Launching A Pharmaceutical Product? Don’t Wait To Formulate Your Payer Strategy

Donna Kerney Correia, PhD Strategy

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Preparing for a new pharmaceutical launch is one of the most exciting – and challenging – jobs for marketers. It’s even more difficult if you don’t think about the payer strategy early in the process. You have to engage stakeholders within your organization (and external vendors) and coordinate activities. You have to decide which customer groups are most important, as well as which tools will be needed to execute your marketing plan. You have to evaluate and test the company’s assumptions, and formulate a value proposition for each customer group. The launch team will develop financial forecasts based on your contracting approach and assumptions around formulary coverage. Finally, you will execute the strategy, through the coordinated efforts of the marketing, sales and account management teams.

During the pre-launch phase, one of the most important tasks is to prepare your payer strategy. Understanding how a product may be perceived by payers is vital to a product’s commercial success. The payer strategy sets the course to launch and therefore should be given attention in the planning process.

A common problem is that many launch teams do not begin working on this crucial plan far enough in advance. A successful payer strategy cannot be developed just before the PDUFA date or even a year earlier—when submitting the original new drug application. The perfect planning window is 18 to 24 months before projected approval. Yes, 18 to 24 months is needed to gather data, analyze, strategize, and set the plan to optimize formulary coverage for your new product.

Why so early? There are several important reasons. First, it will take quite a while to accumulate the information needed to understand the various payers who will influence uptake of your product. Commercial payers, for example, vary by size, geography and formulary structure (e.g., open vs. closed, 3-tier vs. 5 tier) and in their implementation of utilization management programs, like prior authorizations.

If your product will be prescribed to patients over the age of 65, its commercial success will be directly influenced by Medicare Part D prescription drug plans. These plans act like Commercial plans but with very important nuances. Similarly, if your product will be used extensively in low-income populations, you need to understand the dynamics within fee-for-service and managed Medicaid plans in order to adequately prepare for launch in the Medicaid channel.

A great deal of information will be needed to evaluate how these payers currently address the disease area, the available treatment options, and policies related to new products coming to market. All of this requires considerable market research, as well as external and in-house analytics.

Why is all this information so important? Because it will form the basis for product coverage expectations at launch and for evaluating your pricing and contracting options. Nothing has a greater impact on your forecast (and your ability to meet or exceed it) than payer acceptance.

You also must determine if it’s more efficient to consider an external account management team with established relationships with key payers and PBMs vs. hiring individuals to build your own team. This question must be addressed early enough to vet potential external groups, on-board the contract account team, include their insights into the payer strategy and execute that plan at launch.

To answer this question your organization will need to evaluate if they will have sufficient resources internally to approach payers after FDA approval. That is, does your account team have the people and the relationships to address national “A” accounts like United and CVS and regional “B” accounts like Highmark and the Blues plans? What about the Medicaid plans or Medicare Part D plans? Does your account team have expertise and relationships in these arenas?

Viking Healthcare Solutions has established itself as the premier provider of corporate account services and strategic planning support for the pharmaceutical and biotech industries. VHS Insights, our research division, specializing in payer profiling, market research and analytics, can help you find answers to inform your payer strategy. We support traditional and rare/specialty products to create, maintain, defend, and protect access to your product throughout its lifecycle. Bank on our experience to help you achieve successful product commercialization. Contact us at www.vikinghcs.com/connect.

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