Fundamentals of Market Access for Pharmaceuticals

Fundamentals of Market Access for Pharmaceuticals

Fundamentals of Market Access for Pharmaceuticals

Eric Bouteiller and Annie Chicoye

Anthem Press

An imprint of Wimbledon Publishing Company

www.anthempress.com

This edition first published in UK and USA 2025

by ANTHEM PRESS

75–76 Blackfriars Road, London SE1 8HA, UK

or PO Box 9779, London SW19 7ZG, UK

and

244 Madison Ave #116, New York, NY 10016, USA

© 2025 Eric Bouteiller and Annie Chicoye

The author asserts the moral right to be identified as the author of this work.

All rights reserved. Without limiting the rights under copyright reserved above, no part of this publication may be reproduced, stored or introduced into a retrieval system, or transmitted, in any form or by any means (electronic, mechanical, photocopying, recording or otherwise), without the prior written permission of both the copyright owner and the above publisher of this book.

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library.

Library of Congress Cataloging-in-Publication Data: 2024939303

A catalog record for this book has been requested.

ISBN-13: 978-1-83999-217-9 (Hbk)

ISBN-10: 1-83999-217-4 (Hbk)

Cover Credit: Christophe Lourdelet

This title is also available as an e-book.

Contents

Foreword

Acknowledgements

Introduction

1.  Definitions and Drivers

Health, the ‘Supreme Good’?

The philosophical and legal perspectives

Health capital

Pharmaceuticals, essential goods

The Importance of Culture in Healthcare

Cultural influences in general

Culture in the medical field and healthcare

Costs or Investment?

Market forces and pharmaceuticals

Innovation and intellectual property

Intellectual property and expanded access

Definition of Market Access

The core definition

Market access along the pharmaceutical life cycle

2.  Healthcare and Its Funding

Analytical Frameworks

Health system analytical framework

The options for financing healthcare

What is universal health coverage?

Private Health Insurances: Key Features

Workforce-Driven Systems

The German system: The initiator

A mixed model: France

Government-Driven Systems

The National Health Service in United Kingdom

The National Health Service in Italy

Market Forces-Driven Health System: The United States

The Case of China: In Search of a Mix

3.  Different Processes for Market Access

The ‘Medical Benefit’ Approach: Germany, France and Japan

Germany: From grouped capped prices to medical benefit assessment

France: The prevailing medical benefit

Japan: Combining usefulness and cost-plus approaches

The ‘Utilitarianism’ Approach: United Kingdom and Australia

United Kingdom: A cultural heritage

Australia: A Pioneer

The Market Forces Model: United States’ Multiple-Access Pathways

China: ‘Work in Progress’

4.  Assessing Value of Pharmaceuticals

From Regulatory Review to Health Technology Assessment

Evidence Based Medicine: The foundations

From Evidence Based Medicine to health technology assessment

HTA bodies and international networks

HTA Methods: Assessing Relative Effectiveness

Burden of disease and medical needs

Health outcomes and relative effectiveness

HTA Methods: Assessing Cost/Effectiveness

Cost-effectiveness analysis: Concepts

Developing economic analysis

Interpreting results of economic analysis

Budget impact analysis

EBM, HTA: Impact on Decisions

5.  Pricing Pharmaceuticals

The General Perspective

Prices from Manufacturer to End-User

Different Pricing Methods

Cost and cost+ pricing

Internal reference pricing

External reference pricing

Value-based pricing

Managed entry agreements

New payment models for disruptive medications

6.  The Stakeholders

Definition and Profiles

Healthcare professionals

Patients

Policymakers and regulators

Payers

Manufacturers and distributors

Stakeholder Analysis and Mapping

Identify organisations and their relationships

Mapping according to influence

Shaping Policy and Compliance

The complexity of stakeholder relationships

How to prevent and mitigate improper behaviours

7.  The Changing Game

Towards Convergence of Access?

Africa: Building the prerequisites for further access

Latin America: on the way to expanded access?

What are the perspectives in Brazil?

Asia Pacific: contrasted situations

European Union: the integration experience

The Global Perspective

Is there a global governance for access to pharmaceuticals?

