Hull Associates
Mastering the new paradigm in payer value

The problem seems simple: convince payers of the value of a new specialty pharmaceuticals and medical technologies so they can respond with a payment that reflects that added value to the healthcare system. The reality, however, is often very different as payers review and address drug and technology costs through a range of different payment systems, and with misalignment between the budgets where costs are assigned versus the budgets where savings are realized. For many products, payments that may “hide” the product within a bundled service making savings difficult to assess and allocate.

“The struggle for value-based reimbursement is ongoing and varies greatly by a product’s circumstances,” says Stephen Hull, Founder and President of Hull Associates LLC. Hull explains that payers very rarely pay for a technology in proportion to its overall value over time, and rather seek to minimize the costs of new innovations.

The solution, according to Hull, is to develop a targeted, and highly customized solution for each innovator product that bridges both regulatory and reimbursement demands for evidence and provides economic value at different intervals.

“Over twenty five years of work in market access has taught one lesson: for true innovations, there are no cookie-cutter answers,” says Stephen Hull, founder and president of Hull Associates LLC.

The Rising Attention to Specialty Pharma Products

One area that is growing in attention by payers around the world is the cost of specialty, physician administered therapies. The latest immunotherapies for cancer, for example, can have costs of over half million $USD, which makes them prohibitive for many health systems.

“At the end of the day, our focus is enabling expert physicians to use good products for the benefit of patients and their health”

In the USA, while Medicare coverage is relatively seamless for most injectable drugs, US Commercial payers regularly apply coverage restrictions on injectable drugs.

“Approximately one third of commercial payer coverage policies are more restrictive than the FDA approved label for injectable drugs,” says Hull. “This is a trend that has been steadily increasing.”

The solution, says Hull, is in designing reimbursement into the product’s clinical trials, with more specific definition of patient subgroups and longer term patient outcomes, along with strong health economic evidence. “When you see payer coverage restrictions on an injectable drug, it usually reflects overall therapy cost and the availability of cheaper, equally effective substitutes.”

Designing Reimbursement into Medical Technologies

Similarly, for medical technologies, products are frequently designed to improve patient wellbeing, ease the time and expense burdens on providers, or reduce downstream complications and interventions. But payers do not value all innovations equally and are primarily focused on healthcare inputs that create financial risk to their plans.

“For example, innovator companies develop systems that enable earlier diagnosis of cancer,” explains Hull. “That sounds intuitively great for patients, but payers think ‘what will this do to actually reduce the burdens and costs of the disease?’”

Hull explains that his team works with each customer to align its strategies with payer demands.

“The critical path always requires alignment of the key value proposition to payers and development of the right evidence to prove that value,” explains Hull. With an expert team in the Boston area, and key field consultants in Europe, Asia and Latin America, Hull Associates helps companies think through its overall strategy, so that there is alignment with the strategies for the US market and the rest of the world.

“There are plenty of innovations that are valuable yet do not ‘fit’ into reimbursement systems and cannot be monetized,” says Hull. “There are also sometimes strategic choices a company can make to better position itself to succeed in already-existing reimbursement pathways.”

New Digital Innovations, New Challenges

Among the problems Hull Associates helps to address are the barriers facing the latest technologies of the digital age – notably artificial intelligence and remote technologies that help to improve diagnosis, monitoring and management of disease.

“If you consider the greatest innovation in the last decade, much of it has involved digital and remote technologies,” says Hull. “But the reality is healthcare systems are just beginning to develop pathways to pay for these technologies.”

In the USA, Hull explains that digital health received a significant boost from changes in Medicare reimbursement during the Covid epidemic. “The needs for remote technologies expanded greatly during Covid as we needed remote technology solutions,” says Hull. “We don’t yet know how things will settle in the USA and elsewhere after the emergency is over.”

Germany has launched a DiGA software reimbursement pathway for low risk software offerings used directly by patients – which is hailed as a large step forward. Unfortunately it does not include higher risk products including clinical analytics that physicians may use to interpret diagnostic data. “The business model for many digital solutions is not yet aligned with payment systems around the world,” says Hull.

Building Value into Your Drug or Technology

The critical aspect of success, according to Hull, is early integration of strategic positioning and evidence into the product’s launch plan and design. Hull explains that regulatory approvals via the FDA and European Union have long been a key driver of clinical evidence, but the studies produced for such approvals are rarely sufficient to address the needs of payers.

“Twenty years ago we thought that all companies were going to better align themselves with payer evidence needs,” says Hull. “The reality is that in the USA, the evidence focus between FDA and the payers is farther apart than ever.”

For expensive pharmaceuticals, manufacturers continue to leverage the high cost of older, less effective substitute drugs to justify premium prices for their new launches, while at the same time seeking broad labels.

“The problem with this approach is that targeted results are not supportable in the eyes of payers,” explains Hull, who points to the use of targeted companion diagnostics as a key pillar for expensive injectable drugs. “Proper therapy targeting is more critical, along with flexible, managed entry agreements for very expensive therapies.”

For medical devices, Hull explains that more liberal FDA regulatory approaches have led many companies to seek less specific, general labels under the agency’s 510(k) clearance program. At the same time, payers have pushed hard for more specific, targeted studies demonstrating applied value.

“Payers want to understand value for money,” says Hull. “Substantial equivalence is almost the opposite concept, so it is not surprising many tech firms find themselves unprepared for the payer evidence reviews.”

The solution, according to Hull is an early stage and frequently updated review of payer evidence demands to help ensure confidence that payers will understand clinical value for a targeted patient population, along with the duration of the clinical effect of the therapy.

“The last thing payers want to see is an expensive investment that is not actually used or that simply adds cost to the pathway with no known value,” explains Hull.

Local Expertise is Critical

According to Hull, the critical assets of his firm are the core experts on his team, both in the USA and overseas. Each field consultant has a minimum of 10 years industry experience and works as part of an integral team to derive client solutions, specific to each market.

In its 15 years serving pharma and medical technology companies, Hull Associates has served over 450 companies across all disease areas, and among 22 major global markets. What truly differentiates Hull Associates is its focus on field execution and advocacy work for payers to help clients succeed. “There are very few companies that do both,” says Hull. “We do not believe you can give strategic advice without having implemented successful strategies.”

Adding to that is the company’s exposure and understanding of international markets. Since its founding in 2007, Hull Associates has had a major focus on support among the leading global markets, so that clients can develop evidence that truly addresses their major launches. “We are equally focused on helping support launches overseas, as we are in the U.S.,” says Hull.

Hull Associates offers strategic market access and reimbursement consulting to enable pharmaceutical, medical device, and diagnostic products to be recognized by payment systems and readily adopted by healthcare providers. “Our focus is to help organizations with their strategic decision making, evidence strategies, and execution of those strategies in each market to optimize reimbursement from each payment system,” says Hull.