Understanding Managed Markets
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Understanding Managed Markets Document Transcript

  • 1. Understanding Managed Markets: Effective Marketing Research Structures & Activities to Maximize Payers Access & InsightsUnderstanding Managed Markets:Effective Marketing ResearchStructures & Activities to MaximizePayers Access & InsightsSTUDY BACKGROUNDWhile bio-pharmaceutical companies still direct the Benchmarking Reportbulk of their marketing and market research efforts at-a-Glancetowards physician customers, the reality today is that Featured Study Participantsphysicians are rapidly losing their influence over • Abbott Labspatients’ drug utilization decisions. • Alcon • Amgen • GlaxoSmithKlineCommercial and government payers are gaining • Jazz Pharmaceuticalsimportance; third-party payers now manage the vast • Johnson & Johnson • Novo Nordiskmajority of prescription drug expenditures. In fact, it is • Sepracor • Solvayestimated that third-party payers in the Managed • Ther-RxMarkets sector currently control more than 80 percent • Xanodyne Pharmaceuticalsof patient access to prescription drugs in the United Information TypesStates. As a result of this shift, commercial success of • 43 Figures and Tablesnew pharmaceutical products increasingly depends • 24 Data Graphics • 18 Information Graphicsupon anticipating the wants and needs of payers. • 14 Best Practices SpotlightsThis shift, driven in part by the Medicare Combined Participant FactsModernization Act and Medicare Part D, has Annual Revenues: From $500M to $10B Average of 21 years in Pharma Industryprofoundly affected the pharmaceutical industry; and Each average 8 brands in-marketmany companies are now struggling to adjust to thenew order. Companies are refocusing marketing Report Lengthstrategies and revamping business operations to 65 PagesBest Practices, LLC © (919) 403-0251 1
  • 2. Understanding Managed Markets: Effective Marketing Research Structures & Activities to Maximize Payers Access & Insightsstrengthen their relationships with Managed Markets customers. Pfizer, forexample, devoted a separate business division to managed care strategy andaccess during a reshuffling of its organizational structure in 2007. And industryobservers have seen R&D platforms increasingly influenced by anticipated payerresponse.To succeed within this new market reality, pharmaceutical companies must accesspayers and build relationships to develop the best possible Managed Marketsinsights before product launch. Thus, it is vital that pharmaceutical leaders buildmarket research capabilities that are structured and tasked to effectively capture,understand and communicate to their companies the concerns and interests of keyManaged Markets organizations.STUDY METHODOLOGYThis report provides metrics, executive insights and best practices for the effectiveoperation of the Market Research function that is charged with collecting insightsfrom the pharmaceutical Managed Markets sector. Leaders of Market Researchand Managed Markets functions at pharmaceutical, biotech and medical deviceorganizations can use this report to identify tactics and critical success factors foreffectively accessing and acting upon the needs of third-party commercial andgovernment payers.This report identifies the Market Research structures and activities that bestsupport the Managed Markets function in gaining payer access and insightsaround pharmaceutical products, as well as captures executives’ best practices andlessons learned for working successfully in the current payer-driven environment.The report was created using a quantitative survey and field interviews. BestPractices, LLC fielded an online benchmarking survey with managers andexecutives representing Managed Markets or Market Research functions atleading pharmaceutical and biotech companies. Analysts then conducted in-depthBest Practices, LLC © (919) 403-0251 2
  • 3. Understanding Managed Markets: Effective Marketing Research Structures & Activities to Maximize Payers Access & Insightsinterviews with selected research participants. The survey and interview collectedbenchmark data on the following aspects of Managed Markets Market Research(MMMR) organizations: • Current and optimal structure and organizational fit • Effectiveness of current structure • Pre-launch research objectives • Key global MMMR activities with greatest impact on strategic choices • Timing of activities by product development phase • Activities most effective for generating insights • Activities most effective for accessing hard-to-reach partners • Principal drivers of MMMR activities • Percentage of research that is qualitative vs. quantitative • Top Three most important types of pre-launch studies • Anticipated changes in resource allocation levels • Trends in use of vendors to gather payer information • Projected changes in MMMR focus • Best practices and pitfallsKEY FINDINGS AT A GLANCEA number of key findings and insights emerged regarding the effective operationof Managed Markets Market Research organizations within pharmaceutical andbiotechnology companies. The following insights can be used to guide bio-pharmaceutical leaders in evaluating and improving their own MMMRoperations. No Single Structure Is Optimal: Many structure types can work effectively for the Managed Markets Market Research function, and benchmark partners use several different models. A more critical success factor than the structure type is the level of research staff knowledge and understanding of theBest Practices, LLC © (919) 403-0251 3
  • 4. Understanding Managed Markets: Effective Marketing Research Structures & Activities to Maximize Payers Access & Insights Managed Markets sector. Developing staff specialization and expertise is the key to making any structure begin to work from an MMMR perspective. Manage Resource Competition: Brand team and Managed Markets research projects generally have different targets (physician/patient vs. payer) and find themselves competing for resources and attention. Avoid MM priorities being defused or fragmented through resource competition. This can be a critical pitfall. Don’t Wait Until It’s Too Late to Develop MM Insights: MMMR activities peak during Phase 3, though most benchmark partners are moving to push these into earlier phases. This may prove most viable for breakthrough medicines where pharmacoeconomic differences can be identified, and may prove less effective for me-too drugs, as pushing research earlier may give payers more time to develop strategies against undifferentiated products. Role of Account Managers Is Expanding to Access MM Insight: Account managers’ roles are expanding due to the increase of Managed Markets influence in the pharmaceutical industry today. Account managers are seen by most participants as the most reliable method for accessing hard-to-reach partners. MM account managers play different valuable roles depending on the type of product, its market-entry order, and its clinical profile. Performance Guarantees/ Warranties: Eighty percent of benchmarked companies have explored the concept of offering warranties but most find usefulness limited due to unpredictable patient compliance and complex Medicaid-related CMS submissions. The warranty concept seems best applied for novel drugs in unique therapeutic categories where Medicaid is not a major payer.Best Practices, LLC © (919) 403-0251 4
