Sunday, March 16, 2014

How Will Pharma Bring Value to the Evolving ACO?

---Terri Bernacchi, PharmD, MBA,  President, Cambria Health Advisory Professionals, and FOUNDER, SME Systems (this blog also posted on www.smehealthsystems.com)

This is the inaugural post for SME Systems and I will be linking it to others that I post on the web; the issue (especially given my background as a pharmacist with experience in both the clinical and business world in the US) is clear to me:  how will branded pharma and device companies continue to bring value under a retooled US Health Care system? 
The critical changes are removing the traditional parties (doctor and patient) from the buffered world where “someone else will pay for this”.  Risks are being spread, insurance rates are going up and providers are being penalized for what is perceived as “over spending”. 

The new Accountable Care Organization (because it is taking on transferred risk) is unlikely to allow “business as usual” with the pharmaceutical sales machines that have been so successful in the past. 
So how does one INNOVATE and then MARKET in such a different environment? 

In a word, I believe, you can only do these things if you shift your own perspective and become willing to prove value in different ways.  That may be the key mission of SME Systems:  proving Safety as part of compliance and VALUE as part of Medical Effectiveness. 
Tim Norton published a brilliant commentary about the fact that now about 70% of the market is government backed, the meaning of competition, the success of the Medicare Part D program and HHS’ recent attempt to break what worked in that program, too.  HHS has backed off on their most recent plans but the threat to the bounties of a competitive marketplace are clear.   (See the link:  http://blog.pharmexec.com/2014/03/12/close-call-for-american-rx-marketers-on-medicare-part-d/ )

Since I cannot say it better than he did, I hope you read this for yourself.   Here is the most critical part of his commentary and his clarion call to be alert: 
“I believe it’s clear that as the U.S. progresses farther and farther down the road of expansive public healthcare, U.S. pharmaceutical companies are going to face many battles with public entities that will attempt to close their free market channels.

Hopefully, this recent “close call” with Part D is not a foreshadowing of what’s to come. But frankly, as the inevitable cost pressures develop in all these public programs, I would not be surprised to see more of the same, and soon.
In any case, the wise American Rx marketer would do well to fully understand and appreciate the developing mindset of all the new public programs now coming online…A mindset that is definitely not free enterprise oriented.”

Terri is the Founder of SME Health Systems and Cambria Health Advisory Professionals.  She is a Senior Partner at Valiant Health, LLC.  The thoughts put forth on these postings are not necessarily reflective of the views of her employers, clients nor other colleagues. Terri has had a varied career in health related settings including: 9 years in a clinical hospital pharmacy setting, 3 years as a pharmaceutical sales rep serving government, wholesaler, managed markets and traditional physician sales, 3 years working for the executive team of an integrated health system working with physician practices, 4 years as the director of pharmacy for a large BCBS plan, 12 years of experience as founder and primary servant of a health technology company which was sold to IMS Health in late 2007.  She has both a BS and a PharmD in Pharmacy and an MBA.