1. Healthcare Brand Management Market Access ConceptsHealthcareMedicalPharmaceuticalDirectory.COM www.HealthcareMedicalPharmaceuticalDirectory.com

2. Healthcare Brand Management Market Access Concepts 3. What is Access? The degree to which a healthcare product is: Easily prescribed/used by providers Reimbursed by health plans Effectively promoted/sold in a market segment Available through a variety of contractual arrangements and supply chain sources 4. Access And Reimbursement If payers do not reimburse for the product, it is less likelycaregivers and patients can use it Marketing and sales initiatives of manufacturers will bemuch less effective The product will not be able to generate enough revenueto be commercially viable Competitors will gain an advantage through their marketaccess initiatives 5. Planning Access The product must be correctly positioned with primary prescribersand provide clear clinical value in patient treatment Identify channel(s) your product will be used most, where itrealizes greatest revenue potential Target the predominant prescribers and payers in the channel Develop and implement a contracting strategy for each channel, include customers and leading payers Fortify the products position with physicians through clinical marketing strategy and accelerate growth with sales tactics, ongoing promotion and pull-through KOL support establishes a conduit of influence into clinical decision makers and their peers 6. Planning Access A direct customer contract can be undermined if product isavailable at a lower price through a GPO contract Distributors, wholesalers and other reseller contractsneed channel alignment to protect agreements and maintainprofit continuity in other market segments Discounts, rebates and other financial features need to beaccounted for throughout agreements to assure margin andtrue profit is realized before transactions are underway Commercial contract pricing needs to be reconciled againstgovernment contracts requiring best price 7. Planning Access Sole awards and preferred product positions providepremium access but require the steepest discounts andgarner the most competitive attention Rebates based on volume contracts need clear definitionand dedicated resources to maximize access and accuratelymanage rebates through sales tracings, chargeback data It is necessary for pharmaceutical companies to balancedirect contracting strategies with healthcare clients versusGPOs; healthcare entities engage in both arrangementsdepending on their procurement preferences 8. Planning Access Customer supply chains featuring distributors, wholesalersand other sources vary, contracts needs to account for these Maintaining/expanding access requires a budget to opennew initiatives and provide marketing/sales resources topropel them Access requires selectivity, fortifying/expanding accessshould be based on customer need, reimbursementpotential, available resources and long term ROI The product must be correctly positioned with primaryprescribers and provide high clinical utility 9. Pull-Through Reinforces Access Establishing a leading contractual arrangement and/or preferredstatus is just the beginning Physicians and patients need to know they have access to the product, be familiar with the products attributes and establish the processes to procure it through Sales uptake and ongoing momentum is driven by a well- supported sales force and strong marketing initiatives to fortify and expand share/revenue New competitors will launch pull-through initiatives to penetrate the market, established competitors will widen share and prevent newcomers from getting traction Physicians and payers need to be continually engaged and cognizant of the product and its manufacturers value 10. Connectivity Coordinates Access Access is driven by connectivity and throughput of information: Social Media propels clinical and promotional messaging to healthcare professionals, patients and consumers Healthcare plans make data-driven decisions based on care/cost outcomes, claims processing reporting and member utilization Pharmaceutical companies rely on blended data to effectively contract, maintain compliance, determine share, assess marketing/sales ROI CMS/Federal and state sponsored plans are data dependent to fund programs such as Medicare, Medicaid, 340B, reimburse providers and pharmaceutical companies, as well as maintain patient eligibility files ACOs are hugely dependent on electronic information flow to manage their protocols and assess performance 11. Examples of Market Channels Dialysis Long Term Care Mail Order Pharmacy Home Infusion Hospitals Each channel Infusion Clinicsrequires an Military Treatment Facilities/MTFs access Oncology Clinics strategy Physician Practices Retail Pharmacies Specialty Pharmacies Surgical Centers/Outpatient Surgery, Veterans Administration/VA Hospitals & Clinics 12. Leading Pharmacy EntitiesRetail Pharmacy PBMs* CVSCaremark ARGUS Rite Aid BioScrip Target Catalyst RX Walgreens CVSCaremark Wal-Mart Medco Restat SXC HealthIn addition to contracting with pharmaceutical manufacturers, PBMs contract withretail pharmacies to fill prescriptions for pharmacy plan customers *PBMs: Pharmacy Benefit Managers 13. A Note About PBMs PBMs contract with brand and generic manufacturers for betterpharmaceutical pricing and actively manage utilization of prescriptionmedication by customer plan members PBMs feature their own formularies and assertively negotiate for rebatesbased on volume/preferred status with pharmaceutical companies Some PBMs like Express Scripts, Medco, and SXC operate their ownmail order pharmacies, others like ARGUS, CatalystRx and Restat do not PBMs manage prescription plans for employer, government (Medicaid,Medicare, TRICARE, etc.) and other sponsors PBMs offer clinical programs to manage some therapies closely, theseprovide access opportunities for manufacturers 14. A Note About Mail Order Pharmacies Mail order pharmacies dispense maintenance therapies (cholesterol, diabetes,contraceptives, hypertension, etc.) in 90-day supplies, it is key for manufacturersof