Competition for R&D and manufacturing investments

Sustaining rational decisions in fragmented societies

Three Levers to Improve Access to Pharmaceuticals

Philanthropy and public/private partnerships

Intellectual property ‘landscaping’

Enabling technologies: Digital health and artificial intelligence

List of Acronyms

List of Figures

Bibliography

Foreword

There are five global public goods & services that everybody on the planet should be entitled to have access to: food, drinking water, education, sanitation and healthcare. The new generations by the end of the 21st century might be horrified – as we are by slavery and colonization – by our failure to achieve global access for pharmaceuticals while innovation is constantly winning battles against emerging infectious diseases and expanding non-communicable diseases. To make it simple, the medicines are in the North and the sick are in the South.

Because at the heart of the apparent conflict between public health concerns and capitalistic interests, market access for pharmaceuticals is largely driven by political considerations, the difference with usual consumer goods being that pharmaceuticals are saving lives and years of life in good health.

The key factor driving pharmaceutical innovation is intellectual property, stimulating research and development to address unmet medical needs and attracting investors expecting return on investment in proportion to risk of failure. Hence the expansion of the private pharmaceutical industry primarily oriented to developed markets and delayed access for low- and middle-income countries until patent protection has expired.

Inequity of access is unacceptable when effective preventive or curative treatments of diseases such as AIDS, COVID-19, hepatitis C, or cancers are available and affecting hundreds of millions or even billions of people across the globe. Ensuring enlarged and early access is not only about funding, but also about providing solutions that are acceptable for all parties and workable at global level. The goal is supplying essential medications that are adapted to needs, of good quality and affordable. My pride is to have contributed to addressing this challenge, by founding UNITAID in 2006 with the support of President Chirac, based on a 1€ levy on airline tickets. UNITAID, primarily hosted by the WHO, is dedicated to global purchasing of medications for treating AIDs, tuberculosis and other infectious diseases. Furthermore, it has been my fight, encouraged by President Obama, to convince global companies to change their views about the sovereign exclusivity of patents. Since then, several companies are engaging into more consideration of their social responsibilities to the overall humankind. UNITAID initiated the foundation of the Medicines Patent Pool in 2010, providing the framework and services for voluntary global companies to out-source the manufacturing their key products under patent to low-middle income countries manufacturers, expanding from infectious diseases to cancer treatments. My vision is that global pharmaceutical industry can but increasingly adhere to solutions compensating the consequences of intellectual property, that is a major driver for innovation.

Market access for pharmaceuticals remains a national political area, deeply rooted in the cultural, historical and economic background of each health care system. Beyond the controversial relationship between governments and pharmaceutical industries, other stakeholders step in, such as health care professionals, patient representatives and payers. The ‘Fundamentals of Market Access for Pharmaceuticals’ reflects the complexity of market access: what means health at individual and community levels, how governments and health care systems are dealing with the dilemma between rewarding pharmaceutical innovation and ensuring accessibility. The comprehensive scope covered by the authors provide valuable insights in this controversial area, relevant not only for students but also executives from companies, payers, regulators and patients organizations. It also encompasses the global vision that is unavoidable to fully address the strategic implications of discovering, manufacturing and marketing pharmaceuticals.

For that reason, I strongly recommend this book to anybody directly or indirectly involved into dealing with this essential matter.

Prof. Philippe Douste-Blazy

Chair of the United Nations Fund Unitlife

Former French Minister of Health and Foreign Affairs,

Former Under Secretary-General of the United Nations.

Acknowledgements

Dedicated to Bernard and Joku for their active support and kindness during the long and painful writing process.

This book is a synthesis of our experiences in the pharmaceutical community, and we would like to take this opportunity to thank all our present and past colleagues who helped us progress with their critiques, advices and encouragements. We owe special thanks to our two reviewers: Emeritus Professor Gérard Viens (ESSEC Business School, Paris) and Professor Hu Shanlian (School of Public Health, Fudan University, Shanghai), who stimulated our thinking and helped us hunt numerous mistakes.

