Healthcare Brand Management Market Access Concepts - Successful healthcare marketing requires market segmentation followed by development of strategies and tactics for each customer channel. Pharmaceutical companies, medical product manufacturers and healthcare service providers can maximize their marketing spend and sales effectiveness through individualized strategies and tactics for specific market segments. Review this objective presentation and visit www.healthcaremedicalpharmaceuticaldirector.com for more contemporary healthcare business insights. John G. Baresky

1. Healthcare Brand Management
Market Access Concepts
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2. Healthcare Brand Management
Market Access Concepts

3. • The degree to which a healthcare product is:
– Easily prescribed/used by providers
– Reimbursed by health plans
– Effectively promoted/sold in a market segment
– Available through a variety of contractual arrangements
and supply chain sources
What is Access?

4. • If payers do not reimburse for the product, it is less likely
caregivers and patients can use it
• Marketing and sales initiatives of manufacturers will be
much less effective
• The product will not be able to generate enough revenue
to be commercially viable
• Competitors will gain an advantage through their market
access initiatives
Access And Reimbursement

5. • The product must be correctly positioned with primary prescribers
and provide clear clinical value in patient treatment
• Identify channel(s) your product will be used most, where it
realizes greatest revenue potential
– Target the predominant prescribers and payers in the channel
– Develop and implement a contracting strategy for each
channel, include customers and leading payers
– Fortify the product’s position with physicians through clinical
marketing strategy and accelerate growth with sales tactics,
ongoing promotion and pull-through
– KOL support establishes a conduit of influence into clinical
decision makers and their peers
Planning Access

6. • A direct customer contract can be undermined if product is
available at a lower price through a GPO contract
• Distributors, wholesalers and other reseller contracts
need channel alignment to protect agreements and maintain
profit continuity in other market segments
• Discounts, rebates and other financial features need to be
accounted for throughout agreements to assure margin and
true profit is realized before transactions are underway
• Commercial contract pricing needs to be reconciled against
government contracts requiring “best price”
Planning Access

7. • Sole awards and preferred product positions provide
premium access but require the steepest discounts and
garner the most competitive attention
• Rebates based on volume contracts need clear definition
and dedicated resources to maximize access and accurately
manage rebates through sales tracings, chargeback data
• It is necessary for pharmaceutical companies to balance
direct contracting strategies with healthcare clients versus
GPOs; healthcare entities engage in both arrangements
depending on their procurement preferences
Planning Access

8. • Customer supply chains featuring distributors, wholesalers
and other sources vary, contracts needs to account for these
• Maintaining/expanding access requires a budget to open
new initiatives and provide marketing/sales resources to
propel them
• Access requires selectivity, fortifying/expanding access
should be based on customer need, reimbursement
potential, available resources and long term ROI
• The product must be correctly positioned with primary
prescribers and provide high clinical utility
Planning Access

9. • Establishing a leading contractual arrangement and/or preferred
status is just the beginning…
– Physicians and patients need to know they have access to the
product, be familiar with the product’s attributes and establish
the processes to procure it through
– Sales uptake and ongoing momentum is driven by a well-
supported sales force and strong marketing initiatives to fortify
and expand share/revenue
– New competitors will launch pull-through initiatives to penetrate
the market, established competitors will widen share and
prevent newcomers from getting traction
– Physicians and payers need to be continually engaged and
cognizant of the product and its manufacturer’s value
Pull-Through Reinforces Access

10. • Access is driven by connectivity and throughput of information:
– Social Media propels clinical and promotional messaging to
healthcare professionals, patients and consumers
– Healthcare plans make data-driven decisions based on care/cost
outcomes, claims processing reporting and member utilization
– Pharmaceutical companies rely on blended data to effectively
contract, maintain compliance, determine share, assess
marketing/sales ROI
– CMS/Federal and state sponsored plans are data dependent to fund
programs such as Medicare, Medicaid, 340B, reimburse providers and
pharmaceutical companies, as well as maintain patient eligibility files
– ACOs are hugely dependent on electronic information flow to manage
their protocols and assess performance
Connectivity Coordinates Access

