Monthly Archives: September 2019

The politics of market access

Market access is wrapped in the politics of health

The attention politicians and stakeholders pay to healthcare and its challenges is a keen driver of the ease or difficulty companies experience with drug regulation and market access and has implications through the development process to discovery. How this manifests itself, in part depends on a country’s investment in research infrastructure, availability of scientific talent, as well as the competency and experience of experts in the various regulators, whether HTA or pricing.

One thing that focuses political minds is a crisis in the healthcare system, whether a cluster of unexplained deaths, systematic abuse of payment systems, medical corruption, poor hospital management, declining outcomes, drug shortages, golly, the list goes on. What drives reform, well as Harold Macmillan is reported to have said, “events, dear boy, events”.

Can market access be sensibly undertaken without consideration of political forces? Those who see market access as simply planning will no doubt be surprised when their plans are overtaken by events.

Politics is the exercise of power

Like bankers who need to know their customers, market access specialists need to have deep knowledge of regulators, and the very functioning of government.

In many countries, payers and governments exert monopsony power; they are often the only game in town when it comes to purchasing anything healthcare, whether doctors, hospitals or medicines. And regulators are monopoly suppliers of regulation, whether pricing, reimbursement decisions or HTA. Together, whether in a coordinated way or not, they set the tone for how market access will actually work, quite independently of the actual demand on the clinical ground for a new medicine or therapy.

Sense-making of political forces is a core competency for market access

Public bodies do not exist in a vacuum, but are determined by how political concepts are implemented by governments. In the main, if you are into archetyping, there are broadly three views of how government decides how a healthcare system will work:

1. some things are properly done by non-publicly owned agents because they have proved competent (pharmacies); but this does not mean they are unregulated;

2. some things are a mix of public (hospitals in some cases) and private entities (doctors and general practitioners);

3. some things are generally accepted to be public responsibilities (public health).

Over time, of course, events dictate how governments interpret these three broad roles, and they will move things from one area to another as a function of reform or policy.

What we are seeing right now is the emergence of new ways for governments to regulate through the availability of big data and data analytics. These show up in indicators of hospital performance for instance, or activity based funding. The ability to measure these accurately is necessary.

With even greater power from the data analytics, e.g. machine learning, we can anticipate greater use of predictive modelling of features of healthcare systems. Two examples stand out for me.

The first is pharmacovigilance. A ‘smart (in artificial intelligence sense) regulator’ could directly monitor for adverse drug reactions; this would alter how regulatory action occurs and impact the speed of decision making on safety.

The second is drug pricing. ‘Smart drug pricing’ would enable reimbursement regulators (pricing authorities) to build predictive analytical pricing models of new medicines performance in clinical use to more precisely model value pricing. This would obviously alter the pricing dynamic.

Other factors come and go in terms of acceptability by governments, most notably the role of contestable markets themselves in healthcare. Some, such as Alain Enthoven, believed that competition in managed markets could be a driver of service quality, improve responsiveness to patients, for instance. The purchaser/provider split, so-called, is one approach to apply what I have called a ‘game theory’ approach to setting service standards and quality. Actually, there are two ways to characterise quality in healthcare. One is through (rigid) specification of standards (the Crosby model) and the other is through continuous quality improvement [CQI] (the Deming model); there are others such as 6-sigma, Lean/Toyota, etc., but they are in my view just variants of these two main ways of understanding quality.

A lower tolerance for risk will lend itself to rigid standard setting with a corresponding impact on how new medicines are viewed, e.g. greater need for evidence prior to adoption, versus a higher tolerance for risk through CQI with e.g. conditional approval.

Risk and salience are key factors in politics and hence in market access

Politicians respond to events that are widely salient, while civil servants are tasked with dealing with ‘technocratic’ or procedural matters. Counterfeit medicines, something I’ve worked on, can be either a risk that can kill people, or a factor in intellectual property and copyright. The former is politics, the latter is technocratic. Focusing on the second means dealing with settled matters and the interpretation of rules and regulations. A health crisis, for instance, lifts the event to wider salience amongst the public and in so doing can constrain the freedom of politicians to act or not, indeed, whether they can ignore the issue or delegate it to civil servants. A crisis also creates a window of opportunity though which new ideas and changes can flow – as they say, you shouldn’t waste a good crisis.

Another source of political change comes from rights-based challenges to health policy. While often seen as only of relevance within legal rule sets, (i.e. technocratic), they are about citizens’ or patients’ rights and access to treatment and therefore have high public salience. In the US, right now, there is a major political issue around the ‘deferred action’ programme which funds care for immigrants. Hitherto a technocratic issue, it is now widely salient (people in general are learning about it) and politicians (a.k.a. lawmakers) actions are now constrained, perhaps tellingly by moral factors. Other noteworthy historical examples are the Chaoulli case in Quebec and the various cases decided by the European Court of Justice on portability of healthcare benefits in the EU.

Politics and policy options determine how costs and benefits are distributed

Underlying political positioning is how policy implementation distributes the costs of a policy and the benefits of a policy (whether in time, money or resources). This type of analysis, from the work of the political scientists James Q Wilson, is revealing as it lays bear these underlying assumptions and the real world impact of a policy and its implementation. Examples where this approach is useful includes analysing drug rationing (approvals, defining treatment cohorts), price controls, reimbursement (or not) of branded generics, health technology assessments, and more generally the logic of market access. What we learn is where the costs sit and where the benefits sit, and importantly, who pays and who benefits. Such an analysis is profoundly revealing for identifying, for example free-riders, and the NIMBYs, two groups where there are often strong socio-political beliefs arising from political ideology transferred into policy.

Approaching market access purely as a technocratic exercise will under-power the associated solutions for market access initiatives. There is a good reason to know how and in what way the benefits of a new medicine are distributed (to whom and how), and what those costs are, whether measured in money, time, risk or opportunity. These considerations, drawn from the ability to apply relevant political analysis and insight, adds explanatory power and relevance, for instance, market entry strategies, or identifying gaps in evidence.