Segmentation, Contracting, Gross to Net and Understanding Payers

A Case Study

Client/Scope

  • Small/mid-sized US pharmaceutical manufacturer preparing to establish a product in a competitive market
  • Scope – US (Payer, Multi-channel)

Project Objectives

The client wanted to segment payers to understand volume and access contribution, prioritize MCO accounts and selectively contract to improve access and utilization management (UM), and attain formulary access based on:

  • Access value to the brand, the relative opportunity/willingness/likelihood of payers to manage product utilization
  • Relative value of access on a channel/ segment/customer level using claims and formulary data
  • Though a segmentation exercise, develop net price strategy, specifically creation of contract guidelines and assessment of gross-to-net

Project Description

Approached analysis of third-party formulary access and utilization data via segmentation of payers according to willingness to manage product utilization and size of opportunity which resulted in creation of contract guidelines (3rd party data included MMIT and IQVIA FIA)

  • Assessed critical payers in major segments which made up 80%-90% of the segment volume, their % volume and revenue contribution to overall brand volume
  • Determined appropriate performance metrics ( market share and rejection rate), matched these metrics to the different levels of access/restrictions and assessed performance on an absolute and relative manner
  • Assessed payers within segments for access impact (looked for natural UM groups, compare/contrast performance for different UM groups within and across segments)
  • Using the data analytics, created contract guidelines for each channel and segment/subsegment by valuing the changes in access or UM to improvements in market share and rejection rates
  • Used the contract guidelines to develop a 5-year gross-to-net model using channel and payer mix for commercial and government payers, including voluntary and mandatory discounts

Project Outcome

  • Working with the brand and contracting teams, MME utilized the segmentation results to develop a new set of contract guidelines which supported the brand plan and took into account MCO’s market conditions and utilization management, allowing  the  client to focus on high-value payers and to negotiate with them more effectively

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