1. HawkPartners Perspective on
Payer Research
Discussion Document
August 2012
For more information contact:
Scott Wilkerson
Scott.wilkerson@hawkpartners.com
301 951-7046

2. The US health insurance landscape includes a mix of
private commercial plans and government payers
US Healthcare Payer Landscape
8%
Other Gov’t Medicare Age of
Programs Covered
Under Age 18
6%
Medicaid Private Health Age 18-65
Insurance
Avg. Annual Age 65+
Spending
Growth, 2005- 4% Out of Pocket/ Relative size of
2010 Uninsured* circle
represents total
covered lives
2%
0%
$250 $500 $750 $1,000
Estimated Total Spending, US$B (2011)
*Estimated covered lives based on number of uninsured
Sources: US Census; Congressional Budget Office; CMS.gov “National Health Expenditures 2010-2020”
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3. Both commercial health insurance and PBM markets are
consolidating, with large players increasingly dominant
Largest US Private Health Insurers US Pharmacy Benefit Managers
Share of Total Premiums Written (2010) Share of Members (2010)
32% All Others
50%
All Others 4% Argus Health Systems, Inc.
5% MedImpact Healthcare Systems
6% NovoLogix
3% Highmark Inc. 8%
4% Health Care Services Health Information Designs, Inc.
5% Aetna Inc. 9% ICORE Healthcare, Inc.
6% Humana Inc.
10% Medco Health Solutions, Inc.*
8% Kaiser Permanente
10% WellPoint 13% CVS/Caremark Rx, Inc
16% UnitedHealth Group 13% Express Scripts Inc.
*Acquired by Express Scripts in April 2012
Sources: AM Mindpower Solutions; Pharmacy Benefit Manager Institute
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4. Payer influence in the pharmaceutical marketplace has
risen dramatically
 As health care costs continue to rise, therapeutic categories become more
crowded, and products become less differentiated, payers will gain even more
influence
Which pharmaceutical stakeholder is the most
influential?
34% 33% 32%
26%
18% 17% 2001-2006
14% 14% 2007-2011
10%
2%
Payers Specialists Key Opinion Others General
Leaders Practitioners
Source: Monitor survey of 256 executives from large and mid-sized pharmaceutical companies
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5. As they gain influence, payers are looking for a more
strategic relationship with pharma companies
Payers
Greater flexibility and
transparency with
 Private Insurers More information about the
pricing/contracts  Medicare total cost of care vs.
 Medicaid alternative therapies
 Other gov’t
programs
 PBMs
Value-added programs to assist Providing information about
patients, pharmacists and clinicians their products and pipeline
Payers are looking for pharma companies to partner with them to
achieve better, more cost-effective patient outcomes
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6. The current environment has enhanced the need for market
research to understand payer needs and expectations
Potential Uses of Payer Market Research
Clinical
Market Launch and
Development/ LOE
Growth
Pre Launch
• Market opportunity • Value proposition • LOE strategic
assessment testing planning
• Clinical trial • Customer experience • Generic competition
design/endpoints research impact assessment
• Pricing and • New indications • LOE messaging
formulary tier assessment/testing testing
placement • Specialty pharmacy
• Packaging needs research
/distribution strategy
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7. If done right, payer research provides significant insights
Pharmaceutical Payer Research – Key Success Factors:
1.
1 Reaching the RIGHT respondents
• Recruiting influential respondents from the leading national plans requires
a strong network and database of MCO contacts, as well as utilizing senior
recruiters with payer experience
2.
2 Mining maximum insights
• Maximizing insights from payer research requires using skilled moderators
with deep category knowledge, an understanding of payer dynamics, and
appropriate sensitivity to payer time constraints and confidentiality issues
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3. Integrating the results
• Significant value can be added by integrating payer insights with data from
different areas, including physician and patient research, market
forecasting, customer experience tracking, and competitive intelligence
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8. HawkPartners has extensive experience with both private
payers and other large scale health organizations
 We have experience interviewing and surveying MCOs, PBMs, Specialty
Pharmacies, and other payer organizations
– We also have experience with other large scale health organizations, including key
stakeholders from both Integrated Delivery Networks and large medical groups
 Working with our field partners, HawkPartners utilizes databases of specifically
targeted Medical and Pharmacy Directors in managed care organizations
– We recruit using phone, fax and email information, and conduct additional desk research as
needed, especially to reach larger national plans and PBMs
– Telephone recruitment is conducted by trained executive interviewers with prior experience
recruiting these types of respondents
 HawkPartners and our field partners have recruited respondents from the
largest US commercial plans and PBMs
– We have also successfully recruited a wide range of payers in Europe and Asia Pacific
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9. HawkPartners has successfully completed payer
research in US, EU and other markets
 HawkPartners has completed projects with payers on such topics as customer
experience, new product evaluation, prioritization of coverage considerations in a
therapeutic area, product messaging development, as well as broader therapeutic
category trends
Examples of HawkPartners Payer Research
• Oncology Payer Customer Experience Assessment (US)*
• HDL Market Opportunity Assessment (US & EU)
• Market Opportunity Assessment for New Product Formulation/Delivery (US)*
• Stroke Treatment Assessment (US &EU)
• Omega-3 Market Opportunity Assessment (US)
• Therapeutic Category Long-Term Opportunity Analysis (US & EU)*
• Chronic Pain Product Comparator Research (US)
• Ophthalmology Perceptions/Trends (US & EU)
• Diabetic Macular Edema Opportunity Assessment (Emerging Markets: Latin America, Eastern
Europe, Africa/Middle East, Asia)
• Chronic Pain Product Profile Refresh (US)
• Impact of Packaging / Distribution Changes on Respiratory Medication (US)
• Bone Healing Development Strategy (US, EU, & Japan)
• Understanding Specialty Pharmacy Considerations for High-Risk Patient Groups (US)
*see case study
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10. Case Study: Measuring customer experience drivers
among payer account customers
 Challenge: Client seeks to establish a baseline measure of payer account customers’
experiences to understand how well their needs are being addressed through partnerships
with pharmaceutical companies.
