- Value-based healthcare is shifting life science organizations’ focus from sellers of volume to contributors in outcomes in terms of improving patients’ quality of life.
- It calls for greater collaboration between life sciences companies, patients, providers, pharmacists, procurers and insurers, to look beyond their individual inputs and instead how they all contribute to a specific outcome.
- Adopting value-based healthcare can help life sciences companies become more competitive through greater patient-centricity, stronger relationships with clinicians, and potentially better value-for-money by delivering better on outcomes.
The traditional life sciences value chain often begins in the research laboratory and ends when a doctor writes out a prescription. To reach this goal, companies have established extensive sales and marketing networks aimed at persuading clinicians, pharmacists and procurement professionals of their products’ efficacy. But is this the best way to achieve optimum health outcomes for patients, health systems and society as a whole? I don’t believe it is.
I passionately believe that value-based healthcare is a concept whose time has arrived. Not just as a response to strained health budgets that are demanding value in all expenditures – including drugs; but also as a way to completely re-write the perception of life sciences organizations in healthcare, with companies evolving from pill providers to deliverers of improved health outcomes.
This paradigm shift isn’t just a concept, it’s becoming a reality with companies like Ferring, a Swiss pharmaceutical company, which has been a champion of embracing value-based care. It all started when Ferring developed a new drug to boost the chances of getting pregnant through in vitro fertilization (IVF). Everyone in the organization believed in the product and felt it could make a big difference to people desperate to start a family. But they feared that, in the prevailing cost-constrained environment, it might be rejected.
So, as Thomas Leiers, General Manager, Ferring Pharmaceuticals in Germany and the Netherlands explains, they chose to follow a different path.
We had observed the Netherlands market for medical devices moving towards value and wanted a business model that would detach negotiations from pure price in favor of value. This meant reimagining ourselves as much more than suppliers of a drug, to become integral players in the care pathway.
Ferring Pharmaceuticals in Germany and the Netherlands
KPMG colleagues and I had the privilege to work with Ferring in the Netherlands and play a small part in their incredible transformation, to help the company re-define its ambition in terms of value.
Establishing the true meaning of value in healthcare
Value means different things to different people. To start, you need to understand what value means to the patient, so we facilitated workshops in the Netherlands with the patients themselves. Some of the stories were truly heartbreaking and moved me to tears, hearing from women who were so fragile I thought they would break into pieces. Women who wanted a child so desperately but couldn’t conceive. The joy of women who had finally managed to get pregnant after years of trying. The pain of women who had been treated with a lack of empathy by clinical staff. However, to also get the other perspective, we listened to doctors’ experiences and struggles of guiding patients through intensely emotional times. These experiences reminded me why I work in healthcare.
Further workshops with Dutch fertility clinic medical specialists, hospitals, and health insurance providers discussed the meaning of value to the health system in terms of health outcomes, patient happiness and quality of life, in addition to the strain on health facilities. Hearing these accounts confirmed to all of us that Ferring wasn’t just in the pharmaceuticals business; they were in the business of helping women build families, fulfil dreams and, in some cases, learning to live with the knowledge that they would never be able to give birth.
Winning the culture clash
Moving from a traditional sales and marketing approach to one based around the patient was a significant paradigm shift for Ferring in the Netherlands. Having been accustomed to sales calls and event sponsorship, the company had to recalibrate mindsets onto patient care and interventions, to collectively commit to improving patients’ and their families’ lives, and to work with other parts of the health and social care sector to achieve these goals. Internally, it meant a wholesale cultural change across all departments – with sales and marketing, program managers, and finance teams all buying into the new philosophy and to put in the effort to make it successful.
Thomas Leiers says it was all about taking collective responsibility to provide collective value: “We had to change and train and educate people in our organization about why we’re doing this, where we are heading, about a shift in culture of how we operate. Pharma companies traditionally sell drugs, so putting the patient in the center was a shift of mindset in our organization. We had to carry out a lot of training and internal marketing for this concept, involving everybody in the organization. We were not just shifting our business model but our entire culture, so we had to bring everybody with us.”
Today, Ferring in the Netherlands doesn’t think of itself as a research company and medical supplier; it sees itself as playing an important role in the patient pathway, always thinking about where it can provide most value. For Sales and Marketing, this means aligning product sales to outcomes via pay-for-outcome contracts. For the Medical Affairs team, it means developing outcome-based relationships with quality providers to increase chances of success. And for Research and Development, it’s about evaluating product pipelines which have the best chance in meeting health outcomes.
It wasn’t just about culture, of course. Ferring is a commercial business and had to produce a business case for its new direction, involving market simulations to determine return on investment in value-based healthcare compared to traditional marketing methods. Data played a key role, with a strong focus on building patient-reported outcome measures (PROMs) and patient-reported experience measures (PREMs) into the drug evaluation process, working with clinicians and healthcare providers to define those. These results play a critical role in working with payers/insurers to confirm the success of the care and the value proposition for purchasing their product.
MyFertiCoach – lifestyle and emotional support
When undergoing IVF treatment, it’s important that women adopt the appropriate lifestyle habits to maximize the chances of getting pregnant. Ferring in the Netherlands and KPMG spoke at length with researchers and fertility care professionals to determine the ideal conditions: including diet, weight, alcohol consumption, smoking, stress management, and sleep – and the kinds of interventions that could increase the chances of conception. These were all factored into a psychological coaching program that would be offered to support those undergoing fertility treatments.
Ferring chose to offer coaching via an app it developed, MyFertiCoach, which offers interventions on lifestyle, encouragement and opportunities to interact with a medical support team, and access to vital clinical help or just have a virtual ‘shoulder to cry on’. We must remember that undergoing IVF can be a very stressful, lonely, and uncertain time. Any interventions, therefore, must focus on helping women along this rollercoaster ride, and making sure that those who are unable to get pregnant can find a route to happiness and fulfilment.
Encouraging early signs
Although Ferring in the Netherlands sees its new approach as a long-term transformation program, there are encouraging early signs of success. One of the most dramatic statistics is that, thanks to the combination of the new drug and the interventions, the average number of IVF treatments needed to get pregnant has come down significantly – which saves overall costs for the healthcare system. The company is now in talks with medical insurers to invest those shared savings into care pathways and interventions that make treatment even more effective.
This process itself has increased the interactions with doctors; helping Ferring build longer-term relationships with these key stakeholders as partners in their value-based vision.
It’s been an intense experience for Ferring in the Netherlands, and Thomas Leiers is full of praise for the way its employees have responded: “I’m most proud of my team. It’s been a long journey that started in 2015 and took 4 years, so we needed a lot of breath, a level of tolerance for frustration, for what was a very complex undertaking, to bundle the needs and requirements of different stakeholders like payers, patients and healthcare providers. I’m very proud of my team to have the courage, spirit, and energy to take the long run.”
- The road ahead for life sciences is to deliver collective value to the triangle of pharmaceutical companies, providers and patients; ultimately delivering value-for-money to payers and systems. To build that triangle, companies should build relationships and a consensus with patients, doctors and procurers, viewing them as partners, not simply customers for their product.
- This is about far more than re-setting sales and marketing strategy; the entire organization must embrace value-based healthcare led from the top by championing a patient-centric culture where everyone has a re-defined role to play to deliver value by improving patients’ lives.
- Data is a key factor, expanding beyond traditional efficacy metrics and broadening to define success through patient-reported outcome measures (PROMs) and patient-reported experience measures (PREMs).
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