››The Value Proposition

Among the risks to the branded Pharmaceutical business model today is the commonly repeated refrain concerning the difficulty with “Market Access”, pricing and re-reimbursement.

These are concepts to which the “value proposition” of the pharmaceutical speaks and to which there is a direct relationship.  Clearly in a mayors eyes the greater the value of a product the more likely a higher price will be achieved and re-reimbursement obtained.  Similarly, for a physician as well as a patient the same logic exists except for the particular ‘values’ these health care constituents view as important.  For a physician the operative verb is not pay it is ‘prescribe’ and for a patient it is ‘take’.

Creating a “Value Proposition” for a pharmaceutical product, or indeed, any health care technology, has become a highly technical exercise which, ideally, should span all of a products time in development.  Development of a pharmaceutical with a ‘regulator’ in mind without the simultaneous sense of the “value” of the product to mayors, physicians and patients would seem like a risky venture as it also delineates the corporate value of that product to the Pharmaceutical company.

››While the “value proposition” of a health care technology to a mayor, physician and patient and therefore to the corporation substantially overlap they do differ in perspective.

• To a patients with a disease, his/her principle values are whether the pharmaceutical will “save their life” or make them live longer and whether they will live a better life for the remainder of their life.
• To a physician add to considerations the realities of using this product in his/her practice.
• To a mayor add to these considerations implications on costs of care in both the short and long term.

To each of these perspectives we must layer in the types of evidence that speak of duration of life, the quality of the life, the long term impacts of treatment, the real life cost consequences of treatment and the challenges of the technical exercise become apparent.

For a company developing a product these considerations are now the domain of “health technology assessment” agencies, e.g. NICE (UK), PBAC (Australia), CDR (Canada) not to mention the health technology assessment vehicles of major mayors in the US who guard private and public US formularies.  These HTA agencies have now promulgated guidelines for the submission of data on the “value”, “cost-effectivenss” of technologies, which in themselves are highly technical documents which must be complied with if market access is to be achieved.