Connected data gives you a clearer picture
At Evaluate we collect, calibrate and connect the pharmaceutical world's data.
Let’s start with some stats.
- About half of the drugs launched in the last 15 years underperformed analysts' sales estimates by more than 20%1.
- Only one-fifth of new meds reached $1 billion in U.S. sales, and more than half failed to hit even $250 million2.
- The average cost to develop a drug is close to $1 billion2 with the average, even for drugs that have reached phase 1 trials exceeding $425m3
Selecting a molecule or an indication in the pipeline development stage that doesn’t provide sufficient return on investment can result in significant financial losses for a company. In fact, for small and mid-sized manufacturers, bankruptcy is a very real possibility. The importance of factoring in payer perspectives and reimbursement dynamics within an indication has become more critical than ever.
Let’s think about this. Could previously launched drugs that significantly missed sales expectations have met a different fate if their manufacturers had accounted for payer perspectives in their early-stage development strategy?
Clearly, we can’t be sure, but payer perspectives in early pipeline development could have shown K-V pharmaceuticals early on in their development that Makena, as a $1,500 priced drug per dose, wouldn't gain reimbursement when compounding pharmacies were selling an equivalent dose at $10-$204.
Similarly, proactively gaining payer perspectives on reimbursement for new mechanisms of action or new routes of administration could have changed the course of drugs that didn’t meet launch expectations. Companies like Dendreon4 with Provenge, or Regeneron with Praluent, and Amgen with Repatha might have prioritised other molecules/indications in their pipeline, set more relevant prices at launch, or managed the market's expectations at launch better by closely factoring in payer perspectives in early pipeline development.
So, if we accept that payer perspectives should underpin every stage of pipeline development5, what are some of the insights that manufacturers should seek from payers, pharmacy benefit managers, and potentially even integrated delivery networks?
Proactively understanding the U.S. reimbursement landscape from pipeline development is essential, especially for small- and mid- sized companies or companies that are entering into the US market with their first treatment. Using P&T decision-makers as a sounding board during asset evaluation, early-stage pipeline development/optimisation, and as a company nears launch can significantly impact the success of a drug. It can help manufacturers feel more confident in communicating a solid value story for their treatment, and in turn gaining parity or preferential placement on formularies and policies.
1 - https://www.fiercepharma.com/pharma/half-drugs-launched-last-15-years-failed-to-meet-wall-street-s-expectations-report
2 - https://jamanetwork.com/journals/jama/article-abstract/2762311
3 - Evaluate Omnium
4 - https://www.fiercepharma.com/special-report/10-top-drug-launch-disasters
5 - https://www2.deloitte.com/us/en/insights/industry/life-sciences/pharmaceutical-pricing-market-access.html