Musings on Payer-Pharma Relations

This fall’s Academy of Managed Care Pharmacy’s meeting, which took place in San Antonio last week, seemed subdued, with fewer programs and attendees than in the past, likely a byproduct of the weak economy.

Lack of buzz didn’t change the AMCP’s penchant for showcasing the tense, yet symbiotic dynamics between payers and pharmaceutical manufacturers, however. It’s a meeting where pharma manufacturers sponsor satellite sessions and symposia led by top clinicians on new and evolving biologics, even as managed-care thought leaders, speaking in neighboring rooms, educate rapt pharmacists and managed care professionals on how to limit or control use of brand-name drugs.

The juxtaposition, although not new, continues to fascinate. The crux of managed care’s position was summed up in a session, “Value Analysis of New Medications – 2009 Update,” which is this year’s take on the value of the scientific data supporting newly approved NMEs. Its presenters’ conclusions: hardly any drugs came to market in 2009 with acceptably reliable data to back their clinical efficacy or safety claims.

RegenceRx, which did the analysis, is the technology assessment arm of The Regence Group, an affiliation of five Western health plans. Overall, less than 10% of studies submitted to Regence for formulary decision making are what the group defines as “reliable,” said Helen Sherman, RegenceRx’ Chief Pharmacy Officer, who, along with Laurie Wesolowicz, a director of pharmacy clinical services at Blue Cross Blue Shield of Michigan, has been enlightening AMCP members on the data surrounding the latest new drugs for several years. And only about 10% of new drugs make it onto Regence formularies, she observed.

Among the most common flaws in pharma studies: lack of blinding, small sample size, high drop-out rates, and endpoints with uncertain or unknown clinical meaning, Sherman pointed out. The findings weren’t shattering—RegenceRx has been delivering a similar message for several years now. But the build up, now, just as in years past, was a stark reminder of how big the gap is between what payers want and what pharmaceutical manufacturers provide.

To be sure, drug companies are starting—ever so slowly--to change their approach, and Sherman points out that several have asked RegenceRx to provide feedback on clinical trial design – for a reality check, not an assessment of the cost benefit ratio. But the results of their latest efforts won’t be seen in the market for at least five years. Read: Don’t expect much substantial change in data quality in the near term.

Now, RegenceRx is to managed care what a key opinion leader is among physician groups: it leads the way, while the rest of the flock follows. That is, most managed care organizations rely on much less sophisticated supporting analysis when they make formulary decisions. Still, in general, plans are getting better: if interest in particular AMCP sessions is any indication, the managed care industry is training a new generation of pharmacists who are also seasoned evaluators of clinical trial data.

Drug makers are fighting back, of course: they’ve got rebates, patient assistance programs and, perhaps, are taking hesitant steps toward pay-for-performance contracts. The latter would be a particularly big step because it is defined by collaborations among historically mistrustful parties, which share few goals. After all, only last fall at AMCP, the chief medical officer of Express Scripts, when asked, dismissed emphatically the idea of a role for pharma in his company’s fine-tuned efforts to improve patient compliance with medication regimens.

This year, in what may or may not signal a subtle change in tone, AMCP featured two panels focusing on payer-pharma partnerships. One was a case study of a coordinated effort by AstraZeneca and Molina Healthcare to improve appropriate use of PPIs. The second was a more general view of the promise and pitfalls of such relationships. Both ended on a straightforward message that more of these types of activities are coming. (For a discussion of how pharma-payer relationships are evolving in Europe, see July IN VIVO Pricing Experiments: Pharmas Get Creative in Germany) and also see (The RPM Report's Feb. 2009 issue, The Cost Sharing Solution: The New NICE Ticket.)

Plenty of challenges linger before such agreements become common, if ever. Without truly innovative, effective new drugs, pharma’s hands are somewhat tied. And payers, for their part, are concerned that, even as they use more generics for basics, the prices of proprietary drugs they need – and their medical costs overall – will go through the roof. But at the moment, both sides seem to agree the current pricing structure has to change. What that change involves and who gives and gets what is up in the air.

image by flickr user jvverde used under a creative commons license.