Progressions – Navigating the payer landscape

Global pharmaceutical report 2014


How soon is the move to outcomes and value becoming real?

How do pharma companies make sense of the complex and changing payer landscape?

How much should pharma companies invest now?

What investment approaches should pharma companies use with different payers?

How do pharma companies move beyond pilots to larger-scale solutions?

EY - Progressions 2014: Navigating the payer landscape in pharma
  • Share
The rise of the payer

For pharma companies, dealing with a fragmented and rapidly changing payer universe poses challenges and raises some key questions.

In addition, it has been two years since our last report, Progressions 2012 came out, and much has happened in that time frame with respect to the industry’s business model innovation efforts. As a result, companies also have some important questions about business model innovation.

To address challenges in both of these areas, this year’s report focuses on a few key questions — issues that appear to be top-of-mind for our clients with respect to payers and business model innovation.

Central questions explored in this report

A few definitional issues: We often use the term “payers” loosely to refer to both traditional payers (insurance companies and governmental bodies) as well as other entities that are increasingly acting like de facto payers (e.g., many providers and employers). We also focus primarily on large markets in which all or most citizens have health insurance coverage, since the move to outcomes and value is being driven by institutional payers. 

1. The pace of change
How soon is the move to outcomes and value becoming real? Is there any real urgency for us to act now?
Health care is changing rapidly. Early-mover advantages could make it difficult to enter later.
2. Understanding payers
What do payers want? How do we make sense of a complex and changing payer landscape?
Our survey found broad similarities in payers’ needs (e.g., budgetary predictability) and key gaps between pharma and payers (e.g., comparative trials and trust).
3. Investment strategy
How much should we invest now versus later? What approaches do we use with different payers? To what extent, and in what ways, do we need to move beyond the product?
We add a new paradigm to the business model innovation toolkit: strategic payer engagement (SPE), a framework for screening, segmenting and sequencing payers and offerings.
4. Beyond pilots
How do we move beyond pilots to larger scale solutions?
Payers are tired of pilots; companies need fewer dead-end experiments. SPE provides an answer, by creating a map for scaling up solutions from the outset.