Best Practices, LLC Strategic Benchmarking Research
Increasing Market Access through
Innovative Payer Market Research:
Ass...
Table of Contents
2
Copyright © Best Practices, LLC
 Research Overview 3
 Universe of Learning 5
 Key Findings & Insig...
The Affordable Care Act has been the catalyst for dramatic change in US healthcare. The power
structures that influence th...
 Prioritizing Players in the Complex Payer
Landscape: Which Payers Most Impact Your
Business
 Optimizing Your Payer Rese...
Benchmark Class:
Universe of Learning: 38 Participants Contributed to this
Benchmark
Thirty-eight payer research leaders p...
Managing the
Payer
“Ecosystem”
Understand & Manage the Payer Ecosystem
The healthcare marketplace is rapidly and sometimes...
44%
47%
44%
33%
41%
32%
50%
35%
24%
24%
9%
6%
Value Proposition Testing - testing messaging/materials to convey
value a ne...
Payer Contracting Research across Payer Types Private
National
Payers
Private
Regional
Payers
Government
Payers
ACOs/ IDNs...
6%
3%
24%
36%
12%
3% 3%
15%
30%
15%
3%
0%
7%
17% 17%
3%
0% 0%
10%
40%
9%
3% 3%
13%
41%
Pre-clinical Phase 1 Phase 2 Phase ...
Numerous Issues Limit Pharma Understanding of ACOs
10
Copyright © Best Practices, LLC
Benchmark participants shared issue...
Dashboard of Leading Indicators Signals Evolution into
Outcomes-Oriented World
Across multiple benchmarks in this study, a...
Best Practices, LLC
6350 Quadrangle Drive, Suite 200
Chapel Hill, NC 27517
www.best-in-class.com
About Best Practices, LLC...
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Increasing Market Access through Innovative Payer Market Research: Assessing New Tools and Technologies to Gain Insight into Payer Decision Making

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The health care marketplace is rapidly and sometimes chaotically evolving. The overall influence of payers is rising and the types of payers influencing health care access is diversifying. Any company hoping to compete and win in this “brave new world” must understand the “payer ecosystem” and learn to navigate through it.
Best Practices, LLC conducted this research to probe how health care companies structure internal research groups conducting payer research, and it assesses what market research approaches are most effective and innovative for understanding diverse payer needs, preferences and decision-making. This study also examines what research techniques work best during all product lifecycle stages to ensure access for therapies through national, regional and government payers and through Accountable Care Organizations and Integrated Health Delivery Networks.

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Increasing Market Access through Innovative Payer Market Research: Assessing New Tools and Technologies to Gain Insight into Payer Decision Making

  1. 1. Best Practices, LLC Strategic Benchmarking Research Increasing Market Access through Innovative Payer Market Research: Assessing New Tools & Technologies to Gain Insight into Payer Decision Making
  2. 2. Table of Contents 2 Copyright © Best Practices, LLC  Research Overview 3  Universe of Learning 5  Key Findings & Insights for Managing the Payer Ecosystem 7  Mapping the Rapidly Evolving Payer Ecosystem 16  Effective Tools & Technologies to Understand Payer Decision-making 26  Key Trends in Managed Markets Contracting Research 36  Key Trends in Payer Formulary & Tracking Research 42  Understanding What Drives National & Regional Payer Decision-making 47  Understanding What Drives Government Payer Decision-making 54  ACOs & IDNs Are Rising in Importance 59  Cross-Functional Collaboration & Communication Are Critical 67  Optimizing Payer Research Structures, Roles & Resources 74  Preparing to Compete in an Outcomes-oriented World 82  Appendix 89
  3. 3. The Affordable Care Act has been the catalyst for dramatic change in US healthcare. The power structures that influence this $2.8 trillion economic sector are shifting. This benchmarking field study was undertaken to help life sciences companies keep pace with the rising influence of public and private healthcare payers. Regulatory, political and legislative changes are redefining the traditional power structures among healthcare stakeholders. Increasingly, payer insights drive a product’s success or failure. Private and public payers are assuming greater power and control. In the current and future marketplace, payer coverage, support or opposition are tantamount to success or failure for a new bio-pharma product. New technologies and rising expectations regarding health economics and outcomes research are transforming how payers learn, educate themselves and inform critical formulary and contracting decisions. Some companies are farther along than others, investing more resources, creating dedicated payer research groups, building risk models, etc. Today, success depends on understanding where the power is, who pharma must influence, and what influencing tactics will work with the new power centers. 3 Copyright © Best Practices, LLC Shifting Sources of Power & Influence Payers Increasingly Influence Product Success or Failure Bio-pharma Companies Are Planning & Reacting Technology & Outcomes Research Transforming Decision-making Issue Background: Healthcare Insurers Are Gaining Power & Can Influence the Destiny of Bio-pharma Products
