Many countries are starting to reimburse digital health products, but pharma companies usually need to take a different approach when it comes to pricing and market access. Experts Stephen Dunbar, Madelane Teran, and Jeremy Winkler discuss the “who,” the “what,” and the “how” in terms of organizational set-up, operational effectiveness, and customized talent management.
The digital healthcare space is becoming more prominent than ever before, with $8.1b USD invested worldwide in 2018. It has gained the attention of healthcare providers, insurers, and governments alike, with Express Scripts and CVS in the US recently announcing the start of a stand-alone digital health formulary. For companies looking to market a digital health product, understanding the unique market access opportunities and challenges compared to a traditional pharmaceutical will be crucial. Manufacturers will need to adapt their current market access activities and functions to meet the needs of this new category of healthcare products.
Digital Health Funding (2011 - 2018 US Dollars)
Monetization of a traditional pharmaceutical can be relatively straightforward: You seek reimbursement/market access using defined pathways. But there are multiple ways companies can monetize a digital product, some involving reimbursement, others not. In some cases, payers might be willing to reimburse the digital health product itself as a fee-for-service, as was achieved by Sleepio and Pear Therapeutics. Additionally, manufacturers can pair a digital product with a traditional therapeutic in their portfolio to achieve a higher realized value of the portfolio product, either by increased volume or by achieving a higher reimbursed price thanks to a higher value perception (data collection, improved outcomes, etc.). If a decision is made to seek reimbursement for the digital health product, manufacturers will need to adapt the “what”, the “how”, and the “who” of traditional P&MA processes for digital healthcare. Small organizational changes can ensure the responsible teams have all the tools needed for a successful launch.
P&MA process flow for digital products/traditional pathway for digital therapeutics
What? Reimbursement and funding activities for digital health products
Once the decision is made to pursue market access for the digital health product, determining potential pathways will be one of the key initial tasks. Market access for traditional pharmaceuticals typically follows a well-established pathway, and the teams working towards achieving this goal are very familiar with the requirements and timeline. Reimbursement and funding pathways for digital health products are currently poorly defined and vary significantly by market. Therefore, pursuing reimbursement will be a continuously evolving process requiring in-depth country-specific knowledge and flexibility to explore creative ideas for funding, and will need to be routinely monitored and re-assessed.
Furthermore, using established market archetypes or extrapolations between markets, which is common for traditional pharmaceuticals, becomes ineffective for digital products given the level of variability. For example, France and Germany are typically considered to have similar evaluation processes for traditional pharmaceuticals, however, this is not the case when it comes to their evaluation of digital products. In France, there is an established national pilot program for tele-monitoring products but in Germany, no such program exists and reimbursement is often driven by negotiations with individual sick funds. Despite differences in the evaluation process, both markets offer unique opportunities in the digital healthcare space. The teams involved in securing reimbursement for the digital product must first understand any existing regulations and policies but also harness the skills and knowledge to create/propose/materialize new market access pathways if none are available.
How? Moving toward a traditional reimbursement pathway
There are usually three key criteria for digital health products to qualify for reimbursement:
- Strategy development: Digital health requires a much more flexible and road-mapped approach when developing a launch strategy. With a traditional pharmaceutical, a great deal of time and effort is typically put into developing the product strategy leading up to launch. For a digital health product on the other hand, there might need to be an initial strategy for launch, for example, selling direct to consumer, before moving forward to a traditional reimbursement pathway after a certain time has passed.
- Evidence generation: Most evidence generation is front-loaded prior to launch for traditional pharmaceuticals. As a result, companies typically have well-established processes for generating evidence to support market access. This includes draft trial protocols, an established set of stakeholders to engage, a clear timeline of when input is needed, and so forth. However, as seeking reimbursement at launch might not be the primary goal for a digital product, existing evidence generation processes may not apply.
In France, to qualify for national reimbursement via the tele-monitoring pilot program (ETAPES), all that is required is to demonstrate that the digital health product offers tele-monitoring and has a protocol for a real world study. In this case the market access pathway requires minimum evidence generation upfront but requires significant evidence generation post-launch. Manufacturers might need to have an evidence generation strategy at launch and then develop a new strategy for X number of years post-launch, depending on the ultimate market access goals. In other cases, manufacturers might have already gathered significant amounts of evidence at launch and still face MA limitations due to an inherent data skepticism in the digital health space. To avoid this, having a clear understanding of the evidence requirements imposed by the appropriate stakeholders is paramount.
- Stakeholder engagement: Stakeholders involved in evaluating products, negotiating prices, and deciding on reimbursement of traditional pharmaceuticals might not be the same stakeholders involved throughout the launch and commercialization of a digital health product.
In Germany, the requirement to achieve funding for a digital therapeutic product may not rely on the G-BA but instead, individual sick funds. While the G-BA is very clinically-focused, sick funds are much more interested in reducing their annual spend. In some organizations and government bodies, even an entirely new team of individuals might be responsible for evaluating digital health products (e.g., innovation teams at ESI). This means that payer strategies will need to be tailored to the value drivers of these new set of stakeholders.
Who? Attracting market expertise in an evolving field
As market access might not be the ultimate goal for the launch of a digital product, the organization will need to internally align on what success means both at launch and post-launch, in order to establish clear expectations for the P&MA team. Lastly, success will require planned talent management to be able to attract market expertise in an evolving field where many gaps currently exist. A good understanding of how new digital health products are entering the commercial arena and a strong foundation of the payer requirements will be needed for anyone leading a digital health product P&MA team. Given the evolving nature of the digital healthcare space and the variability between markets, manufacturers might prefer to harness these skills at the global level instead of the affiliates, which might not have the bandwidth to take on additional tasks.
Future challenges and opportunities
The P&MA function will likely need to evolve with the coming of age for new digital health products. Understanding the “who,” the “what,” and the “how” will support a successful market access pathway for a non-traditional product that may be driven by a different set of principles. Preparing for this new wave of digital health products will require organizational set-up, operational effectiveness, and customized talent management. Having the right operational plan in place will allow the P&MA function to quickly adapt to new payer mindsets as different lines of thinking develop around how these products demonstrate clinical value and how this value is realized.