Mar6

The Power of Payer: Prescribe All You Want…We Can Block You!

6808124Remember the Doritos slogan, “Crunch all you want, we’ll make more!”? What a mantra, supply and demand. So simple. So obvious.

Sure, prescriber demand plays a role in how available some drugs are, but at the end of the day health plans and formulary P&T committees within hospitals and large practices make category decisions that effect drug availability for patients and directly impact prescribing behavior. These formulary decisions aren’t made in a vacuum, and they can impact your brands, your marketing goals, and play a huge role in getting a leg up in today’s market.

So what do you know about all this? If your client came to you tomorrow in a competitive market situation—multiple new branded entrants, generic domination, or patient abandonment at the pharmacy—and they couldn’t get a foothold, what would you tell them? How would you break that wall? How do you partner with your clients to fulfill your brand’s true market destiny?

Consider what the payer marketing unit can bring to the table for you and your clients. More and more we hear our clients talk about access challenges broadly, issues with patient co-pays, or prior authorizations and step edits getting in the way of reaching marketing goals. In this changing healthcare environment there is so much to consider that plays a role in prescriber decision making, it goes well beyond the clinical profile of your brand. The smarter we all are regarding the holistic considerations of a brand, the better we can show our value as a marketing partner and offer uniquely impactful solutions to our clients.insurances

This is where the Power of Payer comes in. The payer marketing units at Ogilvy CommonHealth Worldwide want to help provide you with a strong background on health plan and environmental issues to more effectively reach your client’s marketing goals. We are actively working towards open house events for Ogilvy CommonHealth Worldwide in NJ and NY where we can share information specific to two hot topics:

  • Emerging healthcare models: What are they? How do they hold the keys to success in the market? What should we know about them? Better understand how they act and what these actions mean to our clients and their brands.
  • Payer for newbies: An overview of what a payer is. Who are payer customers and manufacturer clients? How do payer decisions impact overall market sales goals and category usage? Why do we need to consider them when building brand plans and overcoming marketing hurdles?

"Open House” Posting. Part of our “Create a Sign” Series.As part of the Power of Payer open houses, we will also showcase some of the unique work we have done to achieve market success as well as answer any questions you may have about the payer customer, unique challenges your brand may be facing, or just have a fun discussion around environmental trends!

Watch for more information and then mark your calendars to join us for the Power of Payer open houses.

CONTINUE THE CONVERSATION: Questions? Comments? You can contact the author directly at blog@ochww.com. Please allow 24 hours for response.

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Feb26

Digital Trends Impacting US Healthcare – Infographic

In the past year, digital innovations have brought about new markets and channels for digital health interactions. This infographic is a visual mapping of the technologies and innovations which are already playing a key role in shaping the future of healthcare and the experiences and journeys which surround it.

Of course the ACA is affecting healthcare coverage, but it is also affecting our healthcare experiences by placing increased importance on and driving more frequent interactions with NPs, PAs, and Pharmacists. Additionally, more priority has shifted to consumers to educate themselves and take responsibility for their own health, especially when combined with our growing culture of social media and trust networks, and recent draft guidance from the FDA. Video remains hot, but the trending has shifted to the length of videos patients are consuming, increasing its relevance to pharmaceutical marketers. Mobile and tablets continue to grow rapidly, with and quantified self driving deeper engagement though apps, not just web. Last, but certainly not least, EHR is poised to enter the next phase of meaningful use, setting the stage for a platform shake-out as certification requirements evolve to provide more and deeper data sets to systems of connected health as providers continue to on-board.

Infographic of important technologies that impact digital healthcare marketing.

Infographic of important technologies that impact digital healthcare marketing.

Technology is evolving fast, and healthcare, believe it or not, is keeping pace and even leading the charge on many fronts. Spurred on by government mandates and initiatives, innovative organizations ranging from Google and Apple to Silicon Valley startups like Practice Fusion are quickly carrying the ball forward, sometimes struggling to keep pace with consumer expectations of today’s technology. It’s these digital healthcare innovations which have set the trends affecting us today, and will carry us forward to tomorrow.

