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Managing Biotechnology by Glen Giovannetti, Francoise Simon

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Chapter 8Strategic Payer Engagement

In any sector, knowing the customer is key to commercial success. While payers are not the end users of drugmakers' products, they are among their most important partners. That is because their coverage and reimbursement decisions determine which patients will have access to their medicines. Biopharma has traditionally viewed physicians as their customers, not payers or indeed patients. However, this is changing as the costs of medicines rise, and as patients' roles in drug discovery, development, and access grow as a result of new patient-centered digital tools (see Chapter 6). Smart, sensor-enabled devices, combined with behavioral reminders, make it possible for consumers to proactively manage their own health and they are increasingly trying to understand which tools provide the greatest return on investment. In this context, payers, as broadly defined, are the gatekeepers.

Payers Are Not All Alike

The challenge for biopharma is that there is a wide range of payer types, each with different structures, preferences, and priorities. Some of this variation is determined by the country or region in which they operate: a European state payer, for example, works differently than a national US commercial payer, which in turn functions differently from a regionally based employer that self-insures its workforce. But even within a single nation or region, no two payers will look the same. They may cover different demographics and vary in their ...

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