Optimize Pharma GTM communications
Innovative messaging market research
Analyze messaging with algorithms
Source for pharma insights and updates
Pharma's top behavioral science source
Payer marketing plays a significant role in shaping the backbone of the pharmaceutical industry. Whether it’s about promoting a pharma product or service, or improving patient access and its coverage, the strategic approach of payer marketing has proved to be indispensable in the evolving landscape of the healthcare sector.
Who are the payers, and how exactly do they influence the pharma industry? Starting from the insurance companies to the pharmacy benefit managers ( PBMs) and government programs like Medicare or Medicaid - all of them more popularly known as payers - have a significant influence on determining drug access, and reimbursement.
Effective engagement with the payers is crucial to ensuring drug reimbursement, enhancing market access, and keeping up with the profitability.
The healthcare industry has seen a massive shift towards value-based care, where decision making is predominantly driven by cost containment, and patient outcomes.
Today, drug sales are not the sole priority. At present, the focus has shifted to health outcomes, and the payers’ demand for evidence-based drug’s effectiveness is on the rise.
With both government and private insurers implementing stricter cost control policies, gaining market access has become more challenging than ever. Policies like Medicare price negotiations under the Inflation Reduction Act and rigorous formulary management by private payers are driving tighter reimbursement standards and increased pressure on drug pricing.
Artificial Intelligence (AI) and real-world evidence (RWE) are now taking the center stage. These encourage the payers to justify pricing and reimbursement with stronger data.
In this blog, we will guide you through payer marketing essentials, challenges, effective strategies, and emerging trends, sharing useful and efficient solutions in payer marketing.
Payers in the pharma industry can be categorized into two:
These include the insurance companies and PBMs that negotiate drug prices and reimbursement rates.
These cover health expense coverage as offered by the employers.
Payers directly influence certain important aspects of the pharmaceutical industry. Like:
They identify which drugs would get covered under health plans.
The extent of coverage and how much would the patients’ out-of-pocket costs be decided by the payers.
Whether or not the patient gets access to insurance claims lies in the hands of the payers. They approve or restrict access to specific treatments based on cost and effectiveness.
Preference for affordable yet effective treatments.
Drugs must demonstrate real-world effectiveness.
Payers assess the financial impact of covering a drug on their healthcare budget.
Challenge: Market entry gets difficult, thanks to the regulatory measures, and competitive pricing.
Solution: The journey becomes smoother when there is early engagement with payers with strong clinical and economic proofs.
Pfizer faced declining sales post-COVID, particularly with their migraine drug Nurtec, due to insurance hurdles and ineffective sales strategies. They revamped their approach by creating a phone line for doctors and patients to navigate insurance, and by reallocating sales reps to key regions and emphasizing in-person doctor meetings. These changes resulted in a 31% increase in Nurtec's US sales in 2024.
Challenge: Payers look for evidence for long-term merits before giving approvals to reimbursement.
Solution: Use health economics and outcomes research (HEOR) to showcase cost savings and patient benefits.
Novartis entered into value-based pricing agreements with Aetna and Cigna for its heart failure drug, Entresto, linking reimbursement to the drug's performance in reducing hospitalizations and mortality rates.
Challenge: The US market is known for frequent policy changes, which affect pricing and reimbursement models.
Solution: Stay updated on regulatory trends and engage with policymakers proactively.
Johnson & Johnson announced plans to invest over $55 billion in building new manufacturing plants in the United States over the next four years. This strategic move aligns with President Trump's push for reshoring drug production and responds to potential tariffs on imported pharmaceuticals. By investing domestically, J&J aims to bolster its American operations and navigate the evolving regulatory landscape effectively.
Pharmaceutical companies are increasingly adopting messaging approaches highlighting their value-based pricing strategies to align drug prices with the clinical benefits they provide. This approach ensures that the cost of a medication reflects its effectiveness in improving patient outcomes and reducing overall healthcare expenses.
