Managed Markets Market Research

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Best Practices, LLC Business Excellence Board

Strategic Benchmarking Research

Managed Markets Market Research:

Effective Structures & Activities for Gaining Maximum Payer Access & Insight


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Field Study Overview

Key Findings

Universe of Learning: Benchmark Class

Structure Preferences

Research Types That Deliver Greatest Insight

Pre-Launch Objectives That Focus Research

Innovative Practices for Developing Insights

Timing of Key Managed Markets Market Research Activities

Key Trends, Best Practices & Critical Pitfalls

Appendix of Full Source Data & Analysis

Managed Markets Market Research: Effective Structures & Activities for Gaining Maximum Payer Access & Insight

Table of Contents

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Key Topic Areas

Optimal structure and organizational fit

of the function responsible for Managed

Markets market research (MMMR)

Major pre-launch objectives for MMMR

Top global Managed Markets research

activities by product development phase

Most effective activities for accessing

hard-to-reach channel partners

Primary categories of MMMR

Most critical pre-launch study types

Trends in MMMR staffing and focus

Best practices and executive insights

This client-driven research was conducted to help pharmaceutical and biotech companies build effective Managed Markets market research functions that can drive access to—and gain critical insights from—the increasingly influential Managed Markets sector.

Research Objective

Study Objective & Methodology

Best Practices, LLC undertook this

research to identify market research

activities and structures that are most

effective for gaining access to – and

gathering insights from – the increasingly

important Managed Markets sector.

This research was completed using two

insight and intelligence gathering

approaches: an online benchmarking

survey of Managed Markets executives at

leading pharmaceutical companies and

in-depth field interviews with selected

survey participants.

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Definitions & Abbreviations

Definitions

1. Managed Markets: The function within pharma that is concerned with actions of payer (payor) organizations – including both commercial and government providers of prescription drug coverage (e.g., Medco, Cigna, United Healthcare, Medicare, Medicaid, Veterans Administration.)

2. Managed Markets market research (MMMR): The study of payer organization perspectives on topics such as meaningful endpoints, health outcomes, definition of innovative medical products, pricing requirements, formulary access/positioning, contracting, and reimbursement. Also includes research on payer companies and agencies and on current and future trends in the payer and managed care environment.

3. FTE: One FTE (full time equivalent employee) is the equivalent of one person working full time. Example: 2 people each working ½ time=1 FTE.

Abbreviations

• MMMR=Managed Markets Market Research

• MM=Managed Markets

• MR=Market Research

The following definitions and abbreviations are used in this study:

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Sample Key Findings

The following key findings and insights emerged from the field surveys and executive interviews:

Key Sources for Developing MM Insights: Ad boards and account managers

(setting up team meetings) are the most effective MM activities and yield the best

insights. Ad boards become most effective when innovative approaches are applied to

engage diverse payer viewpoints instead of re-using the same small group of

traditional payer participants.

Role of Account Managers Is Expanding to Access MM Insight: Account

managers’ roles are expanding due to the increase of Managed Markets influence in

the pharmaceutical industry today. Account managers are seen by most participants

as the most reliable method for accessing hard- to-reach partners. MM account

managers play different valuable roles depending on the type of product, its market-

entry order and its clinical profile.

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Universe of Learning: Participating CompaniesEleven leading pharmaceutical companies participated in this field research. Ten organizations contributed to the performance benchmark survey, and six participated through in-depth “lessons learned” interviews and discussions. Ninety-percent of participants are at the director level or above.

Survey Only Survey & InterviewParticipants in Survey Only Participants in Survey & Interviews

Participants’ Job Titles: EVP, Commercial Operations; VP, Managed Markets; Senior Director, Business Improvement; Executive Director, Managed Markets (2); Director, Managed Markets; Director of Marketing Research; Director of Strategy—Managed Markets; Associate Director of Managed Markets; Manager, Payer Analytics; and Director of Marketing—Managed Markets.

Interview Only

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Q. Which of the following global activities have the greatest impact on strategic choices?

(n=10) Ranking Scale: 1=No impact to 7=Very high impact

Ad Boards & Team Meetings Have Greatest Decision Impact

Six out of ten participating companies rank payer advisory boards and use of a team approach to account meetings as the global MMMR activities with the highest impact on strategic choices or decisions.

