improving us access success indicators: testing...

Improving US Access Success Indicators: Testing Benefit Design Assumptions

Kevin Fitzpatrick, Principal, IMS Consulting

On average, how many different benefit designs do you think are offered by the

top 18 MCOs?

Options A: 27 B: 72 C: 104 D: 176

Benefit Design: For simplicity, let’s think about benefit design as being the co-pay amounts assigned to Tier 2

and Tier 3; for example $25-50 or $30-60.

2 ▪ 2011 IMS US Market Access Conference ∙ Improving US Access Success Indicators

On average, how many different benefit designs do you think are offered by the

top 7 PBMs?

Options A: 57 B: 102 C: 323 D: 622

Benefit Design: For simplicity, let’s think about benefit design as being the co-pay amounts assigned to Tier 2

and Tier 3; for example $25-50 or $30-60.


Pharma manufacturers measure access differently than physicians and patients

Tier + Restrictions

OOP Cost + Restrictions

Industry View

Physicians & Patients View

Access Indicators


The bridge that links Tier and OOP Cost is Benefit Design, so that is what we will explore

Today’s Goal

Test common assumptions related to benefit design and determine whether or not they are based on sound evidence


Assumption #1: What you see is what you get

Fact #1

Fact #2

Fact #3

Most Common Benefit Design (MCBD) is an appropriate measure to understand the benefit design of a plan



Fact #1

Fact #2

Fact #3

For the majority of top 25 payers in the US, MCBD represents less than one quarter of the script volume



The Most Common Benefit Design (MCBD) is actually not as common as you might think

MCO PBM

21 of the top 25 payers have MCBD with less than 20% of payer’s total volume

0%

20%

40%

60%

80%

100%

MCBD as % of Payer Volume for Top 25 Payers

Payer S

crip

t V

olu

me

*Based on a Sampling of National Rx Benefit Data for ARB market basket (Commercial Only) *Timeframe of the data used: January 2010 to May 2010


This fact is not surprising when you consider that plans have hundreds of different benefit designs

0

100

200

300

400

500

600

700

# o

f B

en

efi

t D

esig

ns

MCO PBM

Number of Benefit Designs by Top 25 Payers

17 of the top 25 payers have more than 100 benefit designs



And that leads to the answers to our quiz questions…

• Top 18 MCO’s

−176 different benefit designs on average

−The answer is D

• Top 7 PBM’s

−323 different benefit designs on average

−The answer is C

On average, how many different benefit designs do you think are offered

by the top 18 MCOs?

On average, how many different benefit designs do you think are offered

by the top 7 PBMs?



Fact #1

Fact #2

Fact #3

MCBD masks the underlying basket of benefit designs and the relative influence they can exert



A quick example shows the national market share for Diovan on Tier 3 at a single plan, United Healthcare

4%

5%

6%

7%

8%

9%

10%

11%

12%

DIOVAN

Sh

are o

f M

arket

Diovan Share of Market (United Healthcare)

Full Plan Market Share for Diovan

Diovan: Tier 3



Looking more closely across benefit designs shows the impact of T2:T3 differentials on market share for Diovan

4%

5%

6%

7%

8%

9%

10%

11%

12%

$5 $10 $15 $20 $25 $30 $35 $40

DIOVAN Linear (DIOVAN)

Tier2:Tier3 Co-Pay Differentials ($)

Diovan Shares of Market by T2:T3 Co-Pay Differentials

Diovan: Tier 3

Sh

are o

f M

arket

Full Plan Market Share for Diovan



Adding competitor, Benicar, further illustrates the negative impact of high co-pay differentials on Diovan market share

4%

5%

6%

7%

8%

9%

10%

11%

12%

$5 $10 $15 $20 $25 $30 $35 $40

BENICAR DIOVAN Linear (BENICAR) Linear (DIOVAN)

Tier2:Tier3 Co-Pay Differentials ($)

Benicar and Diovan Shares of Market by Tier2:Tier3 Co-Pay Differentials (United Healthcare)

