Insight. Innovation. Impact. Integrity.

During the first quarter of 2014, Alliance began our journey to develop a new message that would embody our company as a whole.  Our clients and internal team provided feedback that shaped a new prospective leading to the launch of our re-branding.  Through all of our development activities, one theme prevailed, the importance of our customers.  The ultimate outcome being, that it’s not about what we do but who we do it for and how they benefit.

Keeping both the feedback and the end goals of our customers in mind we developed our new tagline Insight. Innovation. Impact. Integrity. Through this process, we found that it’s not our knowledge, solutions, and proprietary tools that our company thrives on. It’s the team of passionate people.

Who better to ask what the new Alliance brand means then those people themselves? Check out their responses at the link below.

https://www.youtube.com/watch?v=qvIyErRkDII&list=UUiPA3dAD-HVHSyfsVgQ5mmg

To celebrate the re-birth of our brand, we held a “brand day” party on September 26th, 2014, which luckily for us, and our executive team whom were elected to take the ALS Ice Bucket challenge, ended up being a warm Indian summer day.  Equipped with a Taco truck and various team building activities the day left our team with high moral and many laughs to take with us.

taco truck

 

Alliance’s V.P.Global Client Development Jon Kizner and Executive V.P, Global Sales and Marketing Jeff Erb order lunch!

ring toss

 

CFO Jason Watters playing Ring Toss to raise money for ALS.

ice bucket challenge

CEO Alan Crowther takes the ALS Ice Bucket Challenge.

 

Alliance Life Sciences Launches New Brand and Website Brings Focus to Customer Centric Impact

SOMERSET, N.J. / LONDON – September 29, 2014 – Alliance Life Sciences Consulting Group (ALSCG), a leading global life sciences consultancy and technology provider, announces the re-launch of its brand and website at http://www.alscg.com.

After a thorough review of its brand positioning and their client’s motivations for engagement, the company debuts it’s new positioning through the tagline: “Insight. Innovation. Impact. Integrity.”

ALSCG is a global innovator that delivers peace of mind and unlocks business value with unique solutions to complex commercial problems. The company combines proprietary technology and consulting to maximize product portfolio value through strategy, insights, technology and customer engagement.

“Our customers think of ALSCG as the definitive go-to resource, helping them to rethink contracting, sales and marketing, pricing and market access operations to meet emerging stakeholder requirements and expectations,” says Alan Crowther, CEO of ALSCG. “We are strategically aligned with our customers to unlock business value with unique solutions to these problems.”

After conducting research utilizing an agency, Alliance‘s new brand direction closely portrays a bold and innovative approach to solving challenges within life sciences, while providing messaging that align with its customer’s motivational drivers.

Through its three practice areas that focus on revenue management through a product’s lifecycle, Alliance creates meaningful and compelling value, with global projects that have included:

  • Pricing study delivered in Switzerland
  • Global pricing system delivered in Germany
  • Health economic study for a “Top 5″ pharma company in Taiwan
  • Animal health website delivered in Chile
  • Emerging market entrance pricing strategy in India
  • Revenue contract management system delivered in the USA

Are You Ready for Customer Centric Marketing? Part 2

The customer centric environment brings together data which most of the time already exists within your organization and analyzes it in a way that has not been done in the past. The result, a clearer customer picture.  While the best data strategies begin with traditional methods, they go both broader and deeper into incorporating all customer and influencer touch points from a content, channel, timing, impact, and cost perspective. Historical quantitative data is complimented by current customer perceptions and defined based on your unique challenges to remove extraneous or misleading information.  To avoid discrepancy issues, all data must be integrated, managed, and follow governance protocols. A cloud-based analytic ecosystem can help bridge the gap between today’s marketing decision making needs and the permanent operational foundation that supports them.

Along with the need to understand the attitudes and preferences behind customer behavior comes the ability to identify the characteristics most closely associated with customer defection so that pharmaceutical brands can adapt and deliver a relevant engagement. Analyzing customer interaction patterns and value potential can result in sales force augmentation or white space solutions that lead to efficient growth.

