Three predictions for 2017 are:
- Greater acceptance of biosimilars
The development, approval and acceptance of biosimilars will increase in 2017. As of October 2016, the US Food and Drug Administration (FDA) has approved four biosimilars, which are setting up for launch in 2017, and there are several biosimilars still awaiting approval and launch. With the cost of many innovator biologics on the rise, biosimilars will definitely continue to gain traction among payers in the coming year.
In the 2016 Biosimilars Forum survey on doctors, some of the identified knowledge gaps were in:
- Defining biologics, biosimilarity, biosimilars, interchangeability and pharmacy-level substitution.
- Understanding the approval and evaluation process of biosimilars.
- Understanding the safety profile shared between a biosimilar and an originator biologic.
In response to the slow uptake of biosimilars, several biologics companies have provided education or opened discussions about the product. Throughout 2016, patient groups, professional societies, health authorities and think tanks joined the conversations and knowledge sharing, which has fuelled the interest among patients and physicians to try biosimilars.
Governments are also zoning in on the regulatory frameworks to facilitate the biosimilar path-to-market, which is augmenting support for the product’s use. Before the end of 2017, the FDA is set to publish draft guidance on interchangeability considerations of biosimilars and statistical considerations for the analysis of biosimilarity.
- A rise in the number of innovative payment schemes
The year 2016 truly highlighted the patient as the ultimate customer of pharma and healthcare, but 2017 will see payers as the primary customer segment to target. In the coming year, payers can be expected to impose more price cuts and greater spending scrutiny. Subsequently, more and more pharma companies will be willing to explore innovative pricing and reimbursement schemes with payers. A specialty reimbursement report found that the number of US payers with at least one pay-for-performance contract increased from 10% in 2014 to 14% in 2016; and another 30% have plans to entertain outcomes-based contracts in 2017.
Executing and demonstrating cost-effectiveness will be a recurring topic during negotiations between pharma and payers. Cost-effectiveness is laborious to prove, especially when outcomes are not easily measured (as with orphan conditions) or when it takes time before outcomes become measurable (as with long-term conditions). Nonetheless, the drive for cost-effectiveness will push pharma to keep on developing innovative pricing schemes.
Specifically, there will be increased confidence in, and a more defined protocol for, risk sharing or performance-based agreements. Payers, insurers and government health authorities have gained familiarity with these innovative schemes in the recent past, especially in contracts with physician groups and large hospitals. Therefore, they will be more willing to listen and explore pharma’s proposed value-based purchasing models.
- A deluge of more value-added services
The hunt for value will continue. Pharma’s option is to continue shifting away from a product-orientation and focusing efforts towards a service-orientation. The development of value added services is likely to continue in 2017 in the form of beyond-the-pill benefits, adherence, and patient management apps/services. With the unique ability to enable self-management and diagnosis, remote tracking and monitoring, fluid communication with practitioners, and remote education, the arena of wearable medical devices will continue to thrive. The mHealth market revenue is projected to grow to $26 Billion with a consequent annual global healthcare cost savings amounting to $370 Billion by the end of 2017.