Drugmakers cherry pick launch regions as MFN creates ‘policy environment like an earthquake’

 

With multiple drug pricing initiatives like Most Favored Nation now in force, drugmakers have to reinvent their commercial strategies to stay ahead of the fast-moving policy environment, according to a new report from Numerof & Associates.

No more is launching a drug a “straight math exercise,” as Most Favored Nation drug pricing pressures drugmakers to reconsider launch sequences to ensure the best price can be achieved in the main global market: the United States.

That’s according to pharmaceutical executives interviewed as part of healthcare consulting firm Numerof & Associates’ Thursday report titled “Pharma’s Commercial Reset.” The firm surveyed 157 pharma leaders from 67 companies to come up with the analysis.

When Numerof last conducted the survey in 2024, the industry was coming off the COVID-19 pandemic, when patients rushed to digital and virtual options to access healthcare. This forced drug manufacturers to look beyond traditional boots-on-the-ground sales forces. At this time, price control measures like the Inflation Reduction Act were just being introduced.

Now, the impact of that policy—and MFN—have hit, forcing another upset in commercial strategies.

“Interviewees reported that the current era of policy change is unlike anything they have experienced before—and is unlikely to be temporary,” Numerof wrote. Beyond the U.S., the European Commission has rolled out the Joint Clinical Assessments, a new regulatory framework that assesses the clinical efficacy and safety of new therapies and medical devices. The region is also working on its own drug pricing initiatives.

This means drugmakers can no longer escape regulatory pressures to keep prices down, nor can they justify the high cost of new medicines. One interviewee wrote: “The policy environment is like an earthquake; it’s not going to settle down soon.”

Drugmakers previously treated regions separately. But now, setting a price in one region could affect the potential cost elsewhere. Rather than set the same price across the board, drugmakers are deeply considering where they launch first and what evidence they will use to support the set price. “It used to be a straight math exercise, but now there are a lot of qualitative inputs involved,” one interviewee stated.

“To this end, launch sequencing is particularly important,” Numerof wrote. “Companies are evaluating whether, and when, to launch in individual countries based on the potential downstream implications in other markets, including whether launching in a lower-price market could affect the price achievable elsewhere.”

The firm continued: “In some cases, the implications are significant enough to influence whether a company launches in a market at all.”

This decision-making goes beyond the commercial stage, too, Numerof found. Companies are considering pricing controls in clinical decisions as well, from the specific endpoints for clinical trials to the indications to go after. The interviewees also wondered if the “multi-indication blockbuster drug model”—think Merck’s Keytruda or AbbVie’s Humira—might not be viable going forward.

More targeted therapies for smaller populations “may offer a stronger value proposition and therefore justification for premium pricing,” the firm wrote.

That means drugmakers must reinvent their commercialization strategies. Previously, companies would aim to get across the regulatory approval threshold with less thought toward building evidence of the medicine’s value that payers and health systems will consider before offering coverage.

Teams across the pharma drug development were fairly siloed as they focused on their own goals. This is what needs to change, with one interviewee stating: “We’re currently operating in a world where the commercial engine is often turned on too late in the clinical process. I believe we must flip this model entirely so that the most critical phase of commercialization occurs during Phase 1 and Phase 2, because if you get that foundation right, the backend of the process will be much more streamlined.”

Pharmas have been responding to this new reality by bringing together teams to address commercialization earlier in the process. Several interviewees noted this has changed, with market access and distribution teams brought in earlier than before. “Market access, for instance, used to be a secondary component tacked on to a brand plan. Today, it’s evolved into one of our core strategic pillars,” one person responded.

These changes must be established policy, rather than offering a loose directive to the teams to collaborate more, Numerof noted.

The fast-moving policy environment is also forcing companies to be nimbler, with more communication than ever before. Pharma must be more agile, Numerof argued.

As one interviewee put it: “Every morning it feels like there is another tweet, announcement, policy statement, or market development; and organizations are constantly evaluating how those changes could impact the business and what they ultimately mean strategically and operationally. That pace is forcing teams to communicate more closely, coordinate more quickly, and react in a much more integrated way than in the past.”

https://www.biospace.com/drug-development/drugmakers-cherry-pick-launch-regions-as-mfn-creates-policy-environment-like-an-earthquake