The following post, the second of a two-blog series, is adapted from IntegriChain’s 2022 Access Insights Conference panel session: Best Practices: Pre-Launch to Launch to Post-Launch Optimization featuring Jason Noto, VP, Market Access, AVEO Oncology; Amy Winnen, VP, Head of Value, Access and Policy, Fulcrum Therapeutics, Inc.; and John Bardi, SVP Market Access, Policy & Government Affairs, Intra-Cellular Therapies.

The views and opinions of the panelists are their own and should not be attributed to their employer. Responses have been edited for clarity. The panel was moderated by IntegriChain Executive Director of Operational Consulting Rupal Patel. Did you miss Part 1 of this series?

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Commercialization is a critical process for any pharmaceutical manufacturer, with alignment of multiple work streams that span across market access and brand teams as well as finance and the c-suite. We asked three market access leaders with significant launch experience across varying therapeutic categories about their launch journey–from pre-launch strategy and planning to post-launch optimization.

Patel: What were your pharmaceutical commercialization challenges and how did you overcome them?

Bardi: COVID was a huge hurdle as it was not at all expected nor planned for. We launched the same week the country shut down. This required immediate action and modifying our pharma launch strategies and tactics across all dimensions of our commercial organizations. Small and agile companies can move quickly to adapt to such hurdles and challenges.

I think the other hurdle, and again I go back to my big pharma versus small biotech experience, I didn’t anticipate how a small biotech company would be prioritized by the payer customers. Payer staffs are very busy and although they recognize the importance of your newly approved product, many other priorities are on their plates so responsiveness to your team’s efforts may not be so optimal in the early launch period.

One friendly thing that’s out there that supports payer engagement with manufacturers, and I think it’s a good thing to utilize, is the 2018 FDA-issued guidance on pre-PDUFA engagement with payers. Importantly, your market access group can get out ahead of FDA approval to engage and have conversations with the payers. Make sure to discuss this with your compliance officers or legal counsel as you near that window of time as that is when payers want to hear from you because they’re trying to anticipate the budget impact. While they have no idea if you’re going to get approved, they do want to know things.

Winnen: There are several potential hurdles, and most of them can be overcome with planning and communication. One hurdle not mentioned yet is identifying what you don’t know and making sure you have resources around you to educate and help execute. For instance, many small pharma companies don’t know if they need a P Number – much less how to get it. Launching a new product can be a crash course in education. Other examples of items that can be overlooked: state licenses for distribution in certain states, packaging serialization process, or government pricing methodology documentation. Market access is a long list of behind-the-scenes tasks and projects that require planning and cross-functional communication. You need to ensure you have a sounding board of trusted colleagues and service partners.  Creating a master list of tasks and related workflows that people can reference in the execution phases is very helpful.

Another idea is to tap into knowledgeable resources that you might not traditionally think are willing to provide guidance but often are. In a previous role in the oncology space, we were entering a disease area that already had competition and we wanted to understand what payers were looking for in the therapeutic area to be considered an efficacious and safe product they could possibly cover. We had an internal expert who had outstanding payer relationships, and we were able to create joint sessions with medical directors from a few payers and learn more about what they are looking for. Their guidance helped inform our clinical development plans but also our access strategy. One example they provided was if you have a known biomarker, don’t require a test for that marker unless treatment decisions will truly be based on the results. They don’t want to pay for tests unless it holds value. These early discussions provided a lot of insight into what they were looking for while allowing us, as a small company, to build early relationships.

Noto: The one thing that I noticed when I started my biotech career and left Big Pharma was the importance of being authentic and embracing sort of who we are. As biotech executives, we’re excited to take on these different pharma commercial challenges and go on these learning journeys. I was also really excited to see the willingness of other folks to help along the way.

As I mentioned earlier, we set up a distribution network that’s very friendly to community oncology practices. We focused on the patient and the right programs to support them and the community oncology practices. When meeting with large cancer centers, we admitted that we didn’t have “two nickels to rub together,” to steal the old phrase but were able to convince each of them that we truly needed them in particular to create this successful partnership.

When you’re authentic, embrace who you are, and look to partner with organizations and more importantly people, then people step up and they help you and they embrace your story and support you along the way. That was really a welcoming event for me.

Patel: What advice can you provide around ensuring some more operational effectiveness for gross-to-net?

Winnen: It’s sometimes hard for pre-commercial companies to fully comprehend the new accounting procedures and requirements that come with launching a product. Yes, most companies have royalties or alliance income, but what does it mean when you start to sell products?

I like to start with education and communication: what is gross-to-net? What are the components of it? Where do you have to accrue? What does that look like? What is the order-to-cash process? Where can we use benchmarks? What items are considered expense versus contra-revenue? How will the assumptions be documented? This needs to happen cross-functionally as success will depend on collaboration with revenue accounting, finance, your auditors, legal, account managers, IT, and analytics.

You also need to plan for the data you need to obtain for certain elements of the calculations. Where are you going to get your chargeback data for your 340B sales? Where are you going to get your Medicaid rebate data? If you’re not getting the required data in a contract from somebody, how are you going to make an estimate? Understanding what data you need to inform your gross-to-net model needs to be part of your broader commercialization data strategy.

