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COVID-19 Implications for Pharma: US Payer Insights

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COVID-19 Implications for Pharma: US Payer Insights
Published: May 21, 2020
Delivery time: 1-2 business days
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What are the implications for pharma as COVID-19 forces fundamental change in US payer practice and policy?

The COVID-19 pandemic has created a unique set of challenges for US payers. In the short-term emergency healthcare packages have included increasing patient access to medicines, waiving co-pays, relaxing prior approval requirements and increasing telemedicine services. But longer term? The commercial healthcare market is likely to contract and demand for Medicare/Medicaid will increase. Payers are looking at a very different post-COVID-19 world and the impact on drug prices, formulary coverage, generic use and plan coverage will present significant hurdles to drug manufacturers.

Pharma needs to plan for a new long-term reality. To explore current thinking we interviewed, in ‘COVID-19 implications for pharma: US payer insights’, experienced US payers to give you a clear perspective of the immediate actions being taken and the emerging issues and trends that will shape pharma/payer relations.

Payers explore key issues

  • What emergency measures are in place to ensure the health plans address customers' medical needs and will these need to be reconsidered on an ongoing basis?
  • What precautions are currently being taken to negate the impact of costs directly related to COVID-19 such as screening, hospital admissions and long-term treatment of COVID-related health issues?
  • What impact could COVID-19 have on private healthcare plans and Medicare/Medicaid and their formulary coverage, market access to medicines and the role of telemedicine services in the future?
  • How might COVID-19 impact policy on co-payments, premiums and patient selection criteria for treatments in the future?
  • What impact could COVID-19 have on pricing and reimbursement of drugs and the role of value-based contracting?

What US payers say...

"The commercial healthcare market is going to shrink no doubt. And of those that survive, are employers going to afford and want to pay for extraordinarily high price tags including gene therapy? We have some employers, especially small employers, [who] if they get hit with a million-dollar-a-month claim (and this is the norm in oncology, or CAR-T-therapy, or gene therapy at 2.1 million), they can't stay solvent." US Payer 2.

"I think we're still going to see more value-based care; it's just on pause while we deal with this crisis. The logistics of getting new agreements signed and implemented is a problem but perhaps it will break down some of those barriers and let payers and manufacturers address them together so that it is not as administratively burdensome." US Payer 1.

"I think we will see more of a switch to generics where they are available. There is still an issue of inflated costs and complex contracts and pricing transparency; and who's getting rebates and discounts and who keeps those dollars? I don't think those will go away but I think fundamentally we are looking at more closed formularies where some categories may not have branded options if there are low-cost generics available." , US Payer 2.

What to expect

  • A detailed investigation of how COVID-19 has impacted US payers, the short-term measures they have put in place and the long-term implications for pharma
  • An examination of the key issues which pharma need to understand and respond to
  • Answers to 20 targeted questions put to experts
  • Their perceptive responses that provided 19 insights supported by 60 directly quoted comments

Expert payer contributors

  • US Payer 1: is a Pharmacy Vice-President with a leading US Payer and has been working in the payer environment for more than 18 years. Payer 1 performs various leadership roles and is responsible for the growth and profitability of the business, developing business strategies, industry and trade relations and creating and executing strategies in sales, marketing, clinical, quality and products.
  • US Payer 2: is a Medical Director, Regional US Healthcare Insurer, representing multiple states and has been the Chief Medical Officer at a provider-sponsored US health insurance company for the past 18 years, with responsibility for biosimilar formulary placement and contracting decisions. A Senior Physician Executive, Payer 2 has worked for over 20 years in managed care in Medicare and Medicaid and is an expert in population health, pay for performance, provider profiling, medical cost control and analytics, network development, PBMs, product strategy and sales, and integrated systems.
  • US Payer 3: is a Pharmacy Director with responsibility for several large national and regional health insurance clients, as well as within the pharmacy benefit management industry. Payer 3 is responsible for the development of clinical strategic initiatives and the creation of new benefit designs and programmes. Payer 3 has extensive knowledge and experience with formulary and coverage decisions and establishes criteria to encourage drug therapy that is both appropriate and economical through the implementation of utilisation management programmes, including prior authorisation, quantity limit and step-therapy programmes.

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Product Code: 596201695

Table of Contents

Subject synopsis

Research methodology and objectives

  • Desk research
  • Expert interviews
  • Research Objectives

Key insights summary

Issues and insights

  • COVID-19 immediate impact on US healthcare
    • Issue summary
    • Questions
    • Key insights
    • Supporting quotes
    • Intelligence exhibits
  • US payer emergency strategies in response to COVID
    • Issue summary
    • Questions
    • Key insights
    • Supporting quotes
    • Intelligence exhibits
  • Future impact of COVID-19 on US healthcare
    • Issue summary
    • Questions
    • Key insights
    • Supporting quotes
    • Intelligence exhibits

Further reading