Whether you are looking to maximize the value of your customer contract strategy or project the market share impact of your promotional investment levels, analytic solutions can blend deep customer insights and microeconomic analysis to yield effective and efficient customer engagement strategies. Viewing data through a customer centric lens builds new relationships between customer attitudes and actions, as well as uncovers their revenue impact.

The experiences between a brand and its customer or prospect increase brand adoption and ultimately are the underlying principles laying the foundation for effective promotion. But what is the formula for a is.  Changing to an analytical-based model offers the ability to strategize, plan, and react quickly across all customer channels while integrating sales and marketing to relevantly engage valued customers.  To truly impact brand relevancy and increase adoption, particularly in a regulated environment, full business integration of analytics, data, marketing, and compliance is needed. You can achieve this framework and bring your brand to the forefront of your customers’ minds.

 

 

Are You Ready for Customer Centric Marketing? Part 1

Leveraging the success of other industries, pharmaceutical companies have entered the world of utilizing customer centric business models. These models can be a cost effective approach, allowing the customer to reach out for the information they want on their own terms, creating a customer and brand connection which results in financial benefits. As all new adventures, the customer centric model comes with challenges because of the new level of intelligence and technology it requires to effectively engage your customer and drive growth.

As a brand, you must ask yourself the following questions:

  1. What will motivate adoption?
  2. Have the legacy methods of patient education material/programs and co-pay cards/samples answered the needs of customers?

With the answers to these questions you can begin to think about creating the right brand without compromising your promotional budget.

Proving to still be powerful tools, the access to better data and advanced analytical models can improve decision making by delivering a deeper understanding of your customers’ behaviors and attitudes. This understanding enables you to dimensionalize segmentation and map engagement trajectory models, and expose efficient promotional investments. Integrating smart data elements and analyzing them through a customer centric lens becomes the goal.

But are you ready to transform your legacy infrastructures to handle the dynamics of customer centric marketing?

Stay toned for part 2.

Linking Health Economics and Policy Part 2

Results

The biggest challenge perceived by stakeholders is demonstrating the ‘right’ evidence. Specifically, evidence generation, demonstrating value and insufficient internal experience are the biggest factors playing into this.

Image 1

This mainly stems from demonstrating value in a way that is meaningful to
payers. This is best summed up by a Brand Director that participated in the
survey: “Showing value (is the biggest challenge). Is value based pricing a
reality? I’m not convinced yet myself.”

Add to that a lack of experience and expertise internally, which was the
largest output from the people category, and the headache turns into a
migraine. These two factors play into each other, as in order to generate the
right evidence, you need the right resources to plan and execute.

Results – Part 1

Nearly half of the KSFs from the survey respondents relate to the process
and people category. More specifically external and internal communication
and alignment are considered most important. This implies that having a
truly innovative offering/product is not enough on its own to optimize
access.

Surprisingly, having an innovative product does not even score high on the
KSF list, only 11%. Does this mean that pharma accepts that revolutionary
product changes are truly rare, and it’s the expertise of their resources that
truly make the difference?

Image 2

Having evidence to justify the value of the drug in a format that
stakeholders want is what is important, and this requires the internal
expertise to demonstrate that value. Once again, this is best summed up by
a respondent from the survey. The Head of Global HEOR from one of the
companies said, “Clinical data that truly differentiates your drug from its
competition (is the most important KSF). That is still #1”.

What makes a successful launch is a robust understanding of your internal
and external stakeholders. Connecting directly with your customer is
considered essential. Having the experience to efficiently ‘sift through the
weeds’ and find what is truly meaningful to stakeholders’ matters, and
communication internally is as important as externally.

Learnings

Based on the results we tabulated the top 3 learnings that enable
transformational market access:

  1. Know your customer: You must identify and prioritize your
    customers. You must understand their values and beliefs.
    Understand their constraints and limitations. Understand what
    motivates them to take action.
  2. Develop your evidence: What truly makes an impact on their
    values and beliefs? What trial design and endpoints will help them
    move into action? What data design and evaluations best support
    the evidence? What format should the data be in to be most
    relevant to them?
  3. Be crystal clear internally on strategy and execution: What is
    your plan? Who has the experience to execute them? When will they do it? How will they do it? What’s the contingency plan when something goes wrong?

