About the Experts
Nitin Jain, Principal,
Business Consulting Manager, Boston
In an era of patent expirations, vanishing blockbusters and shrinking sales forces, new product launches are more critical than ever. Companies don’t get many opportunities to introduce new products, and launches usually can’t be corrected if they go bad.
Market access is critical to a successful launch, which requires products available at a reasonable cost. Ensuring market access—and the right type of access to the right payers—means more than throwing money at rebates.
Several trends are complicating matters. The average differential in copay between generics and preferred or non-preferred brands has doubled since 2000, and the number of drugs facing restrictions has increased. Insurers are requiring prior authorization before covering new drugs, and placing the brands on the highest formulary tier—or are refusing to cover them at all.
The end result is that less than 10% of all brand launches achieve 5% market share in the first year.
Nitin Jain, a ZS Principal in Evanston, Ill., and Howard Deutsch, a business-consulting manager with ZS in Boston, spoke about why a market access strategy is so important to a new product launch, and how pharmaceutical companies can implement such a strategy.
What is “market access,” and why is it so important in a product launch?
NITIN JAIN: Market access is the likelihood that a prescribed product is made available to the patient at a reasonable cost without a lot of utilization-management hassles. Access has been important for a long time, but gaining access has become much more difficult. The general landscape has changed, with payers becoming more powerful and flexing their muscles. There have been so many launch failures that leaving access to chance is not an option.
HOWARD DEUTSCH: Pharmaceutical companies must ensure that customers have a positive and seamless experience. They want physicians to feel as if prescribing the product is effortless; they don’t want doctors to be getting calls from the pharmacy.
If a successful transaction is effortless, an unsuccessful transaction can be annoying or even painful for the prescribing doctor or patient. In an unsuccessful transaction, the patient doesn’t receive the prescribed drug, either because the cost is too high or the payer doesn’t approve it. The physician’s office is disrupted with a callback from the pharmacist, and the physician forms an impression that prescribing the drug is a hassle.
What are the common gaps in market access strategy?
HOWARD: We see an overreliance on history and a focus only on “successful” analogs. Additionally, companies may develop high-level access objectives. For instance, they may say, “We will match our main competitor’s access in two years,” but not, “How will we get to where we want to go?” The result may be post-launch fire drills and general confusion.
Companies must ask themselves where can they get the access, including which payers and geographies. Are these individual payers open to giving access to a new drug product? And should objectives be different for different payers and geographies?
They must also determine what it takes to achieve access, whether it is rebates, uniqueness of clinical data or more choice for the patients covered by the payer. Sometimes, companies set overoptimistic expectations about the pace of access uptake.
How can companies close gaps in their access strategies?
HOWARD: Companies need to start by understanding the market landscape—what brands are on the market, what their coverage looks like and the impact of payer access.
NITIN: Companies can improve access strategies by focusing on the funda- mentally predictable aspects of different payer segments in developing tactical access action plans. Across many therapeutic markets, payers are quite predictable in their behavior regarding what it takes to gain favorable access with the payer, be it clinical uniqueness versus health-economic data versus rebates, and the likely time frame in which a new drug can attain access.
Companies must also align different constituents within the organization. For instance, the brand team needs to weigh in on payer prioritization and segmentation, and the forecasting team needs to incorporate the impact of access on the brand forecast. And depending upon the expected payer control, finance needs to compute profitable rebate levels.
So should access strategy align with new product promotion strategy?
NITIN: Yes—they need to be linked. A company’s resources aren’t unlimited, and the access environment has a significant impact on the effectiveness of a sales and marketing tactic. So depending upon the nature of the promotional tactic, you may need to modify other promotional channels to complement or supplement access.
Can you give an example?
NITIN: In some parts of the country, pharmaceutical companies may need to supplement access through copay offset programs. Likewise, the sales force effort may need to be ramped up as access continues to improve, and physicians become more receptive to the clinical benefits, as well as the availability message, of the new drug.
How much of a difference does linking access and promotional strategy really make?
HOWARD: Well, take Boston, where I live. Boston is known for its poor managed-care access. So in response, one company incorporated managed-care access into its resource allocation, and reduced its sales force resources in the region 15%. It just made sense to reduce expenditures when you’re not able to get access.
Ultimately, what are the keys to a good market access strategy?
NITIN: One major key is remembering that a good access strategy is not just about creating the highest possible access, but maximizing profits. In certain markets, a good market access strategy may mean you have 60% or 70% access. You may need to target certain key geographies. You may need to have access with certain key plans that provide the highest spillover.
A good market access strategy also needs to be tactical—it has to take many factors into consideration, like geographies, payers, messages and tools, in order to win access. And a good market access strategy should also be connected with downstream promotional activities to make the most of the access, or find ways to supplement the lack of payer access.
It is important to keep in mind that payers display a repeatable pattern of behavior across different markets. That makes the access strategy factual and grounded quantitatively.
HOWARD: I’d add that it’s important to emphasize proper stakeholder involvement internally: The managed markets organization members should be engaged strategically when launch planning is in its earliest stages. They need to help assess what level of access the company can realistically achieve profitably, and help build a roadmap to arrive at that level of access in partnership with the commercial team. That stakeholder involvement must absolutely be a part of the market access strategy.