U.S.

Market Access

7 MARKET ACCESS
TRENDS FOR 2027
Political, regulatory, and economic issues are
transforming market access for the life sciences
industry, increasing payer price sensitivity and
challenging willingness to pay.
IQVIA examines how current trends and less predictable
‘game changing’ forces will shape the landscape in
2027 to help you navigate forward.

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INTRODUCTION

The U.S. healthcare market is in a state of continuous flux and uncertainty. Drug costs have generally grown
at a slower rate than overall healthcare costs; however, as payers continue to look for ways to manage
their overall spend, pharmaceuticals are a clear target. While scientific innovations are revolutionizing the
treatment of multiple diseases in ways never before possible, the life sciences industry faces increasing
market access pressure.

What will the 2027 U.S. market look like? There are things we cannot predict. The The more things change, the more they
Here’s a snapshot: Affordable Care Act currently remains stay the same - some trends are merely
a core part of the framework for U.S. incrementalism – “more of the same”
• Overall spending on medicines in the
healthcare. Will it eventually be replaced pressures we have seen over the last
U.S. (Wholesale Acquisition Cost) is
in whole or part by something else? Will 10 years. The old tactics we use today will
expected to double from 2015 to 2027
the reimbursement and coverage approach have to be continually honed and refined.
(6.4% CAGR)
for Medicare Part D and Part B change Others will more dramatically shift market
• Approximately 20% of the population in 10 years? Likely – but crystal balling engagement. New strategies and new
will be over the age of 65 (compared these changes will only get us so far. In approaches will be required to succeed.
to 15% today) the interim, there are core trends that In our 7 Market Access Trends for 2027,
will define how to engage in today and we combine internal expertise and IQVIA
• Medicare spending as a percentage
tomorrow’s healthcare market. Industry analytics with insights from industry
of federal budget will increase from
leaders need to understand the long-term thought leaders to shift the focus
15% to over 18%
implications of the evolving landscape a decade forward.
• Specialty medicines will exceed 50% and take proactive steps to secure their
of pharmaceutical spending companies’ future. This means looking
beyond the immediate landscape, and
adapting to change in the years to come.

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CONTENTS

IDENTIFIED TRENDS FELL INTO TWO CATEGORIES

MORE OF THE SAME GAME CHANGERS
More of the Same Game Changers

TIGHTER, MORE
GREATER PRICE
FRAGMENTED PAYER
TRANSPARENCY
MANAGEMENT

HIGHER PATIENT
SHIFT AWAY FROM THE
OUT-OF-POCKET
DEEP REBATE MODEL TO VIEW A TREND
PAYMENTS
CLICK ON THE
NUMBERED TILE.
MORE STRINGENT
INCREASE IN VALUE-
MEDICAL BENEFIT
BASED MODELS
MANAGEMENT

AMPLIFIED PUBLIC
PRESSURE FOR STRICTER
PRICING SCRUTINY

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TIGHTER, MORE FRAGMENTED PAYER MANAGEMENT

Pharma will continue to feel the payer grip tighten as management across all brands
increases; however, access position will be more mixed than ever.

Managed Care Organizations (MCOs) and Pharmacy and protections for ongoing patients will hold, but
Benefit Managers (PBMs) are increasingly utilizing the pressures will be higher. We have already seen
strict management approaches such as NDC blocks, “specialty products” become less “special” when it
closed formularies, and formulary exclusion policies comes to access, and it is likely that “protected classes”
to manage drugs, including innovative and specialty will be less protected.
medicines.
Over the coming decade this trend will result in a
Formulary exclusions are among the most striking greater fragmentation of coverage across states and
of these actions, and 2017 saw this tactic becoming payer groups, as well as slower uptake of new products
more common. PBMs and health plans were excluding (See Figure). In order to minimize impact, industry
certain prostate cancer drugs from commercial will need to invest more in expert teams who engage
CLICK TO VIEW FIGURE
formularies due to contracting and perceived clinical earlier; negotiate directly with providers for access;
equivalence. Meanwhile, certain branded Chronic and provide robust evidence of the clinical and cost-
Myeloid Leukaemia agents were excluded from select effectiveness of products.
commercial formularies due to the launch of a generic
version of Gleevec (imatinib).