CONTINUE THE CONVERSATION: Questions? Comments? You can contact the author directly at blog@ochww.com. Please allow 24 hours for response.

Also posted in adherence, advertising, Data, Digital, Digital Advertising, Healthcare Communications, Infographics, Marketing, Media, Medical Education, Multi Channel Marketing, Patient Communications, Physician Communications, Research, Social Media, Strategy, Technology | Tagged , , | Leave a comment
Jan7

The Great Migration

Wildebeest Migration
Physicians: Owners to Employees

In the animal kingdom migration is natural and instinctual, a relatively long-distance movement of individuals as a group, as defined in the dictionary. It is found in all major animal species. The trigger for the migration may be climate, availability of food, the season of the year, or a major habitat change or disruption. Whatever it is, migration means survival!

So if birds, fish, butterflies, and elk do it, just to name a few, why are physicians doing it? The answer is adaptation for survival due to environmental shifts.

The Facts

There are approximately 100,000 (or 1/3) fewer doctors in an ownership private practice setting today than in 2000.

Accenture researchers analyzed data from the American Medical Association and MGMA-ACMPE to determine trends in physician independence and practice ownership. Physicians were defined as independent if they owned at least part of a practice.

Table

 

 

 

 

 

 

 

 

 

**Projected.

Source: “Clinical Transformation: New Business Models for a New Era in Healthcare,” Accenture accessed 11/25/2013.

The Why

Top concerns prompting physicians to consider employment

Several issues are persuading doctors to think seriously about leaving independent practice. Accenture researchers surveyed 204 specialty and primary care physicians in May to identify the most pressing concerns.

87% cited business expenses.

61% named the prevalence of managed care.

53% were concerned about EHR requirements.

53% mentioned maintaining and managing staff.

39% cited the number of patients required to break even.

Source: “Clinical Transformation: New Business Models for a New Era in Healthcare,” Accenture, accessed 11/25/2013.

More and more physicians are facing excessive business costs as employers in private practice and decide the price of autonomy just isn’t worth it anymore.

The type of practice setting doctors choose is a decision affecting everything from their salary, practice relationships, and the hours they work. What’s more, given the changes taking place in the healthcare arena, selecting a practice model is no longer a simple decision made in one’s final year of residency. Managed care reimbursement for services and formulary protocols and practices restrictions have increasingly changed the healthcare delivery landscape, financial pressures, government regulation, and technological as well as administrative demands from payers— i.e., commercial health plans, GPOs, hospitals, Medicare, and Medicaid are influencing physicians of all ages and stages in their careers to reevaluate their practice decisions just to make a living. “Where is the doctor-patient relationship in all this?” many doctors have asked me over the past few years.

Many physicians after paying all their monthly expenses and staff salaries have little or nothing to pay themselves and turn to market research and advisory opportunities to supplement their income. Many physicians find this increasingly frustrating and start looking for other options like migration.

Migration takes many forms: just walking away and becoming a chief, retiring, teaching/academia, and physician concierge. One doctor I know walked away and just opened a bar. The answer for many physicians is migration to more of an employee type setting.

Let’s just focus on institutional practice and what that means to manufactures and marketers. The physician has moved from employer to employee—a big communications game changer.

Being part of a hospital or institutional setting relieves physicians of many of the financial and administrative burdens of owning/running a practice. It gives them retirement plans and also support services they may not have had before, and enables them to offer their staff better benefits. Doctors I have interviewed have followed colleagues in this migration of selling their practices, and liked the results.

The Implications

Autonomy is compromised in the new payer-centric environment for survival, and the opportunity for manufactures to have the traditional access to communicate, educate and cultivate relationships is now forever changed.