To prepare this book, we relied on many interviews and in-depth discussions. Thanks for their inputs: Isabella Naana Asante (Founder, Isabella Healthcare, Accra), Paola Barbarino (CEO, Alzheimer Disease International, London), Claude Bertrand (Executive Vice President, R&D, Servier, Paris), André Bourgouin (European Patent Attorney, Paris), Marc Kwame Dzradosi (Head, Pharmaceutical Department of International Maritime Hospital, Tema), Marc de Garidel (CEO, Ipsen, Paris & Boston), Olivier Dessajan (President, China Merchants-Colisée, Guangzhou), Frank-Ulrich Fricke (Health Economist, Technische Hochschule Georg Simon Ohm, Nuremberg), Christoph Glaetzer (Chief Global Value and Access Officer, Johnson & Johnson Innovative Medicine, New York), David Grant (General Manager, Vista Health Europe Ltd, London), David Gruson (Founder, ETHIK-IA, Paris), François Houyez (Information & Access to Therapies Director & Health Policy Advisor, Eurordis, Brussels), Kevin Huang (Founder & Director, CORD, Beijing), Romain Jacquet (Social and Health Affairs Adviser, French Embassy, Beijing), Axel Magis (Medical Director, Bangkok), Hiroshi Nakamura (Dean, Keio Business School, Tokyo), Wilson Nyansah (Consultant, Accra), David Rind (Chief Medical Officer, ICER, Boston), Ren Rui (Representative, Denos, Beijing), Joseph Saba (CEO, Axios International, Paris), John Tierce (Principal and Co-Founder, Monument Analytics, Baltimore), Tu Liang-Ruey (General Manager, Market Access Pricing and Reimbursement, Abbott Laboratories, Green Oaks), Stefan Vranckx (Associate Director, International Affairs, EFPIA, Brussels), Thierry Weishaupt (Director of Key Partnerships, Vyv, Paris) and Stella Wu (Corporate Lawyer, Beijing).

Special thanks to the artist Christophe Lourdelet, who translated our thoughts into a brilliant image for our cover page.

Thanks also to our librarian Hanna Huang, case writer Luis Liu and research assistants: Chen Xiaowen, Sandrine Hu and Gu Lei.

This research benefited from a research grant from China Europe International Business School (CEIBS).

We own all responsibilities and mistakes for the content of this book.

Introduction

Health is a precious thing, the only one, in truth, that deserves not only our time, sweat, effort, and possessions but even our life itself to strive to attain it. Especially since without it, life becomes burdensome and unbearable. Without health, pleasure, wisdom, knowledge, and virtue lose their lustre and fade away. Despite the most solid and firm arguments with which philosophy seeks to persuade us otherwise, we need only oppose the image of Plato struck by epilepsy or apoplexy in such a case, challenging him to call upon the rich faculties of his soul. Any path that can lead us to health, in my opinion, cannot be deemed either rough or costly. —Montaigne, sixteenth century.¹

Ever since the discovery of aspirin or penicillin, pharmaceuticals have essentially addressed a global market because diseases and the medicines for treating them are universal, and restoring and maintaining health is a universal concern. Indeed, access to pharmaceuticals is one of the key components to be achieved by a health system that has to satisfy the needs of the population.

The business model of this industry is more than ever driven by innovation, leveraging strong intellectual property protection to ensure high profitability, thus rewarding the risky research and development investments. By doing so, it limits broad access to patients for a period. It is the price to pay to enhance innovation. Thanks to economic growth and the adhesion of many governments to Universal Health Coverage, many countries have established some sort of public health coverage, frequently combined with private health insurance deployment since the turn of the millennium. Increased demand and solvability have enabled the boom of the pharmaceutical markets in high-income countries. Other countries are following, but broader access is still limited by health systems that are not yet mature. Hence the urge to develop policies not only to ensure safety and efficacy through regulatory control but also to make drugs available and affordable to patients while ensuring government or other payers’ financial sustainability.

The pharmaceutical market is global, but health systems are local. Each country is developing its system according to its wealth and economic growth, but also anchored in its history, culture, social values and political will. A prerequisite to address market access is to understand both the health system, its governance, resources and the organisation and processes for introducing pharmaceuticals. Concepts and tools are provided here for that objective. The choice has been made to illustrate them by summarising the key points from a diversity of countries. Those countries were chosen because they are the largest pharmaceutical markets in value, or they are influential in inspiring other countries to build their own. The United States, China, Japan, France, Germany and the United Kingdom are thus exposed in some detail. But other countries from Europe, South America, Asia-Pacific or Africa are also referred to, given the diversity of their needs, income level and governance, with the ambition to provide a global picture, although not exhaustive.