Looking back at the Sovaldi case, how do those success factors apply to Gilead? The company confirmed sales for the first half of the year have exceeded expectations at $5.75bn, which now accounts for nearly 50% of the company’s turnover. These sales suggest the company clearly understood the market environment, and indeed the differential pricing in emerging markets, such as India. Furthermore, the evidence generation was certainly strong enough to warrant access without excessive restrictions. Perhaps a clear internal process and experienced staff also helped drive the process. So despite the continuing political debate over pharmaceutical manufacturers’ profitability, Sovaldi is a clear example of how Gilead has transformed market access.

In summary, market access is a complicated process with many moving parts and many obstacles to consider along the way. Understanding the strengths and shortcomings in your people, processes and evidence are going to be the keys to your success. Planning around these key factors will enable increased market share and ultimately enhanced revenue for your organization.

 

Linking Health Economics and Policy Part 1

Transforming Market Access

In the face of rising healthcare costs and the rapid development of more innovative and expensive medical technologies, there is a growing recognition of the bearing cost-effectiveness has on the decision-making process of healthcare payers.
To gain further insight into the specific issues and key success factors which impact market access, Alliance conducted a global survey with key global and local stakeholders in the pharmaceutical industry.
The clear standout results from the survey highlighted 1) the importance of identifying and prioritizing the most appropriate stakeholder. Getting this first step right is critical to the success of pharmaceutical product. 2) Equally as important is ensuring sufficient evidence generation to provide support for products. And finally, 3) a clear strategic pathway for access to a product must be established by a manufacturer.

Stretching government boundaries or seeking true value?

As the US and EU economies struggle to bounce back after exiting the financial recession, healthcare budgets face constant restrictions and containment measures. Increased scrutiny is placed on pharmaceutical manufacturers regarding the manner in which they price their products. The trend for cost containment is very much alive today, with certain classes such as antibiotics, being publicly undervalued and under-priced.

Cheaper prices have led to global over-prescription by GPs and other healthcare professionals. This heavy overuse of antibiotics has gradually contributed to the prevalence of antimicrobial resistance. The number of antibiotics coming to market has dropped consistently since the 1980s, and with no clear market leaders forthcoming, the public may now realize we have hit a ceiling in our development of this class of drugs.

Newer, more expensive antibiotics such as Durata’s Dalvance, will test the current price-conscious healthcare environment. Dalvance, indicated in patients with skin infections, has a better administration profile than generic vancomycin, and may also lead to reduced length of hospital stays. The value of Dalvance lies in the vastly improved patient quality of life and reduction in healthcare resource utilization, albeit at a higher unit cost per treatment than generic vancomycin.

The recent furor surrounding Gilead’s US launch of their Hepatitis C drug, Sovaldi, has shown how a seemingly high price can be politicized and criticized without a clear understanding of the lack of effective treatments within the Hepatitis C treatment landscape. Sovaldi has managed to show a 90% cure rate for patients in a therapeutic area where rates historically have been ~50%. Interferon is the primary alternative agent which is effective in these patients, but with high relapse rates and poor tolerability, the launch of Sovaldi was highly anticipated.

Gilead managed to secure a treatment course price of up to $84,000 in the US, as a result of their solid evidence generation and the clear unmet need for Hepatitis C patients. Sovaldi, however, became a target for politicians as well as insurance companies, with the advent of the Affordable Care Act also driving negative opinions. Add to this, Gilead offering Sovaldi at heavily discounted prices in markets such as India, has led to US stakeholders and key opinion leaders campaigning against the company and its perceived greed.