The implications are profound and we need to adapt traditional forms of communications, and find new and meaningful ways to communicate. We need to take a more critical view of some of the more recent options we tend to look toward, like websites. “No, not another website! We are already pulling down ones that are doing nothing for us!” many manufacturers say. I have heard that more times over the past few years than I can count. Today, a new website or iPad detail aid will not do it. We need to fully understand how physicians today want and need to be communicated to in their new environment; it is not one size fits all anymore.  We need to look at institutional barriers to access and develop business-to-business value propositions to gain access. And it doesn’t stop there. We need to look at multiple or customized  value propositions by HCP specialties, gender, age, cultural diversity, as well as regional differences to optimize brand opportunities for growth in the brief moments in time we have to communicate. Think of it this way: a 29-year-old female internist in Texas most likely looks through a different lens for communications, information, and decision-making than a 62-year-old male internist in Vermont. What do they have in common? Most likely today they are in an institutional setting, they want to help keep or get their patients well, and they have no time to talk to you in their growing payer-centric institutional environment.

The Way to Adapt

The answer for manufacturers and marketers is that we need to change. Look to nature and migrate how we think and constantly adapt what we do to survive.

The question is, how are you going to activate your migration?

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Nov22

Payer Marketing—What Happened to the Good Old Days?

prescription padLife was easy in the early days of payer marketing: create a formulary kit, negotiate a market share agreement with tier 2 status, and pull it through with some fancy formulary status flashcards. Yes, life was good back then. Did I say formulary kit? Yep, those have changed as well. The executive summary of AMCP’s Format for Formulary Submissions 3.0 states that it must include a “value statement of the pharmaceutical or biologic agent being discussed.” What does that mean? Is it about pricing? Dollars saved? Rebates? Historically, rebates have been used to gain preferred formulary position with reduced member out-of-pockets. But with over 70% of prescriptions written today being generic, that marketing approach falls apart. Things are further complicated by the fact that payers are much more willing to use step edits (required failure on a preferred agent prior to use of another agent) and prior authorizations to drive use of preferred therapies, as opposed to relying only on formulary positioning differences.

The value proposition is now the most important story a manufacturer needs to craft in the launch of a new brand—so much so that more forward-thinking manufacturers are designing arms of clinical trials that integrate economic and comparative measures to support the value proposition they feel will be needed to gain support from the payer community (traditionally health plans, employers, pharmacy benefit managers) at launch. And the payer audience is expanding as well. It now includes ACOs and other emerging health care provider models with responsibility for populations. Furthermore, the stakeholders at each account matter more than ever. It is imperative to go broader and deeper into an account beyond just the Pharmacy or Medical Director. New stakeholders are emerging such as the Quality Director, Case Management and others who are weighing in on formulary and coverage decisions.

It isn’t tough to see the link between the growing influence of payers and the dramatic drop-off of new product approvals in the past 10 years. When products are not strongly differentiated, payers worry less about depriving patients of choices. Now more than ever, payer marketing is about differentiation and “pill plus.” It’s about developing business-to-business relationships. It’s no longer fee-for-service—it’s fee-for-value. Gone are the days of disease management; today it’s about disease prevention. It’s no longer good enough that a drug works and is FDA-approved. That alone no longer guarantees access. It’s now about outcomes—in trials and in the real world. It’s about costs—costs per member per month, per quality-adjusted life year, medical cost offsets, productivity, absenteeism. This is what now needs to be communicated to the payer audience in ways that are clear and impactful.

When communicating to payers, pharmaceutical manufacturers cannot approach the next 10 years using the time-worn marketing methods of the past 10 years. Pharma pipelines are filled with specialty products, and the use of traditional and new utilization management techniques will only intensify in the coming years. In a post-Obamacare world, pharma’s priority is to develop ways of engaging payers that are customer-centric and that support patient outcomes. Only then will the payer audience listen.

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May8

Is It “Health Insurance,” or Merely Prepaid Health Care?

PillThe Affordable Care Act’s (ACA) goal is to provide health insurance coverage to those without it now, and it uses 2 main mechanisms to do so. It penalizes individuals without insurance, thereby encouraging them to sign up for health insurance. (In order to support this effort, the law creates state insurance exchanges to offer health plans to consumers.) The law also penalizes employers (with 50 or more employees) that do not offer health insurance to their workers. So, these employers will either need to add insurance if they don’t currently offer it, or maintain or modify what they now offer to their employees…or else pay a fine.

