Many products drive most of their business through the Commercial channel. But if your product has the potential to be used extensively among those in low-income populations, the Medicaid channel will become a crucial piece of the proverbial pie.
Medicaid Structure
Medicaid provides health insurance coverage primarily to low-income individuals and families in the US. Coverage is provided at the state level, in the Fee for Service model or under Managed Medicaid (MM) health plans. Each state determines its own systems, policies, and procedures for the determination of drug coverage and placement on a preferred drug list (PDL). Each state also varies in not only the number of lives in the Medicaid population but also the proportion of its Medicaid population covered under FFS vs. MM plans. There are states that operate individually. Then there are the Medicaid purchasing pools, including NMPI, SSDC, and Change Healthcare – and the associated states within those pools.
FFS and MM operate differently and require different approaches if you are looking for product coverage in this channel.
Setting Targets
Most companies have limited resources and Medicaid requires a great deal of effort. There are 50 states plus DC – but it doesn’t mean you need to capture everyone. There are many moving parts and nuances in the Medicaid space. As every state operates differently, simply keeping up to date with the rules and operational setups, tracking P&T schedules, speaker sign-ups, and PDL carve-outs is not only time consuming but can be daunting – especially if the mindset is to cover every state. The key to a successful Medicaid strategy starts with identifying the right targets.
So how do you set the targets? There are several layers to targeting in Medicaid. And in many cases it becomes an iterative process driven by internal resources and expertise, relationships with state Medicaid agencies and a manufacturer’s market focus.
More objective prioritizing can be done based on the following:
- Select states by Medicaid lives covered
- Focus on states with the most lives
- The top 20 states, based on number of Medicaid lives covered, represent ~78% of all Medicaid lives.
- California tops the list at over 10MM lives; followed by
- New York
- Texas
- Florida
- Ohio
- California tops the list at over 10MM lives; followed by
- Select states by percentage of Medicaid lives controlled by the state
- Different approaches are needed for MM plans vs. FFS
- MM operates like the Commercial channel in some ways – with contracting negotiations occurring with PBMs and MCOs
- Select states based on their influence within a pool or their importance based on your organization’s internal discussions
- Certain states within a pool may be influencers on the others regarding product adoption
- Internal organizational optics for gaining access in a certain state may drive that state to be a target where otherwise it may not have been on the radar
These are not mutually exclusive ways to target; and the process tends to be relatively fluid.
Setting Strategy
Once you’ve identified targets (at least as part of an initial set), you need to understand where the decision making/control lies and the number of lives affected. These factors will help to shape the approach for market access. For example, TN is the only state in the top 20 that uses only Managed Medicaid, however, the state still controls the drug formulary. So, focusing on the state is required. TX, FL, NC and AZ have both FFS and MM, but the states control the drug formularies. Work directly with the MCOs won’t be so fruitful if the state is pulling the strings on product coverage.
Engagement with the targets is driven by the policies, procedures, and timing set by each state. Knowledge of the process can make or break success in this channel.
Medicaid is complex. It requires knowledge and focus to maximize the potential opportunity for your product in that channel. Having someone who knows how to navigate the rough waters often associated with government entities is vital.
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.