Historically, pharmaceutical companies have been dogged by severe criticism around ethical standard and an emphasis on business-driven goals as opposed to a patient-focused approach. Health is often seen as a right rather than privilege, and pharma’s close interaction with healthcare systems have often deflected away from inefficient governmental and poorly regulated private systems. Furthermore, a lack of clarity over the true cost of bringing a product to launch, with the manufacturer’s themselves often unable to confirm exact values, has contributed to a lack of understanding around prices which pharma wish to set for their products.

Companies such as AstraZeneca have reported an average spend of ~$12bn on research for each new drug. Healthcare will always remain a controversial discussion point, and the fact that financial gains or potential losses may shape a pharmaceutical company’s strategic directions will always ensure a somewhat negative perception. Avoiding sensationalist media campaigns and a greater clarity around the ultimate goals of pharma will allow for a closer relationship between the public and the pharmaceutical industry.

The Alliance Market Access Survey

As we have seen, market access is the ultimate goal for medical device and pharmaceutical companies, yet it remains one of the biggest current and future challenges for the industry. To uncover the specifics on the challenges and key success factors, we recently conducted a survey with global and local stakeholders to find out more.

We asked the stakeholders two main questions:

  1. What do you consider to be the top three challenges from a price, reimbursement or market access perspective of launching a new drug?
  2. From your experience, what have been the top three key success factors related to price, reimbursement or market access, of launching a new drug?

In our next post we will discuss the results and findings from the Market Access Survey.

As We Wait for the Final AMP Rule…

The AMP rule for implementing the Medicaid prescription drug provisions of the Patient Protection and Affordable Care Act (PPACA) was published by CMS on January 27, 2012. Guidelines with a wide-reaching financial impact on the life science industry were expected to create serious administrative and operational challenges needing to be addressed quickly. The goal of this rule was to lower costs for states and taxpayers by the following:

  • Aligning reimbursement rates to better reflect the actual price the pharmacy pays for the drug
  • By increasing rebates paid by drug manufacturers that participate in Medicaid
  • By providing rebates for drugs dispensed to individuals enrolled in a Medicaid managed care organization

Keeping these goals in mind, manufacturers were suggested to focus on major items in this rule that would ultimately change the way they do business.

  • U.S territories would be included in the AMP calculations.
  • Rebate agreements would include prescriptions paid by Medicaid managed care, as well as Fee-for-Service. This would require Medicaid managed care plans to capture utilization data and provide it to the states, and would only exempt prescriptions dispensed by a health maintenance organization (HMO.
  • OTC drugs would need to be considered covered drugs if they have a National Drug Code (NDC)
  • The Inclusion of sales to wholesales would be prohibited, unless a manufacturer has documented evidence that the drugs sold to the wholesalers were distributed to retail community pharmacies.
  • Specialty pharmacies and home healthcare distributors would be included within the definition of “retail community pharmacies”.
  • Manufacturers would be required to exclude from AMP rebates paid to insurers, but not the underlying sales to the pharmacies.
  • Best Price would be redefined to include discount and rebates “associated” with the sale of a drug to a customer, rather than the price available to that customer.
  • Inclusion of direct sales of an AG labeled drug to a manufacturer or distributor selling under its own NDC in AMP of the brand.

Two years later, Pharmaceutical manufacturers are still eagerly awaiting the release of the AMP Finale Rule. Some changes will require significant change across all aspects of the regulated pricing environment including policies, procedures, methodology, systems, and data. The final rule may include new provisions or nuances to proposed provisions that will not be known until the final release.

Going forward, performing gap and readiness assessments will help to identify the aspects of proposed or final regulations that apply to your business and the areas of your organization and infrastructure that will be impacted by the legislation. Preparing a plan outlining changes by business unit to each component of your GP infrastructure with aid in discovering the necessary resources needed to implement required changes and associated costs, and an overall project timeline identifying key work streams, contingencies, and project milestones. Along with this, it would be wise to assess implementation costs and potential changes to regulated reimbursement resulting from changes in regulation.