Remember, you’ll need help and guidance in this area, and every product has its own nuances. I’m a big advocate of outsourcing some of these services, even if just during early launch, to ensure accuracy but also appropriate allocation of internal resources. Gross-to-net modeling and/or processing can often be paired with other services using some of the same data sets such as government price reporting. Services partners like IntegriChain can provide broad consulting on how to structure gross-to-net models but then assist with the close process if needed while helping with data strategy and government pricing.

A key component of gross-to-net is to understand the analytics and industry benchmarks that will be required. One example is understanding the Product Returns rate for products with similar characteristics to create your initial return rate reserve. Talk to your distribution and pharmacy partners about their experiences and expectations. Also, look at SEC filings of companies with similar products for insights into their gross-to-net. Talk to experts like IntegriChain about what they see. You want to be as well-informed as possible. In all cases, the correct data and related analytics and processes are critical for success.

A helpful tool is a detailed monthly calendar. All the accountants love their calendars! Maybe they close the books in the first three days of the month, but quarterly closes take five. But before that close can happen, what do you know mid-month? How are contracts performing? Is there a lag from chargebacks you need to resolve? What are sales expectations? How many sales days are left before we close? You also need to schedule a soft close and look at the early government pricing contract data and when other data comes in and where there might be an adjustment needed. Regular meeting touchpoints are crucial and maintaining strong relationships with the accounting and finance teams.

In addition, you need to keep in regular contact with key related service partners. Having them in the internal pre-close meetings can be helpful if they are your government pricing and gross-to-net partner to highlight any changes or nuances. Additionally, communication between all key internal teams is key to setting expectations for any quarterly inventory fluctuations, sales increases or decreases, and potential adjustments that will be needed. 

It’s so important to plan and have the right data so you don’t have major adjustments later. Remember, if you’re a public company, don’t surprise the street. They don’t typically respond to unexpected adjustments positively. If there is an adjustment needed, you’ll need to be able to articulate why and set future implications.

And speaking of planning, when you’re initially launching, what are the five-year product horizon expectations? What other products are coming out from a competitive standpoint in the next five years? Do you have new indications or expanded populations that might have different price sensitivities for this product? What is your price increase strategy going to be? Have you considered how a changing payer mix could impact price increases as they relate to inflation penalties by government payers? While you might not have to contract now, you might in the future. Just being strategic about when you do things over the long term and when certain regulations might affect your product is crucial.

Bardi: All roads to gross-to-net lead back to the importance of your payer mix. Make sure you understand it; make sure you’re tracking it; and make sure if there are changes you get ahead of it, particularly when you have indication changes.

We constantly work hand-and-glove with finance. We run our own methodologies on a quarterly basis. Finance runs a separate drill. Then we match the two to make sure that they’re in range. We really want to make sure they get this right because we simply cannot make big mistakes.

Sometimes it can be really hard to get it right, particularly on the commercial channel side of the business. If you are utilizing copay, it’s all volume driven. If you’re not anticipating how much your copay program is going to be utilized, it’s going to be very variable and it could surprise you in a quarter if you’re not paying attention to it.

Noto: One of the things that I wanted to point out is that roughly 60% of the inputs of gross-to-net are statutorily required. They’re out of our hands. So that leaves about 40% control.

As you begin to commercialize a product, I recommend you think through the contracting piece and what you really need to do – not what everyone else is doing, but what you need to do. Quantify everything for the short term and map out how you think your contracting will change over the lifetime of your product. Think through the volume that your product should realize versus the budget impact at the payer level or at the PBM level.

Patel: What are your intuitive thoughts of what’s going to happen in the industry next year or five years from now, especially in light of the Inflation Reduction Act (IRA) of 2022? What do you think this emerging pharma space is going to look like?

Bardi: Things will continue as they will, although there will be impacts of the IRA. I think there will be a real desire to make more clinical development supported by pricing policy decisions that make sense in our space and be very careful about what we invest in. I think we will see adjustments in pipelines as people are worried about what are considered high-risk small molecule plays in therapeutic areas. I believe we’re going to start to see choices being made. The fear that our industry’s always had about this type of price control is whether this will slow down innovation, and that’s the one worry I now have.

Noto: Regarding the IRA, the biggest thing that we worry about is price negotiations and what they look like. We worry about when this will start to hit products that many of us work on – not the blockbuster drugs but for the $200 to $300 million products in 2034 and beyond. Will manufacturers offer 1% or 2% discounts or more 45% or 50%? If it’s a low number, it’s probably not going to impact innovation to too great an extent.

Winnen:I think patient access is changing social determinants of health, and its impact to healthcare and medication access is becoming clearer and manufacturers may have to adjust some programs. Also how patients access medication combined with the use of social networks and technology is creating a more educated and empowered patient population. They are more likely to be aware of what’s coming in the pipeline especially now as many companies work with advocacy groups and the increase in unbranded websites and general social media information. Patients now have more resources to figure out if they want to start one product now or wait six months for another product. Also, how one can receive medicine is changing – especially if they can get prescriptions mailed with their other Amazon deliveries. A nurse coming to their home to administer a product and/or obtain required lab samples saves a trip to a clinic or hospital. The voice of the patient as well as how a company accesses and interacts with those patients will continue to evolve.

We thank John Bardi, Jason Noto, and Amy Winnen for their participation on our conference panel and their agreement to share their expertise in this blog series.

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