United States: Coordinating Your Reimbursement And Regulatory Strategies For A Successful Product Launch

Ensuring appropriate third-party reimbursement for a new pharmaceutical or medical product involves an intricate interplay of considerations. There is no doubt that government and private payers have been under increasing pressure to control spending across the patient management continuum. not surprisingly, there has also been rising tension between, on the one hand, providers, caregivers and other patient advocates and, on the other, the payers, who are financially accountable to a variety of stakeholders and constituencies. A consequence of this growing divide is that reimbursement rate debates have grown ever more rancorous; fraught exchanges between those who "do" and those who "have"—with those in "need" too often left out of the conversation.

Drug pricing is arguably one of the most complex and least understood aspects of the healthcare reform debate. What Is a fair price anyway? And who gets to decide? Payers have created a variety of evidence-based approaches in an attempt to understanding a drug or medical technology's intrinsic value. Beginning in the 1980s, the Blue Cross Blue Shield Association began to coordinate evidence reviews via its Technology Evaluation and Coverage (TEC) group. TEC's assessments continue to be used for coverage decisions and represent a window into private-payer considerations of product value. Today, almost every major payer either has a unit similar to TEC, or utilizes TEC findings in its making reimbursement decisions.

The 1990s witnessed the emergence of the Medicare Evidence Development & Coverage Advisory Committee (MEDCAC), which was jointly launched by the Centers for Medicare & Medicaid Services and the Academy of Managed Care Pharmacy (AMCP). Soon, the AMCP Dossier, a pre-specified format for submission of clinical and economic evidence in support of formulary consideration, was required by every formulary committee for purposes of formulary adoption.

The operation of these entities, and their decision-making rubrics,  provides further insight around drug and technology valuation. Importantly, all of these organizations share common aims and regularly collaborate on issues surrounding reimbursement policies. The evidence requirements are intended for use by manufacturers of pharmaceuticals, biologics and vaccines who are responding to an unsolicited request from a health care system (in the United States) to support reimbursement and/or formulary placement of a new product, new indication or new formulation of an existing product.

The impact of these entities has not only driven access to cutting-edge drugs and technologies for patients but also impacted corporate valuations. The business media regularly reports on the results of TEC Assessments and AMCP Dossiers in a manner similar to coverage of clinical trial results. Whether a new product would be covered widely and priced appropriately has become as compelling an investment concern as whether Phase III clinical trial endpoints were met. This additional layer of pressure on innovation makes the work that is necessary to achieve payer adoption and appropriate pricing all the more critical.

Taking these trends into consideration, there are some clear directions that emerge with respect to how appropriate pricing is best arrived at. Overall, companies seeking to bring new products to market must carefully consider a deliberate strategy for achieving an appropriate price.

  1. Begin early, and include pricing in go/no go decisions. As clinical information emerges about a product in development, so should information be derived and analyzed about sector and product pricing trends. Payers tend to review pricing according to therapeutic or disease categories. Often pricing for drugs and products used in specific medical specialties (e.g., oncology) receive particular scrutiny and recalibration. Utilization is also a key variable in understanding future pricing. Those responsible for product development should possess a working knowledge of factors associated with pricing in order to inform their decisions about continued development and balancing investment risk and return.
  2. Specialty medical society advocacy. Payers turn to medical specialists for guidance about clinical effectiveness. Just as important, these clinicians are regularly asked for comparative information concerning new vs. on-market products by pharmacy staff and other stakeholders. Most specialty societies now operate product- and formulary-related review panels or committees. These groups often publish best practice bulletins and clinical guidelines in specialty journals and publications. An effective pricing strategy includes adopting approaches to offer clinicians opportunities to make critical product comparisons in the context of professional society functions. This will result in a well-informed clinical perspective and position.
  3. Evidence-based analytics. The most effective approach to price determination is an evidence-based valuation of the drug or product. Pharmacoeconomic1 analysis for product valuation has matured over the last two decades. This science-based decision methodology utilizes patient outcomes to determine the cost-effectiveness of product options. Early cost-effectiveness studies can be used to make informed decisions about product development and risk. These studies can also be utilized in clinical trials by including economic endpoints in trial design. In the end, this information will objectively inform payers about value and pricing.
  4. Publication plan that includes pharmacoeconomic findings. The evidence reviewed by payers for pricing determinations is largely in peer-reviewed publications. It is important to include studies that outline quantitative findings concerning product cost-effectiveness in coordination with clinical findings. A series of such publications will prove invaluable in providing payers with justification for making informed pricing decisions.

Dentons, Tiber Creek Partners and Waypoint Institute are a coordinated team working with our clients to ensure that management of drug pricing and strategy are proactively addressed. A coordinated approach to reimbursement (as highlighted in this article) that includes the incorporation of non-traditional issues, such as government pressure on pricing ( as highlighted in a previous article) is critical to the successful launch and commercialization of new pharmaceutical and medical products.

The principal author of this alert is Frank Papatheofanis, MD, MPH, PhD.  Mr. Papatheofanis is a principal with The Waypoint Institute, an educational, research and policy studies organization in San Marcos, CA. He is also a professor of public health and policy studies, the president of Saint Katherine College in San Marcos, CA, and an emeritus professor of radiology and director of Science, Technology and Public Affairs at the University of California, San Diego. The Waypoint Institute is collaborating with Dentons and Tiber Creek Partners LLC on reimbursement issues in the life sciences and biotechnology industry.


1 Pharmacoeconomics has been defined as the description and analysis of the cost of drug therapy to health care systems and society. More specifically, pharmacoeconomic research is the process of identifying, measuring and comparing the costs, risks and benefits of programs, services or therapies and determining which alternative produces the best health outcome for the resource invested.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries. www.dentons.com.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
26 Sep 2018, Conference, New York, United States

Dentons is delighted to support a global IT services and consulting firm Miratech as an event host partner at their annual conference called M-Force18 New York on September 27th. The event will be held at Dentons New York office in the heart of Midtown Manhattan, opposite Rockefeller Center.

2 Oct 2018, Seminar, Dallas, United States

We are pleased to offer a program of five sessions designed specifically for in-house counsel. Topics will include:

  • In-house corporate ethical issues
  • What recent Supreme Court decisions mean for business
  • Keeping lawyers out of your benefit plans
  • Litigation tactics for in-house counsel
  • Employment issues in the age of #MeToo
In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions