The 5 Critical Features of an Excellent Payer Market Research Network

Stanton R. Mehr, President, SM Health Communications LLC

stan.mehr@smhealthcom.com

www.smhealthcom.com

The vast majority of US pharmaceutical executives understand that managed care plans, health insurers, and pharmacy benefit managers (PBMs)—the payer market—have a dominant say over whether their products’ annual revenue will be $10 million, $100 million, $1 billion, or more. Although the market has been changing over the past few years, particularly with the introduction of new specialty biopharmaceutical products, the message remains the same: Access to managed markets and improving product reimbursement by payers are essential to maximizing product revenue in the United States.

            

With the proliferation of Sunshine Laws, which seek to make the consulting/financial relationships between the pharmaceutical industry and healthcare providers (and executives) more transparent, pharmaceutical companies have to come to rely on the services of market research providers to produce, in blinded environments, the business intelligence and marketing feedback that they desperately need to better understand payer markets. In the past, Advisory Boards were relied on heavily for this role, but Sunshine Laws have created another weighty concern for pharmaceutical company attorneys, and the very nature of how Advisory Board information can be obtained may have to undergo a revolutionary change to adapt to the new environment.

One profound result of these changes has been an abundance of managed care market research providers, each jostling for the attention of pharmaceutical product personnel and reimbursement and access units. However, the number of targeted payers—commonly medical directors and pharmacy directors within the health plans, health insurers, and PBMs—is relatively stable. The issue becomes, what are the critical success factors for gaining the best access to this limited (approximately 300) group of key decision makers?

(1) The ability to get them to answer your call.  The average age of these payer decision makers is between 40 and 65. Many have been in their present positions for more than 10 years and have established relationships with market research companies based on long-term familiarity, trust, and a well-earned confidence that their personal opinions and sensitive, corporate proprietary information will not be shared inappropriately.

            The number of these desired executives is few (compared with physicians of nearly any specialty), and they are inundated with requests to participate in market research projects. A market research provider who can get on their schedule and gasin their commitment to participate can be invaluable to obtaining the business intelligence the pharmaceutical executive needs.

(2) The size and variability of the network.  A pharmaceutical manufacturer may focus on one large segment (e.g., commercial) of the payer market, but they may need feedback regarding other significant market segments (e.g., Medicare parts B and D, Medicaid, Veterans Affairs, TriCare, long-term care). It is critical that the market research provider’s network include executives who can shed light on managed care organizations’ approaches to these varied markets and can speak to the differences that may be seen in their firms’ formularies for these separate products.

(3) Solid relationships with the consultant community. Also of importance is the market research organization’s ability to reach out on occasion to industry consultants (often former payer executives) who can provide helpful, fuller insights into what current payer executives may think about new products. This can be useful for both questionnaire development and validation of responses.

(4) A provider who understands the payer market. Many in the pharmaceutical community may believe that managed markets research is a commodity business—so many providers are available, that prices can be driven down. To some extent, this is true, but the value of a provider who truly understands the payer market becomes quickly apparent once the survey development process begins. With the knowledgeable input and understanding of not only the disease state but with an informed view of how most health plans, insurers, and PBMs will approach the area in question, much time can be saved in developing the questionnaire and this can result in briefer survey instruments and importantly, smaller honoraria or other incentives needed to convince busy executives to participate.

(5) The ability to obtain feedback through classic and innovative methods. Time is invaluable to the pharmaceutical sponsor and to the payer executives. In many cases, the sponsor requires far faster turnaround times than can be afforded through conventional survey means. This may prompt the market research organization to consider a different approach than the standard in-depth telephone interviews (which often require weeks to schedule). Innovative products are necessary to meet the needs of the pharmaceutical industry, and to fit the busy timeframes of the targeted payers. A market research organization that can provide flexible ways to obtain critical information and can make it as easy as possible for their network to participate will continue to offer the best mix of services and outcomes for the sponsor.

Every pharmaceutical manufacturer wants to know whether their pipeline product will be reimbursed on copayment tier 2 or the lowest possible specialty tier (and what it may take to get it there). For most new agents, this is the penultimate criteria for whether a US launch will be deemed a success. Getting this information before the FDA makes an approval decision is critical. Partnering with the right market research to reach the real decision-makers within the payer market can make all the difference in the world.

SM Health Communications LLC provides marketing research and specialized communications for healthcare services and pharmaceutical companies. Our comprehensive capabilities provide clients with the essential insights and competitive intelligence that are critical in today’s healthcare environment.

The Technology Assessment Committee: Coverage Decision Making for the Medical Benefit

Stanton R. Mehr, President, SM Health Communications, Valley Cottage, NY

stan.mehr@smhealthcom.com

According to PhRMA, 901 biotech medicines are currently in development. Of these, 300 are monoclonal antibodies and 298 are vaccines, followed by recombinant hormones and proteins (78), cell therapies (64), and gene therapies (50). In today’s medical pipeline, the vast majority of investigational products (>350) are biologics aimed at treating cancer and related disorders, and these have been covered most often by the medical benefit, as they are commonly administered in hospitals or provider’s offices.

