Patient Assistance Programs: Industry and Payer Perspectives (2016)

July 2016

A FirstWord ExpertViews Dossier Report

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Patient Assistance Programs:Industry and Payer Perspectives (2016)

Published August 2016© Copyright 2016 Doctor’s Guide Publishing Limited

All rights reserved. No part of this publication may be reproduced or used in any form or by any means graphic, electronic or mechanical, including photocopying, recording, taping or storage in information retrieval systems without the express permission of the publisher.

This report contains information from numerous sources that Doctor’s Guide Publishing Limited believes to be reliable but for which accuracy cannot be guaranteed. Doctor’s Guide Publishing Limited does not accept responsibility for any loss incurred by any person who acts or who fails to act as a result of information published in this document. Any views and opinions expressed by third parties and reproduced in this document are not necessarily the views and opinions of Doctor’s Guide Publishing Limited. Any views and opinions expressed by individuals and reproduced in this document are not necessarily the views and opinions of their employers.

Cover image: © Raimundas/ Africa Studio | AdobeStock

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Patient Assistance Programs:Industry and Payer Perspectives

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ContentsExecutive summary .............................................................................................................................. 1

Research objectives and methodology .................................................................................3

Patient assistance programs: an overview .........................................................................4

Key findings .................................................................................................................................................4

What are patient assistance programs? .............................................................................................5

‘True’ PAPs provide free drugs to those who genuinely cannot afford them ............................6

Financial assistance schemes provide mechanisms for patients to receive products at a discount ..............................................................................................................................8

Coupons and co-pay assistance provide instant discounts at the point of purchase .......9

Free trials and samples are beneficial for patients, physicians, and pharma companies .... 11

Rebates are less commonly used and not generally favored by industry or payers ......13

Why are PAPs needed? .......................................................................................................................14

PAPs for chronic diseases and specialty products are seen as more valuable ...............16

PAPs deliver a range of benefits ........................................................................................................18

PAPs are viewed negatively by many, particularly payers ..........................................................20

The administrative burden associated with PAPs can be a drawback ................................22

Industry perceptions of PAPs .....................................................................................................25

Key findings ...............................................................................................................................................25

There are a variety of reasons why pharma companies implement PAPs ..............................26

Patient affordability is the major driver for PAPs .......................................................................26

PAPs enable physicians to gain experience with products .................................................... 27

PAPs are also driven by commercial needs ...............................................................................28

Industry views payers’ negative views of PAPs as somewhat unjustified ...............................30

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Insurers are seen as driving a need for PAPs ............................................................................ 31

Working with payers to demonstrate PAPs’ benefits could drive greater acceptance .......33

Payers’ perceptions of PAPs........................................................................................................35

Key findings ...............................................................................................................................................35

Payers have traditionally seen PAPs in a negative light ..............................................................36

Payers see high pharmaceutical prices as the main driver for PAPs ..................................36

Payers believe that pharma uses PAPs to remain competitive ............................................ 37

Payers recognize PAPs deliver benefits to patients in financial need .....................................39

Engaging with payers may help change perceptions of PAPs ..............................................40

Future evolution of PAPs ................................................................................................................43

Key findings ...............................................................................................................................................43

PAPs will continue to be used but will evolve ..................................................................................44

The payers believe a revision of pharmaceutical pricing could reduce reliance on PAPs ......45

Changes in insurance coverage may alter eligibility criteria .................................................. 47

Case study: Gilead restricts enrollment in its PAP but other companies are seen as unlikely to follow suit ............................................................................................50

Industry does not expect that legislation will be enacted to restrict PAPs .........................52

Technology will affect the way PAPs are conducted .................................................................54

Mail order pharmacy could become a hurdle for PAPs ......................................................55

Engaging with payers to ensure PAPs meet their needs may overcome resistance ..........56

Using PAPs to generate data would be valuable for all stakeholders ................................. 57

Patient assistance programs – SWOT analysis .............................................................................60

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Patient Assistance Programs:Industry and Payer Perspectives

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Research objectives and methodologyThis FirstWord Dossier report provides a qualitative analysis of the current environment for PAPs and how these programs are expected to evolve in the next three to five years.

