New risks pharma and biotech face from payers' focus on health care value of biologicals

Written by Bruckner Group partners Michael Russo and David Balekdjian, an article in the February issue of Nature Biotechnology, titled Weighing the Outcomes, explores how the intensification of managed care and employer influence over patient access to biological drugs is presenting new risks for pharmaceutical and biotechnology companies, and provides advice on what companies can do about it. Weighing the Outcomes is a white paper on creating enterprise-wide change in these firms. It says that, to remain competitive, companies must centralize the development and commercialization of drugs with compelling health care value as a mission-critical organizational necessity.

The article advises that many pharmaceutical and biotechnology business models are broken. Most companies' development and commercialization processes are not compatible with payers' requirement that drugs deliver compelling health care value to receive broad market access. It further presents advice to company executives on business model, functional process changes and re-structuring needed to ensure consistent delivery of drugs with demonstrable health care value that meet the needs of patients, physicians and payers.