Health technology assessment describes the evaluation performed by informed professionals to decide on the safety, efficacy, effectiveness, and value of medical interventions. This is the principal activity of Pharmacy & Therapeutics Committees. The P&T Committee traditionally focuses on pharmaceuticals like anti-infective agents or hypercholesterolemia drugs, which are readily available through the pharmacy (or through “specialty pharmacies” in some cases) and are covered under the health plan’s pharmacy benefit. 

A problem exists for many health plans and insurers: Many do not have a body similar to a P&T Committee to evaluate products and interventions potentially covered by the medical benefit, such as biologics, diagnostic tests (including new genetic tests), and medical devices. Often, their P&T Committees will be asked to review these interventions, although they are not well structured to do so. Without others to turn to, the P&T Committee may become the de facto decision-making body for products covered by the medical benefit in many smaller organizations.

There are several exceptions. The Technology Assessment Committee of the Blue Cross Blue Shield Association is a structured unit whose sole purpose is to evaluate treatments that will be covered through the medical benefit, and any member Blues plan can access and utilize its recommendations. UnitedHealthcare has its own Technology Assessment Committee for its regional affiliates. Some integrated health systems have the resources to make these coverage decisions, based on the available hospital and health plan staff.

It is important to understand and recognize the difference between a P&T Committee and a Technology Assessment Committee; this goes well beyond the type and number of panelists at the meetings. Clearly, pharmacy professionals cannot contribute as much to decision making on diagnostic testing or medical devices (other than drug delivery systems), so a Technology Assessment Committee will be more heavily represented by medical professionals compared with a P&T Committee. Since the breadth of diseases treated with medical devices and diagnostics is wide (and those treated with biologics is increasing), there may well be more physician specialists asked to serve on a Technology Assessment Committee.

Another key difference is that many P&T Committees will not only decide on coverage but will recommend where the new agent will be placed on its copayment tiering system. The Technology Assessment Committee will recommend whether the product should be covered—not necessarily how it will be covered or if patients will be asked to share part of the costs (which may not exist at all for interventions covered by the medical benefit).

The Technology Assessment Committee sometimes be asked to consider expensive new technologies for which there are limited similar interventions for comparison. As a result, their decisions can have great implications for health plans and insurers’ budgets, their member populations, and the manufacturers’ bottom lines. Therefore, it is critically important to understand how the technology assessment committee will approach newly introduced technologies before they are actually reviewed.

SM Health Communications provides marketing research and specialized communications for healthcare services and pharmaceutical companies. Our comprehensive capabilities provide clients with the essential insights and competitive intelligence that are critical in today’s healthcare environment.

What Is a Mock P&T Committee and What Is the Best Way to Conduct Them?

Stanton R. Mehr, President, SM Health Communications LLC

www.smhealthcom.com
stan.mehr@smhealthcom.com

In the course of a pharmaceutical launch program, most savvy product managers and brand directors will want to test, compare, and evaluate their managed markets launch strategy in a way that gives them a realistic understanding of how their strategy will fare in the real rough-and-tumble world of health plans, insurers, and pharmacy benefit managers. For most products provided in ambulatory settings in the US, these payer institutions control the majority of coverage decision-making and reimbursement. Therefore, at some time prior to product launch, a litmus test of marketing plans is necessary.

            That final overarching answer—will my product be placed on formulary and on what copayment/coinsurance tier?—is the $1 billion question for most pharma companies. This is everyone’s goal, but few well-proven options exist to obtain strong, reliable response to the question. Even the term that pharma executives use to describe how they will obtain the answer is vague in the minds of most. “We will hold a ‘mock Pharmacy & Therapeutics Committee”: What exactly does that mean? Is it a separate tactic or something that is part of another more common managed markets tool?

            Primarily, a P&T Committee is the coverage decision-making body within a health plan, insurer, hospital, or PBM that evaluates whether a product is safe, effective, and of sufficient value to be considered for reimbursement by the plan for its members. In many ways, it is a technology assessment committee, comparing new pharma products and/or delivery devices against what the organization already covers to decide whether the new technology is of sufficient value to its members. In an actual health plan or PBM setting, the P&T Committee meets on a regular basis (e.g., monthly or quarterly) and spends time deemed sufficient to explore the product in question and vote its assent or dissent on coverage. Therefore, if the objective to holding a mock P&T Committee is to obtain a response as close to that seen in a real Committee setting, it is best to emulate the latter as closely as possible.

What a Mock P&T Is, and What It Isn’t. This means that one broad requisite for holding an effective mock P&T Committee is that it is a live meeting of managed markets experts. However, this can be done in a multitude of ways, and each of which carry their own rewards (but risks, too).  

