Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research & Strategy
/ Communicated
• PDCI and H3 designed an online survey seeking stakeholder insights on private payer PLAs from pharmaceutical manufacturers and private payers.
• In total, 30 complete responses were received from 25 individual pharmaceutical companies and five different private payer representatives.
o Pharmaceutical participants included senior market access managers with private payer accountability.
o Responding private payers were senior product and claim managers working in group benefits at insurance companies or pharmacy benefit managers (PBMs).
• Participants were surveyed from June 18 through July 18, 2016, and were assured of complete anonymity.
For a free copy of the report, please contact one of the authors.
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research & Strategy
/ Communicated
• Respondents were sorted into one of four question streams based on their stakeholder category (manufacturer or private payer representative) and whether they had experience negotiating private payer PLAs.
Manufacturer
Negotiation NaïveNegotiation
Experienced
N=25
N=14 N=11
Private Payer
Negotiation NaïveNegotiation
Experienced
N=5
N=4 N=1
This slide deck focuses on Negotiation Experienced Respondents.
One incomplete response was entered in each stakeholder category. These respondents did not complete the survey and thus are not counted in the recorded sample sizes.
Figure 1. The percentage of manufacturers and private payer respondents indicating they have successfully negotiated a PLA agreement: manufacturers (n=25) and private payers (n=5).
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
56%
44%
80%
20%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Yes No
% R
esp
on
den
ts
Responses
Manufacturers
Private Payers
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research &
Strategy / Communicated
Figure 2. The drug product type(s) for which successful PLAs were negotiated by manufacturer (n=14) and private payer (n=4) respondents.
11
4
0
1 1
4
2
1
0 00
2
4
6
8
10
12
Specialty Drug TraditionalDrug
Oncology Drug Drug for a RareDisease
Prefer Not toDisclose
Re
spo
nse
Co
un
t
Drug Types
Manufacturer
Private Payer
Specialty vs traditional drugs as explained in the survey.
Specialty Drug: Medications used to treat chronic, complex conditions. They are usually costly, require special storage and handling, need intensive clinical monitoring and require frequent dosing adjustment.
Traditional Drug: Medications that are easy to self-administer and require less intensive clinical monitoring, such as those used to treat diabetes and high blood pressure.
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research &
Strategy / Communicated
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
0 2 4 6 8
<1 year
1 year
2 years
3 years
Response Count
Agr
eem
ent
Du
rati
on
Private Payers
Manufacturers
Figure 3. Average duration of PLAs negotiated by manufacturer (n=14) and private payer respondents (n=4).
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research &
Strategy / Communicated
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
Figure 4. Rationale provided for PLA negotiation from manufacturer (A: n=14) and private payer (B: n=4) perspectives.
A B
Response Counts
Rat
ion
ale
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research &
Strategy / Communicated
0 1 2 3 4 5
The manufacturer approachedus about negotiating a PLA
They have a drug product ortherapeutic class suitable for a
PLA
Positive relationship withmanufacturer
Key or high profile productcoming to market
0 2 4 6 8 10 12
Request from private payer
The number of patient lives covered
Positive relationship with the payer
PLA was required for listing
Other*
Counter historical negative listingrecommendations by the payer
*Manufacturer “other” responses refer to “retaining criteria in the face of competition”, “not applicable”, and “inadequate preparation on behalf of payers to cover costs associated with the therapeutic area in question”.
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
Figure 5. PLA experienced manufacturer (n=14) and private payer (n=4) perspectives of the leverage held by manufacturers in a PLA negotiation.
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research &
Strategy / Communicated
0%
10%
20%
30%
40%
50%
60%
70%
80%
First to market/Fulfillsunmet need
Competitive price Supporting services Experience innegotiating PLAs
Other*
Res
po
nse
Co
un
ts (
%)
Leverage
Manufacturer
Private Payer
*Manufacturer “other” responses refer to “knowledge of the market” and “best in class products”.
