Resource Benchmarks for U.S. Pharmaceutical Managed Care Operations

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  • 1. Resource Benchmarks for U.S.Pharmaceutical Managed Care Operations Best Practices, LLC Benchmarking Report
  • 2. Table of Contents  Project Overview  Key Findings  Structure, Revenue and Brand Oversight  Staffing Profiles for U.S. Managed Care  Budget Allocation By Activity for U.S. Managed Care  Efficiency Ratios  Best PracticesCopyright © Best Practices®, LLC 1
  • 3. Business Issue and Corporate ChallengeThis benchmark study will provide payer and Managed Care leaders with importantbenchmarks on the optimal size of U.S. Managed Care groups. The study focusedexclusively on U.S. pharmaceutical/biotechnology company operations. Research Objectives: This survey probes the resource levels, structure and revenue of U.S. Managed Care groups for major pharmaceutical and biotechnology companies.  Key study objectives  Overall Staffing Levels  Outsourcing Levels  Staffing Levels Per Key Activity  Staffing Levels Linked to Brands Supported  Financial Investment for U.S. Managed Care Group and Key Activities  Staffing Efficiency Measures INFORM Research Outcome Field Research & Insight Development:  Results based on survey responses from 12 Improve Management of biopharmaceutical, and medical device executives. Managed Care Operations 2 Copyright © Best Practices®, LLC
  • 4. Definitions for Study Purposes The following terms are defined as follows for this study: U.S. Managed Care: Pharmaceutical or biotechnology Managed Care divisions that serve the U.S. Managed Care: Pharmaceutical or biotechnology Managed Care divisions that serve the following customers: MCOs, PBMs, Trade/Wholesale, Hospitals/IDN, Public Payors (VA, DoD, following customers: MCOs, PBMs, Trade/Wholesale, Hospitals/IDN, Public Payors (VA, DoD, Federal Accts), Clinics (e.g. dialysis) and Specialty Pharmacies. Federal Accts), Clinics (e.g. dialysis) and Specialty Pharmacies. This study defines Managed Care divisions by the following activities: This study defines Managed Care divisions by the following activities: •Account management •Account management •Customer marketing strategy (sets contract strategy, liaison to brand teams) •Customer marketing strategy (sets contract strategy, liaison to brand teams) •Contract management (back office support) •Contract management (back office support) •Customer market research (specific to Managed Care customers) •Customer market research (specific to Managed Care customers) •Customer program management (e.g., disease management or value-added programs) •Customer program management (e.g., disease management or value-added programs) •Pharmacy Relations •Pharmacy Relations •Public Payor pricing (Implementation of rebates/chargebacks for Medicare/Medicaid/DoD/VA). •Public Payor pricing (Implementation of rebates/chargebacks for Medicare/Medicaid/DoD/VA). FTE: For the purposes of this study aa"FTE" is defined as aafull-time equivalent resource. For FTE: For the purposes of this study "FTE" is defined as full-time equivalent resource. For example; ififfull time employees are expected to work forty hours per week that equates to 1.0 example; full time employees are expected to work forty hours per week that equates to 1.0 FTE. Twenty hours per week is half time or .50 FTE. FTE. Twenty hours per week is half time or .50 FTE.Copyright © Best Practices®, LLC 3
  • 5. List of Participating Companies/ Range of Career LevelsThe benchmark class includes 12 participants from the companies across pharmaceutical,biotech and medical device industries. Their roles ranged from senior leaders tomanagers of managed markets.  Bayer Healthcare  Director Marketing Managed Markets  Shire  Sr. Exec. Dir, Sales Rep  GlaxoSmithKline -  Executive Director, Sales Respiratory Representative  GlaxoSmithKline  Sr. Director, MM  Millennium  Senior Director, US Market Access  Smith & Nephew  Health Policy & Reimbursement  Forest Laboratories Director  Alcon  National Director, Managed Market  Acorda Therapeutics Sales  Amylin  Vice President  Purdue  Assistant Director, Managed Care TrainingCopyright © Best Practices®, LLC 4
  • 6. Key Findings The following key findings and insights emerged from the field surveys, direct interviews and study verbatim.  All U.S. Managed Care Headcount is internal staff: Members of the benchmark class do not actively outsource their Managed Care activities. Almost all the activities are performed internally at the benchmark companies.  Account Management & Contract Management have the highest average headcounts: The average FTE deployed for Account Management and Contract Management activities shows the important role in overall Managed Care business in the United States. Account management is the most critical activity in U.S. Managed Care.Copyright © Best Practices®, LLC 5
  • 7. Managed Care Structure Remains Centralized Sixty-seven percent of benchmark companies prefer a centralized structure to organize their Managed Care function. More than 90% of benchmarked organizations Managed Care function either have a hybrid or centralized structure compared to 100% centralized structure in 2003. How are Managed Care resources organized in your U.S. operations? Decentralized , 8% Hybrid, 25% Centralized, 67% N=12Copyright © Best Practices®, LLC 6
  • 8. Managed Care Supports Myriad of ServicesAlmost all the activities performed at the benchmarked companies are supported by U.S.Managed Care. Amongst all the activities, one thirds of the benchmark class do not supportactivities like customer market research, customer program and pharmacy relations. Does Your U.S. Managed Care Support following activities? Yes No 17% 33% 33% 33% 8% 100% 100% 92% 83% 67% 67% 67% Account Customer Contract Customer Customer Pharmacy Public payor management marketing management market program relations pricing research N=12Copyright © Best Practices®, LLC 7
  • 9. Customer Marketing Strategy FTE AllocationThe average FTEs in 2010 are only one-third of what they were in 2003 for the CustomerMarketing Strategy function. Number of Total FTEs for Customer Marketing Strategy 14 8.5 6 4 2.5 2 Max 75th Mean Median 25th Min Percentile Percentile N=11Copyright © Best Practices®, LLC 8
  • 10. About Best Practices, LLC Best Practices, LLC is a research and consulting firm that conducts work based on the simple yet profound principle that organizations can chart a course to superior economic performance by studying the best business practices, operating tactics and winning strategies of world-class companies. Best Practices, LLC 6350 Quadrangle Drive, Suite 200, Chapel Hill, NC 27517 919-403-0251 best@best-in-class.com www.best-in-class.comCopyright © Best Practices®, LLC 9