While payers will continue to be opportunistic across

all therapeutic areas, the old rules will still apply - state
mandates that support broader access for oncology

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HIGHER PATIENT OUT OF POCKET PAYMENTS

Solutions are needed as financial pressures on patients mount.

Today, payers are transferring a higher percentage Manufacturers have been working actively to CLICK TO VIEW FIG 1
of costs to patients through increased premium, address this issue through co-pay card programs and
deductibles, and out-of-pocket (OOP) payments. By foundation support - with co-pay card penetration
2027 the percentage of covered workers enrolled in across oral oncology drugs increasing from 2.2%
an HDHP/HRA or HSA-Qualified HDHP could rise to in 2010 to 64.4% in 2016. Between 2014 and 2016,
56% vs. 28% in 20161 (See Figure 1). Since 2014, co-pays manufacturer co-pay offset across retail brands
have risen by more than 14% (See Figure 2) and are increased by 32%. But is this sustainable? Industry CLICK TO VIEW FIG 2
likely to continue to rise. Today, the average family has will not be able to unilaterally fix these system-wide
a coverage premium of approximately $18,000, a figure problems or force politicians to legislate. As more
that is expected to rise to approximately $25,000 by co-pay card programs face increasing scrutiny, new
2027 (See Figure 3). approaches will need to be considered. Companies
can take a stand on protecting patients by forging new
Patients fear ‘financial toxicity’ – a term that has CLICK TO VIEW FIG 3
multi-lateral agreements with payers to establish limits
become part of the political dialogue and speaks
to OOP costs for patients, and working directly with
to the distress patients experience as healthcare
patients to disrupt a flawed model.
costs and OOPs soar. Under the Affordable Care Act
(ACA), expanded eligibility for Medicaid, and certain
insurance plans, some patients have enjoyed free
prescription benefits. However, if the ACA is repealed
or replaced with a more fiscally conservative plan, OOP
cost growth for patients will be inevitable.

Kaiser Family Foundation and IQVIA analysis

1

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INCREASE IN VALUE-BASED MODELS

Value moves from buzzword to business model.

We expect a continued increase in value-based by 2027 (See Figure). As an example, in November by indication, ASP spiral, and Medicaid best price.
payment models and innovative agreements as 2017 ICER received a three-year $13.9 million grant to The entry of cell and gene therapies across multiple
organizations work to remove regulatory hurdles and expand activities such as reviewing newly approved disease areas will drive new structures of value based
companies invest in lowering data and administrative agents, identifying unjustified price increases, agreements and innovative payment models to capture
barriers. At the same time, the concept of structured stakeholder engagement, and developing innovative their unique treatment dynamics and benefit.
value “frameworks” that lay out rubrics to assess benefit and reimbursement programs. It is still early
As value is seen through the eyes of the stakeholder,
value will also proliferate, but it is unlikely that one and details on these initiatives are limited; what is
even as far as 10 years out there will not be one sole
model or framework will be preferred and dominate clear, is that the organization will continue to be a
path forward. Industry needs to engage early with the
the pricing landscape. player within the value debate.
leading value-driven organizations to ensure these
Among the most notable value frameworks currently In the coming years, the concept of value will become models are robust and ensure, not restrict, access to
in use in the U.S. are the Institute for Clinical and part of the fabric of U.S. healthcare. The next step is for innovative medicines.
Economic Review (ICER) value framework, American “value” to enter clinical decision-making criteria – and
Society of Clinical Oncology (ASCO), and National we’re already seeing this with the NCCN Guidelines
Comprehensive Cancer Network (NCCN). Each of inclusion of Categories of Preference, where cost
these frameworks has different approaches, criteria, can be a factor, as well as ACC/AHA commitment to
outputs, and target therapeutic areas. Academic, include “cost/value” in guidelines. CLICK TO VIEW FIGURE
policy group, and patient group value framework
Value-based agreements and payment models are also
approaches have also entered the market.
expected to increase as companies, payers, and policy
We expect value frameworks to expand influence makers align on strategies to address current data and
and add further complexity to the value landscape regulatory challenges such as tracking of utilization

