PM360 June 2010

MANAGED MARKETS ACCESS

NEW RELATIONSHIPS IN MANAGED MARKETS
BY BRIAN BAMBERGER

Relationships between pharma companies and their payer customers are undergoing a sea change. Managed Markets leaders from 20 companies revealed their top challenges and redirected focus now and for the near future.

We ranked the top issues (see Figure 1, below) in 2010 and compared them to 2009. This year we also asked respondents to project the rankings of these issues out to 2013.

Changing Role of Account Managers 
Rising to the area of greatest concern is the changing role of account managers. In the interviews, Managed Markets leaders indicated that as the need to change customer relationships increased, so did the need to change the skills of account managers.

While the traditional focus has been executing a contract for formulary position and a rebate agreement, the emphasis now changes dramatically to proving the value of medications, influencing treatment patterns, and assisting Managed Markets customers with improving outcomes. Certainly not all products require these tactics, but virtually every new launch will require these activities to gain the needed approvals from payers.

Predicting Contract Value—2009 Revisited?
Predicting contract value was the highest-ranked issue in 2009 with two-thirds of companies planning to make major changes. In 2010, valuing contracts as part of the evaluation continues to be an area that companies want to upgrade. Over 80% of companies in the benchmark plan on increasing efforts and improving. Virtually all the companies that were working on the capability in 2009 are still working on the issue in 2010.

Of particular note in predicting contract values is the concern that this issue will remain unresolved. Looking out to 2013, the challenge to predict contract value remains the second highest ranked priority. The prerequisites for confronting these issues are formidable and take considerable organizational focus and resolve. Rallying a team or task force to deal with the problem continues to be a challenge.

Pull-Through and MM Field Linkages
Pull-through measures identified in last year’s study as a cause for dissatisfaction continue to be an issue. Responses indicate little or no improvement. The study also concludes that fewer than half the organizations in the benchmark have routine pull-through measures during a contract for formulary position.

Although pull-through, ranked second highest in 2009, has slipped to No. 4, it is inextricably connected to Managed Markets/Field Sales teams links. While regional account managers (RAMs) have been linked to sales representatives and district managers to impact pull-through, there is much more they can do together. Strong relationships between RAMs and region/area sales leadership are critical for planning regional contracting strategy and helping regional sales management understand the cost of access. Too often sales teams want “access at any cost,” but once sales leadership begins to understand the dollars invested in rebates, two key changes occur. First, regional leadership’s need for access is traded off against the cost of access, which has the unintended effect of lowering access levels. The second change is that regional sales leadership drives pull-through more effectively than RAMs. With more collaborative contracting decisions between RAMs and regional sales leadership, decisions on how to approach customers change. Some existing customers may no longer have contracts and other relationships may be strengthened.

The Future Is HEOR
Health economics data that proves the value
of medications certainly changes relationships with Managed Markets customers. Obtaining compelling and believable information is a challenge in itself. Over half the companies ranked Health Economics and Outcomes Research (HEOR) among the top four items. However, a few companies with little in the way of Health Economic material for Managed Markets audiences have ranked this issue very low. This resulted in assigning a “middle of the road” ranking as the fifth priority.

Having health economic data and assistance for customer outcomes relationships has been noted as a key to changing the relationships with customers. Companies that have prepared the research for Managed Markets audiences and adapted delivery mechanisms for the information (both account managers and medical staffs) are finding themselves in a position to move forward. Those companies not only have relevant information about their products but also have tools and capabilities to help payers change treatment patterns, improving outcomes.  

Marketing to MM Customers 
Changes in marketing to Managed Markets customers is more of an evolution and a lower priority to the leaders we interviewed. One interviewee suggested that while the future importance of marketing to Managed Markets customers increased (third-highest rating in 2013), other priorities are likely to usurp the priority for changes to Managed Markets marketing as 2013 approaches. With a keen focus on the value medications provide, Managed Markets customers are far less likely to have interest in some of the traditional marketing and image programs run by some pharmaceutical companies.

Healthcare Reform
In the interviews, most Managed Markets leaders were taking a “wait and see” attitude toward the impact healthcare reform would have on Managed Markets teams. Certainly, healthcare reform will have an earnings impact on pharmaceutical companies as mandated rebates increase because of the legislation. TGaS Advisors will continue to monitor the impact of the reform over time.

Figure I

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Brian Bamberger may be contacted at TGaS Advisors, bbamberger@tgas.com