Part D Phase 2 - Pharmaceutical Executive

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Part D Phase 2
Companies have been scrambling to get their Medicare contracting in order. Now it's time to figure out part D marketing and sales. Here's a checklist for the months ahead.


Pharmaceutical Executive


SIZE, STRUCTURE, AND ALIGNMENT OF THE ACCOUNT EXECUTIVE FORCE Once a company prioritizes and segments Part D regions and customers, and defines how it is going to approach account management in Part D, it follows that the company will need to assess the size, structure, and alignment of its account executive group. Specifically, companies need to determine the optimal number of account executives and how to allocate account responsibility to each.

TOOLS AND TRAINING Account executives are manufacturers' most direct line of communication with Part D sponsors and will play a critical role in an organization's success in Part D. Therefore, manufacturers need to define the training and tools required to enable account executives to:

  • Thoroughly understand Part D and how it will affect their customers' business
  • Understand the marketing, selling, and account-management adjustments driven by Part D
  • Communicate the Part D value proposition for the company and its products
  • Facilitate pull-through with the field sales force.

Field Sales

Part D will dramatically change the environment in which sales reps promote their products. As a result, manufacturers need to consider a number of field sales-related changes.

SIZE, STRUCTURE, AND ALIGNMENT The potential of individual products will change at all levels—national, regional, and territory. Sales leaders need to assess this change for each promoted product, and then roll the data up across all products promoted. Even before the relevant data are available, companies will have to make critical decisions about the size, structure, and alignment of its sales force at each level.

  • What do we do with our sales force if we have disappointing formulary access in one or more key Part D regions (for example, decrease or realign sales force)?
  • What do we do with our sales force if we have very strong formulary access in one or more key Part D regions (for example, increase or realign sales force)?

PHYSICIAN TARGETING As Part D unfolds, the relative value of many physicians will shift, forcing a re-segmentation of the market, and adjustments in targeting. For example, a prescriber with a large number of Medicare patients (many of whom were cash-paying patients prior to Part D) may become more important under Part D. But if a large proportion of those patients are enrolled in Part D plans to which the product has limited formulary access, the same doctor could become a less important target.

Criteria companies can use to segment physicians include:

  • Prescription volume (Medicare and non-Medicare population, payer type)
  • Current prescribing practices
  • Patient-population mix (age and payer type)
  • Plan affiliation
  • Most important Part D sponsors for patient population.

INCENTIVE COMPENSATION Incentive compensation plans are intended to drive desired behavior from the sales force based on the current market. As the market changes under Part D, sales leaders will need to adjust their incentive approaches appropriately. As discussed earlier, the business potential of physicians and territories will shift, sometimes dramatically, under Part D. And sales executives need to determine the specific behaviors they want to incentivize vis-ávis Part D. These two variables should serve as the underpinnings of a new approach to incentive compensation in the new environment.

The potential and dynamics of a given territory can be significantly affected by factors outside the rep's control, such as number of Medicare enrollees, formulary wins and losses, and the effects of spillover into the commercial business. A sales rep might be successful today, but give him a product widely used by the Medicare population, and a territory where the product has poor Part D formulary access, and that may change. Conversely, a rep who performs poorly in today's environment might be a success under Part D, without changing his underlying practices, if his territory has very good Part D formulary positioning for a key product.


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