maintenance therapies to have contracts with mail order pharmacies They charge plans/patients less, the concept is patients are getting theirmedications in bulk 90-day supplies versus 30-day retail increments Mail order pharmacies typically operate specialty pharmacy units as well todispense injectable products to support advanced patient care CVSCaremark, Walgreens, Rite Aid and Wal-Mart operate mail order pharmaciesin addition to their retail pharmacy operations Health plans with their own mail-order operations include Cigna (Tel Drug),Humana (FutureScripts), BCBS (Prime Therapeutics) and United HealthCare(Prescription Solutions) 15. Leading Payer PlansCommercial PlansGovernment Payers Aetna Medicaid (state-based, BlueCross BlueShield plans*federally subsidized) Cigna Medicare Humana TRICARE (active/retired Kaiser military) United Healthcare 340B Plans WellPoint (14 BCBS plans)**There are 38 BlueCross BlueShield plans affiliated with theBlueCross BlueShield Association 16. A Note About 340Bs 340B is a Federal drug discount program established in 1992, it requires drugmanufacturers to provide outpatient drugs to eligible health centers, clinics andhospitals at a discounted/negotiated rate (average 50% below retail) The 340B market segment has been growing due to issues with the economy andlarger numbers of uninsured persons but margin is lower as 340B is price driven 340B is also known as "PHS pricing" or "602 pricing, patients discounts arecreated by contractual arrangements between the care provider and a pharmacy Entities eligible to participate in 340B include: Black Lung Clinics Disproportionate Share Hospitals (DSHs) Family Planning Clinics Federally Qualified Health Centers (FQHCs) Federally Qualified Health Center look-alikes (FQHCLAs) Hemophilia treatment centers HIV / Ryan White Clinics Sexually transmitted disease and tuberculosis clinics State-operated AIDS Drug Assistance Programs Urban Indian organizations 17. GPO and Healthcare System LeadersGPOs Healthcare Systems Amerinet Dept. of Veteran Affairs/VA Gerimed HCA Inc. Epic Community Health Systems HealthTrust Purchasing Trinity Health Group (HPG) Partners Healthcare Innovatix NYC Health & Hospitals Corp. ION (M Kaiser Permanente MedAssets Universal Health Services Inc. MHA Catholic Healthcare West Novation Adventist Health System PDM Tenet Healthcare Corp. PremierGPOs are frequently a part of the Healthcare System access formula 18. A Note About GPOs Group Purchasing Organizations (GPOs) contract with manufacturers ofbrand or generic pharmaceutical products, medical devices, equipmentand other items used in healthcare settings Healthcare entities pay a membership fee to join a GPO to get access todiscounted pricing GPOs negotiate with manufacturers, GPOs also collect1-3% margin from drug products and provide other services to gain Some GPOs are business units of distributors/wholesalers but do nottake possession of products, they are price-driven, contracting entities HPG, MedAssets, Novation and Premier are larger independent GPOs Wholesaler operated GPOs include INN, ION (AmerisourceBergen),VitalSource (Cardinal Health), Onmark, U.S. Oncology (McKesson) An array of customer groups use GPOs including healthcare systems,hospitals, oncology clinics, home infusion, surgical centers, dialysisclinics, physician groups and long term care companies 19. Nursing and Assisted Living Facilities Nursing FacilitiesAssisted Living HCR ManorCare Emeritus Corp. Golden Living Brookdale Senior Living Life Care Centers Sunrise Senior Living Kindred Healthcare Altria Senior Living Genesis Healthcare Corp. Five Star Quality Care Sun Healthcare Corp. Assisted Living Concepts SavaSeniorCare Merrill Gardens Extendicare Health Services HCR ManorCare ELGS One Eighty-Leisure Care Skilled Healthcare Corp. Life Care ServicesOnce highly fragmented, consolidation among nursing and assisted living facilityoperators continues which will greatly concentrate revenue sources in the future 20. Long Term Care Pharmacy and Home InfusionLTC Pharmacies Home Infusion Providers Guardian Pharmacy Apria Millenium Pharmacy AxelaCare Home Solutions Omnicare CarePoint Partners Partners Pharmacy Healix PharMerica Home Solutions Senior Care Pharmacy Infuscience Lincare OptionCare/Walgreens Vital CareThe home infusion provider market continues to evolve through consolidation ofexisting providers and hospitals expanding their services into home infusion offerings 21. Surgical Centers and Dialysis ClinicsSurgical Centers Dialysis Providers Amsurg American Renal Associates HVP Centers for Dialysis Care Meridian Surgical Partners DaVita SCA Dialysis Clinic Inc. Surgical Care Affiliates Fresenius Symbion United Surgical Partners Innovative DialysisSystems Renal AdvantageGPOs are frequently a part of the Surgical Renal Care PartnersCenter access formula Satellite Healthcare U.S. Renal CareDaVita and Fresenius control two-thirds of the U.S. dialysis market, consolidation inthe channel is frequent and driven by cost controls to generate revenue underMedicare patient care performance standards and reimbursement limits 22. Access Summary Each market channel requires its own access strategy Fully account for primary physicians and payers in each channel toposition, price and promote product successfully Contracting may involve direct-to-customer, distributor, GPO, wholesaler,payer and other arrangements to succeed in the channel Competitors are selectively stronger/weaker in different channels, exploitchannels they are weakest in to grow product sales Contracts are only part of market access, contract management, pull-through and connectivity are necessary to maintain/expand sales/shareperformance Be selective, fortification and expansion of access requires clinicalperformance to demonstrate true value and gain acceptablereimbursement levels --plus suitable resources to sustain initiatives foracceptable financial returns 23. For ongoing business and clinical healthcare industryresources, please go to: www.HealthcareMedicalPharmaceuticalDirectory.comHealthcareMedicalPharmaceuticalDirectory.COM