As described in our “What is a payer?” educational blog, payers are responsible for making choices on which products or services to fund from limited healthcare budgets. The way in which payers make these decisions varies by market. These differences can often be used to cluster markets into “payer archetypes”, of which there are five main types:
- Clinical differentiation archetypes. In these markets, such as Germany and France, payers compare clinical evidence for similar products to identify the additional clinical benefit of the new product. Level of clinical benefit can be assessed via a scale (for example, in Germany, the GBA will provide a “level of quantifiable benefit”), with higher clinical benefit over standard of care enabling higher prices.
- Health economic archetypes. In markets such as the UK, Australia, Canada and Sweden, payers make decisions based on value for money of a new intervention in terms of both their costs and clinical outcomes. Value for money is formally evaluated using health economic models. There are various types of health economic models, such as cost effectiveness, cost minimisation or cost utility models.
- Budget driven archetypes. For markets such as Spain, Italy, Turkey and Japan, price and reimbursement is primarily determined by budget impact at either a national, regional, or local level. Budget impact analyses are used to estimate the financial consequences of a new treatment within a specific healthcare setting given inevitable resource constraints.
- Patient out-of-pocket archetypes. In countries such as Brazil, Hong Kong, Indonesia and Singapore, cost of treatment is predominately paid for by the patient. In some cases, such as Brazil, even with universal health coverage, there is large private and out-of-pocket (OOP) health expenditure.
- Free-market competition. In the US, price is based on market considerations with limited regulation. Manufacturers launching products within the US must negotiate with multiple organisations including Medicare, Medicaid and private insurers to gain access to product formularies. It should be noted that whilst the US is often characterised as a “free-market” archetype, it also has high patient out-of-pocket expenditure.
Overall, each payer archetype has a number of pricing and market access decision drivers and therefore pricing and market access strategy must be tailored to the individual payer archetype and country system. Remap Consulting has global pricing and market access experience across various markets across the globe and has also developed pricing and market access training for a number of US, European, South American and Asian markets.
Contact us if you would like to learn more about the training we have to offer.