11. • Dialysis
• Long Term Care
• Mail Order Pharmacy
• Home Infusion
• Hospitals
• Infusion Clinics
• Military Treatment Facilities/MTFs
• Oncology Clinics
• Physician Practices
• Retail Pharmacies
• Specialty Pharmacies
• Surgical Centers/Outpatient Surgery,
• Veterans Administration/VA Hospitals & Clinics
Examples of Market Channels
Each channel
requires an
access
strategy…

12. Retail Pharmacy
– CVSCaremark
– Rite Aid
– Target
– Walgreens
– Wal-Mart
PBMs*
– ARGUS
– BioScrip
– Catalyst RX
– CVSCaremark
– Medco
– Restat
– SXC Health
Leading Pharmacy Entities
*PBMs: Pharmacy Benefit Managers
In addition to contracting with pharmaceutical manufacturers, PBMs contract with
retail pharmacies to fill prescriptions for pharmacy plan customers

13. • PBMs contract with brand and generic manufacturers for better
pharmaceutical pricing and actively manage utilization of prescription
medication by customer plan members
• PBMs feature their own formularies and assertively negotiate for rebates
based on volume/preferred status with pharmaceutical companies
• Some PBMs like Express Scripts, Medco, and SXC operate their own
mail order pharmacies, others like ARGUS, CatalystRx and Restat do not
• PBMs manage prescription plans for employer, government (Medicaid,
Medicare, TRICARE, etc.) and other sponsors
• PBMs offer clinical programs to manage some therapies closely, these
provide access opportunities for manufacturers
A Note About PBMs

14. • Mail order pharmacies dispense maintenance therapies (cholesterol, diabetes,
contraceptives, hypertension, etc.) in 90-day supplies, it is key for manufacturers
of maintenance therapies to have contracts with mail order pharmacies
• They charge plans/patients less, the concept is patients are getting their
medications “in bulk” 90-day supplies versus 30-day retail increments
• Mail order pharmacies typically operate specialty pharmacy units as well to
dispense injectable products to support advanced patient care
• CVSCaremark, Walgreens, Rite Aid and Wal-Mart operate mail order pharmacies
in addition to their retail pharmacy operations
• Health plans with their own mail-order operations include Cigna (Tel Drug),
Humana (FutureScripts), BCBS (Prime Therapeutics) and United HealthCare
(Prescription Solutions)
A Note About Mail Order Pharmacies

15. Commercial Plans
– Aetna
– BlueCross BlueShield plans*
– Cigna
– Humana
– Kaiser
– United Healthcare
– WellPoint (14 BCBS plans)*
Leading Payer Plans
Government Payers
– Medicaid (state-based,
federally subsidized)
– Medicare
– TRICARE (active/retired
military)
– 340B Plans
*There are 38 BlueCross BlueShield plans affiliated with the
BlueCross BlueShield Association

16. • 340B is a Federal drug discount program established in 1992, it requires drug
manufacturers to provide outpatient drugs to eligible health centers, clinics and
hospitals at a discounted/negotiated rate (average 50% below retail)
• The 340B market segment has been growing due to issues with the economy and
larger numbers of uninsured persons but margin is lower as 340B is price driven
• 340B is also known as "PHS pricing" or "602 pricing“, patients discounts are
created by contractual arrangements between the care provider and a pharmacy
• Entities eligible to participate in 340B include:
– Black Lung Clinics
– Disproportionate Share Hospitals (DSHs)
– Family Planning Clinics
– Federally Qualified Health Centers (FQHCs)
– Federally Qualified Health Center look-alikes (FQHCLAs)
– Hemophilia treatment centers
– HIV / Ryan White Clinics
– Sexually transmitted disease and tuberculosis clinics
– State-operated AIDS Drug Assistance Programs
– Urban Indian organizations
A Note About 340Bs

