Authored by
Shrinivas Rao Mukku, Ph. D, M. Phil (Cantab), Founding Director, Access Infinity.
Vanit Patel, Senior Consultant, Access Infinity.
Introduction
Excel is a powerful tool that is widely used for developing models in various sectors, including our own, the pharmaceutical industry. Within pharma, forecasting teams use it to forecast sales, commercial teams to analyse revenue scenarios and clinical teams to interpret data, on a daily basis. For the pricing and market access function, some excel tools are essential and constantly used to support decision making at different stages of the product life cycle. Several companies, including Access Infinity offer these tools as products and services to the Global Pricing and Market Access function.
Excel tools do their job
Excel has limitations when it comes to user interface and UX design however it does have several advantages such as ease and speed of build, scalability and editing flexibility. It also enables users to see and amend calculations.
During our time as a Market Access and Pricing (MAP) consultancy business, we’ve seen time and time again how clients use Excel to great effect. In this article, we’ve pulled together our top 10 tools that specifically serve the global MAP function.
1. International Price Referencing (IRP) Tool
Excel IRP tools are commonly used by pricing teams to determine the impact of IRP on different countries and the subsequent influence on global price corridors. By analysing and quantifying the negative impact of IRP, these Excel tools can help generate a revenue-optimising country launch sequence. They are also used to mitigate and reduce IRP-driven price erosion as part of a product’s post launch lifecycle management.
2. Country launch sequencing
Launch sequencing of a product in different countries is one of the key strategic responsibilities of global pricing and market access function. Launch sequencing in many instances is an extension of IRP modelling. In addition to this, the time taken to conduct the HTA review, and the subsequent price negotiation are also incorporated as inputs while developing the optimal launch sequence. This varies by country and could be between 0 – 400 days. Mitigating the risk of IRP impact through optimal launch sequence is achieved by closely monitoring the outcomes of price negotiations factoring what price is visible and the time it is published in the national journal for other countries to access. Launch sequence is closely monitored and global price approval teams need to flexible to make quick tactical decisions.
3. Parallel trade impact analysis
Parallel trade is one of the key challenges pharmaceutical companies face. It is therefore important to identify the countries that are impacted and assess the implications to revenue. This would help in not only managing the risk through different tactical decisions but also considering other elements of price referencing as well as parallel trade laws. Based on the understanding of which countries are impacted and the magnitude of loss, strategies could be developed to curtail this, e.g. packaging, language on the pack etc.
4. Revenue optimisation
Revenue-optimisation excel tools can cater to many use cases such as the optimisation of revenues based on the line of usage (patient volumes x price potential) or analysing the impact of different pricing scenarios. As the name suggests, these Excel models can include multiple variables to assess short- and long-term revenues to inform strategic decisions. Revenue optimisation tools are typically used at every stage of the product lifecycle.
5. Indication sequencing
Indication sequencing tools are important for analysing the overall revenue for a product launching in multiple indications. This is extremely common in oncology and immunology where products are often tested in various distinct indications and lines of treatments. Price potential and volumes can vary by indication and are driven by the price and LOE (loss of exclusivity) status of competitor products, along with the incidence and prevalence of the diseases.
Modelling indication sequencing can help guide the cross-indication launch strategy and is critical not only for the P&MA function but also to influence R&D and commercial planning.
6. Risk sharing agreements
Many payer institutions are looking at managed entry agreements to make novel, expensive products, more accessible. Managed entry agreements exist in multiple options such as pure-play discounting, free goods, cumulative tiered pricing, pay for performance and others. The revenue analysis based on these options can also evaluate launching in multiple indications and multiple countries.
An excel tool that is able to intuitively compare the revenues of all the options for both the pharmaceutical account managers as well as payers to make access decisions, is a win-win for both parties. Our experience indicates that simple calculators for account managers can help in quick decision making as one is able to present which agreement serves the purpose of the payer, both at the regional and/or hospital level.
7. Price calculator
The margins applied on the ex-factory price to arrive at the price paid by the consumer (list price) and other stakeholders vary by market. Margins are applied at the wholesaler level and pharmacy level and the percentages in any country depends on several factors such as the point of care, distribution channel (hospital vs retail) and cost of the medicine. For instance, for more expensive products, the percentage commission is lower for both wholesalers and pharmacies.