Most Important Pharma Company Attributes  HawkPartners’ Approach:
% Ranked in Top Three
65% n=45
Utilized a quali-quant research
% Ranked #2 and 3 approach with pharmacy and
% Ranked #1 medical directors from HMOs,
52%
PBMs and specialty pharmacy
33%
to obtain a baseline read on key
36% customer experience metrics as
37% 30% well as rich insights on CE
14% 23%
drivers.
32% 25% 20%  Results: Client is using the
22% results to develop value-added
15%
5% 6%
programs to assist clinicians,
pharmacists and patients in
Fair pricing Resources Listens to Resources Info for
to assist needs of to assist health
partnership with payer
patients managed physicians/ economic organizations.
care pharmacists analysis
*Note: data has been disguised to protect confidentiality 10

11. Case Study: Scenario planning for an existing medication
facing new category entrants
 Challenge: Pharmaceutical client recognizes the changing market landscape (new class
of agents that is easier to use and the availability of a generic formulation of the market
leader) and needs to proactively address to these issues.
Perceived Benefits Questions / Drawbacks
 HawkPartners’
• Reduction in costs with Approach: Conducted
Pharmacy • Cost
lack of monitoring
Directors • All concerns expressed by physicians qualitative research with
• Easier to administer
• How will we know if it is absorbed? specialist physicians,
• Dosage adjustments for BMI?
• Ease of Admin
• Reversibility?
pharmacy directors and
Physicians • Increased compliance
• No need to monitor
• Metabolization? other payers, exposing
• How to measure efficacy?
• Indications? them to a product profile
• Cost – will most likely be Tier 3 (with the and eliciting their
Managed • Reduction in costs with
potential for one new agent on Tier 2) feedback on their
• Will not impact coverage of current
Care lack of monitoring perceived evolution of
branded meds as the expectation is that
Decision requirements
all will already be Tier 3 when new
Makers • Easier to administer
mechanism agents are introduced
the market and decision
• All concerns expressed by physicians making criteria.
 Results: Feedback confirmed that the agent will indeed face challenges but identified
several potential strategies and tactics for the client to explore to retain share and
deepen existing relationships with pharmacy and medical directors.
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12. Case Study: Leveraging payer feedback to assess the
market opportunity for a new product
 Challenge: To inform its development strategy for a new agent, a pharma client needed
insights into the category’s evolving treatment paradigm, the role of both current and
emerging treatment options, and unmet needs of payers.
 HawkPartners’ Approach:
Category Coverage Decision Considerations Conducted qualitative
Efficacy Safety Cost Guidelines Administration research with payers and
 Cost of entry  Cost of entry  Does drive  Given expense  Associated costs KOLs. Augmented these
 Most important  Second in coverage of (Treatment are key – so findings with secondary
but not really importance but • Especially if no Type), Payers (mechanism A)
differentiating not really other advantage want evidence is preferred to market research, including
now differentiating  Total cost matters, will work in (B) case studies of analogous
today population  Frequency is
 Better efficacy includes admin-
• Or would less important
agents.
alone may not  Superior safety related, e.g. office
visits for prefer agents (but less often
drive displace- alone would
ment of older not drive (Procedure) which have can help with  Results: Findings
that data better
treatments preferred  Rebates/contracts
 Helps drive step compliance) revealed that payers will
status can be vital in
 But less safety status decisions decisions play a critical role in
is a big shaping the category’s
problem
treatment paradigm due to
the agent’s expected high
price and payers’ doubts
regarding generics and
other substitutes.
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