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In recent years, payers have made an effort to exert more control over physicians’ treatment decisions, especially in oncology. They’ve created clinical pathways that set out treatment guidelines and use prior authorizations and step therapy to encourage physicians to select payers’ preferred protocols and drugs.

The American Society of Clinical Oncology (ASCO), a physician advocacy organization, responded to the proliferation of these pathways in January, publishing recommendations for their use. A number of the recommendations directly address the heart of the issue: How much control should health insurers have over a physician’s treatment decision?

As physicians respond to payers’ increasing involvement in oncology treatment decisions, pharmaceutical companies must hone in on the value that their products hold for each distinct stakeholder in the healthcare ecosystem—including payers, providers, professional organizations and patients.

In his book, The Price of Global Health, my colleague Ed Schoonveld analogizes the treatment selection process to a dinner for three attended by a physician, a patient and a payer. The physician selects the right menu option for the patient, but neither of these two parties picks up the tab. The payer covers most of the cost, even though it doesn’t order the meal.

Payer-developed pathways can be seen as a means for payers to take control over the dinner for three. The payer, not the physician, selects the meal based on what it considers to be the appropriate trade-off between costs and what’s best for the patient.


Figure: Healthcare’s Dinner for Three

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ASCO, on the other hand, wants to help physicians regain their footing in the tug of war over treatment selection. Among their more controversial recommendations, especially in payers’ eyes, is to allow each oncology practice to select a single, approved pathway for all of its patients, regardless of their insurer. This change has also been echoed by patient advocacy groups that view payer pathways as a cost containment vehicle that threatens access to treatment options and the personalization of medicine.

This shared desire for payers to reimburse a provider-selected pathway would represent a drastic reversal in the balance of power. It would strip payers of their role in determining the treatments that physicians prescribe and reduce their ability to negotiate discounts with manufacturers.

This specific recommendation is unlikely to gain much traction with payers, given that they have been pushing for more control over the cost of care. Instead, payers likely will meet physicians partway by simplifying approval processes to ease the administrative burden of pathways.

What does this mean for pharmaceutical companies? Even though they’re not invited to the dinner for three, they certainly have a role in both creating the menu’s options and selecting the meal. Their ability to influence the decisions of each participant rests on how well the value of their product is understood. This starts with collecting evidence (whether from clinical trials or real-world evidence) on a product’s clinical and population health attributes for specific patient populations.

To be most successful, this evidence will need to be supported by a comprehensive strategy that communicates the value of the product. This begins with a holistic pricing strategy that reflects a product’s value at each stage of the patient journey. Manufacturers also should develop a sales and marketing strategy that takes into consideration the different ways that payers, physicians and patients value cost, clinical attributes and health outcomes.

To maintain a degree of influence at healthcare’s dinner party, pharmaceutical companies must improve their ability to advocate for their products’ inclusion on payers’ and providers’ pathways. As a first step, each pharmaceutical company should evaluate how its clinical and commercial strategies can be redesigned to enable the creation and communication of value stories that are most relevant for each ecosystem player.


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Topics: Pharmaceutical, oncology, Ed Schoonveld, value, healthcare ecosystem, Paul Darling, payers, ASCO, pathways, reimbursement