17. GPOs
– Amerinet
– Gerimed
– Epic
– HealthTrust Purchasing
Group (HPG)
– Innovatix
– ION (M
– MedAssets
– MHA
– Novation
– PDM
– Premier
Healthcare Systems
– Dept. of Veteran Affairs/VA
– HCA Inc.
– Community Health Systems
– Trinity Health
– Partners Healthcare
– NYC Health & Hospitals Corp.
– Kaiser Permanente
– Universal Health Services Inc.
– Catholic Healthcare West
– Adventist Health System
– Tenet Healthcare Corp.
GPO and Healthcare System Leaders
GPOs are frequently a part of the Healthcare System access formula

18. • Group Purchasing Organizations (GPOs) contract with manufacturers of
brand or generic pharmaceutical products, medical devices, equipment
and other items used in healthcare settings
• Healthcare entities pay a membership fee to “join” a GPO to get access to
discounted pricing GPOs negotiate with manufacturers, GPOs also collect
1-3% margin from drug products and provide other services to gain
• Some GPOs are business units of distributors/wholesalers but do not
take possession of products, they are price-driven, contracting entities
• HPG, MedAssets, Novation and Premier are larger independent GPOs
• Wholesaler operated GPOs include INN, ION (AmerisourceBergen),
VitalSource (Cardinal Health), Onmark, U.S. Oncology (McKesson)
• An array of customer groups use GPOs including healthcare systems,
hospitals, oncology clinics, home infusion, surgical centers, dialysis
clinics, physician groups and long term care companies
A Note About GPOs

19. Nursing Facilities
– HCR ManorCare
– Golden Living
– Life Care Centers
– Kindred Healthcare
– Genesis Healthcare Corp.
– Sun Healthcare Corp.
– SavaSeniorCare
– Extendicare Health Services
– ELGS
– Skilled Healthcare Corp.
Assisted Living
– Emeritus Corp.
– Brookdale Senior Living
– Sunrise Senior Living
– Altria Senior Living
– Five Star Quality Care
– Assisted Living Concepts
– Merrill Gardens
– HCR ManorCare
– One Eighty-Leisure Care
– Life Care Services
Nursing and Assisted Living Facilities
Once highly fragmented, consolidation among nursing and assisted living facility
operators continues which will greatly concentrate revenue sources in the future

20. LTC Pharmacies
– Guardian Pharmacy
– Millenium Pharmacy
– Omnicare
– Partners Pharmacy
– PharMerica
– Senior Care Pharmacy
Home Infusion Providers
– Apria
– AxelaCare Home Solutions
– CarePoint Partners
– Healix
– Home Solutions
– Infuscience
– Lincare
– OptionCare/Walgreens
– Vital Care
Long Term Care Pharmacy and Home Infusion
The home infusion provider market continues to evolve through consolidation of
existing providers and hospitals expanding their services into home infusion offerings

21. Surgical Centers
– Amsurg
– HVP
– Meridian Surgical Partners
– SCA
– Surgical Care Affiliates
– Symbion
– United Surgical Partners
Dialysis Providers
– American Renal Associates
– Centers for Dialysis Care
– DaVita
– Dialysis Clinic Inc.
– Fresenius
– Innovative Dialysis
Systems
– Renal Advantage
– Renal Care Partners
– Satellite Healthcare
– U.S. Renal Care
Surgical Centers and Dialysis Clinics
DaVita and Fresenius control two-thirds of the U.S. dialysis market, consolidation in
the channel is frequent and driven by cost controls to generate revenue under
Medicare patient care performance standards and reimbursement limits
GPOs are frequently a part of the Surgical
Center access formula

22. • Each market channel requires its own access strategy
• Fully account for primary physicians and payers in each channel to
position, price and promote product successfully
• Contracting may involve direct-to-customer, distributor, GPO, wholesaler,
payer and other arrangements to succeed in the channel
• Competitors are selectively stronger/weaker in different channels, exploit
channels they are weakest in to grow product sales
• Contracts are only part of market access, contract management, pull-
through and connectivity are necessary to maintain/expand sales/share
performance
• Be selective, fortification and expansion of access requires clinical
performance to demonstrate true value and gain acceptable
reimbursement levels --plus suitable resources to sustain initiatives for
acceptable financial returns
Access Summary

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