The book is structured into seven chapters. The first chapter sets the scene with the definition and scope of market access, and puts in perspective the cultural background of healthcare, the companies’ converging and conflicting interests with the environment and macroeconomic contexts they are operating in. Chapter 2 is dedicated to an overview of the different models for health systems and clarifies the different options for health insurance that are driving their financing framework. Chapter 3 provides an overview of processes and criteria for the market access of pharmaceuticals in key countries. It addresses more generally the overall regulation of pharmaceutical expenditure by authorities and mechanisms by which balance between the different stakeholders, including companies and payers, can be sought. The next three chapters give insights into the three core methodologies of market access: health technology assessment (Chapter 4), pricing (Chapter 5) and stakeholder involvement (Chapter 6). The last chapter examines current global trends and issues. It addresses, among others, the relationship between market access policies and the attractiveness of countries for manufacturing and investments and global governance.

This book reflects the complexity of the topic. Market access for pharmaceuticals is the junction of very different cognitive fields: medical and pharmaceutical sciences, business management, public policies at country and international level and so on. Hence the challenge to provide adequate information to grasp the fundamentals but also a strategic vision of the issues at stake. This book is proposed to advanced students from pharmacy, medical, business or public policies schools but also to the professionals working in public or private payers, patients’ organisations and governmental bodies. We wish to help all those who need to acquire comprehensive insights when confronted to this strategic topic.

Notes

1 de Pernon 2017.

Chapter 1

Definitions and Drivers

The purpose of this chapter is to provide the reader with pivotal definitions and drivers related to market access for pharmaceuticals. Starting by exploring the broader context, the principles related to health definition and pharmaceuticals as public goods are discussed. Cultural context is also addressed as it plays an important role in shaping market access within cultural and political boundaries. Pharmaceutical use is determined not only by the patient but also by other stakeholders. Inherent imperfections of the pharmaceuticals market are exposed with their structural influence on access. Finally, an enlarged definition of market access for the purpose of this book is proposed.

Health, the ‘Supreme Good’?

Health constitutes a unique and exceptional pursuit, and pharmaceuticals, by extension, represent a distinct category of goods. These truisms profoundly shape expectations and the operational dynamics of market access. This subject is approached not only from philosophical but also from pragmatic standpoints. This exploration is meaningful not only for professionals and experts but also for each of us in terms of aspiration, notwithstanding available resources.

The philosophical and legal perspectives

The wisdom of the 16th century French philosopher Michel de Montaigne encapsulates the essence of a profound truth.¹ The significance of health cannot be overstated; it is the foundation of all aspects of life and should be universally accessible. Montaigne, who suffered the torment of kidney stones and intermittent pain, emphasises that health intertwines with joy. Seeking well-being involves choosing pleasant environments and enjoyable company, cultivating natural remedies and steering clear of tumultuous passions. Montaigne’s perspective dismisses the reliance on surgeons, doctors (whose ignorance and lack of dedication he vehemently criticised) and pharmacists.¹ His stance underscores the importance of a holistic approach to health, emphasising the harmony between physical and emotional well-being.²

The official definition of health by WHO is in line with Montaigne’s:

A state of complete physical, mental and social well-being and not merely the absence of disease or infirmity. The enjoyment of the highest attainable standard of health is one of the fundamental rights of every human being without distinction of race, religion, political belief, economic or social condition.³

Health is one of the human rights stated by WHO since its constitution in 1946 in New York. It states the right to the highest attainable standard of health implies a clear set of legal obligations on states to ensure appropriate conditions for the enjoyment of health for all people without discrimination.

The right to health, as with other rights, includes both freedoms and entitlements:

freedoms include the right to control one’s health and body (e.g, sexual and reproductive rights) and to be free from interference (e.g. free from torture and non-consensual medical treatment and experimentation).

entitlements include the right to a system of health protection that gives everyone an equal opportunity to enjoy the highest attainable level of health.⁴

The right to health is one of a set of internationally agreed human rights standards and is inseparable or ‘indivisible’ from these other rights. This means achieving the right to health is both central to, and dependent upon, the realisation of other human rights, such as food, housing, work, education, information and participation.

