Are We Aligned Yet? A Medicare Part D Roundtable - Pharmaceutical Executive


Are We Aligned Yet? A Medicare Part D Roundtable

Pharmaceutical Executive

METRO: There's a Catch 22 to industry playing a role in enrollment. You want to participate, but you have to be careful from a compliance perspective. You have to be careful about steering people to particular plans, especially if you have a favorable formulary placement in them. There is tension between wanting to help—maybe through having a telephone line or what have you—and at the same time feeling like you can only go so far. We all know that if you're on that call, walking through the patient's options, the question you are going to get is "Well, what do you think I should do?"

WINTERTON: I know there are significant restrictions for the state in terms of signing people up on different plans. Would those same provisions apply to pharmaceutical companies?

METRO: Not directly. I think it's a fraud issue. Usually when people think of a kickback statute, they think about incentive to get somebody to use a particular product, but there is a whole new world of kickback issues out there that industry has to be aware of—such as referral of patients to particular plans or particular pharmacies. If you are in the industry, you probably need to follow the neutrality principle and provide information up to a point—then let it go.

CLINTON: In what areas does pharma have the skill set it needs to effectively manage this program and in what areas is it lagging behind?

ZANT: From the perspective of a well-run pharmaceutical company, it's more of the same done well. If you have a good contracting function in place, you have more contracts. If you have good collaborations with brand teams for strategy and products and rebate opportunities, you need to do more of that well. You will have new data, and you'll do more with it. "

ZOCCHI: We did a survey last spring that asked pharmaceutical companies how they were preparing for Part D. One of the questions was: "Do you believe Medicare Part D contracts will be as complex as your contracts under managed care?" And 70 percent of people said they thought the contracts would be as complex or more complex.

We also asked where control of this new business area would reside within their organizations. That one was interesting: There was a fairly even split between those who named the group controlling governmental business and those who said the group controlling commercial. But 26 percent of the respondents answered "other," meaning perhaps that they weren't sure. So there isn't a predominant trend in how companies are lining up to manage this new type of business relationship.

You can't have siloed operations in this upcoming world of convergence of business types. More than ever now, you need to have shared processes, shared tools, across organizations that will allow you to collaborate.

METRO: I think that's right. The infrastructure and contracting departments are critical. You need somebody in the eye of the storm who can quarterback—and people in the line of fire who are able to understand enough about the big picture to make it work. The real challenge is that you need enough quality people to understand the bigger picture.

SHERMAN: From our point of view, as a PBM working with pharma companies, we often would have discussions with senior management as well as managed-care people. But when it came to negotiating rebate deals, we were left with just the managed-care people and saw a lot of the attitude that prevails in the commercial market—"I'll give you this rebate for 101, this for 102, this for 103 . . ." They want to pay for performance along traditional lines.

A lot of companies, especially smaller pharma companies, are already outsourcing rebate processing, contract administration, and so forth. And as these contracts in Medicare are equally or more complicated than the commercial or private sector, I think we will see more and more of that outsourcing, especially in the smaller companies.

SCHOCK: Well, the infrastructure, the knowledge, the understanding are not there. Obviously a big concern, as with any government program, is just to make sure you are under the OIG guidelines. From a small-pharma perspective, it's scary—what am I going to do today that is going to put me in jail tomorrow?


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