Episode 003: Payer Power

The power of the payer in the biopharmaceutical industry has increased dramatically over the past several years, according to Keith Kelly, Managing Director and Head of the Pricing and Market Access Practice of inVentiv Health Consulting. Market access was once a dull topic. Today, price and if a drug will be covered is discussed on earnings calls and in the board room. What payers do can make or break the stock price of a company overnight.

In this episode, Kelly and host Jeff Stewart discuss what factors have contributed to the payer’s rise in influence; how payers are wielding this power; why drug price negotiation is similar to discount suit shopping; and the “prisoner’s dilemma” of acquiring access for products entering the market at the same or similar time. The pair also explores the nirvana concept of “sustainable market access” – is it even possible? – and the value creation equation for a pharmaceutical company looking to achieve it for their products.

Data from this episode originated from the following sources:
Gross to net pricing from Credit Suisse; manufacturing cost analysis published in the Journal of Pharmaceutical Innovation and Nature Biotechnology; and Hepatitic C drug costs covered in Reuters.

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