Finsights Blog

Is 2015 the Tipping Point for Beyond the Pill?

Joe Jimenez, Novartis CEO, suggested last week that the combination of a “remote patient-monitoring device that the patient could use in their home together with Entresto, … could make an even more serious dent in hospitalization.”

A few years ago, payers would have been skeptical about this type of claimed benefit but today the national plans are very open to creative ideas (e.g. risk share contract arrangements) that have the potential to hold the manufacturer accountable for cost efficiency claims through verification of patient outcomes which aim to potentially lower overall medical costs.

Payers are aggressively pressuring manufacturers for deeper discounts and rebates in exchange for formulary access, especially in competitive categories.  Despite the fact that most manufacturers remain reluctant to pursue risk share contracts for various reasons, there may be an opportunity to improve net revenues through reduced rebate payments to payers and/or reduce reimbursement hurdles (e.g. step edits, prior authorizations, co-pays).  A few successful examples will no doubt accelerate payer interest and manufacturer efforts to find “beyond the pill” solutions.

Back in 2012, Blue Fin Group blogged about what can manufacturers learn from Apple – how differentiation could be achieved by creating a system around the drug. It seems today this idea is starting to taking off.

For the last few years, manufacturers have been conspicuous in their absence at mobile and digital health conferences.  It appears only patients, physicians and health systems saw the potential for using smartphones and wearables to assist with remote diagnosis and ongoing monitoring of patients.

As with all early stages of technology adoption, the lack of evidence makes it difficult to create a compelling business case for investment.  Improving adherence and compliance for chronic medical conditions, such as cardiovascular disease, has been an elusive goal.

Lately, there’s been more evidence of manufacturers engaging in mobile and digital health solutions to improve patient outcomes. For example, manufacturers like Teva and Novartis are launching patient and provider-focused apps in the competitive Multiple Sclerosis category.

The combination of aggressive pricing pressures for payer access, the rapid pace of wearable technology development, and payers’ receptivity to creative solutions for overall cost savings will motivate manufacturers to move beyond the pill. We expect to see more examples in 2015.

This blog post was co-authored by Kent Rogers, Principal Consultant, Blue Fin Group.   Kent is a recognized expert in product commercialization, payer strategy and product development. He speaks frequently at industry events,  and is well-published on the broad commercialization topics relating to pharmaceuticals.   To contact Kent for more insights, please click here.  



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