Pharmaceutical companies leverage RWE and HEOR to demonstrate the real-world effectiveness of drugs, helping secure payer approvals by showcasing cost-effectiveness and patient outcomes.
Pfizer and Bristol Myers Squibb used RWE to support the value of Eliquis (apixaban), a blood thinner used for stroke prevention in patients with atrial fibrillation. Data from insurance claims and electronic health records demonstrated its lower risk of bleeding compared to warfarin, influencing coverage decisions by insurers and Medicare.
Early collaboration with payers ensures new therapies meet reimbursement criteria and align with insurer expectations, facilitating smoother market
Novartis engaged early with payers before launching Zolgensma, a $2.1 million gene therapy for spinal muscular atrophy (SMA). The company worked with insurers like Aetna and Cigna to develop outcomes-based payment models, ensuring affordability and long-term access to the treatment.
Risk-sharing agreements help balance financial risks between pharma companies and insurers, improving patient access to high-cost treatments.
Merck introduced an outcomes-based contract with Express Scripts for Januvia, a diabetes drug. The agreement linked reimbursement to the drug’s ability to help patients achieve specific blood sugar control targets, reducing the financial burden on insurers and ensuring value-based pricing.
Pharma companies are adopting digital tools to enhance payer engagement, using data analytics, AI, and telehealth solutions to optimize communication and reimbursement negotiations.
GlaxoSmithKline (GSK) launched an AI-driven payer engagement platform to provide real-time insights on Trelegy Ellipta, a triple therapy for COPD. The system used predictive analytics to tailor value messaging for payers, improving formulary placement and negotiation outcomes.
The rise of personalized medicine—where treatments are tailored to an individual's genetic makeup—has significantly disrupted traditional reimbursement models. Payers are now forced to adapt, balancing high-cost therapies with long-term clinical benefits.
Blue Cross Blue Shield has been actively working with Novartis on outcomes-based reimbursement for Kymriah, a CAR-T cell therapy for leukemia that costs over $475,000 per dose. The insurer only pays if the patient responds positively within a specified time, ensuring both financial sustainability and patient success.
Artificial Intelligence (AI) and Machine Learning (ML) are transforming payer marketing by predicting drug value, improving formulary placement strategies, and identifying high-risk patient populations.
UnitedHealth Group’s Optum uses AI-driven analytics to assess the real-world effectiveness of medications. By analyzing vast amounts of claims data, Optum predicts how specific drugs perform across different patient demographics, helping payers refine prior authorization requirements and ensure the most cost-effective drugs are covered first.
Traditional fee-for-service models are being replaced with value-based agreements, where reimbursement is tied to real-world patient outcomes rather than just drug sales. This shift incentivizes pharmaceutical companies to prove their therapies work in real-life scenarios.
Eli Lilly’s value-based contract for Trulicity (a diabetes drug) with Harvard Pilgrim Health Care tied reimbursement to patients' improving their HbA1c levels within a set timeframe, ensuring the drug delivered actual clinical benefits.
In today’s competitive landscape, the key to faster drug approvals and favorable reimbursement lies in leveraging big data analytics to:
Pfizer used big data analytics and payer engagement tools while launching Ibrance, its blockbuster breast cancer drug. By analyzing historical claims data, Pfizer anticipated coverage concerns and engaged major payers like Cigna and United Healthcare with tailored pricing strategies, ensuring rapid formulary inclusion.
Pharma companies should start engaging payers during Phase II or III trials, leveraging real-world data to build a strong case for reimbursement before launch.
Stay updated on regulatory trends and engage with policymakers proactively.
Johnson & Johnson announced plans to invest over $55 billion in building new manufacturing plants in the United States over the next four years. This strategic move aligns with President Trump's push for reshoring drug production and responds to potential tariffs on imported pharmaceuticals. By investing domestically, J&J aims to bolster its American operations and navigate the evolving regulatory landscape effectively.
Share this Blog posts to your social media handles.
Back
Blog posts
Newristics
01 Feb 2024
Share
Webinars
Time : 60 Mins
Whitepapers
Case Studies