Improving Outlook in the U.S. Market is Due to Specialty Product Opportunities and Broader Patient Access with Implementation of the Affordable Care Act and Expansion of Medicaid
Outcomes-Based Approaches by Payers May Support Value Messaging for Pharmaceuticals, According to Findings from Decision Resources Group
BURLINGTON, Mass., Aug. 13, 2014 /PRNewswire/ — Decision Resources Group finds that the outlook for the pharmaceutical market in the United States is becoming more favorable, as the size of the insured population is expanding and opportunities for specialty pharmaceutical products support premium pricing and better profitability. The implementation of the Affordable Care Act appears to be expanding patient access, as mandated enrollment through the state and federal health insurance exchanges has outpaced government estimates. In addition, the majority of states have expanded their Medicaid programs according to this law (or are proposing alternative programs).
Other key findings from the United States Market Access Tracker advisory service:
-- Healthcare reform reducing the ranks of the uninsured: The Affordable Care Act exceeded government expectations with the enrollment of 8 million people through federal and state health insurance exchanges. The expansion of Medicaid coverage at the state level has further reduced the ranks of the uninsured with 26 states (and the District of Colombia) expanding coverage, while 21 states have decided not to expand this program, and four states remain undecided or are proposing alternative plans. -- New model for providers and payers: Accountable Care Organizations (ACOs) were established to better align patient, provider and payer interests with financial incentives for meeting performance standards and specific levels of savings. The number of Medicare and commercial ACOs has greatly exceeded expectations in terms of both number of plans and covered lives. -- Increase of comparative effectiveness research (CER): CER will play an increasingly important role in reimbursement decisions in the United States. AMCP's Format for Formulary Submissions includes CER guidelines in its standards for formulary submissions, and the Patient-Centered Outcomes Research Institute was established under the Affordable Care Act to promote CER in evaluating new drugs. -- Value-Based Purchasing: The American Hospital Association is promoting new operating methods to support value-based payment initiatives that are more focused on patient outcomes, population health management and a coordinated care approach, while moving away from providing volume-based services.
Comments from Decision Resources Group Analyst Michael Latwis, M.B.A.:
-- "Government and private payers are exploring new models that put greater emphasis on disease prevention and improving the quality of healthcare services. This shift could be an advantage for the pharmaceutical industry if companies can demonstrate that their products can improve outcomes and reduce overall healthcare expenditures." -- "Many companies are focusing their strategies on higher-priced specialty pharmaceutical products to help their businesses recover from the severe generic erosion experienced over the past several years. Regulatory reforms like Breakthrough Therapy Designation have helped accelerate clinical development timelines for innovative pharmaceutical products, while recent orphan drug legislation has become more accommodative by expanding exclusivity periods for drugs that treat multiple indications (that may put them over the 200,000 patient threshold) or contain new delivery formulations."
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