With Medicare Part D looming in the industry's immediate future, formulary placement is high on product managers' list
of priorities. A brand's formulary status with current health plans may well affect its placement with new Medicare prescription
drug plans. So the central question for pharma is "How do managed care organizations make formulary decisions?"
A panel of eight MCO medical directors recently convened to answer that question and evaluate the influence of consumers,
physicians, pull-through programs, and outcomes studies. MedPanel, Inc., an online market intelligence company, asked eight
US medical directors to comment on the influences that affect whether a drug is included on a typical formulary and what criteria
are used to evaluate a new drug entry.
The panel was convened online over a two-week period, and participant identities were concealed from each other to foster
more candid responses and maximize the interaction. (See "Panelist Profile," ) This article highlights the study group's findings—which
may come as a bit of a surprise to some product managers.
Consumers Lack Clout
The panelists unanimously asserted that consumers have little impact on decisions relating to a single drug. This lack of
influence is, in large part, a result of the difference between what direct-to-consumer (DTC) advertising focuses on and what
drives pharmacy and therapeutics (P&T) committee decisions. "Efficacy, safety, and cost drive the formulary decision process,"
one panelist said. "Consumer demand is likely based on DTC or another source that does not consider the critical decision
points of the P&T committee."
What manufacturers do you rank as the top five in terms of flexibility, knowledge, and services?
Although DTC advertising may be what influences consumers most, health plans tend to dismiss the information provided in consumer
advertising and focus on science.
Consumers also lack a unified means of asserting pressure, panelists emphasized. That's why some medical directors view employer
groups, rather than individuals, as the real consumers. Although most participants expected little change in consumers' influence
over formulary decisions, there were a few interesting exceptions. One medical director said, "Organizations such as AARP
may be able to affect the consumer voice in the future," because they are an organized and powerful group with a public agenda.
Taking on formulary decision making seems like a natural next step for AARP. As other groups form—or wake up to the formulary
issue—consumers will find their influence growing. Another participant asserted that escalating costs will lead to increased
consumer involvement over drug availability. Still another stated that although individuals have almost no impact, "High demand
may push an earlier determination of a drug's placement than would have otherwise occurred."
"There will be more activity from the consumer, related to influencing the drugs/treatments available," said one participant.
Through DTC, manufacturers are encouraging consumers to take the selection of medicines into their own hands. That empowerment
is leading consumers to examine more closely the claims pharmaceutical companies make about their products and how those drugs
are being managed by insurance companies. As consumers increasingly coalesce into groups, their voices will be a more powerful
force than they currently are in their splintered state. Taken as a whole, the data suggest that a concerted, unified effort
on the part of consumers might well influence formulary decisions in the future.
What are your top five criteria for determining if a product will be available on the formulary?