Access to diagnostic tests and the subsequent reimbursement is an issue affecting all stakeholders in the fast evolving personalized medicine space. It’s an intricate web woven by drug companies, payers, insurance giants, laboratories and national health organizations. And once you think you have it sorted, you’re likely to face continuing adjustments and new considerations on pricing for each diagnostic test and therapy. Negotiating the system is crucial, however, because access to the right diagnostics is closely linked to efficient reimbursement. Here are seven ways that may help to ease your way through the challenges.
Become familiar with variations in global reimbursement
Reimbursement criteria can vary around the world and even within one country so it is essential to become familiar with global reimbursement differences for companion diagnostics. Each national health system will consider aspects such as the cost to society, QALYs and the price of the diagnostic with the therapy compared to other targeted and stand-alone drugs. Pharma needs to consider ways to comply with current and future reimbursement criteria.
Ideas for dealing constructively with these challenges could include:
Understand the stakeholder profit chain
The profit chain is at the core of how the diagnostic industry works. All the key stakeholders involved with a diagnostic and testing can benefit from a healthy profit chain, which in turn encourages greater diagnostic competition and test adoption. An aligned profit chain can be an incentive for labs and doctors to adopt a test so it is important to assess any gaps or stakeholder losses arising from the test strategy and provide profit opportunities for all involved.
Consider subsidized testing
Pharma is increasingly funding diagnostic testing and in some countries it is even expected. For instance, payers in Canada have come to expect pharma funding following the introduction of the HER2 test. But support elsewhere can be varied and inconsistent. For some tests, the revenue from testing may not even cover the laboratories’ own costs. Pharma must sometimes commit to subsidized testing, even temporarily, as it can create a ‘win-win’ diagnostic launch for all stakeholders.
Develop an early dialogue with payers to demonstrate healthcare savings
Discussions with payers to clarify their particular requirements for a test, and then effectively showing where your diagnostic can offer healthcare savings, can remove barriers to test access in advance. For instance, by demonstrating that your test works in the early identification of non-responders and patients at risk of adverse reactions, payers can see how the expense of additional care could be eliminated.
Provide robust evidence for your diagnostic
Providers and patients want to better understand the decisions determining their healthcare choices, including its cost, so consider clear ways to demonstrate your diagnostic and therapy values. Providing health systems and payers with comprehensive, robust evidence of clinical and health economic benefits can certainly help to ease access and reimbursement issues. It clearly played a role in the favourable access decision for Oncotype DX in the UK, even though Genomic Health still had to make price indication concessions.
Support physician education
Reimbursement problems are consistently a barrier to good test adoption and a major concern for physicians – after all, they are the people who make the decision to run a test while worrying who is going to pay. If that information is clear, then decision-making becomes easier. Pharma can directly help support physician education around the test and reimbursement processes and thereby improve the adoption rate. Companies can also assist by providing clear data on cost and clinical effectiveness for a more accurate determination of financial impact.
Be prepared to negotiate on price
Pharma will increasingly be expected to negotiate on the price of personalized medicines and sometimes fund the companion diagnostic for a period after launch, all of which can smooth the reimbursement process for those in the front line. The introduction of drug pricing models and the implications this brings means we could see pharma developing valuation models in order to ‘own’ the messaging being defined by others, while payers may need a more transparent methodology for setting reimbursement rates for new medications.
Nothing’s ever simple and straightforward where money is concerned and given that patient and physician access to tests is so closely woven with the question of who is going to pay, any attempt to improve access and reimbursement is surely worthwhile. Given the fast pace of personalized medicine development, it might pay to be one step ahead.
This subject is discussed in more detail in the Diaceutics E-book The Challenges of Access and Reimbursement which can be downloaded here.