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
Figure 6. PLA experienced manufacturer (n=14) and private payer (n=4) perspectives of the leverage held by private payers in a PLA negotiation.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
The size of thepayer's book of
business
Experience withnegotiation
Coverage ofexisting products
Payer could refuseto list without a
PLA
Market reputation Restricted accessto similar products
Other
Res
po
nse
Co
un
ts (
%)
Leverage
Manufacturer
Private Payer
*
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research &
Strategy / Communicated
*Manufacturer “other” responses refer to payer “further restricting listing”.
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
9
4
1
3
Price rebate
Cap on expenditures(cost per patient)
Cap on expenditures(total cost)
Pay for performance
Outcome based
Other
4
2
1
1
1
Price rebate
Cap on expenditures(cost per patient)
Cap on expenditures(total cost)
Pay for performance
Outcome based
Other
Figure 7. PLA types negotiated as per manufacturer (A: n=14) and private payer (B: n=4) respondents.
A B
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research &
Strategy / Communicated
* *
*Manufacturer “other” responses refer to “criteria”, “not applicable”, and “prefer not to disclose”.
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research &
Strategy / Communicated
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
Figure 8. Average negotiation process duration as per manufacturer (n=14) and private payer (n=4) respondents.
0
1
2
3
4
5
6
7
0-6 months 6-12 months ≥ 12 months
Res
po
nd
ent
Co
un
t
Average Negotiation Time
Manufacturers
Private Payers
Negotiation process, as defined in the
survey, is the time from initial
communication to the agreement’s
execution.
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
Figure 9. Respondents’ perspective on the issues encountered while negotiating PLAs (manufacturers n=14, private payers n=4).
0 2 4 6 8 10 12
Financial reconciliation of PLAs
Confidentiality of PLAs
Clarity of PLA process
Timeliness or duration of negotiation process
Appropriate expertise or adequate flexibility from oppositenegotiating party
No issues
Other
Respondent Count
Issu
es
Manufacturers
Private Payers
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research &
Strategy / Communicated
*
* Based on manufacturer responses, “Other” includes “not applicable”, “the variance of payers to implement various strategies” and “negotiations with private payers in the early stages lead to many of the issue options provided”. Based on private payer responses, “Other” refers to “level of data requested”.
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
Figure 10. Respondent perspective of how well the negotiated PLA delivered on their expectations(manufacturers n=14, private payers n=4).
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research &
Strategy / Communicated
0 2 4 6 8 10 12
Strongly disagree
Disagree
Neither agree nor disagree
Agree
Strongly agree
Respondent Count
Ne
goti
atio
n S
atis
fact
ion
Manufacturers
Private Payers
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research &
Strategy / Communicated
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
Conclusions and Outlook• PLA activity is growing quickly, driven by both private payer and
manufacturer interest.
• Manufacturers have significant public PLA experience and are more sophisticated. Few insurers have PLAs, but they are the largest ones and are positioning themselves to control access to high-cost new drugs.
Overall, the private market is cautious: agreements are shorter and focus on product price. Private PLAs will become more standardized.
• Manufacturers will require a strategy that understands the evolving and different interests, players, goals and resources of the private market.
• Insurers will need to measure and communicate the value of PLAs to plan sponsors and members in order to commit more resources to this tactic.
Copyright© 2016 by PDCI Market Access Inc. and H3 Consulting. The information presented is the property of PDCI Market Access and H3 Consulting. Unauthorized reproduction or distribution of this material is prohibited.
Arvind ManiDirector of Strategy, Policy and Business
DevelopmentPDCI Market Access
Cell: 613.864.8645 Email: [email protected]
Sherry O’QuinnDirector of Reimbursement Strategy
PDCI Market Access
Cell: 647.717.3179 Email: [email protected]
Chris BonnettPrincipal Consultant
H3 Consulting
Cell: 416.458.5468 Email: [email protected]
Second Joint Industry/Payer SurveyReleased November 2016
PRIVATE PAYER PRODUCT LISTING AGREEMENTS (PLAs) IN CANADA
H3 ConsultingHealth Research &
Strategy / Communicated