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Defining 'market access'
(Excerpted from ‘The Price of Global Health, 2nd edition, by Ed Schoonveld, Gower Publishing, Burlington, VT)
Market access is the new buzzword in the pharmaceutical industry. Companies re-focus, restructure and add staff to their organizations to better address today’s market access needs. More disciplines and people get involved in an already complex multidisciplinary process to further optimize development and commercial strategies aimed at preparing fewer new chemical entities for an increasingly demanding pay environment. However, there is a lot of confusion over the term “market access.”
As with every new term, individuals from different disciplines translate a meaning, sometimes twisting it in the context of their own functional specialty, particularly when it seems to be the new hot trend. This reminds me of an analogy from the aircraft industry, which uses the functional perspectives and priorities discussed above, but applied in an aircraft design setting. The wing design group sees the aircraft as a wing with a small fuselage attached, the service group emphasizes all the access panels to reach their service items, whereas the armament group merely sees the plane as an opportunity to hang weapons.
In an attempt to eliminate some of the confusion, this book starts with a definition of market access:
Market access is the discipline that addresses any financially based consideration or hurdle to drug prescribing and use, whether imposed by public or private third-party payers, or experienced as a consequence of patient affordability.
Pricing, reimbursement and access or market access are terms that are used in any set of combinations to describe the activities related to setting a drug price across markets that addresses third-party reimbursement or cash pay affordability in the context of each payer system and segment. The term pricing is usually well understood to be the activity of evaluating willingness-to-pay among key customers, resulting in an assessment of the optimal price.
For most consumer goods, pricing involves the assessment of customer price elasticity of demand. Not considering middlemen for now, the two key players are the seller and the buyer, and the micro-economics laws of supply and demand that drive optimal price. In the drug market, the purchasing process is much more complicated due to the involvement of third-party payers such as insurance companies. Depending on country and healthcare-system, the payer acts as a gatekeeper in order to control drug and overall medical cost of treatment in some way or form. In some cases, for example in the United States, payers decide on a co-payment (fixed dollar amount of say $25) or co-insurance (fixed percentage of cost of say 20 percent). In markets such as China and Mexico, there is a very limited insurance coverage for prescription drugs. Patients frequently pay for drugs cash out-of-pocket as they can afford it. Issues related to full or partial reimbursement by a payer, or patient affordability, are usually all captured under the term “market access.”
A broader set of activities can be considered part of market access. For instance, it is important for a drug to be included in clinical treatment guidelines as they are frequently agreed upon and published, for example, in the US for hypertension, by the Joint National Committee on Prevention, Detection, Evaluation and Treatment of High Blood Pressure. Some argue that gaining marketing authorization by the FDA is part of market access. I would argue that this is a bit of a stretch.
The term “access” is also used to address the ability to reach patients in developing countries or even the ability for the sales force to speak to physicians. In this book this is not considered part of the market access definition. Healthcare technology assessments and health economics evaluations, frequently used in reimbursement decision making, is part of market access.
ABOUT THE AUTHOR
Ed Schoonveld is one of the leading experts in global pharmaceutical pricing and market access. He has unparalleled experience as head of Global Market Access and Pricing functions at Wyeth, Lilly and BMS, and as a consulting leader at Cambridge/IMS and a number of other organizations. Ed is providing strategic consulting and research solutions to healthcare industry clients as Managing Principal and Practice Leader for the Market Access and Pricing practice at ZS.