In this Asia-Pacific (APAC) market access update, Jeff Weisel (Senior Strategic Advisor) of Avalere Health moves the focus to emerging markets.
He discusses their characteristics, what distinguishes them from developed markets and from each other, and crucially, how pharmaceutical and biotechnology companies might best be able to access them strategically.
Although his focus is usually on the APAC region, Jeff’s observations can be applied to emerging markets in other parts of the world, including Africa and Latin America. Though each market has its own unique features, grouping markets into archetypes can be a useful approach in developing access strategies that fit local opportunities yet are scalable globally.
Market access continues to evolve into a more holistic approach, and this is especially relevant for emerging markets. In developed markets, where payer systems and processes are mature and well-funded, market access requires a structured approach based on submitting evidence of value for the payers. In emerging markets, however, payers are still at various stages of maturity as part of the broader development of the overall healthcare system in each country.
On access in emerging markets, Jeff notes that:
- Less developed payer environments require a broader view of affordability that includes government funding as well as how this combines with private payers and out-of-pocket spending to allow access
- Beyond affordability, access strategies in emerging markets also consider the overall maturity of the healthcare system: in particular, the barriers to access relating to the availability of care and the awareness of disease
- Building market archetypes based on these factors lead to access models that are appropriate to the markets and bring treatments to more patients globally
- Implementing successful access models in emerging markets often requires collaboration with new stakeholders and business partners to meet the needs of local operating environments.
The focus and challenges for access in APAC emerging markets
In my previous article, ‘5 insights for improving pharmaceutical market access in Asia-Pacific’, I touched on some of the challenges presented in emerging markets in the APAC region when compared with more mature markets. The obvious starting point is in healthcare expenditure where there is a clear gap between mature markets spending at least $3,000 per capita and emerging markets spending less than $1,000.
Having less to spend means a difference in priorities for governments – the focus in emerging markets continues to be more on building capacity in both physical infrastructure and human capital. Developed markets with infrastructure in place prioritize efficient utilization and high service quality. In funding, the primary concern will remain containing the budget impact and pricing over assessing the outcomes value of interventions.
In this article, we will go deeper into the challenges in emerging markets in APAC and other regions and outline a framework for biopharmaceutical companies to approach market access options in these markets. First step is to define the market characteristics and provide structure for that approach.
Follow the money first
If healthcare expenditure is the starting point, then any framework for understanding access must begin with affordability. One way to assess affordability is to map the relationship between individual resources (e.g., GDP per capita or household income) and the level of healthcare funding support from government (e.g., % of out-of-pocket spend where lower is better). Generally, in developed markets, higher income and higher government support go up together, with the reverse in emerging markets, though there are exceptions. For example, high-income Singapore has relatively lower government funding and thus lower affordability than some other developed markets, whereas middle-income Thailand provides a high level of government support and performs better on affordability than many of its peers.
Governments take different paths to funding healthcare, especially medicines, based on policy decisions relating to how much of the population will be under coverage and which products will be reimbursed. Mature markets (on the right side in Figure 1) tend to provide comprehensive product coverage for the patients funded by government, whereas emerging markets (on the left side) generally focus on basic medicines and services as they expand towards universal coverage of their populations.
In many markets, private health insurance and other sources of funding are expanding to fill some of the gaps in public coverage, especially in middle income countries where rising middle class demand and expectations are moving faster than governments can provide.
Pharmaceutical companies increasingly offer patient support programs that address affordability based on patient financial need. Many of these programs now involve partnerships with digital health companies and even fintech players to enable patients relying on private funding.
A more holistic model for market access in emerging markets
Affordability for both governments and patients is one significant barrier to access in emerging markets but not always the most immediate barrier, especially outside of major urban areas. The maturity of the local healthcare system also constitutes a major factor in restricting access – in two ways:
Availability of product depends on supply chain elements such as logistics, warehousing, and cold chain. This has been a high profile issue in 2021 as the Pfizer-BioNTech and Moderna Covid-19 vaccines required very cold temperature storage that was simply unavailable in many emerging markets. Provincial hospitals and clinics may not have sufficient budgets to purchase needed medicines. Access can also be impacted by the absence of adequate healthcare facilities, especially for specialty care such as oncology, and even trained healthcare professionals in a particular location.