As the ACA proceeds to full implementation, it’s probably polite to say that various “inconsistencies” in the law are emerging. While “self-pay” employers may still exercise some degree of freedom in adding, maintaining, or modifying their health insurance offerings, the law is determining many of the characteristics of health insurance offered to the public via health care exchanges.

It’s interesting to note that 2 key requirements of the law undermine the basics of insurance, which is defined simply as “coverage by contract whereby one party undertakes to indemnify or guarantee another against loss by a specified contingency or peril.”

The first requirement is that all beneficiaries pay essentially identical rates, regardless of their risk factors. One of the few recognitions of varied risk among the population, an individual’s age, is still subject to constraint (older people cannot be charged more than 3 times the premiums charged to younger people). The other requirement is that insurance companies should ignore individuals’ preexisting conditions when writing new policies. While this rule is popular—no one wants to deny health insurance coverage to a cancer survivor—it also could encourage people to wait until they are sick before they purchase insurance.

Additionally, the law’s definition of an insurance plan’s “essential health benefits” may also contribute to an unintended result: a small set of insurance offerings on health care exchanges that are all generally very expensive, due to the fact that the policies are required to cover many things. One possible effect on consumers is that they will pay higher premiums.

Let’s go back to employers. Year-over-year health care cost increases have recently moderated, but over the long term they have traditionally been higher than the rate of overall consumer inflation. Some employers may use the soon-to-be-created state exchanges as an opportunity to withdraw the health insurance they offer to their employees. Employers who still plan to offer health insurance will continue to scrutinize costs and seek ways to mitigate their increases. They may continue to restrict the breadth of offerings in their health plans (a trend that is opposite to the expansion of essential health benefits above). Another mechanism that works is to shift more costs to their employees in the form of higher premiums, copays, coinsurance and deductibles.

So, in the 2 areas that the ACA seeks to create new health insurance opportunities (state-based exchanges and newly regulated employer markets), the individual will most likely pay a greater share of costs and have a greater responsibility to evaluate his insurance policy as well as the health care interventions he receives.

What does this mean for marketing communications?

One question facing employers, employees, payers and consumers will be the role and importance of deductibles, copays, and coinsurance. These patient payments are essentially behavioral-change tools, encouraging the patient to “shop wisely” because he is spending his own money on health care. Will these mechanisms continue to work as they have in the past? It may depend on which segment of the market grows larger: the state-based exchanges or the employer-provided plans.

On the one hand, if the law is encouraging fewer, similar insurance offerings on state exchanges, it will hardly be easy for insurance companies to differentiate one policy from another. If the offerings from health plans become expensive and undifferentiated, with most of their benefits “prepaid” by premiums, how much impact will deductibles, copays, and coinsurance have? Would this also complicate manufacturers’ efforts to differentiate their products to insurers, providers, and patients/members?

On the other hand, if employers are restricting benefits in their heath plans and shifting more and more costs to employees, employees will be using more of their funds to pay for premiums, and there may be less left for deductibles, copays, and coinsurance. With fewer health care dollars available, the employee may respond more to the cost effects of those patient payments.

Readers, what will be the health plan implications for related drug and device issues such as tier placement, contracting terms, and pricing? What marketing efforts are still needed? And to whom should they be directed?

Source:

  1. Merriam-Webster. Definition of “insurance.” http://www.merriam-webster.com/dictionary/insurance. Accessed April 22, 2013.

CONTINUE THE CONVERSATION:

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Feb1

The Unintended Consequences of Personalized Medicine

Personalized-MedicineInnovative technological and scientific advancements in oncology have enabled scientists to unravel the biological complexity of more than 200 diseases commonly called cancer, and reexamine how these diseases should be classified, diagnosed, and treated.

Understanding how these diseases work and the applying of these insights to clinical practice have formed the foundation of personalized medicine, defined as the tailoring of drugs and other treatments to specific populations, based on their genetic profiles or other differentiating factors.

This concept provides a potential future in which prevention and treatment strategies will be individualized based on the molecular makeup of a patient and their disease, dramatically improving chances for better patient outcomes and reduced healthcare costs.

