Market Access in the Healthcare Exchanges: Look At the Big Picture

Facing pricing pressures and generic and brand competition, it is challenging enough for pharmaceutical marketers to differentiate their products for payers. Now, as the Affordable Care Act (ACA) forces diversification of payer channels, this task has become even larger. Marketers must understand not only what these emerging channels are, but also their nuances to leverage them for competitive advantage. Much of this activity has focused on the Health Insurance Marketplaces, or “exchanges.”

But the ACA is still young. It will take years to assess the effects of healthcare reform and the exchanges on market access and to develop sound strategies for addressing those effects. In the short term, marketers are tasked with maximizing profitability and opportunity—even without fully understanding the law’s influence on the market. Strategically, we find most of our customers focusing on the big picture while monitoring how the ACA is altering the nature of the healthcare landscape.

More Channels for Marketers

Until recently, it was easy for marketers to identify profitable distribution channels. In the public market, the action was in Medicare. In the commercial sector, group health plans were king.

That all changed with the ACA. On the public side, 10 million new enrollees have given muscle to managed Medicaid plans,1 potentially driving substantial volume increases for some classes of drugs. On the commercial side, insurers had to decide which channels to play in. Some large payers narrowed their customer base, focusing exclusively on the large-group market and self-insured employers. Other insurers “went retail,” focusing directly on the consumer through the exchanges.

With customers now partitioned this way, what’s a marketer to focus on? The simple answer: Don’t lose sight of where your customers are. The exchanges are the newest shiny thing to come along, but they may not necessarily be your most profitable channel. In each key geography, focus on the channel with the greatest impact for your brands. Currently, there are 183 million lives in commercial group insurance and Medicare Part D channels.2,3 These channels will continue to represent the lion’s share of your business, so ensuring that coverage meets the goals of your brand will be the key to success.

Is Your Brand a Fit With the Exchanges?

By 2016, 22 million people—perhaps one of every 7 or 8 commercial lives—will be covered through the exchanges.4 This is enough “critical mass” to make the exchanges a channel to watch, and yet its impact on your brand may still be minimal. Depending on the local market, an exchange may comprise demographics that may or may not be taking your brand (Figure 1). If, for example, your drug is used by postmenopausal women, but the predominant group in a given market is younger adults, then the benefit to your brand in that region will be slim to none.

Insurers in the exchanges attract consumers who need healthcare coverage at a reasonable price. When the exchanges opened in October 2013, the target consumer was similar to those enrolled in employer-sponsored plans. The reality, however, is that the makeup and utilization patterns of exchange enrollees are closer to Medicaid than employer-sponsored plans. On the whole, members in new exchange plans are not as healthy as expected.5 For pharmaceutical marketers, this may be an opportunity if new members’ health status can be tied to prior lack of access—and especially if payers can be shown that treating their conditions now may prevent high-cost events downstream.

Conversely, these new members may represent little opportunity for brands that lack a clear value proposition or are relegated to higher tiers. The exchange population is price-sensitive. Drawn by lower monthly premiums and the availability of federal subsidies, 85% of those who enrolled through the exchanges in 2013–2014 selected a bronze or silver plan.6 These plans feature high-cost sharing for prescription drugs (Figure 2),7 making the pharmacy benefit expensive for some consumers to use. Exchange plans tend to place innovative products on the third and fourth formulary tiers, frequently using co-insurance for non-preferred products as a way to drive members to preferred brands and generic options.

As Plans Tinker, Pharma Can Add Value

Insurers in the exchanges are tracking enrollee utilization patterns and will use this data to modify cost sharing and the breadth of the pharmacy and other benefits. Analytics and informatics will drive insurers’ exchange strategies, and health plans will align tactics with what is working. Payers are likely to modify their offerings for several years as they come to understand the behaviors of exchange consumers.

Plans’ efforts to find the right cost-benefit formula may create uncertainty for industry, but manufacturers should consider whether they have an innovation that would be attractive to payers. A product’s brand name, for instance, can be an important marketing benefit for a health plan. Several products are indicative of a certain type of consumer, and the plan’s medical leadership monitors utilization of these products when deciding whether and how to make them accessible.

Even as market channels evolve, the basics still apply: Stay focused on the quality and effectiveness of your brand, then fit the message to the channel you choose. Regardless of the channel, all incentives revolve around quality and reduction of unnecessary resource utilization. Health economics data connecting your brand to reductions in big-ticket events, such as hospitalization, give you a powerful winning story. Promote it properly to patients, physicians and payers: Each stakeholder responds to messaging that resonates with decision-making challenges they face every day.

Now is a good time to follow the exchanges and test the waters. By doing so, you may learn about what works for increasing or maintaining access. The smart move, however, is to maintain the business in the group health and Medicare markets. Remember what has traditionally worked for your brand, and build on that success as the exchanges evolve.


1. Centers for Medicare & Medicaid Services. September 2014 Monthly Applications, Eligibility Determinations, and Enrollment Report. Nov. 19, 2014.

2. D’Amico, B, et al. “Navigating the Coming Changes in the Commercial Group Market.” McKinsey & Co., January 2014.

3. Hoadley, J, et al. “Medicare Part D Prescription Drug Plans: The Marketplace in 2013 and Key Trends, 2006–2013.” Kaiser Family Foundation, December 2013.

4. Congressional Budget Office. The Budget and Economic Outlook. Feb. 4, 2014.

5. Hamel, L, et al. “Survey of Non-group Health Insurance Enrollees.” Kaiser Family Foundation, June 19, 2014.

6. Department of Health and Human Services. ASPE Issue Brief. May 1, 2014.

7. Coleman, K. “Obamacare Expands Drug Coverage but Out-of-Pocket Expenses Go Up.” July 11, 2013.



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