  • 5. Understanding Managed Markets: Effective Marketing Research Structures & Activities to Maximize Payers Access & InsightsPITFALLS AND LESSONS LEARNED AT A GLANCE Benchmark participants shared their collective experience of pitfalls and lessons learned in developing a successful Managed Markets market research function. Among these are the following: • Duplicating research efforts between MM and MR groups. “Managed Markets is not the only group that needs payer research anymore. Brand teams and others are asking Market Research for payer information. If Managed Markets is doing its own research, there can be unnecessary duplication. There needs to be coordination of efforts.” • Believing everything payers say – sometimes they don’t have as much power as they say they do. “When you’re negotiating on tiers, you take some payers very seriously—those with ability to deliver on their access. Others exaggerate their influence. Account managers need to know when they can walk away.”DATA EXCERPTS AT A GLANCEMMMR Structure Can Influence Effectiveness (an Excerpt)Interviewed executives said organizations with dedicated research staff andbudgets—regardless of departmental location—are likely to be more effectivethan those without. Dedication has several advantages, such as: • Allows researchers to develop subject matter expertise • Enables long-term or ongoing projects, where researchers produce regular MM updates • Eliminates competition with brand teams for limited resource availability • Puts the budget in the hands of the people asking the research questions • Reduces potential duplication of workBest Practices, LLC © (919) 403-0251 5
  • 6. Understanding Managed Markets: Effective Marketing Research Structures & Activities to Maximize Payers Access & InsightsFor smaller companies, dedicated staff for Managed Markets market research maynot be realistic; however, MM ownership of aresearch budget can be a solution. For “I think a lot of Managed Markets’ success comesexample, an interviewed executive director of down to where the dollarsManaged Markets at an emerging company reside.” –Interviewed Executive Directorcredited her success to budget access.Figure 2.6 MMMR Structure Can Influence Effectiveness MMMR Structure Can Influence Effectiveness Benchm ark partners described three structural models for the MMMR function. Those using the two models involving dedicated resources noted improvements gained from reduced resource competition and increased subject matter expertise. No Dedicated Resources Dedicated Resources Models When Managed Markets has no dedicated resources for its market research needs, the group Managed Markets Group must compete with brand teams, commercial Dedicated Dedicated MR operations and other organizations for limited MR resources Resourceswithin MM support. This model does not facilitate research within either staf f development of MM subject expertise. Managed Markets or Market Research Market Market Research Department Research Department gives MM without dedicated with dedicated Competing direct MM Resources access MM Resour ces requests for shared MR t o subject resources matter Dedicated experts. MM Resources within MR BEST PRACTICES , ® Copyrigh t © Best Practices®, LLC LLCSuccessful Access to Hard-to-Reach Payers (an Excerpt)Account management is the approach that best opens doors to hard-to-reachpayers, according to survey respondents. More than three-quarters (78%) of studyparticipants ranked account management as “highly effective” for reachingpayers. Other approaches were ranked “highly effective” by no more than half thebenchmark class. “One-off” informational discussions with payers and peer-to-peer meetings between clinical experts, physicians and contracting specialistseach were scored “highly effective” by 50 percent. A third of partners identifiedBest Practices, LLC © (919) 403-0251 6
  • 7. Understanding Managed Markets: Effective Marketing Research Structures & Activities to Maximize Payers Access & Insightsquantitative online surveys and qualitative interviews/focus groups conductedeither online or via telephone as “highly effective.”Figure 4.3 Account Manager Provide the Best Access to the Hard to Reach Account Managers Provide the Best Access to the Hard to Reach More than three-quarters of study participants find account managers a highly effective way to access hard-to-reach Managed Markets partners. No more than half rated any other activity as highly effective for access. Q. Which activities are most effective for gaining access to hard-to-reach Managed Markets channel partners? (Rank each activity from 1 to7.) Approaches for Gaining Access Account management 70% One-off” informational discussions with payer (telephone) 40% 30% Peer-to-peer meetings between departments (in person) Advisory board 20% One-off” informational discussions with payer (in person) 20% Qualitative interviews/focus groups (online) 20% Qualitative interviews/focus groups (telephone) 20% Quantitative surveys (online) 20% Quantitative surveys (mail) 10% None of the companies Mock P&T committee 0% in the study Peer-to-peer meetings between departments (telephone) 0% give high rankings to Qualitative interviews/focus groups (in person) 0% four of the Quantitative surveys (telephone) 0% activities. Ranking Scale: 1=Not at all effective to 7=Extremely effective. 37 Copyright © Best Practices®, LLC BEST PRACTICES,® LLCInterviewed study participants shared a variety of tactics and strategies that theyuse successfully to improve access to hard-to-reach payers. The most widely usedof those are employing third-party vendors to ask the necessary questions ofpayers and focusing on science, industry and overall customer value wheninteracting with the Managed Markets sector.Best Practices, LLC © (919) 403-0251 7