Those advancements may provide opportunities, but they also may pose potential unintended consequences to the healthcare system.

The aging American population, combined with an additional 32 million covered lives under the Affordable Care Act (ACA), and overall increased survivorship in patients have created new challenges surrounding affordability and accessibility to healthcare.

Increased pressure for greater clinical and economic advancements creates imbalance among innovation, quality, and cost. In addition, ACA requirements impose more disparity by requiring improved quality of care, greater transparency in reimbursement coverage, and performance-based payments.

Payers and providers who are responsible for the implementation and adoption of personalized medicine are challenged to navigate the new environment as they are the major stakeholders.

Full implementation of personalized medicine may create new challenges for stakeholders and their patients, such as:

  • More stringent regulatory framework requiring greater transparency and tighter reimbursement controls for costly diagnostic technologies
  • Loss of patients’ ability to make their own healthcare decisions
    • In an effort to optimize clinical outcomes and minimize costs, some current therapies are aligned with patients’ biomarkers in order to ensure therapies are targeted to a specific genotype mutation. A prime example of this can be seen in patients with advanced stage melanoma who have approximately a 3-month survival rate. There are two treatment options: one with a companion diagnostic test (personalized) and one without (non-personalized). Because the personalized therapy has a companion diagnostic test that specifically identifies appropriate patients, payers and providers may be influenced toward this therapy over the non-personalized in order to maximize therapeutic outcomes. However, this creates a potential unintended consequence involving the non-personalized treatment option, which demonstrates efficacy in approximately 20% of patients and can extend survivorship up to 3 years. Therefore, these patients may be denied potentially 33 months of extended life.

In an attempt to improve the overall healthcare system by managing costs through personalized, tailored treatments, new barriers are created that can directly impact patient outcomes and limit the personal choice of available healthcare options.

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Aug2

Still Crazy After All These Years

I bought a car once because I liked the TV commercial.

And I didn’t even like the car. Crazy, huh?

It was those TV spots with the Crocodile Dundee guy, Paul Hogan, that made me yearn to take the wheel of the then brand new Subaru Forester. The spots had him teaming up Indiana Jones-style with sexy female accomplices for derring-do missions. Clearly they targeted the Forester to females, and I bought it…literally.

I remember to this day standing between the Forester and the Outback, trying to decide which car to choose. I liked the Outback better. But I still bought the Forester. This was back in 1998, and I still remember those TV spots.

The power of advertising.

That reminds me of another great creative campaign…for cheese. It was “Behold the power of cheese.” A deep-voiced announcer intoned that phrase while we watched dogs held spellbound as they looked at a piece of cheese held in front of them.

That’s the power great creative has…it can stop you in your tracks, and make you do things you wouldn’t ever before have considered doing, things your mama warned you about. But then all of a sudden, you have to have whatever that is in your life.

All because of great creative. 

I’m crazy about creative.

It’s my addiction, and I can’t get enough of it. It’s what’s kept me in this crazy business for decades.

It’s what all of us creatives live for…to create the campaign that knocks it out of the ballpark, that everyone talks about, that everyone says, “I wish I’d done that.” The one that gets tacked up on the wall of fame.

However…as we know in our world of healthcare marketing, there can be many forces that seem to conspire against our best efforts…the regulatory restrictions, the FDA, budget limitations, the list goes on.

But we don’t let that stop us, and when we do amazing work in spite of those obstacles, the rewards are even sweeter.

So that’s why I get jazzed when I hear my fellow creatives here talk about what gets them excited.

Just the other day, there we were—creative leads from each of our divisions, interviewing a fresh-faced college grad so full of enthusiasm as she talked about why she wants to start her career as a writer here at Ogilvy CommonHealth. So she asked each of us to talk about what we do.

My colleague in OCH Medical Marketing starts it off by describing with great pride the responsibility of putting into the hands of healthcare professionals the materials that will motivate them to give their patients the benefits of the prescription medications we market for our clients.

