McKinsey: High impact interventions to rapidly address market access challenges

Check out a real Mckinsey presentation on innovative health contracts.

McKinsey Presentation: High impact interventions to rapidly address market access challenges

Key Learnings from the Presentation

The McKinsey report on “High-Impact Interventions to Rapidly Address Market Access Challenges” provides a comprehensive analysis of the evolving landscape of market access strategies, particularly focusing on innovative contracting in the pharmaceutical sector. Here’s a detailed summary capturing the main takeaways and actionable insights:

Overview of Innovative Contracting

• Innovative Contracting Landscape: The report highlights a trend towards more innovative contracting mechanisms within the U.S., noting that while these contracts are increasingly visible, their actual numbers remain low. These contracts often remain confidential and are not publicly disclosed.

Types of Innovative Contracts

• Predictability and Outcomes-Based: Two primary types of contracts dominate—predictability and outcomes-based. These contracts help manage risks such as budgetary, outcome, dosage, over-utilization, off-label use, adherence, and safety.
• Contracting Trends: Previously, innovative contracts were mostly concentrated in specific therapeutic areas like oncology and cardiovascular diseases. However, they are now being utilized more broadly across various drug categories, particularly for newly launched drugs and specialty, high-value brands.

Implementation Challenges

• Barriers to Execution: The implementation of innovative contracts faces several barriers, including complexity, the need for robust infrastructure for tracking and managing contracts, and high execution costs.
• Payor and PBM Perspectives: Not all payors and PBMs have the same appetite for innovative contracts. Organizations like Cigna and CVS Health have been more open to adopting such approaches.

Strategic Considerations

• Objectives for Pharmaceutical Companies: The objectives for engaging in innovative contracts include maintaining formulary positions, aligning incentives with payors, and demonstrating a commitment to addressing broader health issues like the opioid crisis.
• Market Access Strategy: The report discusses strategic market access considerations, emphasizing the importance of aligning drug pricing and reimbursement strategies with the evolving expectations of payors and regulatory bodies.

Recommendations

• Customizing Contract Offerings: Companies are advised to develop a clear and communicable “menu” of innovative offerings, typically involving 2-3 options with straightforward terms.
• Navigating Regulatory and Legal Challenges: Ensuring compliance with legal and regulatory requirements is crucial, especially when contracts involve complex pricing schemes or risk-sharing arrangements.

About McKinsey

McKinsey & Company stands as a premier entity in the global management consulting sphere, initiated by James O. McKinsey in 1926. Anchored in New York City, this firm has carved a distinguished position in the consulting arena, offering strategic guidance across the globe to a diverse clientele that includes businesses, governments, and various institutions.

Want to see more? Head to the collection here:

Management Consulting Collection