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AMPLIFIED PUBLIC PRESSURE FOR STRICTER PRICING SCRUTINY

Expect the “Name and Shame” approach to continue for drugs perceived as having
too high a price, without a clear value story and value communication strategy.

Public pressure on industry regarding U.S. pricing All new drugs will be pushed to communicate a clear
policies has reached a fever pitch, with the issue rationale for their pricing and will face scrutiny and
rooted firmly in the nation’s conversation on pushback from payers, providers, and policymakers.
healthcare (See Figure). Manufacturers will need to show innovation and
differentiation to make a case for higher prices.
President Trump continues to publicly attack
pharma regarding its pricing policies, saying that,
“prescription drug prices are out of control.” The
actual impact on policy is yet to be determined;
however, his administration’s approach to this issue
will certainly influence the next four years, with a
CLICK TO VIEW FIGURE
lasting impact into the next decade.

Companies seen as excessively increasing prices will

face increased pressure across all media, particularly
social media. New patient groups have formed with
a focus on drug pricing and as OOP costs rise,
patient advocates are likely to become more vocal
and engaged in this discussion.

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GREATER PRICE TRANSPARENCY

Regulators are demanding clarity from complexity – and pharma must find a way to adapt.

Currently numerous pieces of legislation are being containing the impact of these measures in the near CLICK TO VIEW FIG 1
developed at the state and federal levels to provide term, action by state legislatures across the country
drug price transparency and help governments will continue to accumulate.
tackle rising healthcare costs. Most notable is
There is also growing pressure for greater
the state of California, which passed a drug price
transparency in relations between pharmaceutical
transparency law in October, compelling pharma
companies, Pharmacy Benefit Managers (PBMs), and
companies to provide 60 days’ notice to the state CLICK TO VIEW FIG 2
health insurers, which will likely reshape not only the
if prices are raised more than 16% over a two-year
payer market, but the entire value chain.
period – as well as provide reports on how pricing
affects healthcare premiums in the state. On the Pharma leaders need to model how this could
individual state level, the impact of these legislation impact their businesses – and find ways to sustain
efforts is minor; however, collectively they signal a performance for shareholders.
swing in the market perspective.

Several other states have either passed legislation

or are looking to introduce new legislation. And
the calls for transparency are echoed by multiple
stakeholders: media, shareholder groups, patient
advocacy groups, and consumers (See Figure 1 and
2). While industry opposition will be effective in

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SHIFT AWAY FROM THE DEEP REBATE MODEL

The age of deep rebates will end – requiring a step change in pharma-PBM relations.

The current rebate system provides a platform for A reduced delta between rebate and list price will CLICK TO VIEW FIGURE
payers and manufacturers to differentiate products. present a significant challenge for manufacturers in
However, the system has been broken as value of differentiating their products, and limit the ability for
access is eroding, and manufacturers have been negotiations between manufacturers and payers.
paying more for less. Deep rebates may soon
To strike a balance moving forward, the industry must
become a volume tactic of the past.
find a ‘win-win’ scenario to both protect margins and
We’re already seeing a decrease in the growth of the interests of patients.
branded product list prices and estimate that while
Wholesale Acquisition Cost (WAC) will continue to
grow at approximately 8-11% (See Figure), net price
will grow much slower at only 2-5%2. We are already
beginning to see brand price increases at 7% YTD
compared to 15% two years ago2. The average rebate
sits around the 33% mark 2 ranging from 42% for
traditional primary care brands to 22% for specialty
brands. If list price continues to slow as predicted, we
will see this percentage shrink significantly, placing
greater strain on negotiation efforts between payers
and manufacturers.