  4. 4.  Prioritizing Players in the Complex Payer Landscape: Which Payers Most Impact Your Business  Optimizing Your Payer Research Structure to Capture Managed Markets Insights  Market Research Resources for Conducting Impactful Payer Research  Engaging Payers & Harvesting Insights across the Product Lifecycle  Payer Landscape Research Activities & Timing  Payer Contracting Research Activities & Timing  Formulary Research Activities & Timing to Gauge Payer Perspectives  Effective Tools & Technologies to Capture Payer Insights  Future Trends & Lessons Learned in Conducting Payer Research for Greater Market Access Research Objective: This evidence-based benchmark study probes how healthcare companies structure internal research groups conducting payer research, and it assesses what market research approaches are most effective and innovative for understanding diverse payer needs, preferences and decision-making. This study also examines what research techniques work best during all product lifecycle stages to ensure access for therapies through national, regional and government payers and through Accountable Care Organizations and Integrated Health Delivery Networks. Methodology: Best Practices, LLC engaged 38 executives and managers working in diverse payer- focused functions through a benchmarking survey instrument and field interviews. Research analysts conducted executive interviews with five leaders to collect qualitative data and insights. Research Project Objectives, Methodology & Results Best Practices, LLC conducted this benchmarking study to probe the rapidly changing specialty of Managed Markets Market Research. Topics IncludedStudy Overview 4 Copyright © Best Practices, LLC
  5. 5. Benchmark Class: Universe of Learning: 38 Participants Contributed to this Benchmark Thirty-eight payer research leaders participated in this study. More than half of the participants represent pharma or biotech companies, and another quarter come from medical device companies. Five selected participants were interviewed to add qualitative depth to the study. 5 Copyright © Best Practices, LLC Industry Representation Pharmaceuticals/ Biotech 53% Medical Devices 28% Market Research Agency or Consultancy 11% Diagnostics 6% Retail Pharmacy 3%
  6. 6. Managing the Payer “Ecosystem” Understand & Manage the Payer Ecosystem The healthcare marketplace is rapidly and sometimes chaotically evolving. The overall influence of payers is rising and the types of payers influencing healthcare access is diversifying. Any company hoping to compete and win in this “brave new world” must understand the “payer ecosystem” and learn to navigate through it. 6 Copyright © Best Practices, LLC 3. Fully Collaborate & Communicate Across All Units Engaging Payers 4. Start Earlier to Understand Payer Priorities & Perspectives 5.Prepare to Compete in an Outcomes- Oriented World 2. Research Payer Decision-making by Segment Archetype 6. Reorient to Work & Win in the ACO/IDN Marketplace 1. Map Payer Landscape to Segment & Prioritize
  7. 7. 44% 47% 44% 33% 41% 32% 50% 35% 24% 24% 9% 6% Value Proposition Testing - testing messaging/materials to convey value a new medication will provide to patients Payer "Landscape" Research to understand how payers evaluate products in a therapeutic area Burden of Illness Message/Presentation research – testing prelaunch materials to educate payers on unmet need Perception tracking of Company image and performance of Account Executives and others who work with payers Exploration of opportunities to support Accountable Care Organizations Research into implications of expanded access through HIEs among payers who participate Somewhat Effective Highly Effective Many Approaches Are Employed to Study Payer Landscape – But New Niches Challenge Most Companies The most commonly used payer landscape research focuses on value proposition testing, Therapeutic Area evaluation and Pre-launch materials testing. These approaches are highly effective for up to 50% of companies. However, it appears many companies are still struggling with how to effectively examine new niches, such as Accountable Care Organizations and Health Insurance Exchanges. (n=31-34) Q. For the following market research approaches, indicate the effectiveness of each for understanding payer thinking and decision-making. 7 Copyright © Best Practices, LLC Effective Market Research Approaches Examining the Payer Landscape: Highly Effective - Other: • Mock P&T Committee research • Payer and ACO research to understand gaps in data that could limit access to product at present and in competitive future landscape% of Responses
