Case Study: Strengthening Positioning for IRA Drug Price Negotiation
A large life sciences manufacturer was targeted for negotiation as one of the first ten products selected by the Centers for Medicare & Medicaid Services (CMS) under the Inflation Reduction Act (IRA). It wanted to create a strategy to articulate the value of its product during negotiations and understand the people, processes, and politics the agency may bring to bear in its formal negotiation procedure. ADVI helped the client anticipate CMS’s approach to negotiation, predict how CMS might weigh manufacturer evidence submission and real-world evidence, and develop strategies to strengthen its narrative and arguments to CMS to ensure that negotiated “maximum fair prices” (MFPs) accurately reflect the patient perspective and overall value of the client’s products.
The Challenge
Being selected as one of the first ten drugs targeted for IRA drug price negotiations, life sciences manufacturers needed to prepare for negotiation with CMS on a host of business issues, the impact of which is unclear and in a competitive environment. Manufacturers need insight into the people, processes, politics, and precedent that CMS may use in making their internal decisions and external guidance. Manufacturers with selected drugs sought to determine how their manufacturer submitted package and additional evidence might be evaluated, how their arguments may be perceived by CMS officials, and how nuances like real world evidence or total cost of care models may be perceived by the negotiation team during negotiation. The companies sought to strengthen their negotiation position by fine tuning, adding, and presenting their arguments in the best light with an eye towards impacting CMS’s evaluation of these arguments in their consideration of an MFP for selected drugs.
The Strategy
ADVI worked with manufacturers involved in the initial negotiation process. We evaluated manufacturer submitted evidence; facilitated development of manufacturer value stories and arguments; curated a live model negotiation role play exercise including a discussion guide and recruitment of mock CMS participants, and organized and participated in a mock negotiation. We then provided competitive positioning utilizing our ADVI Advisor network and access to former CMS decision-makers familiar with CMS policy planning around IRA drug price negotiations. This exercise and related work allowed us to create and suggest a strategy for the manufacturers which we believed would strengthen their position throughout this first round of negotiations and future negotiations to come for drugs that are likely to be selected in future years.
The Results
ADVI’s clients engaged in drug price negotiation with CMS. ADVI received positive feedback that our input, workshop, strategy, and stakeholder mapping enabled them to anticipate, plan for, and deploy strategies that improved their negotiating position and enhanced their engagement with CMS.
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