Medicare Part D: It’s “Crunch Time” and Many Brand Teams Aren’t Ready
Senior VP, Managed Markets Practice, Campbell Alliance
On Dec. 8, 2003, President Bush signed the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) into law. While the new Medicare Part D drug benefit will not go into effect until Jan. 1, 2006, just last month the landscape changed slightly, bringing a further sense of urgency to the pharmaceutical industry. Guidance issued by the Centers for Medicare and Medicaid Services (CMS) on Dec. 3, 2004, makes the timeline even tighter, as it requires managed-care organizations (MCOs), pharmacy benefit managers (PBMs), and other possible plan administrators to submit their formularies and approved drugs to CMS by April 18, 2005. Pharmaceutical companies now must make product-specific pricing and contracting decisions in January and February 2005.
To meet that deadline, MCOs and PBMs will contact pharmaceutical companies during the preceding months to ask how they plan to contract for their products. Unfortunately, many pharma companies are not yet ready. In our discussions with pharmaceutical companies, we have found that many executives are just beginning to look closely at developing these strategies, forcing them to make extremely critical and strategic decisions in a very short period of time. To make the right decisions, brand teams must be able to confidently answer a number of the key questions listed below. Doing so will enable them to gain a solid understanding of the Medicare Part D environment and then use that to develop strategies and tactics that will help them contract their products appropriately….