Pharmaceutical Market Europe • October 2023 • 12

DARWIN'S MEDICINE

BRIAN D SMITH
DARWIN’S MEDICINE 
HAPPY ACCIDENTS

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A happy collision in market access

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Recently, I had a good day. I’m often asked which of my three roles – teacher, researcher or advisor – I like best and I always say I’m happiest when the three collide in a positive, constructive way. That’s what happened on that day and, because it’s relevant and useful to the readers of my column, I’d like to share it with you.

Rigorous research

For decades now, I’ve studied the evolution of the life sciences industry and especially ‘mutations’ in its organisational routines, the sub-processes that are a firm’s DNA. In particular, I’ve looked for mutations on firms’ ‘commercial chromosome’, where the routines for interacting with patients and professionals reside. For example, my paper about the differences between strong and weak market access teams is one of my most read. (Drop me a line if you would like a copy.) I’ve recently been especially interested in the government affairs element of market access. I’ve made some fascinating findings about why some firms are good at government affairs relating to pricing and others are left failing and frustrated. I had those findings in mind as I prepared some recent lectures.

Top teaching

I teach post-graduate students and that’s a mixed blessing. They are bright and interested but, with their constant and well-informed questioning, they make me work hard. This week, I’ve been writing lectures for the new DBA programme at UCL’s Global Business School for Health. At that level, the lectures must capture the latest research and, in this case, the newest thinking about how pharma and medtech companies interact with government payers. To prepare, I have to weave the latest literature into a coherent narrative that these experienced executives-turned-scholars will find useful, so I’d incorporated a 2022 paper from Carmen Ho and her colleagues. This studied the political processes around health coverage and found that there were three essential elements. First, assembling the coalition of interest parties. Second, working through the relevant institutions and processes. Third, bringing new ideas to the discussion. Ho’s is a great piece of work and builds on masses of other work about the politics of coverage and access. I know the DBAs will like it because demographically, educationally and attitudinally, they’re very similar to the pharma and medtech clients I advise.

Advanced advising

My advisory work is varied in format but always focused on that ‘commercial chromosome’. And that day I was facilitating a discussion about how governments constrain market access and how firms could influence them. The experienced executives shared the same problem: how do we get government payers to see the value of innovative therapies? It was one of those meetings where I couldn’t possibly tell the vastly experienced audience any new facts. I was there to help them see what they already knew through fresh eyes. And it was here that my research, teaching and advisory work collided in the best of ways.

Crrr-runch

In my research, I knew that firms that had influenced payers effectively had different routines from their less-successful peers. I’d understood most of the differences but I knew there was a missing piece of the jigsaw, something I hadn’t seen yet. That research and Ho’s paper were all rattling around in the back of my mind during the meeting and, as the market access and government affairs people talked, my thoughts, my teaching and their experiences collided. It was obvious that they knew all about which parties – producers, payers, patients, professionals – needed to be involved. They also had an in-depth understanding of the institutions and processes they needed to work through. What the successful influencers had that the others didn’t was ideas. Or, more accurately, novel, original ideas. Most pharma and medtech companies were pushing the obvious ideas about incremental cost-effectiveness ratios. But the successful few also had new ideas about the ‘sweet spot’ of pricing that both encourages innovation and shares incremental value between payers and producers. As a facilitator, I managed to ‘put a pin’ in that idea and lead the group to a practical conclusion. This was that, although as the engagement pattern between companies and payers is always unique and idiosyncratic, it always had to contain Ho’s three elements. And although the professional experts in the room almost always captured two of them – the interested parties and the institutional processes – their failures were usually attributable to the strength of their ideas. Too often, they clung to ideas about justifying price by incremental value that the payers didn’t accept. Only the minority had learned that new ideas, about finding the ‘sweet spot’ price that encouraged affordable innovation, were the missing key element.

Spreading serendipity

What made that day such a good day was the happy, accidental collision between my research, teaching and advisory work. It will help my clients, inform my students and, eventually, feed into my published research. To me, the whole point of my work is to spread that serendipity when ideas collide. And now, dear reader, I hope I’ve spread one more idea to you.


Professor Brian D Smith is a world-recognised authority on the evolution of the life sciences industry. He welcomes questions at brian.smith@pragmedic.com. This and earlier articles are available as video and podcast at www.pragmedic.com