Another variable is the addition of government tax e.g. VAT (value added tax), GST (goods and services tax) and others. This also varies if the product is funded through the retail route or hospital. The most complex price to estimate is the net price which is based on the discounts applied at ex-factory, wholesaler or pharmacy levels.
Price calculators are simple Excel tools that can help derive prices at all levels for a given product in each country. Users are able to select a country, input one of the known prices (list, ex-factory, pharmacy or wholesaler price) and the tool is able to determine automatically prices at all other levels for that country.
8. Due Diligence framework
Due diligence of potential acquisitions is conducted on a frequent basis and is a time drain for many P&MA executives. To ensure that a systematic approach is used for due diligence exercises, a simple model can help to assess product value at the time of its launch.
This framework helps in defining the product environment through scoring of disease severity, unmet need, current and future competition, patient numbers and prices of current treatments. Once the environment is defined, users can overlay the product characteristics being tested, including the efficacy and safety of the product over its current and future competition and the quality of data supporting it. Through a simple logic of value differentiation, one can derive the potential HTA outcome and price of the product. Although the hypotheses is based on performance of past launches and future competition, it is a great starting point to conduct a quick BD assessment.
9. Price forecasting tool
Pricing teams play a key role in product investment decisions – they need to generate defendable price forecasts to assess if assets are worth investing in.
An Excel model can help to forecast the price in several countries and/or regions. Country-specific baseline assumptions can be used to estimate price evolution over time. Example assumptions include: time to reimbursement, gross-to-net discount, LOE and price changes due to specific country events such as mandatory price cuts, currency conversion policy and others. This provides a quick and validated starting point for users to tailor their forecast.
10. Payer decision driver matrix
As payer expectations, reimbursement drivers and WTP vary across markets, tools that map where an asset is meeting expectations can be of great use. In order to effectively plan evidence-generation activities, teams must be able to identify, categorize and track payer expectations and the associated data gaps.
An Excel tool provides the ability to collate this information as a single source of truth that enables teams to:
- Understand country-specific payer decision drivers
- Track and make informed decisions on the evidence generation activities to pursue
- Easily share and distribute information with internal teams
Let us know your top Excel tools
In this article we’ve shared our top 10 Excel tools for Market Access and Pricing teams, based on our experiences in industry and client feedback.
How many of these tools are you using in your own team? Are there any others that you think should make our list?
We’d love to hear your thoughts, drop us a line on [email protected].
About the authors
Dr. Shrinivas Rao Mukku (Shri)
Shri is the founding director of Access Infinity and has 16+ years of consulting and industry experience. Shri worked at Merck as Global Director, MAP (Market Access and Pricing) responsible for Erbitux and other oncology products and at Lundbeck as ‘Pricing Specialist’ in the Global Pricing team. Work in many regions and countries including UK, the current location, France, Germany, Denmark and Southeast Asia in biotech, pharma, research and management consulting has led to a very good understanding of drivers of access globally. In addition, this has led to personally managed of strong network of payers and key opinion leaders.
Shri’s consulting experience includes launch pricing strategy, country and indication sequencing, qualitative payer and KOL research on impact of clinical evidence generation on product value assessment, post LoE (loss of exclusivity) pricing strategy and assessment of new products for BD opportunities (in- and out-licensing). He has also established and/or led pricing and market access departments of different consulting companies such as Access Partnership and Double Helix Consulting. With is strong interest in excel tools, he has developed several on-demand tools for pharma clients. Shri has a Ph.D in Bioprocess Engineering from Asian Institute of Technology, Bangkok and an M.Phil from the University of Cambridge, UK in Bioscience Enterprise as a fellow of Melinda and Gates foundation.
Vanit Patel
Vanit is a senior consultant at Access Infinity and has 6+ years consulting in the healthcare industry. In this time, he has created 20+ bespoke Excel models for top-20 pharmaceutical companies. Vanit has also conducted and managed over 60 projects focusing on global pricing and market access strategy, evidence generation, value assessment, value message creation and testing, international reference pricing, forecasting, due diligence exercises and leading internal client workshops.
Vanit is a UK qualified pharmacist, graduating from University College London (UCL). He previously worked at the Royal Free London NHS foundation trust and also completed academic research at Monash University in Australia, where he studied PfPDE inhibition and produced published data on PI3K inhibition.