% Very High Impact(Rated "6" or "7")

60%

60%

50%

40%

30%

20%

10%

0% 10% 20% 30% 40% 50% 60% 70%

Payer advisory boards

Team approach to critical account meetings

Market research

Health outcomes/economics data collection

Field interviews with individual payers

Interviews with internal account managers

Managed markets industry meetings & events

`

% Responses

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Payer Advisory Board Success Strategies

Payer advisory boards are a high-impact, high-value activity for capturing Managed Markets insights – in part because companies have developed strategies to overcome limitations of this vehicle.

Limitations:

The same few people are on the boards every time

There is insufficient diversity among board members

Some important payers strictly prohibit participation because of compliance issues

Strategies:Target a wider range of people within a payer company: “Most of the time we're all recruiting the vice-president of pharmacy or director of pharmacy. Look to people who are in charge of putting together dossiers. Who are those people and what is the information they look at when they're putting together a package for the P&T committee? Find medical directors working on a tech assessment that you should be targeting, because they're going to give you a very different perspective than are pharmacy directors. Pharmacy directors are thinking about placement on the formulary of a class of drugs and how you compete in that class of drugs. Medical directors will be thinking about what's medically necessary and what's not medically necessary.” – Interviewed Executive

Reduce the size and change the name: “The big ad boards tend not to give you quality. One or two dynamic people often dominate and shut down the conversation. A group of four or five maximum gives us far better dialog. We don’t call them ad boards either—they’re focus groups now. We have had better success with smaller groups, not any different than getting a small group of physicians together at a society meeting—to give feedback. “ – Interviewed VP

Payer advisory boards can be highly effective for gathering Managed Markets insights if companies use innovative strategies to overcome some inherent limitations.

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Managed Markets MR Activities Peak During Phase 3

Phase 3 is the peak time for most global activities in Managed Markets market research, although some companies begin selected activities as early as the Pre-Clinical stage of product development. Earlier payer activities are a growing trend.

% c

ompa

nies

Q. During which product development phase does the Managed Markets MR staff perform each activity?

0%

20%

40%

60%

80%

100%

Pre -Clinical

Phase 1 Phase 2 Phase 3 Launch

Field interviews withindividual payers

Health outcomes/economicsdata collection

Interviews with internalaccount managers

Managed markets industrymeetings & events

Market research

Payer advisory boards

Team approach to criticalaccount meetings (n=8-10)

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Sample Best Practices: Structure & Communication

Benchmarked companies shared some of their best practices for Managed Markets market research activities.

Structure/ Internal Communication

Segment customer groups so that answers are more meaningful based on segment

Keep management informed on challenges payers face. (“The more you can give

senior

management insight into the legitimate challenges that managed care plans face as they

try to balance their cost picture, the better off you are. Communicate this right down

to

the rep level.”)

Hire staff who have worked in the Managed Markets sector.

Develop internal and external networks of MM experts.

Align with internal government affairs group to be alerted

to and to help shape future policy.

Take brand team members to payer meetings.


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About This Research

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About This Research

This presentation is the result of primary client-driven research conducted by Best Practices, LLC. See www.best-in-class.com for more on our research services.

This benchmarking study is intended to be a directional indicator on the Managed Markets market research function.

Clients have used our benchmark research in the following ways:

• Gap Analyses: Identify areas for improvement.

• Business Cases: Prepare a proposal for change.

• Training: Learn about new areas, industry trends & standards.

• Resourcing Decisions: Assess staffing, budget & structure.

• Sharing Research: Satisfy internal customers with unique data.

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Serving your Research Needs

1) Customize this Presentation: We can chart and present your organization’s metrics in comparison to this study’s benchmark class.

2) Access more Client-initiated Research: If you purchased this study, you may be eligible for a credit toward membership. To learn what you can access, do an advanced search at www.bestpracticedatabase.com.

3) Conduct your Own Study: Let our analysts assist you in designing your own questions for an on-line survey and/or interview.

www3.best-in-class.com/ResearchConsulting

Best Practices, LLC919-403-0251 ● [email protected]

If you want to visually compare your data with that of this study’s benchmark class, get more research on this topic, or you want to sponsor a study, see below.

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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.

Best Practices, LLC research provides key directional indicators, proven business practices and executive insights to support organizations seeking to achieve best-in-class business performance.

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Chapel Hill, NC 27517(919) 403-0251

[email protected]

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Managed Markets Market Research