The information for this report was gathered from multiple sources, including comprehensive secondary research across multiple publically available sources of information and primary research that involved in-depth telephone interviews with four US payers, two pharmaceutical industry representatives (all anonymous), and Nathan White, Global Practice Lead, Access Pathways and Outcomes, ApotheCom, a medical communications agency.

These experts were selected on the basis of their current and previous roles and experience in relation to PAPs. The objectives of the interviews were to:

nUnderstand the advantages and disadvantages of PAPs from payer and industry perspectives;

nUncover the key drivers of PAPs from a pharmaceutical company perspective, including the reasons for implementing them;

nAssess the specific future challenges of PAP development and management in the US;

nEvaluate the ways in which payers and industry can interact in order to ensure a positive view of PAPs;

nDetermine what payers and manufacturers expect to happen in the future in relation to PAPs.

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Rebates are less commonly used and not generally favored by industry or payersRebates are slightly different as the patient is required to pay upfront for their drug costs and then apply to the manufacturers for their out-of-pocket expenses. They are generally less favored as patients have to find the money to pay for the drug in order to access it in the first instance; while they do receive this money back, the initial outlay can be prohibitive for some patients, as this US payer explains.

“Any process that is retroactive reduces the opportunity that all patients will actually end up with their medications in their hands. A fair amount of patients just don’t have the resources to make that initial purchase. That hurdle of actually being able to afford the initial purchase is significant for people. There’s plenty of evidence to show when people are at the lower end of the economic strata or have low or no income, their purchasing decisions really are based on the resources they have today—not resources that they might receive as a result. Their decisions may be, are they going to buy food for the table or buy the medications? I think anything that happens after the point of purchase is just going to be a disincentive to purchasing the drugs in the first place.”

US payer

Moreover, as an executive from a drug manufacturer comments, technological advances have rendered retrospective rebates redundant, as software allows for instant discounting at the point of purchase, which is seen as more effective both in terms of enhancing the likelihood of a patient filling their prescription and also driving patients towards a particular product, as they can instantly compare the discounted prices of different drugs for the same indication.

“They’re not really used—they are few and far between because what happens with the rebate is that the patient would have to pay out of pocket and then submit their paperwork and then be reimbursed. Technology has caught up where you could provide that discounting at time of purchase rather than after. They are not really required any more given the technology that’s available in the pharmacies.”

Pharma industry executive

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Working with payers to demonstrate PAPs’ benefits could drive greater acceptanceThe industry executives understand that most payers do not view PAPs or financial assistance programs favorably, but feel that applying a generalization across all programs is unfair, and does a disservice to the different kinds of programs that are in place.

“I do believe that PAPs are there as goodwill, as part of being a good citizen and a partner. There’s no real benefit—these programs are expensive to run as far as just getting the staff to approve everyone that wants to participate. If you think about it, if they’re giving away product, what is the benefit to the manufacturer?”

Pharma industry executive

Indeed, as another pharma executive states, payers should not just be differentiating between the charitable PAPs and the financial assistance schemes in terms of their negative perceptions, but also between the different financial programs, as some can be seen as more justifiable than others.

“There are over 750 different kinds of coupon offers in the market today, and on the payers’ side they don’t like any of them. It’s always interesting to have them comment on the difference in their feelings on these offers based on the formulary status of the products. They tend to be more concerned about a product that is at a Tier 3 position on their formulary or otherwise restricted on their formulary. So the coupon programs for these could be seen as more problematic for them than if the brand is a Tier 2 unrestricted preferred product. In this case, the offer programs should be less problematic for them. I can understand them being concerned about the ones that from their point of view are impacting on their ability to have patients on a preferred product versus the non-preferred product.”

Pharma industry executive

Nathan White from the medcomms agency ApotheCom supports this view, further explaining how the manufacturers have a significant cost outlay associated with the financial assistance programs and that these schemes are not undertaken lightly.

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