, PharmD, has worked with pharmaceutical manufacturers to launch dozens of products … and more importantly, to ensure appropriate reimbursement for those products. Here he speaks with to discuss how manufacturers are changing their approaches to access in response to seismic shifts in the payer environment.

KnowledgeDriven: Matt, you’ve spent your career helping manufacturers commercialize new products. Let's discuss some of what you've seen manufacturers do really well when they've launched into a new space.

Matt Sarnes: I think one core theme to understand is that the data that gets you through FDA milestones or through approval isn’t necessarily all the data you’ll need to have on-hand to voice your value message to payers.

Increasingly, we’re sitting down with the brand teams, the marketing teams, the new product planning teams at manufacturers in phase 2 or phase 3 trials to help them think through what resource utilization data they’re collecting—if any at all. Sometimes, these discussions have even changed trial designs or patient populations for trials because we’ve looked at the real-world data in the therapeutic area to identify which patients the product may help best—and applied that knowledge to inform the manufacturer’s strategy. We’re helping manufacturers understand better and earlier how their products might perform in the market—not just clinically, but economically as well.

KD: As more complex and orphan therapies fill the pipeline, where do you see them most challenged in how they approach product value?

MS: We do work with a number of manufacturers of complex therapies and orphan disease treatments. Often, the question comes to us with the following perspective: Our price is going to be high because of what it costs to bring to market. We won’t be able to show cost savings. Why should we invest in a data plan to show health economic benefits?

If the manufacturer really understands the patient journey, what patients are going through today and then what the resource utilization is currently, then it might be a different story entirely. The new product may not be cost-saving on the face of it, but being able to show the cost of the new treatment compared to what the patient currently costs the system, what costs can potentially be avoided and how the patient’s life can be improved … all that carries some weight with payers. It helps the manufacturer demonstrate that the cost of its product is not purely additive.

We see that a lot with orphan products, because manufacturers are entering new markets that aren’t well enough understood, where payers may not have a comprehensive view of what the total costs are for such specific patient populations.

KD: What about instances where manufacturers are entering established markets that just happen to be new for the manufacturer?

MS: Yes, so that’s really the flip side of what I described for orphan drug manufacturers. A lot of times when we're working with manufacturers entering established markets, they think that all the burden is already well understood. But as you know, usually products are brought to market to meet an unmet need or to improve on the standard of care that's already out there. And that presents challenges that require different ways of thinking.

To give you a couple examples: Diabetes has been studied for 30 or 40 years. You'd think that all the burden information and cost information that’s needed has already been produced. But for one product we worked on—because it had a cardiovascular benefit—the manufacturer needed to be able to clearly define the burden of cardiovascular disease in a subset of the diabetes population, and that is something that had never been studied or costed out. This piece of information was critical to the manufacturer’s story and being about to show the product’s value.

We interviewed several payers. They all agreed that diabetes costs them a lot of money, but in this instance they had no idea how costly the specific patient population actually was. We had to generate a lot of the information to be able to tell that story effectively.

In another instance, we were working with the product in Phase II. It was a biologic that would be administered during a procedure. Again, it was in a relatively well-known disease area.

As the product was coming to launch, the manufacturer was smartly thinking ahead about the reimbursement dynamics and how they varied with site of care. If the product was used in an inpatient setting, it would need to fit under an existing DRG payment. If the product was used in the outpatient setting, the drug could be billed for separately. Since the product was still being studied, it wasn’t clear whether its adverse event profile would require an overnight hospital stay. Therefore, we had to plan for both scenarios.

What we found was that if the product was utilized in the inpatient setting, the hospital could lose money every time they used this therapy until the DRG payment level was reset. In interviews with hospital administrators and with some of the physicians, they really liked the product profile, they liked the clinical benefit, but they were concerned about using the product because they could not routinely lose money on the procedure.

So in this instance, to prepare for the scenario in the inpatient setting, we helped that manufacturer think about its data plan early on in the process. We started collecting data even in phase II trials to enable the manufacturer to submit that information to CMS for a new technology add-on payment. This would create a path forward that would alleviate some of the concerns around reimbursement levels.

Again, it's thinking about the payment dynamic even earlier in the process. It’s considering what the coverage dynamic will look like, so manufacturers are prepared with the data package that sets them up for success.

KD: What are some of the more urgent or impactful developments to come in the payer and market access space?

MS: I feel like we’ve been talking about outcomes-based contracts or performance-based contracts for over a decade, but because of the pricing pressures we’re now all seeing, that’s likely going to open up and become more of a reality. The key here is that our industry—the pharmaceutical companies and insurance companies—need to be proactive about creating an approach that works; otherwise it may be dictated to us through regulations.

We are seeing a lot more examples of outcomes-based contracts now between pharmaceutical manufacturers and payers. In addition, several of the manufacturer customers I speak with have recently set up teams to focus on their outcomes based-contracting strategy. Therefore, I think we are at an inflection point in the industry. However, we will see if the recent election will have any impact on that direction.

One other change we’re seeing is that our audience for health economic information is evolving. It used to be solely the payer; but now who’s a payer?

The lines have been very much blurred, especially if you're talking about ACOs or patient-centered medical homes. Physicians are taking more and more risk. A lot of demonstration projects have been initiated and more bundled or value-based payment models are appearing. In the end, the physicians are becoming more invested in not only the clinical, but the economic implications of their treatment decisions. One of my Xcenda colleagues refers to it as the emergence of the “pay-vider.”

So what you’ll see is the potential for further expansion of what’s communicated from manufacturers to providers—not just clinical information about products, but economic information as well. Right now, legislation is not set up for that to occur. But as times change for how products are evaluated and who’s accountable for the clinical and economic impact that products have on patients, the legislative environment that governs provider-facing communications could and needs to change as well.

The last development I’ll mention is that we’re seeing a number of manufacturers thinking about access through a much broader lens. Where a product is dispensed or administered can impact product success as much as its reimbursement. So a comprehensive market access plan today should encompass channel strategy and distribution considerations at the same time that decisions are being made about reimbursement strategies and patient support. Manufacturers that are working with the right partners to execute access strategies in this multi-dimensional way are the ones best positioned for success.

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For more information on Xcenda’s capabilities in market access and product commercialization, visit To learn more about what it takes to create a patient-centric approach to improving product access, visit


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