While the pharmaceutical and biotechnology industry might like to take a moment to catch its breath following the contracting crunch, there is still a daunting amount of work to be done before the new benefit goes into effect on January 1, 2006. Companies still need to assess their own levels of "Part D readiness" and define and implement required changes to their structures, processes, strategies, and tactics.
In September, CMS will award bids to MCOs and PBMs, and we will learn which plans will administer the benefit in 2006. But many key variables will remain unknown for quite some time after January 1, and manufacturers will not have the luxury of waiting for complete or perfect information before making Part D-related decisions. With more than 40 million Medicare beneficiaries in the US, the stakes are high for manufacturers, and the window for making strategic decisions is closing. Companies need to move forward with their Part D readiness planning now, develop hypotheses, and make informed projections on how the Medicare market will play out in 2006 and beyond.Part D will shift the market dynamics and revenue potential of many products at the national, regional, district, and physician levels. The variables that will determine the magnitude and impact of these shifts include:
There are a myriad of marketing- and selling-related items that manufacturers need to address over the next few months to ensure they are prepared for Part D—planning points that can be segmented into four primary areas: brand management, managed-markets marketing, managed-markets sales, and field sales. The following section introduces some of the specific items that manufacturers need to consider in each area.
Brand marketers must develop a detailed understanding of how Part D will affect their products, and coordinate their efforts closely with their colleagues in managed-markets and field sales. This will be especially critical for brands that are heavily used by seniors or dual-eligibles—Medicare beneficiaries who also qualify for Medicaid. Roughly one-third of dual-eligibles are under the age of 65. Therefore, Part D will affect a number of products (such as HIV medications and antipsychotics) not typically associated with the elderly. There are four important areas for brand marketers to address:
PLANNING AND FORECASTING Historically, most brand teams haven't placed much emphasis on Medicare beneficiaries. Now they need to ask some basic questions, including: