By Sydney Rubin.
The first rule of effective communications — whether speaking to a beloved offspring or an important customer — is to know your audience. We must understanding what motivates the listener, what they care about, what language will most likely persuade. Don’t expect an argument on the importance of retirement savings to convince your teenage daughter not to buy a pair of costly jeans, and don’t think that those making decisions on drug reimbursement will be persuaded by the traditional forms of drug advertising used to reach patients and physicians.
In today’s world, payers lie at the center of a rapidly changing healthcare marketplace, increasingly empowered to make decisions affecting which drugs and treatments are prescribed. Their growing influence explains why old marketing communications models no longer get the best results. Market success now depends to a great extent on reaching and persuading payers. It is a business imperative, yet in some ways reaching this market remains an afterthought.
Market research studies by CAM and IMS Health reveal that most monitored promotional spending still goes toward detailing and samples for physicians, even though GPs in particular have lost influence over market access decisions. A survey conducted last year of pharmaceutical marketing directors showed they were still allocating about 75% of their total budget to healthcare professionals and 25% to consumers. Pharmaceutical companies spend large sums of money on payer rebates without investing the time or resources needed to understand payer priorities and decision-making processes.
To prosper in today’s environment, pharmaceutical companies should be investing the same effort and budget to gain insights into payers as they once devoted to physicians. We need a clear understanding of the payer as customer.
The good news is that we already have all the skills required to deliver persuasive payer communications. We’re experts in market research and healthcare communications, we’re scientists experienced in developing data and we know all about diseases and patients. Now we must translate everything we do into language linked entirely to value as it is defined by people deciding what products to reimburse and how much each is worth.
This is translation destined for an audience unlike any other. The number and variety of stakeholders within the payer community continues to expand with new players such as accountable care organizations (ACOs), medical home plans, integrated delivery networks, and new risk-sharing HMOs joining the traditional payers, public and private organizations, employers and individuals who buy healthcare products and services. Each has its own particular needs.
And even within each of these diverse organizations that are sub-groups, departments within payers with their own goals. Often operating in silos, these departments may not all have equal access to information on benefit and cost required to make formulary decisions and may be focused single-mindedly on their own departmental bottom-line. Successful commercialization means not only understanding the differing needs of each payer group, but also having insights into the internal operations of each. Only through this sort of insight can we know what form of communications is most appropriate and effective.
One thing all payers have in common, though, is the need to deliver value, defined as better outcomes at a lower cost. All payers are faced with reducing spend while costs continue to rise faster than their ability to increase premiums. Understanding the specific pressures they face is the place to start developing messages.
Messages today are a long way from the “old” days when payers only needed to know that a drug was effective to add it to their formulary. Now, we must demonstrate value in both the short- and long-term using comparative data, such as head-to-head studies and real-world results, which is more meaningful for this audience than data from controlled clinical trials.
Payers have been quite clear in their demand for comparative effectiveness data and analysis. Many contend that the data they receive from manufacturers is not sufficient to show real evidence of value. Like everything else in the current marketplace, beneath the surface, the commitment of both sides around data-driven evidence tends to be fuzzy and contingent. Although payers and pharmaceutical manufacturers are publicly open to more dialogue, privately there are still numerous conflicting agendas. Payers want to maintain as much flexibility as possible in making reimbursement and formulary decisions and have little interest in any proscribed, rigid definition of value. Industry is still not organized institutionally to guarantee outcomes and is concerned why it bears all the risk if it cannot demonstrate unequivocal results. Despite feelings of ambiguity, payers are demanding information companies must work harder to build their in-house expertise on comparative effectiveness.
Comparative effectiveness research isn’t new. Most companies have health economics departments that gather it. Until now, however, these researchers often had little interaction with the customer-facing side of the business. That’s changing. Pharmaceutical executives are starting to tap into this research and combine it with Big Data, often from government research, to deliver budget impact modeling and richer communications.
Such aggregated data is useful, but even better in demonstrating ultimate effectiveness and cost in a value equation is the research we do ourselves. In countries like England and Germany, with single-payer systems, this research is routinely done. In the United States, we have been less diligent in delivering original research that shows the ultimate value of our therapies – so payers press us for discounts as the shortest path to savings.
It is imperative that we begin including value outcomes in early clinical study design. If we develop a drug that will decrease hospitalization, we have to include this in the pivotal trial. Adding value outcomes to approval trials gives us credible data to deliver to payers, helping them do their jobs and make good decisions for patients, while supporting our own formulary goals and market success.
A few companies have begun investing heavily in payer research groups and risk modeling. They recognize the importance of knowing the decision makers for a product, understanding what they specifically care about and building the tactics likely to produce desired results. Armed with data showing how a drug saves in other healthcare costs, they are well positioned to make a persuasive argument for the price of a drug or device.
And we’re all seeing how this can be done within the FDAMA 114 guidelines that:
- Acknowledge that discussions about drugs are different with payers than with healthcare professionals;
- Allow for conversations about the broader impact of a drug based on reliable data that makes direct comparisons;
- Are not a license to talk off label, but do allow discussions about value.
- One final note: In our efforts to better reach payers, we must not lose focus on physicians. Some of the new providers in U.S. healthcare, like ACOs, encourage teams of physicians and hospitals to coordinate their efforts on behalf of health consumers. Physicians’ opinions still matter and they, too, are looking for dramatic improvements in clinical outcomes.
Payer and market access strategy should be approached with the same rigor and processes as traditional commercial strategy. Market access strategy must be developed in close coordination with brand strategy from the outset. We must have deep familiarity with the needs of payers and a mastery of the language that matters. In short, to succeed, we must speak payer.
Sydney Rubin is the Chief Communications Officer of inVentiv Health.