For more information: http://www.alscg.com/expertise/contract-strategy-operations-and-compliance/government-pricing

How will the New Marketplace Affect Pharmaceutical Companies? Part 2

The Marketplace Effect on Pharmaceutical Companies

A Need for Vigilance and Readiness

New rules and compliance requirements will continue to evolve and change likely at a greater pace than commercial or other managed markets. This will require expanded vigilance and new tools to help track and work with these changes. There will be greater cost control and pricing negotiation expectations on pharma each year in this segment, with spill over potential to the broader commercial market. The Marketplace will become a significant component of the managed markets segment, with strong ties to Medicaid. This becomes an opportunity, with an estimated $26 billion in additional retail drug spend anticipated because of expanded coverage through 2021.

Tweak to Optimize the Opportunities

The out-of-pocket cap on medical costs across new insurance plans as stipulated by ACA is a significant opportunity for Pharma. This creates the following opportunities for Pharma:

  • Validation of currently subsidized patients who were uninsured, to make sure they are not in the Marketplace and thus qualified for benefit coverage (no longer in financial need of the subsidy).
  • Build Marketplace enrollment questions, guidance, and referral into the application process
  • Consider approving subsidies for a limited time, contingent on Marketplace enrollment

For specialty drugs, we anticipate that most insurers will require use of their specialty pharmacy network. Identifying patients through Pharma-specialty pharmacy relationships may become an efficient first step. Pharma will need to structure its research, clinical studies, contracting, marketing, and operations to meet these new stakeholder requirements and expectations.

Marketplace Bottom Line

In 2015 many insurers are looking to expand into new Marketplaces, and national insurers are planning to expand their footprints as well, due to very limited 2014 participation. Medicaid enrollment will continue to grow, particularly in those states that expanded the qualification limits. Those benefits, formularies, and pharmaceutical management approaches that are successful within the Marketplace plans in 2014-2015 will expand to become the norm across most of the commercial business.

 

 

How will the New Marketplace Affect Pharmaceutical Companies? Part 1

With the emergence of a new national health insurance Marketplace, insurance shopping has a new level of accessibility that has resulted in a broad-spectrum shift of health insurance operations, new insurers, formularies, and an array of benefits designed to meet the actuarial expectations stipulated by the law. As of April 19, 2014, over 8 million people signed up for a Marketplace plan, exceeding the projected 6 to 7 million, with an additional 6 to 7 million enrolled in Medicaid. The majority being previously uninsured. The Marketplace is poised to grow to over 24 million members by 2016 with the potential of expansion beyond that by tens of millions.

Formularies and Benefits in the Marketplace

There are approximately 250 formularies that have been created by over 275 insurers. While these formularies had to meet state specific essential health benefit standards, there is a similarity between the 2014 formularies and their commercial counterparts.

In addition, the Marketplace appears to take a more transparent approach to a number of circumstances where the drug benefit would not apply, including:

  • Out of network drug purchases do not count toward deductible or out of pocket maximum, or may have a substantially higher set of deductibles that apply.
  • Drugs prescribed by an out of network physician – not covered.
  • Brand drugs purchased when a generic is available – not covered.
  • Drugs that require prior authorization but are obtained without going through this process – not covered.
  • Non-formulary drugs – not covered.

Drug Utilization

Current Marketplace enrollees, tending to be lower income, overwhelmingly selected the lowest cost premium plans available. We would expect the same type of pharmaceutical purchasing behavior. An initial 2-month snapshot review of approx. 650,000 claims for 25 insurers from January to February 2014 by Express Scripts showed:

  • Higher antidepressant (8% higher), pain medication (29% higher), seizure medication (19%) use vs commercial
  • Specialty Meds: 1.1% of Rx vs 0.75% in commercial
  • HIV: 55% of specialty claims vs 21% in commercial
  • Cancer and HIV higher in Exchanges based on claim cost

Going forward, we would expect to see that initial skewing of drug utilization patterns begin to normalize.