  8. 8. Payer Contracting Research across Payer Types Private National Payers Private Regional Payers Government Payers ACOs/ IDNs Pricing Research 69% 61% 39% 22% Contracting Strategy Research – by product or by portfolio of products 69% 53% 39% 22% Explore partnership efforts related to showing better outcomes in a specified patient population 56% 42% 19% 39% Track results of Patient Support/Adherence program offerings 42% 33% 17% 25% Exploration of Risk-Sharing contracts 28% 22% 3% 19% Many Explore Partnerships to Show Better Outcomes with Private Payers & ACOs in Payer Contracting Research Pricing research and contracting strategy research (by product or portfolio) are common approaches across national, regional, and, to an extent, government payers for payer research groups. However, nearly 40% of respondents indicated research to explore partnership efforts for showing better outcomes in a specified patient population is underway to understand ACOs/ IDNs. Q. Please indicate which of the following approaches your organization uses to understand payer thinking and decision-making for the payer types listed. 8 Copyright © Best Practices, LLC (n=36)
  9. 9. 6% 3% 24% 36% 12% 3% 3% 15% 30% 15% 3% 0% 7% 17% 17% 3% 0% 0% 10% 40% 9% 3% 3% 13% 41% Pre-clinical Phase 1 Phase 2 Phase 3 Launch Pricing Research Contracting Strategy Research - by product or by portfolio of products Exploration of Risk-Sharing contracts Track results of Patient Support/Adherence program offerings Research to Explore Partnership efforts related to showing better outcomes in a specified patient population Pricing & Contracting Research Ramps Up at Phase 2 - Launch Nearly a quarter of companies begin pricing research in Phase 2. However, 36% do not start until Phase 3. In Phase 3, 30% of companies are beginning to examine payers’ contracting strategy. At launch, around 40% of respondents begin tracking results of patient support programs and exploring partnerships to show better outcomes in patient populations. Benchmark interviews surfaced a clear signal that companies should begin to research critical payer issues earlier. (n=29-33) Q. For each payer market research approach, indicate when your organization first begins employing the approach to understand payers' thinking and perspective on pricing and contracting. 9 Copyright © Best Practices, LLC Phases to Begin Payer Contracting Research: %ofResponses
  10. 10. Numerous Issues Limit Pharma Understanding of ACOs 10 Copyright © Best Practices, LLC Benchmark participants shared issues that create barriers for them in their efforts to understand ACOs, IDNs and similar organizations. A key problem for pharma is recognizing what is and what is not an ACO to ensure actual ACOs are represented on panels. Another issue is judging long-term ACO impact.  It is difficult to determine which entities to include in market research studies. For example, some entities identifying themselves as ACOs are not registered with CMS. Should they be on panels?  Vendors are not yet up to speed on vetting ACO participants for panels.  ACOs are independent business ventures that do not behave uniformly. Given typical small sample to sizes, how valid are extrapolations about this segment—especially with regional segmentation?  There are many different architectural types of ACO. There is no algorithm for predicting which ones will remain in business and which will fail.  ACOs are customized to geographic markets, introducing additional diversity to the segment.  Lines between payer and provider are blurred in these large medical groups. They resemble payers but they are not yet taking on pharmacy risk. It is unknown whether ACOs will drive share or just serve as a structure for controlling costs.  It is uncertain whether pharma will have any significant influence with ACOs. Said an interviewed executive: “I don’t know if pharma has enough horsepower now to really influence the ACO space. We have to understand what they are trying to accomplish in the ACO space—will they take on risk? Will they design their own formularies? Will they drive share?” Hurdles to Understanding ACOs and Their Potential Impact on the Pharma Business Model
  11. 11. Dashboard of Leading Indicators Signals Evolution into Outcomes-Oriented World Across multiple benchmarks in this study, a strong signal can be heard: Health Outcomes are increasingly important! The signal is picked up in HEOR, CER and in leadership structures. Biopharma companies must prepare to compete in an outcomes-oriented world. 11 Copyright © Best Practices, LLC Effective Outcomes Research is Increasing in 7 of 10 companies in next 24 months Innovative Outcomes Research is Increasing in 6 of 10 companies next 24 months Patient-reported Outcomes Research is Increasing in 5 of 10 companies next 24 months Research to Explore Partnership efforts related to showing better outcomes in a specified patient population 48% % RATING HIGHLY OR SOMEWHAT EFFECTIVE HEOR LEADERSHIP ON THE RISE • VP-level execs now often lead HEOR • HEOR specific roles emerging for global & national • MMMR observed reporting to HEOR and MM OUTCOMES RESEARCH FUTURE TRENDS COMPARATIVE EFFECTIVENESS RESEARCH FUTURE TRENDS CER in Crowded Market CER vs.. Market Leader CER vs..Generics CER vs..FDC
  12. 12. Best Practices, LLC 6350 Quadrangle Drive, Suite 200 Chapel Hill, NC 27517 www.best-in-class.com 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. 12 Copyright © Best Practices, LLC

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