Managed care Q&A Part two of a two-part interview with expert Mark Callahan

May 1, 2000

Pharmaceutical Representative

An interview with Mark Callahan.

Last month, Pharmaceutical Representative asked Mark Callahan, division chief of outcomes and effectiveness research for the New York Presbyterian Healthcare Network, to tell pharmaceutical representatives what trends he saw taking place in the managed care industry. This month, Pharmaceutical Representative asked Callahan to explain ways sales representatives can adapt to these trends to help them gain access to doctors.

How do restrictive formularies impact pharmaceutical sales representatives?

Patients are now seeing much higher out-of-pocket costs if they are going to get a non-formulary drug. From a rep's point of view, the key is to find out who's making the decision for formulary approval at the health plan. That's a very difficult process for a rep to influence. It's usually being made at a fairly high level and being made on contract costs, not on therapeutic flexibility or efficacy. If a rep is detailing a doctor who is operating with a restricted formulary, the rep's position is going to be difficult because the physician's hands are tied. It costs the patient a lot more to use that medicine, so you can get pushback from the patient. And it requires a lot more bureaucratic effort on the physician's effort, including phone calls and letters to get the medication authorized. To influence formulary placement, a rep would have to have a pretty good argument on clinical efficacy first and then, from a national or regional perspective, whoever's doing the contracts from the rep's company would need to make sure they were pricing that medication competitively in order to get on the formulary.

What is the most important thing reps need to know about managed care's effect on doctors?

They need to understand the enormous managerial and financial pressure doctors are under and be sympathetic to that. They need to understand that sometimes decisions about prescribing are no longer in the physician's hands, so the frustration on the part of the doctors is enormous. It's also important to understand what's going on in the local marketplace from the point of view of who the large managed care organizations are, who the big physician groups are and how people in these various places are doing financially so they can understand the dynamic of the local marketplace.

Where is the best place to find that information?

Reps need to read the business pages of the local and national press to keep up-to-date with what's going on in managed care. From a contracting point of view, reps need to interact with people on both the health plan side as well as on the physician group side to understand the dynamic between the two. All that information can be gotten through the press and by being on the street and interacting with the decision-makers and the people who are involved with these issues.

Once they have that information, how can reps use that knowledge to gain access?

Physicians are looking for the same knowledge, and so pharmacy reps who bring in outside experts or local experts to help doctors understand what's going on are going to be well-received. Programs that are oriented towards some of these big picture issues are often well received by physicians if they are well run. That's a good place to get access to the physicians. So a meeting where you bring in somebody to talk about practice management and what's going on in the local environment from a health plan point of view, will be well-received by the doctors. The days of just walking in and detailing a doctor are not gone, but they're harder these days for everybody. Harder for the doctor to have time, harder for the rep to gain access because of the pressures the physicians are under. The important thing to understand is that managed care is very much an evolution and there are dozens of different models of organizing delivery and financing care that are called managed care. We don't know which of these models is going to work, because managed care is such an impulse industry. So likely where we are now in the year 2000 will look very different in the next five or ten years. Some of the current models will survive and some will not and nobody really knows yet which will be the survivors and which will be the failures. So it's very important to keep up with what's going on because it is a very fluid and flexible environment out there. PR

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