Then my colleague from OCH Payer Marketing chimes in with great intensity that in order for those patients to have access to those drugs, the drugs have to be on healthcare insurance formularies, so his job is to communicate the business and economic benefits of partnering with those pharma companies.

Next, my colleague from OCH Specialty Marketing speaks with such fervor about promoting newly discovered molecules that are just a breath away from bringing life-saving treatments to those who until now had no hope.

And I close by saying that everyone’s health and well-being is our passion at OCH Consumer Care, whether we talk directly to consumers, or to patients through their healthcare providers.

So I guess I could sum it all up by saying that here at Ogilvy CommonHealth Worldwide we creatives have the power to make a difference, a real difference, in people’s lives.

Now that truly is the power of creative.

Well that’s my story. I’d like to hear yours.

So, tell me…

Why are you still crazy about creative?

What’s the craziest thing advertising ever made you do?

 

Also posted in Access, advertising, agency life, Branding, Clients, Creativity, Great Ideas, Healthcare Communications, Marketing | Tagged , , , , , , | 1 Response
Jul31

Affordability of Medicines—the New Kid on the Block

You know the feeling: you pop into the shop and see something you want to buy, but times are tight and you simply can’t afford it. You want the best, but you feel compelled to consider all your spending priorities and choose to go for the less expensive brand—it’s a question of affordability.

In today’s environment, this is a challenge facing healthcare systems throughout the world. Coupled with this, more healthcare resources are being consumed as people are living longer with increasingly complex health problems. Add to this the increased complexity of how national health systems are assessing a medicine’s value, and you have the perfect storm.

Indeed, just as you weigh up whether you can afford to pay for something, those who pay for medicines (termed “payers”) all have affordability at the forefront of their minds. Governments are addressing the issue by driving further healthcare reforms, while payers are aggressively managing costs, limiting therapy choice, and shifting more of the cost burden to consumers.

However, if industry is to effectively support payers in their informed decision-making, it is important that they are viewed as investors in their community’s health and not simply gatekeepers of the budget.

As investors in health, payers deploy a variety of instruments to support medicines’ cost control. These can be broadly divided into supply-side and demand-side approaches.

Demand-side instruments include:

  • National-level price negotiations/price cuts
  • Reference pricing systems–using the cost of other similar drugs to set the price
  • Health technology assessments–assessing the value of a medicine using a range of tools including cost- and comparative-effectiveness
  • Promoting generic medicines and parallel imports–parallel imports refer to the practice of importing a medicine from another market where the medicine is cheaper

Supply-side instruments include:

  • Patient co-payments–this is the practice where patients will pay a certain percentage of the medicine’s cost
  • Reimbursement restrictions–restricting the money paid for a particular drug
  • Delisting–removing a product from a list of drugs that will be paid for
  • Prescribing budgets–setting financial budgets for the prescribing of medicines
  • Formularies and guidelines–a list of medicines that have been approved to be prescribed, or their incorporation within guidelines that should be adhered to

To date, the pharmaceutical industry has focused predominantly on communicating about cost and cost-effectiveness to secure optimal pricing and reimbursement for their brands at a market level. Arguably, more needs to be done to demonstrate the true benefit of treatment to patients, the communities in which they live, and society at large.

Some solutions to help demonstrate the true value of a treatment include:

  • Evaluating and demonstrating the longer-term patient outcomes
  • Demonstrating and communicating the economic value across all stages of a product lifecycle
  • Supporting payers to identify which patient segments would benefit most from treatment
  • Relating the outcomes demonstrated through clinical trials to local demographics

There is no doubt that the industry continues to go through a challenging time, while the economic crisis faced by many countries is only likely to get worse. In this environment, the issue of affordability is higher up on governments’ and payers’ agendas. However, by understanding and meeting the needs of payers and their communities, the industry will be better placed to ensure patient access to their medicines.

 

 

Also posted in Access, adherence, Clients, clinical trials, Efficacy, Health & Wellness, Healthcare Communications, Marketing, medical affairs, Reimbursement | Tagged , , , , , , , , | Leave a comment
Jul5

Will Health Plans Of The Future Take Care Of Widows And Orphans?

