Medicare Part D is launching in a few months and is expected to pump $540 million in benefits over the next 10 years into the healthcare industry, making the government the largest purchaser in the United States. After a long buildup period, the marketing of Medicare Part D prescription drug benefit plans begins Oct. 1 2005. Sponsors of Prescription Drug Plans (PDPs) and Medicare Advantage drug plans (MA-DPs) face the largest and most complex healthcare communications “street fight” in history, according to some experts. For the first time, plans will be able to outline to prospective enrollees their precise drug benefit structure and pricing provisions for the benefit that takes effect Jan. 1. Some believe that the multitude of options and the complexity of Part D threaten to result in beneficiary paralysis and enrollment suppression. PDPs, MA-DPs, and HMOs are not the only entities to be affected by the new prescription drug plan. Pharmaceutical manufacturers likewise need to make sure they are Part D ready, and fine tune and implement changes to their internal processes, strategies, and marketing plans. According to Tom Koenig, senior director of segment marketing at Endo Pharmaceuticals Inc., who is responsible for developing marketing strategies and tactics for all payer channels, are the only customers who purchase products as part of a business decision. “Patients pay for medications because they have a disease or condition,” he says. “Physicians don’t actually pay for anything. They do put their professional reputation on the line when they put that pen to pad, but they are not actually paying for the product. Managed-care marketing has evolved significantly because payers are demanding more and because the areas of outcomes research and pharmacoeconomics have advanced significantly.” Most experts agree that pharmaceutical companies and their partners have a long way to go to achieving standarized outcomes research, but insights generated from such data will go a long way to developing messages about the total outcome for the patient. Because managed care is going to become much more critical, companies will be required to conduct more pharmacoeconomic analysis and define the value message and value proposition for pharmaceutical brands. “The message has to be about the total outcome for the patient,” Mr. Koenig says. “For example, if patients take drug X, what is the impact on global healthcare costs, whether they be hospital visits, emergency room visits, office visits, additional drug costs, or testing? The story has to talk about how their global healthcare costs will go down. Marketers really need to be able to tell an outcomes story, especially when they are looking to get formulary placement.” The experts who participated in this special VIEW Forum believe one of the challenges for marketers is to determine what other message marketers can deliver to consumers so that they will pay more for a product on a third-tier plan than the second-tier alternative. Taren Grom Editor Taren Grom Because managed care is going to become much more critical, companies will be required to conduct more pharmacoeconomic analysis and define the value message and value proposition for pharmaceutical brands. A seat at the table Letter from the Editor VIEW on Marketing September 2005

Download PDF