  • 8. Understanding Managed Markets: Effective Marketing Research Structures & Activities to Maximize Payers Access & InsightsABOUT BENCHMARKINGREPORTS.COM BenchmarkingReports.com is a service of Best Practices, LLC, world leader in benchmarking research and analysis. BenchmarkingReports.com provides vital insights and data from our primary research at a fraction of original project cost. Best Practices, LLC has conducted pioneering benchmarking research for top companies since 1991, providing clients with "Access and Intelligence for Achieving World-Class Excellence." To learn how we can help you find solutions to your current business issues, visit our site at www.best-in-class.com.APPENDIXTABLE OF CONTENTSTable of Contents........................................................................................................................... 1Figures and Tables ........................................................................................................................ 3Executive Summary ....................................................................................................................... 4Introduction .................................................................................................................................... 4 Objective & Research Approach......................................................................................... 4 Project Participants ............................................................................................................. 5 Definitions & Abbreviations ................................................................................................. 7 Key Findings & Insights ...................................................................................................... 8Structure & Organization ............................................................................................................ 11 Introduction ....................................................................................................................... 11 Organizational Fit .............................................................................................................. 11 Inability to Measure Value Limits Resources for Managed Markets................................. 20Focus of Managed Markets Market Research.......................................................................... 24 Introduction ....................................................................................................................... 24 Pre-Launch Objectives...................................................................................................... 24Best Practices, LLC © (919) 403-0251 8
  • 9. Understanding Managed Markets: Effective Marketing Research Structures & Activities to Maximize Payers Access & Insights Study Types ...................................................................................................................... 27 Research Drivers .............................................................................................................. 28 Data Types........................................................................................................................ 29Effective Activities & Approaches for Payer Access & Insights............................................. 32 Introduction ....................................................................................................................... 32 Activities with High Decision Impact ................................................................................. 32 Best Approaches for Insights From MM Sector ................................................................ 33Best Approaches to Hard-to-Reach Payers: Access & Insights............................................. 34 Understand and Demonstrate Interest in Customer Issues to Open Payers’ Doors ........ 36Viewpoints on High-Rated Approaches..................................................................................... 40 Reduce the Size of Ad Boards to Facilitate Better Conversations ................................... 41 Expand Participant Parameters to Increase Advisory Board Diversity and Broaden Perspectives ....................................................................................................... 41 Account Management Viewpoints..................................................................................... 42Timing of Key Activities .............................................................................................................. 45 Begin Managed Markets Research Activities before Phase 3 to Ensure Clinical Trial Design Produces the Data That Payers Will Request .............................................. 47MMMR Roles................................................................................................................................. 50Current Trends in MMMR ............................................................................................................ 52 Companies Are Adapting Slowly to the New Paradigm:................................................... 53Best Practices, Pitfalls & Success Factors .............................................................................. 57 Participants’ Best Practices .............................................................................................. 57 Pittfalls and Lessons Learned........................................................................................... 60Appendix: Full Source Data ........................................................................................................ 63Best Practices, LLC © (919) 403-0251 9
  • 10. Understanding Managed Markets: Effective Marketing Research Structures & Activities to Maximize Payers Access & InsightsODER FORM I’d like to order the following Best Practice Benchmarking Report.® ID PUBLICATION TITLE QUANTITY PRICE SUBTOTAL Pharmaceutical New ProductSM-176 Commercialization: Preparing for Ordering Market Success 3 or more reports Deduct 10% Options Shipping and Handling: Add $26 ($48 international) per report ONLINE TOTAL benchmarkingreports.com PHONE SHIP TO: (919) 403-0251 Name FAX Title (919) 403-0144 Company EMAIL Street Address bestpractices@best-in- class.com City/State/Country Zip MAIL Phone Fax Best Practices, LLC tices, 6350 Quadrangle Drive Email Suite 200 Chapel Hill, NC 27517 PAYMENT OPTIONS: Check enclosed payable to “Best Practices, LLC” Visa MasterCard American Express Card Number Exp. Date Authorized SignatureBest Practices, LLC © (919) 403-0251 10