Health capital

Overall, health status depends upon numerous determinants, as proposed by WHO (Figure 1.1). Attribution of the respective role of each determinant is a very ambitious enterprise and will vary according to the population and geography examined. Still, in developed countries, it may be shown that the healthcare system can be an important determinant. In 2010, across Organization of Economic Co-operation and Development (OECD) countries, gains in life expectancy had been more significant between 1998 and 2007 than in the three previous decades: gains were attributable not only to education, sanitation, but also – up to 40 per cent – to increase in health expenditure and better allocation of resources. However, after the financial crisis in 2007/2008, this performance was starting to be compromised, and other factors, such as more constraints on health expenditure, behaviours, increasing inequities, environmental issues, became a growing concern.⁵

Figure 1.1 The determinants of health according to WHO.

At the individual level, ‘health capital’ refers to an individual’s ability to live without physical or mental impairment and to withstand diseases, a capacity directly linked to one’s ability to engage in work, productivity and social integration. Disparities in health promotion and disease control within different socio-economic segments pose a significant and common threat. This inequality extends globally, as evident in the case of communicable diseases like COVID-19, exacerbated by increasing population exchanges.

Grossman (1972) introduced the term ‘health capital’ as part of a model of the demand for the commodity ‘good health’. This model views health as a ‘durable capital stock that produces an output of healthy time’ and depreciates with age, but that can be invested in through medical treatments.⁶ One key concept is the individual responsibility in maintaining one’s own health.

Health capital reflects an overall state and extends beyond the mere absence of physical or mental illness. However, the concept of health, and particularly health capital, remains vague and restrictive in the collective consciousness, often reduced to the absence of sickness. True health encompasses more, defined by the absence of activity limitations in daily life and the absence of disabilities. This broader concept of ‘good health’ now determines the quality of ageing and, by extension, life expectancy measured not only as years of life but also as years of life in good health.

Linking life expectancy to an individual’s health is crucial because living longer is valuable, but living those years in good health is paramount. Advances in science, reduced work-related strain and improved medical care contribute to achieving this goal. This pragmatic perspective is sufficient for our purpose here. The emphasis remains on the tangible aspects of health capital, its socio-economic implications and the importance of connecting life expectancy to the overall well-being of individuals.

Citizen of most wealthy countries tend to consider good health and access to care as taken for granted. In lower-income countries, good health may be considered a luxury.

When the World Bank launched the Human Capital Index (HCI) project in 2018, the purpose was to trigger a global effort to accelerate progress towards a world where all children can achieve their full potential. Actually, education and health are the two pillars of this approach. According to the World Bank, human capital – the knowledge, skills and health that people accumulate over their lives – is a central driver of sustainable growth and poverty reduction. More human capital is associated with higher earnings for people, higher income for countries and stronger cohesion in societies. HCI is an international metric that benchmarks the key components of human capital across economies. It provides a new definition of human capital and quantifies the contribution of health and education to the productivity of the next generation of workers. Countries can use it to assess how much income they are foregoing because of human capital gaps and how much faster they can turn these losses into gains if they act. There are two core indicators integrating health in the HCI:⁷

Adult survival rates. This is measured as the share of 15-year-olds who survive until age 60. This measure of mortality serves as a proxy for the range of nonfatal health outcomes that a child born today would experience as an adult if current conditions prevail into the future.

Healthy growth among children under age five. This is measured using stunting rates, that is, as 1 minus the share of children under five who are below normal height for their age. Stunting serves as an indicator for the prenatal, infant and early childhood health environments, summarising the risks to good health that children born today are likely to experience in their early years, with important consequences for health and well-being in adulthood.

In that respect, access to pharmaceuticals to prevent disease from occurring with vaccines and to treat diseases when they occur, whether in infancy or adulthood, contributes to the human capital.

