Biopharma Needs a Health System Strategy to Secure Optimal Market Access

Kevin Tse, PharmD, VP, Value & Access, Formulary Insights

If somebody asked for evidence of how the healthcare landscape is rapidly changing, a primary exhibit would have to be the growing importance of Integrated Delivery Networks (IDNs) and health systems. The numbers more than back up this assertion: Between 1999 and 2019, the share of physicians integrated into hospital-based systems more than doubled, rising from 19.5% to 43.5%, according to a recent publication in the Journal of Health Services Research & Policy.¹

This rise in health systems across the US has significant implications for stakeholders across all of healthcare, and the impacts are especially acute for pharmaceutical companies and market access professionals. IDNs and health systems are pivotal players in the effort to reach patients, with the power to steer drug utilization within and across their vast networks. Manufacturers risk falling behind without a comprehensive understanding of these networks’ needs and a targeted strategy to engage with them.

Joe Rossi IV, MHA, Principal, Formulary Insights

This is a brave new world for the pharmaceutical industry. Historically, market access strategies have been highly concentrated on payers. That remains an essential and highly relevant focus, given payers’ role in determining formulary placement, pharmacy networks, and patient cost-shares.

Yet the influence of IDNs and health systems simply can’t be ignored. Proprietary primary market research finds that more than 70% of polled healthcare administrators and healthcare professionals say health systems hold as much—if not more—influence as payers when it comes to their ability to prescribe oncology regimens, such as cancer immunotherapies.²

Importantly, IDNs and health systems operate under different incentives and constraints than payers, which require different strategies and insights to secure market access. In the absence of stringent payer controls, the priorities and needs of health systems play a major role in driving drug utilization.

The goal for market access professionals is to understand these dynamics to secure lasting partnerships.

A health system’s drug utilization decision-making process will, of course, be influenced by clinical and safety considerations. But it will also incorporate a dizzying array of factors, including, but not limited to, capitation arrangements, delegated formulary, and utilization management services, the 340B Drug Pricing Program, quality metrics, and risk-sharing arrangements with payers. In addition, health systems and IDNs are also directing sites of care, pushing drug administration to their preferred locations. They take a multifaceted approach in managing these dynamics, hiring dedicated experts such as revenue cycle management professionals, benefits investigation specialists, and provider relations representatives, among others. Their many initiatives include launching education campaigns with providers, managing utilization protocols and guidelines (which may include order sets/infusion plans), and controlling drug administration through site-of-care preferencing and in-house dispensing.

To secure market access, biopharma manufacturers will need a thorough analysis of health system accounts to tailor strategies for different field teams effectively. Assessing the alignment of various health system affiliates, understanding financial arrangements, evaluating turnaround times for utilization management, and examining the influence of different insurance types and reimbursement mixes on prescription strategies are all critical. So, too, are identifying key network professionals and understanding how provider fee schedules from payers might impact drug use—particularly in non-capitated environments where incentives can vary dramatically.

This environment demands more than just a cursory analysis. While claims data provides a basic foundation of insights, primary market research is indispensable for capturing the subtleties of physician behavior. Our proprietary market research finds that 60% of polled prescribers self-adjudicated their prescribing decisions for oncology regimens based on their perceptions of health system utilization management barriers,² a strong indication of how IDN and health system policies are directly shaping prescriber habits.

Manufacturers can begin by assessing high-impact areas, such as determining how population-based healthcare is delivered and financed. In one case study, primary market research helped biopharma manufacturers streamline the tangled web of Assignment of Benefit insurance nuances, incorporating unearthed lessons from health systems into their hub services to help patients get the treatment they needed more quickly. These are the kinds of insights that can uncover direct ways of engaging with IDNs and health systems as they take on an increasingly critical role in the healthcare ecosystem.

Kevin Tse, PharmD, VP, Value & Access and Joe Rossi IV, MHA, Principal; both of Formulary Insights

References

1. Luo, Qian Eric et al. “A more complete measure of vertical integration between physicians and hospitals.” Health services research vol. 59,4 (2024): e14314. doi:10.1111/1475-6773.14314
2. Formulary Insights, Proprietary Market Access Research, 2024