Payer Marketing—What Happened to the Good Old Days?

prescription padLife was easy in the early days of payer marketing: create a formulary kit, negotiate a market share agreement with tier 2 status, and pull it through with some fancy formulary status flashcards. Yes, life was good back then. Did I say formulary kit? Yep, those have changed as well. The executive summary of AMCP’s Format for Formulary Submissions 3.0 states that it must include a “value statement of the pharmaceutical or biologic agent being discussed.” What does that mean? Is it about pricing? Dollars saved? Rebates? Historically, rebates have been used to gain preferred formulary position with reduced member out-of-pockets. But with over 70% of prescriptions written today being generic, that marketing approach falls apart. Things are further complicated by the fact that payers are much more willing to use step edits (required failure on a preferred agent prior to use of another agent) and prior authorizations to drive use of preferred therapies, as opposed to relying only on formulary positioning differences.

The value proposition is now the most important story a manufacturer needs to craft in the launch of a new brand—so much so that more forward-thinking manufacturers are designing arms of clinical trials that integrate economic and comparative measures to support the value proposition they feel will be needed to gain support from the payer community (traditionally health plans, employers, pharmacy benefit managers) at launch. And the payer audience is expanding as well. It now includes ACOs and other emerging health care provider models with responsibility for populations. Furthermore, the stakeholders at each account matter more than ever. It is imperative to go broader and deeper into an account beyond just the Pharmacy or Medical Director. New stakeholders are emerging such as the Quality Director, Case Management and others who are weighing in on formulary and coverage decisions.

It isn’t tough to see the link between the growing influence of payers and the dramatic drop-off of new product approvals in the past 10 years. When products are not strongly differentiated, payers worry less about depriving patients of choices. Now more than ever, payer marketing is about differentiation and “pill plus.” It’s about developing business-to-business relationships. It’s no longer fee-for-service—it’s fee-for-value. Gone are the days of disease management; today it’s about disease prevention. It’s no longer good enough that a drug works and is FDA-approved. That alone no longer guarantees access. It’s now about outcomes—in trials and in the real world. It’s about costs—costs per member per month, per quality-adjusted life year, medical cost offsets, productivity, absenteeism. This is what now needs to be communicated to the payer audience in ways that are clear and impactful.

When communicating to payers, pharmaceutical manufacturers cannot approach the next 10 years using the time-worn marketing methods of the past 10 years. Pharma pipelines are filled with specialty products, and the use of traditional and new utilization management techniques will only intensify in the coming years. In a post-Obamacare world, pharma’s priority is to develop ways of engaging payers that are customer-centric and that support patient outcomes. Only then will the payer audience listen.

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