“Widows and orphans” is a long-established phrase that connotes one of the neediest segments of societies. Throughout time, communities have been asked (or commanded, as in the Bible) to support them in some way. One modern-day version of this support takes the form of estate planning. In the 20th century, stocks that provided a relatively high degree of safety (from declines in price) and steady dividends were nicknamed “widows and orphans” because they were good to have in the portfolio and provided relatively steady income. Prevalent among this type of stock were utilities. Utilities offered consistent returns because state or federal governments had established these companies as monopolies. In return for their monopoly status, governments regulated (or seen another way, guaranteed) a specific level of profits after fixed and variable costs were covered.

In 2012, a new group of companies that may fulfill the role of utilities is health plans. The Affordable Care Act fixes the medical loss ratio (MLR) of health plans at 80%, or 85% for large health plans. Here, the medical loss ratio is a metric that means 85% of health plan revenues must be spent on patient care. You don’t need to be a mathematician to figure out that 15% of revenues is left for overhead expenses and profits. So, the level of profits is regulated, just like those of utilities.

The business leaders of health plans are not settling for lower profits, which are estimated to fall from the 7-8% range to 3-5%. Health plans are already diversifying and are either acquiring or developing higher margin businesses. Here are a few examples:

Information technology (IT) or information management (IM) is a popular area. The thought here is: instead of assuming the financial risk of insuring patients, acquire the financial and actuarial know-how to do so, and sell that expertise to others who will assume the risks (and the lower profit levels). The Wall Street Journal says that managed care plans have made about 20% of their merger-and-acquisition deals with IT firms since 2010, up from about 7% in 2007. They’ve reduced their M&A of other insurers from 39% to 27% in the same period.

  • Aetna purchased Medicity in 2011, a company that sells software that transmits health care data across the different systems in different provider offices
  • Aetna also purchased Prodigy Health Holdings, which will allow midsize companies the financial and information knowledge to offer self-insurance options

Other insurers are purchasing physician practices. Humana purchased Concentra, which runs urgent- and occupational-care clinics. The thinking here is to exert more control over physicians and other providers, optimize their approach to patient care, and lower costs (and fatten profits).

Some insurers are expanding internationally, where legal and regulatory (and profit) constraints may be less onerous. Cigna has entered India in the form of a joint venture with TTK.

And recently, WellPoint acquired a contact lens company. Simply, the margins in vision companies are higher, and this is also an opportunity for health plans to cement relationships with consumers without the “middle men” of physicians or external opticians.

What does this mean for marketing communications?

Payer marketers traditionally target 3 audience levels: the payer level, the provider level, and the patient level. While these audiences will remain in the evolving health care landscape, they may need to be approached differently:

  • At the payer level: analytics groups may possess powerful data that show differences in cost or performance for specific drug therapies. Can marketers acquire and leverage these data to reinforce the value of our drugs or other therapies? Conversely, if sophisticated IT systems detect physician deviations from practice protocols sooner, traditional formulary controls such as prior authorizations or step edits may be enhanced and present bigger obstacles to prescriptions
  • At the physician level: if physicians work directly for health plans, their flexibility to practice or prescribe will be constrained more than if they worked on their own. Will drug marketing messages that only contain safety, efficacy, and effectiveness be enough, or will additional message components be needed? How will sales force pull-through campaigns need to be engineered if a greater degree of control binds both formularies and prescribers?
  • At the patient level: cost pressures may make insurance plans a bit more rigid. Out-of-network (or non-formulary) options may be sparse and much more expensive. What value proposition will convince the member/patient to pay for the appropriate therapy?

No one knows what the future will bring. Even if health plans do transform themselves in the 21st century and “take care” of widows and orphans in a hypothetical role as “utilities,” we can probably guess that many payer audiences will still be eager for high-quality information that demonstrates value for each health care intervention. Most likely, health care marketing communications will have challenges and goals that are similar to those of today, yet slightly more difficult.

Readers, will heath plans’ transformations affect drug and device marketing significantly?