2
IQVIA Institute for Human Data Science

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MORE STRINGENT MEDICAL BENEFIT MANAGEMENT

Shifting market forces suggest that Medical Benefit Management – the “Final Frontier”
of payer management – will finally be conquered.

Historically, management of the medical benefit has announced plans to build its own PBM. As these
been limited. Driven primarily by physicians, Prior shifts begin to take root in the broader marketplace,
Authorization and PreCert represented the extent we can expect further disruption of Medical Benefit
of payer management. However, with commercial Management.
medical benefit spend increasing 55% since 2011
The implications for the pharma industry are clear:
(compared to Medicare’s 5%)3, as well as the
integration of medical and pharmacy benefits, we
generating outcomes-based data across speciality
therapy areas will become critical to minimize
VIEW TREND
expect a significant shift in the next 10 years.
downward pressure on prices and commoditization IMPLICATIONS
Our forecasts predict that by 2020, more than half products.
of all specialty medication spending will be under
the medical benefit, and this trend will continue
to 2027 and beyond. Payers are taking note and
investing heavily in new programs and partnerships:
MagellenRX and OptumRX are working on plans
to bring more management to medical benefits;
Express Scripts acquired eviCore, a company skilled VIEW
in medical benefit management; and Aetna recently CONCLUSION

3
http://www.ajpb.com/news/survey-commercial-medical-benefit-spend-jumped-55-in-last-5-years

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IMPLICATIONS

SO WHAT NOW? PRACTICE MINDFULNESS AND ADAPT TO CHANGE

While it remains impossible to predict exactly Move from “Patient Centric” to “Patient Driven”
how events and trends will shape the market
by 2027, corporate level awareness and
preparation will be key to staying competitive
over the coming decade. Manufacturers will
MARKETING
have to “do more with less.” • Leverage technology in new ways
• Personalize medicine through digital health
The average number of patients per launch
brand in the first year has gone from 180,000
in 2007 to 42,000 in 2016. Projecting the
same rates, this number will drop to 28,000 MARKET ACCESS
by 2027. How will companies succeed in this • Treat patients as shoppers
environment? • Engage with payers and influencers
• Gather patient-relevant outcomes

MEDICAL
• FDA considering Patient Affairs office
• Leverage real-world evidence to support value
frameworks and shared decision making in the
clinical development process
NEXT
IMPLICATION

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IMPLICATIONS

ACKNOWLEDGE THE NEW (PAYER) DEAL

Consider increased Value of Redefine

co-pay offset costs “preferred access” contracting
when evaluating total is eroded models
cost of access

NEXT
IMPLICATION

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IMPLICATIONS

WINNING BEHAVIORS FOR 2027

Monitor
Track
Prepare development Proactivity
Detailed spend Define value-
pricing
based price
approach

Partner
Efficiency Practice Team up with
Do more Mindfulness value-based
with less
organizations
VIEW
CONCLUSION

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CONCLUSION

CONCLUSION

The U.S. healthcare market of 2027 will retain All these factors will create a very different Contact us
many dynamics familiar to us today, but relationship between the biopharmaceutical iqvia.com/contactus
emergent trends such as the shift away from industry, payers, physicians, and patients.
deep rebate models, greater price transparency, The often conflicting challenges facing
and increased management within the medical stakeholders will remain, but new approaches
benefit could all be ‘game changers’. to co-operation and risk-sharing will be vital. In
practical terms, this will increasingly depend on
There will also be important technological mutually beneficial contracts to bring innovative
advances: artificial intelligence (AI) has the products to patients at reasonable costs and
potential to streamline drug discovery and with minimal administrative delays.
disease diagnosis and treatment, while the
maturing of genomic profiling will allow the era
of precision medicine to truly arrive. In addition,
the evolving field of human data science, a
combination of deep healthcare expertise and
innovative thinking, will empower patients to
make more informed decisions and enable
improved health outcomes.

PT.0001-1-11.2017
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