Pharmaceuticals, essential goods

A pharmaceutical product is defined by WHO as ‘any substance or combination of substances marketed or manufactured to be marketed for treating or preventing disease in human beings, or with a view to making a medical diagnosis in human beings, or to restoring, correcting or modifying physiological functions in human beings’. It is commonly referred interchangeably with the terms drug, medicine or pharmaceutical.⁸ Medicines are not one single economic entity but a spectrum of commodities which range from luxury consumption goods to life-saving goods with important public health externalities.⁹

From a global public health perspective, pharmaceuticals are ‘essential goods’. In general, non-essential consumer goods have a high price elasticity of demand: demand increases when prices decrease, and vice versa (i.e. consumers renounce when the price is too high). Essential goods have a low elasticity of demand. ‘Essential goods’ here means basic food and consumer items, emergency products, medical and hygiene supplies (including pharmaceutical products), refined petroleum products and emergency clean-up products. This includes the final good itself as well as all inputs in the supply chain required for production, distribution and retail. It is a relatively recent concept with the creation of the Essential Drug List by WHO in 1977.¹⁰ The first list contained 220 active ingredients (the name was later modified). Since then, an Expert Committee meets every two years to update the Model List based on evidence of the proposed drug’s safety, efficacy and cost-effectiveness. It must also be shown that the medication is both essential to meeting priority healthcare needs and is available² in adequate amounts.

The Importance of Culture in Healthcare

The organisation of a healthcare system is profoundly influenced by culture. It is fundamental to understand the social values of a community to see how it shapes its healthcare system. It also explains why evolution is so difficult. Medical knowledge is progressing fast. Business models are adapting. But healthcare systems evolve slowly. Cultural differences explain why international communication is difficult. These are all important factors impacting market access of pharmaceuticals.

Cultural influences in general

Culture is understood here, as masterfully demonstrated by Geert and Gert Jan Hofstede, as the total sum of values, team spirit, work style, code of conduct and thinking mode that are generally recognised and followed by the members of an organisation in long-term practices.

Culture is the result of history with at least three different sources. First, institutions play a pivotal role, serving as the visible bedrock of a culture. These encompass a plethora of established norms, rules, laws and tangible organisations that serve as the structural framework upon which the culture is built. These institutions not only regulate socio-economic conduct but also contribute significantly to the visible manifestations of culture.

Second, values form the intangible core of a culture, akin to the software that runs the minds of its people. These values are the deeply ingrained beliefs, principles and philosophies that guide individual and collective behaviour. Invisible to the naked eye, these values influence decision-making, interpersonal relationships and socio-economic structures, providing the moral compass that steers the course of a culture.

Third the identity of a culture is intricately tied to factors such as language, religion and other defining characteristics. Language, as a medium of expression, shapes communication patterns and reflects the unique nuances of thought within a cultural context. Religion, with its rituals and belief systems, adds another layer of identity, influencing social practices and guiding moral frameworks. Together, these elements contribute to the distinctive identity of a culture, reflecting a shared heritage that binds its people.

A customary term for such mental software is culture. This word has several meanings, all derived from its Latin source, which refers to the tilling of the soil. In most Western languages culture commonly means ‘civilization’ or ‘refinement of the mind’ and in particular the results of such refinement, such as education, art, and literature. This is culture in the narrow sense. Culture as mental software, however, corresponds to a much broader use of the word that is common among sociologists and, especially, anthropologists.¹¹

Cultural influences may sometimes be difficult to perceive. Like communication between two people of different cultures, perception may vary, often leading to challenging discussions. These perceptions can be categorised into different levels:

No perception of cultural differences. Individuals may not recognise or acknowledge cultural differences. This lack of awareness can lead to misunderstandings and misinterpretations, hindering effective communication.

Perception of cultural differences is too high. An exceptionally heightened perception of cultural differences reflects a deep awareness and sensitivity towards the nuances and intricacies of diverse cultures. At this level, one can delve into the underlying values, norms and perspectives that shape a particular culture. However, it may limit adequate comparison, and structural issues of different healthcare systems are overlooked.

Intercultural communication. At the most advanced level, individuals engage in intercultural communication, actively seeking to understand, appreciate and navigate cultural differences. This involves a conscious effort to bridge gaps, adapt communication styles and foster effective collaboration in diverse settings.

Recognising and navigating