increasing market access through innovative payer market research: assessing new tools and...

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

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

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


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

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 Included Study Overview

4


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


Industry Representation

Pharmaceuticals/ Biotech

53%

Medical Devices 28% Market Research Agency or Consultancy

11%

Diagnostics 6% Retail Pharmacy 3%

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


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

44%

47%

44%

33%

41%

32%

50%

35%

24%

24%

9%

6%

Value Proposition Testing - testing messaging/materials to conveyvalue a new medication will provide to patients

Payer "Landscape" Research to understand how payers evaluateproducts 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 AccountExecutives and others who work with payers

Exploration of opportunities to support Accountable CareOrganizations

Research into implications of expanded access through HIEs amongpayers 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


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

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


(n=36)

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 ResearchContracting Strategy Research - by product or by portfolio of productsExploration of Risk-Sharing contractsTrack results of Patient Support/Adherence program offeringsResearch 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


Phases to Begin Payer Contracting Research:

% o

f R

esp

on

se

s

Numerous Issues Limit Pharma Understanding of ACOs

10


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

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


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

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


http://www.best-in-class.com/





increasing market access through innovative payer market research: assessing new tools and...

Health & Medicine

impactful payer research

payer coverage

complex payer landscape

evolving payer ecosystem

llc research overview

internal research groups

healthcare companies

greater power