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Market access risk: An update to the changing market access landscape

21 November 2014 Praful Mehta

This month, we launched our first full update of our newly created Market Access Risk Scores (MARS). These risk ratings are designed to provide a framework to help pharmaceutical companies better navigate and understand the changing market access landscape by quantifying the effects of macroeconomic and healthcare policy environment in each individual country, and rating them on a risk gradient scale.

As we continue to evolve the risk ratings framework, we have recently made more changes to our risk algorithm by incorporating events risk i.e. risk of each individual market access event in a country. Events risk measures the current pulse of the market access environment and helps in optimizing the country level risk rankings. Additionally, we have also updated the ratings for the macroeconomic environment which has changed quite significantly due to improving global economic environment and a stronger focus on healthcare investments.

Globally, market access risk scores have improved with a median reduction of 7% in global risk scores.

Changes to the risk scores are attributable to the following reasons:

  1. Macroeconomic Environment – Overall macroeconomic environment has significantly improved as most countries are slowly coming out of recession and healthcare investments are becoming a top priority in most markets around the world. However, in the Eurozone there is still an ongoing debate about best possible ways to achieve growth and cutbacks in public spending including healthcare has become the new norm.
  2. Market Access Policy Environment – The market access policy environment has also gone through a tremendous change with most countries focusing on implementing the market access policies adopted during the height of financial crises. There is definitely more insight into the policy environment than few years ago and this has reduced the overall risk propensity in most of the countries. However, there is a renewed focus on reducing systemic healthcare costs and increasing the adoption of generics in most developed markets. In developing markets, the policies are more geared with investing the economic surpluses back into their healthcare markets and expanding both healthcare insurance and access to innovative medicines.
  3. Events Landscape and Event Risk Ratings – There have been few high impact negative and positive events in countries in the last 3 months, which have affected our view of the market access environment (please refer to the impact of event risk on total market access risk as described in the figure below). Most notable event which has impacted market access negatively is in Portugal, where the Ministry of Health (MOH) has signed as agreement with the country's National Association of Pharmacies (ANF), according to which pharmacies will be receiving financial incentives in exchange for increasing generics substitution. Conversely, on the positive side of events, Argentina after three months of price freeze approved an increase of 4% for medicine prices including both prescription and OTC drugs. But there are numerous other developments across the world that have had an impact that we have quantified into our updated risk ratings, and will continue to do so going forward.

Market Access Risk Scores (MARS) and our updated monthly event risk tracker are integrated into our World Markets Healthcare (WMH) and World Markets Pricing and Reimbursement (WMPR) market solutions. Learn more about our ratings, and download a whitepaper to understand our methodology. In addition, you can view a recent research abstract on the impact of risk ratings as presented at ISPOR and watch our latest video on the framework we used to assess the market access risk environment.

Praful Mehta is a senior life sciences analyst for IHS
Posted 21 November 2014



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