The Marketplace:  What to expect in 2015 and in the Years Ahead

Insurer Expectations

Over the next 1 to 3 years, we expect to see greater market segmentation by key insurers. With some gaining hundreds of thousands of new Marketplace enrollees, this could stimulate new selective and targeted contracting interest and arrangements with Pharma. Insurers will drive toward value and lower costs in this transparent and competitive market, and will request this through contractual concessions and migration to shared risk/outcome type contracts from Pharma. Pharma will need to evaluate the traditional contracting value in light of the emerging reality in this market.

There may be a greater emphasis on certain classes of drug vs others. Products with a lower perceived value to the insurer (i.e., ones that don’t demonstrate cost reductions or quality of care improvements) may struggle to gain preferred status. Bundling such products in rebate agreements with other drugs that do have stronger perceived value is one way in which this risk could be mitigated.

The New Cost-Reactive Stakeholders

The member, with cooperation from their prescriber, becomes the key product decision maker relative to their ability to afford the copay (or coinsurance) at any tier level or the full cost through the deductible. Simply gaining a preferred brand position on a formulary may not return the contract value, as even preferred brand positioning often is associated with a significantly higher copay or coinsurance compared to generics (or compared to traditional commercial coverage of preferred brands (See table 1 above). Physicians will be interested in complying with their patient’s affordability expectation.

The Marketplace Formulary and Benefits

The formulary rules in place for 2014 will continue through the 2015 season (i.e., same benchmark plan, formulary Essential Health Benefits). There will likely be a change for 2016, but insurers are awaiting formal guidance from CMS which is expected to be issued by the end of 2014.

In our next post, we explore the effect on pharmaceutical companies and their business models.

 

 

Gross-To-Net Survey Uncovers Challenges in Industry Maturity

Financial accruals have become a major headache for corporate finance teams in the Life Sciences industry as they are increasingly difficult to manage, and can lead to major business issues if calculated incorrectly. These accruals are an important part of compliance with Generally Accepted Accounting Principles (GAAP). Funds are set aside to cover the financial obligations associated with sales, from promotional programs, rebates and discounts. The data associated with these programs, must be gathered and then amounts to set aside must be determined based on past and future projections.  Often times, the data for each type of program is captured in different places within an organization making it hard to manage.

Any calculation errors can have a significant impact. If the accrual percentage is too high for rebates and promotions, funds are essentially being taken away from other areas of the business, such as research and product development, which can help grow revenue. But if enough isn’t reserved, manufacturers could find themselves in a cash crunch, and money will need to be borrowed to cover obligations. If the amounts get to be too large, it can also be considered a “material impact” item for earnings reports.

Alliance conducted a survey in which various Pharmaceutical companies were asked four questions to gain a deeper understanding of the majority in their Gross-To-Net processes.  After reviewing the results, few organizations have fully automated Gross-To-Net solutions which can be leveraged for strategic pricing and trend analysis.  Organizations focus the bulk of their time on aggregating data to provide basic forecast and accrual information, restraining their ability to use this data for strategic analysis around pricing and other areas.

While automation of the fundamental processes is still in its infancy, the primary goal by those pursuing it, is the reduction of cycle time. But accuracy must not be sacrificed for speed, meaning any automated solutions must maintain or improve forecast and accrual accuracy.  Currently, companies are focusing on improving the underlying models, which proves to be an important step on the path to automation. Leading companies are recognizing the strategic value of this data and making the investment in its strategic use, even in the absence of automated solutions. The key objectives found in this survey are depicted in the image below.

image 1

Beyond the need for automation, the number one priority is to assess the readiness and rationale for automation in analytical capabilities. This acts as the key driver for generating business insights in the following areas:

  • Revenue growth through WAC price optimization
  • Impact of contracting especially price protections on the net revenue
  • Insights of contracting strategy on Medicaid & PHS liabilities
  • Insights from deep dive diagnostics

Following this as second priority is the desire to get full time employees focused on deriving business insights from the data, rather than spending all their time crunching it. Many organizations are spending more time and money on the mechanics of the accruals – the number crunching – than on understanding what the data is telling them. They’re missing an opportunity to analyze the accruals to see what promotions and programs are really driving the business, helping them expand market share and drive revenue.