From vision to decision Pharma 2020 - pwc

Healthcare payers in the
mature markets want more
value for their money and
they’re measuring the value
they get much more carefully
What’s it worth?
To sum up, the message healthcare
payers in the mature markets are sending
is clear: they want more value for their
money, they’re measuring the value
they get more carefully and they’re not
prepared to pay thousands of dollars for
medicines that offer only incremental
improvements in outcomes. Their
pockets aren’t deep enough.
But what healthcare payers mean by
‘value’ is also becoming clearer, as the
pricing and reimbursement processes
they use become more transparent.
And the scope for helping them make
savings is huge. Thus far, pharma’s
focused on the roughly 15% of the
health budget that goes on medicines. 68
That leaves another 85% from which
it can generate revenues by reducing
consumption of more costly medical
services. If it succeeds in doing this – and
in surmounting sociopolitical opposition
to the rebalancing of the mix – we think
its share of healthcare expenditure in
the mature economies could rise to 20%
by 2020.
Maximising the molecule will involve
major decisions about which diseases
to concentrate on, which medicines to
pursue, what data to collect and how
best to plug leaks in the healthcare
system. The vast majority of companies
will also need to revise their budgeting
and forecasting processes, billing and
payment systems and the way they go
to market.
Most importantly of all, they’ll need to
keep the big picture in mind at all times.
Treatments that prevent disease, cure
otherwise incurable diseases, reduce the
overall use of resources and let patients
stay as productive as possible for as long
as possible: these are the sort of
medicines governments and health
insurers in the mature markets will buy.
And, in the end, as the Roman writer
Publilius Syrus once noted, “A thing is
worth only as much as it can be sold for.”
So it’s what payers, providers and
patients value that will determine the
value pharma creates for its shareholders.
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