Key insights for the design of Market Access strategy for startup companies in the healthcare sector

The Importance of Market Access

Due to budgetary constraints and the need to ensure that a new product has a positive impact, public healthcare systems have been less willing to approve complex and expensive technologies over the last 10 years. Health authorities have implemented new regulations, controls, and sophisticated evaluations to boost efficiency while closely monitoring health expenditures.

From major enterprises to startups, a solid Market Access plan is critical for navigating the increasingly difficult evaluation of healthcare products. Yet while the science and technology behind the product are usually under control, many startups fail to design a Market Access strategy. Because the vast majority of healthcare startups have an exit strategy that includes product licensing and/or co-development with a midsize or large pharma, a weak Market Access strategy can have a major impact on license talks with a counterpart who is often more prepared.

The Pillars of a Market Access Strategy

Regardless of product classification (i.e., drug, medical device, or digital solution) or firm size, the design of the Market Access strategy must take these five critical pillars into account:

• Disease overview: Gain a deep understanding of the intended indication at all levels (i.e. unmet needs, the burden of the disease, mechanism of action, quality of life, etc.)
   
• Standard of care: Determine the approved and most commonly used treatment for the specified indication among medical experts.
   
• Product value proposition: Identify what differentiates the product or solution, not only at a technical/scientific level but also its impact on healthcare and patients.
   
• Competitive landscape: Identify and monitor direct and indirect competitors, both current and in the pipeline.
   
• Pricing & Reimbursement (P&R) Strategy: Understand the potential P&R ranges in the different countries in scope.

The creation of the PICO framework is another key step when developing a Market Access strategy. With this process, the novel health solution is framed in terms of a particular illness or treatment. The PICO framework consists of the following crucial questions:

• Patient: What is the potential population, patients, or subgroup of patients that the new health solution will serve?
   
• Intervention: What is the medical device, digital solution or drug doing at a technical (i.e. mechanism of action) and clinical (i.e. new process design) level?
   
• Comparator: Is there a comparison treatment or process to be considered?
   
• Outcome: What would be the desired effect if the new health solution is applied?

The Market Access strategy pillars, supported by the PICO framework, apply to any company or product on the market. What is different for startups is the exit strategy and the limited resources available to implement that strategy. A Market Access strategy intended for a license agreement emphasizes the design of the P&R pillar regardless of the evidence acquired before the licensing negotiation. P&R is key because, before purchasing the technology, the prospective buyer must analyze the product’s potential adoption rate and buyers’ willingness to pay. Of course, the P&R pillar cannot be designed without the other pillars of Market Access.

The Exit Strategy Role in Market Access

A successful healthcare startup with a product on the market will have transitioned from product development to a Market Access focus at some point. The ideal scenario, however, would not involve a shift in focus but rather a continuum, with both functions running in parallel. Startups typically concentrate their limited resources on product development, the regulatory approval process, and fundraising. Often, the view of patients, payers and healthcare providers is left behind. These firms are not always ready when license or co-development negotiations begin with large and mid-sized pharmaceutical companies which have considerable Market Access experience, and will keep the licensing discussion focused on the potential results of their well-implemented Market Access strategy.

Differences between Pharmaceuticals, MedTech and Digital Solutions

There are major distinctions in the creation of a Market Access strategy for a medicine, a medical device, or a digital health solution. The routes to market for MedTech and digital solutions are more flexible, but the process of bringing a pharmaceutical product to market is highly designed and defined.

A medicine often requires significantly more data and evidence to be authorized and get access to the market than a MedTech product or a digital solution. However, as the new MDR (Medical Device Regulation) demonstrates, health authorities in the EU are starting to implement sophisticated evaluation procedures before admitting MedTech and digital solutions for public reimbursement.

At the same time, DRG (Diagnosis-Related Groups) codes are frequently employed as the basis for the payment mechanisms for MedTech and digital solutions. Certain hospital cases are given a tariff charge by these codes. Hospitals most frequently obtain funding from this reimbursement scheme when purchasing digital and medical equipment. On the other hand, medicine prices are negotiated at the national and/or regional levels, with known and concealed discounts, and reimbursement levels that specify the co-payment percentage for particular patient groups

Product Classification and Market Access Outcomes

In the EU market, medical equipment and digital solutions without a CE mark certification are more likely than certified products to reach the local private market first. But MedTech devices with the CE mark are more likely to find success in foreign markets and receive public reimbursement.

In the pharmaceutical sector, the differentiation between an innovative first-in-class drug and a sequential innovation/hybrid is important for Market Access design. Pharmaceuticals that contain a generic active ingredient but have distinct properties from the approved drug due to formulation, indication, potency, or combination with another active ingredient are known as hybrid pharmaceuticals. In the EU, hybrid pharmaceuticals are regulated and categorized separately. Startups with hybrid drugs usually target local markets due to the high product development costs associated with globalizing a therapy. On the other hand, first-in-class pharmaceuticals often have a wider market reach and are available in the vast majority of EU nations. Both types of products have different pricing strategies, regulation frameworks, and access processes in EU countries.

Conclusion

When it comes to startups, a solid Market Access strategy is vital to success. Learn more about Alira Health’s approach to Market Access.

For startups who want to enter the market in Spain and Portugal, there are multiple potential strategic partners that can help sponsors and Alira Health can make those connections. In Spain, Biocat and Alira Health have started a Market Access support program for startups that have previously participated or participating in a Biocat program. The program offers mentoring from an experienced team of market access consultants to help identify the level of maturity of a company’s product and the steps they need to follow to get the product into the market. Learn more.

This article is the result of a collaboration with Alira Health in the framework of the BioRegion 2022 Report. Authors: Chus Castillo, VP of Market Access Iberia, and Eduard Vidal-Barraquer, consultant at Market Access Iberia.