As the healthcare industry moves toward a value-based paradigm, the healthcare environment is becoming increasingly complex with emerging market influencers. Rising healthcare costs and reforms are tilting the balance of power toward payers and provider networks.
Today, commercial success is no longer exclusively dependent on the amount of manufacturers’ sales forces that are actively targeting providers. Specifically, stakeholders are now focusing decision criteria on safety profiles, patient outcomes, and economic value, whereas sales-led detailing has relatively less influence.1
Consciously allocating analytics-supported resources can enable pharma companies to achieve brand success. Effective analytics and insights are necessary to understand and assess the impact of different stakeholders and to know the resources the company allocates to reach the right customer.
This blog highlights the shift in the pharma landscape. It offers a practical analytical approach that uses health care professional (HCP) scoring and segmentation based on payer and integrated delivery network (IDN) influences. As a result, this approach will improve call plans and help manufacturers maximize their sales operations’ return on investment (ROI).
In the changing landscape, prescription decisions are moving away from individual physicians, whereas they dominated decision-making in the old framework. Physicians who are IDN employees must adhere to formularies or justify their choice when they elect to use another product.
The managed care model has also seen massive growth in the US pharmaceutical industry. Gaining access to a managed care formulary is crucial for a product’s success. Therefore, manufacturers are providing payers higher rebates to secure a favorable formulary position.
However, formulary wins alone cannot ensure increases in net profits. On the contrary, net profits can reduce if the formulary wins and rebate increases do not materialize into expected gains in market shares. We can attribute this profit loss to a growing difference between a manufacturer’s list price for a drug and the net price to a third-party payer after rebates.
Learn More - "Driving Sales Rep Performance With Statistically Defined Incentive Plans"
In today’s competitive marketplace, practical analytical tools and insights must follow formulary wins to effectively assess the stakeholders’ influence levels, as well as the resources that companies allocate for reaching the right customers.
This conscious tactical selection can vastly improve the prospects’ chances for brand success. Sales representatives must receive timely information about which customers will be most affected or influenced. Then, they must appropriately prioritize their efforts and resources to pull through the opportunity in the best manner.
Before delving into modeling parameters, the framework, and the processes influencing managed care and health care systems, it is critical to understand how a typical call planning approach works.
Planning for success requires a tactical call planning strategy through effective platforms - such as Axtria SalesIQ™. This analytics-embedded cloud-based sales planning and operations platform powers commercial organizations to make data-driven decisions, properly align territories, and efficiently reach the right customers at the right time.
While many factors influence how an HCP prescribes products, the four characteristics listed below have a significant impact. The HCP scoring approach considers these characteristics during score production.
Plan attributes like payer type (commercial/Medicare), deductible amounts, etc. are not directly linked to a brand, but can significantly impact an HCP’s behavior.
The following attributes indicate a product’s favorability based on its formulary, which controls product usage:
Often, co-pay requirement variances are directly associated with formulary tiers and are the most common way payers manage formulary compliance. This “lever” passes a portion of medication costs directly to the patient based on the product’s position on the payer’s formulary. Typically, consumers pay lower co-payments for generic and preferred brands and high-cost portions for non-preferred products.
Control attributes define a plan’s ability to control physician behavior. These attributes define plan consistency across a particular geography and within a plan across physician deciles, e.g., plan control and plan homogeneity.
If the analysis determines that a payer can exert high control, a pharma manufacturer will need to secure a more favorable formulary position. In turn, aggressive rebating may secure the business and maximize the product’s performance. Budgets allocated for other promotional efforts may relax as the payer’s control will be a tremendous asset in driving product utilization.
Conversely, if the analysis reflects that a payer is ineffective at controlling formulary adherence, a pharma manufacturer may pursue a less favorable formulary status (with lower rebates) and direct more resources to pull through efforts.
For brands competing with other products in a market, an absolute formulary position has limited implications. A brand’s relative position on all these attributes as compared to other products in the market is equally critical and must be included in the framework.
The framework involves a step-by-step process using advanced analytical techniques to arrive at an HCP score:
Apart from incorporating the HCP framework in call planning, the frame can also be used in many other areas, e.g., the identification of pull-through opportunities, as a physician-level trigger for outliers, for evaluating contracting opportunities and related decisions, incentive compensation goal setting, and more.
For predicting IDN influence, the HCP scoring framework will leverage a similar approach and include multiple factors like percentage of generic share, deviation of IDN market share with the neighborhood, variance in brand share, physician affiliation, and more.
Pharma companies are providing payers more significant discounts and rebates to achieve favorite formulary positions while spending considerable effort to influence IDNs. To ensure a brand’s success, manufacturers must consider the influence of payers and providers on treatment decisions and reconfigure their strategy and operations.
Watch the webinar done in collaboration with the Pharmaceutical Management Science Association (PMSA), “Improving Targeting and Call Planning for the Changing Pharma Landscape,” and learn how Axtria’s HCP scoring framework efficiently yields HCP scores to improve sales and operations.