Awareness of the impact of a disease as well as the benefits and risks of treatment can also present barriers to access. Lack of awareness extends to prevention and diagnosis which can delay in seeking treatment. In some cases, patients and their families may simply not know about a particular disease. Treatment decisions also may be impacted by cultural beliefs, financial concerns or general reluctance to go to healthcare facilities.
Finally, local healthcare professionals themselves may lack awareness about the disease and provide the wrong treatment or the required specialist referral.
Awareness and availability are reflections of the overall maturity of a country’s healthcare system. The level of system maturity impacts the capacity of that country to anticipate and manage the diagnosis and treatment of a particular disease as well as overall. One approach to understanding healthcare system maturity is to rank countries on a basket of indicators. Some of these would be general indicators such as physicians or hospital beds per capita or presence of pathology labs, with others looking at a particular disease area in terms of policy or funding.
Taken together, these three elements present numerous barriers that significantly reduce the number of potentially eligible patients receiving treatment. The example figure below shows the outcome in the case of one group of patients in an emerging market.
Example: Cardiovascular device (ICD) in Thailand
Taking action for access in emerging markets
Successful strategies and implementation for market access in emerging markets therefore requires addressing challenges in both affordability and system maturity. The first step is understanding these two elements at a country level and defining market archetypes that will enable the development of a framework for access models that can start quickly and be scaled within and across markets. The archetypes can be based on defining country situations in each element as high, medium or low to reflect the full range of markets, especially recognizing that emerging markets themselves encompass a broad diversity of conditions.
Once the archetypes are defined, a company can deploy an appropriate access model for each archetype. In most developed markets, for example, the usual approach would be a standard model of applying for national reimbursement based on HTA submission in anticipation of a full commercial launch. In emerging markets, the pathway to access is not so straightforward and may call for different models depending on the archetype, or even a combination of approaches for different populations within markets (as seen in the figure below).
Broadly, markets within medium-level archetypes are best addressed with approaches that focus on the affordability for individual patients who may have the ability to pay for at least some of their treatment. For some patients, the route can include private health insurance, either through individual policies or as part of health benefits provided by employers. In some situations, large employers may provide healthcare directly as payers themselves or even in their own in-house clinics and hospitals.
Beyond insurance, many patients get access under Patient Support Programs (PSPs) offered by pharma companies to eligible patients based on assessment of their ability to pay for treatment, though generally run by third-parties such as NGOs. These programs can be structured in a number of ways but most often involve some level of free or discounted doses provided for patients who are paying for part of their treatment (e.g., ‘buy 2, get 1 free’).
In the low-level archetypes, where the system maturity barriers of availability and awareness are more acute, access approaches generally focus on patient populations more than on individuals. These ‘Access to Medicines’ models usually involve companies working with governments (both local and those from donor countries) and multilateral agencies such as the WHO and non-profit institutions.
These collaborations typically would not involve commercial sales but may encompass subsidized or at-cost supply to governments or donations of product to governments or NGOs. These markets have also seen a variety of innovative approaches to financing healthcare, ranging from microinsurance and microlending to crowdfunding and even the use of national lotteries and impact bonds. Pharma companies are increasingly collaborating with these financing players to enable access. Finally, some partnerships also focus on supporting health system infrastructure such as diagnostic screening or supply chain logistics to ensure that patients can get access to treatment.
The biopharmaceutical industry is currently experiencing a revolution in technological innovation that is bringing truly breakthrough therapies to patients. But given that more than 80% of the world’s population lives in emerging markets, the industry must view these breakthroughs in terms of the expansion of global access and equity as well as the clinical impact on patient outcomes.
The next wave of innovation must also address access challenges in distribution, healthcare delivery, financing, and human capital. These will require advances in both technology and business model thinking if we are to realize the true potential of this revolution in medicine.
In my next article, we will dive deeper into how digital technologies are enabling new collaborations and new models for access in both emerging and developed markets.