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Summary

As the COVID-19 pandemic unfolds, stakeholders across the healthcare system are facing new realities that will affect the environment in which drugs are commercialized and accessed.

While the biopharmaceutical industry works to identify therapies and vaccines to treat and prevent COVID-19, the virus is creating new considerations for companies’ inline and pipeline products unrelated to the disease. While implications for the supply chain and FDA review processes are top of mind, manufacturers must also consider the potential downstream implications of COVID-19.

Economic factors will change the health insurance coverage landscape

As jobs are lost and Americans’ financial reality changes, the ties between employment, income, and health insurance will become even more clear. The rise in unemployment will lead some individuals to lose employer coverage and transition to exchanges or Medicaid, while others will become uninsured. For the pharmaceutical industry, shifts in coverage will have immediate impacts on manufacturer liabilities for Medicaid rebates and 340B discounts and patient access as formularies and cost sharing for medications change.

Patient support programs will need to evolve to reflect new sources of insurance coverage and the needs of patients

As the insurance landscape shifts, so too will the need for manufacturer-funded patient support programs. Importantly, manufacturers should assess current program designs and quantify the potential investment necessary to maintain patient access amid the COVID-19 pandemic. Additionally, manufacturers should consider if additional policy and regulatory flexibilities offer an opportunity to offer support to patients, particularly for patients who are uninsured or underinsured.

Patient utilization of medications will change

While changes in insurance coverage may interrupt continuity of care, even patients who remain in the same plan may experience challenges accessing medications. Face-to-face physician visits for non-urgent needs have virtually stopped in most parts of the country, leading to fewer people receiving diagnoses and starting on prescription medications. Moreover, despite efforts to transition refills to mail order, some patients will become less adherent over time, as fewer people visit their doctors and pharmacies. Some patients may choose to skip therapy or alter doses to prolong their current supply in order to avoid leaving their homes. Manufacturers should assess the impact of these trends on patient care management and consider partnerships with stakeholders to help mitigate decreased adherence and associated longer-term negative health outcomes.

The virus creates a potential obstacle for patients needing physician-administered therapy

In addition to challenges related to medications accessed at the pharmacy counter, patients face challenges to receiving physician-administered therapy. Some patients may have trouble getting to the doctor or may be restricted from seeing a provider. To begin to address these concerns, recent CMS guidance provides more flexibility for some Medicare beneficiaries to receive infused therapies at home. Despite these flexibilities for providers to administer a drug in a home-based setting, the underlying coverage and reimbursement requirements related to Part B drugs remains unchanged, which could create barriers to patient access to care. Obstacles to physician-administered therapies may therefore cause some patients to consider therapeutic alternatives, including pharmacy benefit drugs, to maintain therapy. In addition to short-term patient implications, these dynamics could inform development and commercialization strategies for manufacturers over the long-term.

Innovation and investment will drive virtual customer engagement

Just as patients are limited in how they can interact with the medical system, manufacturers are constrained in their ability to meet face-to-face with customers. The industry will need to make investments in virtual customer engagement strategies and may need to consider how to leverage 3rd-party partnerships and new marketing approaches to influence the ecosystem without direct contact with the medical community.

The patient experience will vary by geography

As the COVID-19 impact on the healthcare system continues to develop, patient experience and manufacturer impact will vary by geography. The magnitude and duration of the implications described above will depend on the effect of the virus in different geographic areas. Moreover, a patchwork of pre-existing state laws and new efforts to manage COVID-19 will also impact the reality on the ground. For example, over 30 states have received approval for Medicaid 1135 waivers that provide flexibility from existing rules in their state plans like prior authorization for some services. Other states have enacted previously unscheduled special enrollment periods to allow off-cycle enrollment into exchange plans. For manufacturers, 50-state variation will require strategies tailored by region of the country and in some cases by county, that also consider structural aspects of specific markets such as urban vs. rural, provider capacity, and penetration of managed care in public programs.

COVID-19 has upended the federal policy outlook and shifted focus away from the 2020 election

As recently as a few weeks ago, manufacturers were preparing for the drug pricing debate to resurface on Capitol Hill as part of must-pass legislation scheduled for May. Over the past weeks, Congress’ focus has shifted squarely to COVID-19. The must-pass Medicare and Medicaid “extenders” were addressed through November 30 in the latest virus relief package. A serious drug pricing debate on Capitol Hill appears unlikely before the November election. Meanwhile, the healthcare discussion on the virtual campaign trail has swung from Medicare for All and a public option to focus on our nation’s response to COVID-19. While there may be an opportunity to advance policies to improve patient access and affordability in potential future legislative packages related to COVID-19, major reform conversations are on hold. Over the long term, spending related to COVID-19 could increase calls for fiscal restraint and deficit reduction, depending on political dynamics.

Avalere is tracking COVID-19 developments and their implications for healthcare stakeholders. To learn more about what this pandemic will mean for manufacturers, connect with one of our experts.

Check out our COVID-19 Intel Center.

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