How therapeutic area dynamics could influence strategyWhy does competition drive formulary positioning in some TAs?What drives preferential positioning within drug classes? The rise of value assessors such as The Institute for Clinical and Economic Review (ICER), the increased use of value-based contracting, and public scrutiny of the rebating system are clear signals that the market is moving away from volume-based pricing and toward value-based pricing and contracting. The cost and benefits of market access strategies such as rebating, value-based contracting, or patient services should be carefully considered. Market access is the process to ensure that all appropriate patients who would benefit, get rapid and maintained access to the brand, at the right price. For example, consider two hepatitis C drugs. Drugs that appear to have even higher formulary positioning scores are those where a proportion of the population does have access to the drug. Drugs that fall in the upper-right quadrant face the highest competitive intensity and have the highest formulary positions, while those that fall in lower-left quadrant have lower competitive intensity and lower formulary positioning.We did this separately for commercial and Medicare populations.Competition through direct (in-class) or indirect (outside of class) generic or branded competitors can impact formulary positioning. Value-based contracting (VBC) is one strategy manufacturers The design of the prior authorization program cannot be determined by reviewing the formulary alone; one should analyze the specific prior authorization language to determine which products are advantaged or disadvantaged.
In contrast, a branded drug with multiple competitors, especially ones for which there is greater evidence around efficacy, may need to apply different tools to enhance market access.We analyzed the relationship between competitive intensity and formulary positioning by therapeutic area, focusing on the top-selling branded drugs of the top 19 biopharma companies by their revenue for 2016. Indeed may be compensated by these employers, helping keep Indeed free for jobseekers.
These factors can be strong differentiators, especially as health care becomes more responsive to consumer demands.For example, amongst a class of three type 2 diabetes drugs in our analysis that have the same competitive intensity score, the drug with the lowest formulary positioning score (27.36) has been shown to have better patient retention than others in the class.Companies offering lower net prices through rebates typically obtain preferential formulary positioning as a result. At the population level, the cost to treat diabetes, for example, is much higher than the cost to treat many cancer subtypes. In oncology, despite increasing levels of competition across drug classes, most drugs fall in Tier 2 or 3 (figure 2).
Sonal has a Master of Business Administration in health care management from the Wharton School, and a Doctor of Pharmacy from the Rutgers University Ernest Mario School of Pharmacy. Interestingly, we found that formulary positioning appears to be driven by competition in some TAs (metabolic, cardiovascular, central nervous system, and gastrointestinal), but not others (oncology, infectious disease, immunology, and respiratory).Comparing metabolic with oncology provides some insight into why competition might drive formulary positioning in some TAs and not in others. For example, some cancer therapies are only effective on certain tumor types, whereas response rates for some diabetes drugs may be more consistent.