(1)  Managed care advisory boards or webinars—well known, once ubiquitous, managed care advisory boards typically brought up to 15 managed care medical directors and pharmacy directors into one room, with pharmaceutical sponsors sitting either at the roundtable or in the back of the room. Sometimes run directly by the pharmaceutical marketing team or a professional facilitator, the goal of the ad board (which were often done as a series held in geographical regions or by types of plans or insurers) was to obtain responses to a specific list of questions posed by the marketing team. In some cases, a “mock P&T Committee” scenario is included in some portion of the ad board agenda, to try to tease out the whether the managed care executives will, in the end, place the product in question on a health plan formulary. The goal of an advisory board is not necessarily the same as that for the mock P&T Committee. In this setting, part of the problem resides in the very room where the mock P&T is held. In no managed care organization are pharmaceutical company representatives allowed to participate in P&T Committee meetings. This would bias the proceedings and would like inhibit directed, full discussion of the company’s product (or competition).

(2)  P&T “wargames”—P&T wargames are marketing activities in which pharmaceutical company personnel combine with managed care consultants to play the role of health plan executives, not to obtain accurate formulary decisions, but to devise marketing strategies and approaches in response to possible outcomes of the formulary decision. In other words, if one of the possible outcomes of a P&T Committee decision is that Product X will not be placed on formulary because it doesn’t provide sufficient value over presently covered agents, then the wargames team may suggest increasing contracted rebates or discounts to overcome this barrier. However, the P&T wargames is not focused on what outcome is most likely, only what to do in the event it occurs.

(3)  Product theatres—Product theatres, often run at major clinical and professional conventions, offers the chance for pharmaceutical companies to present their marketing story to large groups of managed care professionals. This can be accompanied by a staged P&T Committee review, where some of the issues that may be raised in a real P&T Committee may acted out for the benefit of the larger audience, along with some possible responses.

(4)  The virtual P&T Committee—In this format, a P&T Committee meets on a regular basis, just like a real P&T Committee, to evaluate specific products or drug classes for virtual health plan or PBM. That is, it may represent a specific type of plan, such as a 1-million member regional point-of-service plan, based on the East Coast, or a 500,000-member integrated health plan based in California. The committee members are usually blinded to which pharmaceutical company is sponsoring a session (as part of their regular meeting), and pharma executives are prohibited from attending the meeting in real-time (that is, no one but the Committee members are allowed in the conference room, no use of one-way mirrored observation rooms, and no satellite feed of the actual meeting to other sites). This minimizes inherent biases in discussions and decision making. It also assures that all discussions and comments are encouraged, with regard to how a real P&T Committee approaches the disease state, drug class, or specific product. The result of the virtual P&T Committee is a formulary decision based on a clearly developed scenario, which will set a standard for how real managed care organizations of similar type will most likely vote on the product. It is an outcomes report based on one scenario (which can be a certain pricing level, including specific assumptions on formulary positioning of competitive products, and of course, the value proposition).

It is therefore as important to remember what a mock P&T Committee is versus what it is not. What type of live meeting of managed care experts a pharma company chooses to achieve its goals really depends on what the expectations or objectives of that exercise. If seeking possible responses to a set of P&T Committee decisions, a “wargames” scenario may be most appropriate. If looking for general feedback on the managed care marketing strategy or trying to develop the initial strategy is main objective, an ad board or series of boards may be the ticket. But if the product team is seeking to understand what is the likeliest P&T Committee decision based on their product launch, the virtual P&T meeting is the best way to go.

Not Just for a New Product Launch. Although the most obvious use of a virtual P&T Committee meeting is for a pharmaceutical company seeking to test the outcome for their own new soon-to-be-launched agent, it can be at least as useful to better understand the effect of a competitor’s new entry on the company’s mature product. Virtual P&T Committees have enabled a marketing team to “pre-position” the competitor’s product, based on reaction from the committee members, as well as conduct essential business intelligence on the probability that the new agent will be (1) accepted onto the formulary, (2) at what copayment tier, and (3) what effect, if any, if will have on the rest of the product class. For example, will Product Y’s acceptance onto the formulary at the preferred tier require all other products of the class to require prior authorization before coverage can be obtained? The drug company can then determine if a new strategy is necessary, such as increased rebating or better comparative-effectiveness research will help mitigate these effects.

Again, what is the real objective of conducting a mock P&T? That should define which format provides the greatest chance of success in answering the question.

SM Health Communications provides writing, consulting, and market research services for the long-term care and payer markets. Its proprietary P&T Insight™ virtual P&T Committee program is the leading mock P&T Committee product in the field. For more information, please visit www.smhealthcom.com or contact Stanton R. Mehr, President, at stan.mehr@smhealthcom.com.