 

 

Sources:

  1. King James Bible (James 1:27).
  2. Do “widow and orphan” stocks still exist? Investopedia.com. http://www.investopedia.com/articles/analyst/121802.asp#axzz1x7O6I4Dw. Accessed June 5, 2012.
  3. Reforms prod insurers to diversify. The Wall Street Journal. May 12, 2011. http://professional.wsj.com/article/SB10001424052748703643104576291022457851278.html. Accessed June 5, 2012.
  4. To find new revenue streams, insurers are branching out into nontraditional areas. From Health Plan Week. http://www.henryloubet.com/news030512.htm. Accessed June 5, 2012.
  5. WellPoint to buy 1-800-contacts. The Wall Street Journal. June 4, 2012. http://professional.wsj.com/article/TPBWR0000020120604e8640002u.html. Accessed June 4, 2012.

 

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Apr12

Specialty Pull-Through (It’s Not The Pull-Through We Grew Up With!)

As pharma companies continue to fight a more generic market and strive to maximize their access, the one term you hear time and time again in brand marketing circles is “pull-through.” For the past 15 years, pharma has viewed pull-through as the art of maximizing preferred tier status at a health plan—usually the result of a lucrative contract with the health plan. But now that the market for common chronic conditions such as branded ARBs, HMGs, PPIs and SSRIs has all but dried up, pharma companies are moving into new areas of rare cancers and orphan diseases where the traditional rules of pull-through do not apply. In the case of specialty markets, the focus is on identifying access opportunities and improving the “quality” of your access.

Quality of access is measured by factors such as:

  • Extent of PA (or SE in orals) [suggest expanding the acronyms]
  • Medical criteria
  • “Hassel factor” as perceived by office staff
  • Reimbursement support services (when all else is equal, providers will look at this)

In traditional pull-through, identifying the opportunity is relatively simple: you contract for a preferred position and announce your lower co-pay to providers by means of formulary grids and shelf-talkers. It’s not so simple in the world of specialty products that are often reimbursed as a medical benefit and not a pharmacy benefit. In this case, tier status may not apply, or all brands may be subject to coinsurance.

We generally divide pull-through in the specialty space into 4 steps: Step 1 – Opportunity Identification; Step 2 – Plan Development; Step 3 – Execution; Step 4 – Assess, Evaluate, and Refine

Although opportunity identification is fairly obvious in traditional pull-through, this step is the most challenging one in the specialty market space. Opportunities in the specialty market are more difficult to tease out. They include areas such as the following:

  • Your brand has moved up on a clinical pathway
  • A benefit design change that results in lower OOPs [suggest expanding[ for your brand
  • A change in indication that now expands the use of your brand
  • Additional clinical data become available that further differentiate your brand
  • Improved SPP [expand] services become available for your brand
  • Enhanced reimbursement HUB [expand] offerings further differentiate your brand
  • A change in medical policy benefits your brand
  • A price change makes your brand more affordable for the patient or the plan
  • Your competitor now requires companion diagnostic testing

Plan Development in specialty pull-through further demonstrates how this process differs from traditional pull-through. In the case of specialty pull-through, aspects of timeline development and success-metric formulation are not as clear. Traditional data resources (e.g., IMS, MediMedia) are not available for infused or provider-injected products. In addition, the traditional selling cycle is much longer in the specialty market and the number of patients is usually much smaller than in the primary care market.

Finally, the area of assessment, evaluation, and refinement is different in the specialty market. Due to the general lack of data mentioned earlier, assessment is not as straightforward. Areas such as number of benefit verifications, “time to fill,” and “time to reimbursement” for the provider are metrics often used in the specialty market.

As pharma manufacturers move into the specialty market, they will need to approach pull-through from a different perspective in order to compete. The traditional methods of pull-through do not fully apply. Furthermore, as the specialty market continues to become a mix of both orals and infused/injectable therapies and the lines between what is a medical benefit and what is a pharmacy benefit become more blurred, manufacturers will need to be able to quickly adapt their approach and message matrix to accommodate a rapidly evolving market.

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