Friday, April 9, 2010

Top 5 HC Reform Action Steps for Pharmaceuticals

Healthcare Reform has passed (as predicted here in January).  It's time for action.  Wait you say... many aspects of reform won't take place for several years.  While that's true, seizing opportunity in the wake of reform requires immediate attentive action.  Some of what's in the legislation will require careful analysis driving well constructed plans both of which will take some time to do well.  Other opportunities created by the legislation have a distinct first mover advantage.  Those who take action now will win the day.  Other aspects will demand years of hard work to accumulate a winning position.

So let's have a look at my top five action steps pharmaceutical companies can and should take now to  take advantage of opportunities presented by Healthcare Reform.  Here they are in no particular order. 

1) Get ready to add sales representatives in targeted areas in 2014 to capture more than your fair share of incremental volume.  As controversial as this thought might seem, consider this... healthcare reform means 35 million additional people will have coverage in 2014.  Most of them are young (under 65).  Some areas of the country will be adding 20% to the population of covered lives.  Pharmaceutical companies with product lines geared to younger populations should start analysis and plans now to consider adding representatives in geographic specific areas to expand reach.  Companies thinking about adding reps but not wishing to add fixed costs might consider chatting with a favorite CSO about variable cost options.  (more here from an earlier blog!). Consider running pilots now to test promotional response.

2) Ramp up comparative effectiveness studies.  Ever see a comparative effectiveness study from RAND or AHRQ?  Often the winner is the product which has not just favorable evidence but the most evidence. Classic first mover advantage.  These studies take time.  Start planning and investing in studies.  Pick your studies carefully though.  Running additional studies is not without risk.

3) Design and pilot programs to help busy practitioners.  Your customers are overloaded already particularly primary care physicians.  Imagine when their practice volume increases by 10% to 20% in 2014.  Pharmaceutical companies who can help their busy practitioner customers will have enhanced relationship and access (more here from an earlier blog).  One simple idea which can be accomplished immediately, and at low cost, is to make sure marketing and reps understand the impact of healthcare reform on their brands and customers.  In fact, I'm already in discussions regarding this capability with a number of interested companies.

4) Review your R&D pipeline and make sure you have the right portfolio and right clinical trials and endpoints to succeed in the future.  Increasingly products will need to not only show efficacy and safety for market acceptance but also superiority vis-a-vis competition.  This is obviously not without risk.  A smart way to do this is to conduct clinicals in a narrower patient population a where a product is likely to come out on top.  In other words ..segment to win....mass market to lose.  Also make sure you cover off the economic side of the picture.  A product that shows economic benefit and clinical superiority will have a field day within a targeted segment.

5) Conduct pilots with large customers to learn how to win in tomorrow's markets.  Large managed care customers will be under some pressure.  Pressure to not only drive revenue above medical costs but to demonstrate quality outcomes.  Pressure to better service customers.  Some aspects of recent legislation mandate pharmaceutical counseling and treatment plans.  Anything pharmaceutical companies can do to help it's large managed care customers succeed and meet their customers needs will be a win-win. Merck is already experimenting with Junuvia.  Don't be left behind.