Friday, June 14, 2024

Expanding our Definitions of Out-of-Pocket Costs: Three Imperatives for Biopharmaceutical Manufacturers

Today’s guest post comes from Christine Juday, Head of Market Access at Real Chemistry.

Chris discusses new research on how patients perceive out-of-pocket costs. As she explains, many patients and unpaid caregivers consider out-of-pocket costs for medication within the context of their total spending. She then recommends three ways that manufacturers can improve patients' access and affordability.

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Read on for Chris' insights.

Expanding our Definitions of Out-of-Pocket Costs: Three Imperatives for Biopharmaceutical Manufacturers
By Christine Juday, Head of Market Access, Real Chemistry

In this election year, drug costs and broader questions of healthcare affordability are once again in the crosshairs. Amidst Congressional hearings, policy posturing, and cross-sector finger-pointing, the complexities of actual patient experiences and ongoing financial burdens can easily get lost in the noise.

As it turns out, patients’ healthcare-related financial burdens — specifically, the out-of-pocket (OOP) costs they associate with diagnosis, medications, and other treatments — range more broadly than many in biopharma may have assumed.

The scope of those OOP costs extends well beyond the co-pays, co-insurance, and deductibles most frequently cited when discussing medication-related expenses. For anyone leading market access strategy or patient services programs — or advancing equitable access to care — the implications of a broader OOP cost definition are significant.

Recently, we partnered with researchers from Merck and the University of Michigan’s Center for Value-Based Insurance Design (V-BID) to expand our understanding of what might be considered OOP costs from the perspective of patients and their unpaid caregivers (often family members). The resulting article, Expanding the Catalog of Patient and Caregiver Out-of-Pocket Costs: A Systematic Literature Review, was published in Population Health Management. It has stimulated important conversations about access strategy innovations, opportunities for cross-sector collaboration, and the need for additional research.

Below, we summarize key insights from that research along with three critical imperatives for biopharmaceutical manufacturers.


For an expense to “count” as OOP in our systematic literature review, it had to be paid by a patient or unpaid caregiver and associated with a real-world healthcare experience. Across the 817 articles in our study, we captured 31 distinct categories of OOP costs. Those expenses spanned direct medical costs like those mentioned above, plus direct nonmedical costs like transportation or childcare, and indirect spending — what some might call opportunity costs — like absenteeism from work or lost productivity.

And while manufacturers have many strategies to help lower the direct cost of patients’ medications, this analysis reminds us that patients don’t necessarily distinguish between the OOP expense of their medication and the OPP expense for the doctor visit and lab tests that preceded their prescription.

Our biggest takeaway from the research: there’s a lot more to consider when developing access strategies and patient support programs. And while many of these variables may seem out of manufacturers’ control, this research opens new possibilities for innovation, collaboration, and exploration. Here’s how we suggest moving forward:


Our collective work to expand affordability and access — especially in underserved or marginalized populations — has been necessary but insufficient to date. To expand our impact, we must deepen our understanding of patients’ financial barriers to seeking care and taking medications as prescribed. And we must consider how SDOH and other factors contribute to or worsen those barriers. That, in turn, can spark innovation.

How might expanded prior authorization support or step-by-step navigation guides reduce the time some patients spend away from work just to secure their medications? How might compliant investments in food delivery programs or transportation vouchers change how patients decide if they can afford next month’s scheduled infusion? We understand the very real financial, regulatory, and market-based limits to what manufacturers can do, but a more holistic understanding of OOP costs may help guide those actions.


No one sector can solve the patient affordability crisis on its own. But the range of patient-defined OOP costs we identified should compel all stakeholders to seek out more creative cross-industry partnerships — fostering the kinds of experimentation that can help address medication affordability barriers. Examples may include more holistic approaches to bundled payments, joint investments in access-related services (e.g., transportation, childcare) in under-resourced communities, cross-industry advocacy efforts, or technology innovation to support care navigation and telemedicine.


While our study clearly suggests medication access and affordability barriers are more “multifarious and underestimated” than previously thought, it also raises many new questions.

Market access and patient services leaders would benefit from more robust insights into how patients weigh different kinds of out-of-pocket costs when choosing to seek care or (re)fill a prescription. And how do those tradeoffs vary based on disease type, treatment duration, or patient demographics? Such research would help us understand how the expenses we catalogued actually show up in people’s lives — and how they influence healthcare-related conversations and actions.

This, in turn, could foster new research into how SDOH and legacy inequities impact the frequency and weight of certain OOP costs such as transportation, lost productivity, or wasted time associated with navigating complex healthcare structures — especially for those with communication barriers that make it difficult to schedule appointments, order medications, or deal with utilization management policies.

We are actively looking for manufacturer partners interested in exploring some of these questions with us to chart a path towards improved access and outcomes.

If you’re interested in collaborating on future OOP cost research or learning more about Real Chemistry’s full suite of market access strategy services, let’s chat. You can reach me at You can also learn more about our ongoing work with manufacturers on affordability-related research in this recent Q&A article.

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