Benicar: Tier 2

Diovan: Tier 3

Sh

are o

f M

arket

National Market Share for Diovan on Tier 3 and Benicar on Tier 2




Fact #1

Fact #2

Fact #3

Just because two plans have similar MCBD, doesn’t mean their overall mix of benefit designs is the same



For example, even when MCBDs are equal ($30:$50), the percent of TRx on high Tier 2 co-pays can be very different from payer to payer

By Market TRx

BCBS HCSC

Cigna

Most Common Benefit Design

$30:$50 $30:$50

% Tier 2 > $30 23% 7%

HCSC has significantly more Tier 2 high cost sharing designs than Cigna



Assumption #2: The Price is Right

Fact #2

Fact #1

Tier 2 co-pay is $20-30



Fact #1

Fact #2

Tier 2 co-pay is $20-30

Co-pay on Tier 2 varies significantly… …and so does Tier 3 co-pay


The range of Tier 2 co-pays is wide…

Co-pay Amount in $

0%

5%

10%

15%

20%

25%

$5 $15 $25 $35 $45 $55 $65 $75 $85 $95

Distribution of Tier 2 Co-pay Amounts by Percent of Benefit Designs

Percen

tag

e o

f M

arket

TR

x

*Based on a Sampling of National Rx Benefit Data for ARB market basket (Commercial Only) *Timeframe of the data used: September 2009 to May 2010


…and overlaps significantly with Tier 3 Co-pays

Co-pay Amount in $

0%

5%

10%

15%

20%

25%

$5 $15 $25 $35 $45 $55 $65 $75 $85 $95

Distribution of Tier 2 and Tier 3 Co-pay Amounts by Percent of Benefit Designs

T2 Co-pay T3 Co-pay

Percen

tag

e o

f M

arket

TR

x




Fact #1

Fact #2

Tier 2 co-pay is less than Tier 3 co-pay

That’s true, but how much lower is it? Tiers 2 and 3 co-pay differentials vary markedly


The savings offered by Tier 2 over Tier 3 varies considerably across benefit designs

0%

5%

10%

15%

20%

25%

30%

$5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $55 $60 $65 $70 $75

Market TRx distribution of T2:T3 co-pay differentials across RxBD’s

Q22010

Percen

tag

e o

f M

arket

TR

x

T2:T3 Co-pay Differential ($)

The middle 66% of Market TRx has a co-pay differential between $15 and $35 (inclusive)



Interestingly, about 20% of scripts are on a Tier 2 open plan

0%

5%

10%

15%

20%

25%

30%

$- $5 $10 $15 $20 $25 $30 $35 $40 $45 $50 $55 $60 $65 $70 $75

Market TRx distribution of T2:T3 co-pay differentials across RxBD’s

Q22010

Percen

tag

e o

f M

arket

TR

x

T2:T3 Co-pay Differential ($)


The middle 66% of Market TRx has a co-pay differential between $15 and $35 (inclusive)


Assumption #3: Location, Location, Location

Benefit design varies geographically

Fact #1


Assumption #3: Location, Location, Location

The assumption is true – there are important differences in benefit design across the US

Fact #1

Benefit design varies geographically


Which US City (MSA) has the highest percentage of benefit designs with T2:T3 co-pay differentials

greater than or equal to $35?

Options A: Houston B: Detroit C: Atlanta D: Cleveland


And the answer is… Atlanta

Atlanta has approximately 16% of scripts falling under

such a design

Which major US City (MSA) has the

highest percentage of benefit designs with T2:T3 co-pay

differentials greater than or equal to

$35?


A view of the T2:T3 co-pay differentials in a few MSAs further illustrates this geographic variation

• In Detroit, low differentials are prevalent ($0-5),

whereas $20-$30 differentials account for 50% of BDs in Boston

• Atlanta is more evenly divided, and has highest percent of 35+ differentials

Tier 3:Tier 2 Co-Pay Differential Distribution by Select MSAs


So What?


“MCBD” and “Tier Status” are blunt instrument for understanding access and can drive the wrong decisions

Plan A Plan B

Members 5,000,000 5,000,000

MCBD $30-$50 $30-$50

Net Price (including 20% rebate)

$3.60 $3.60

Illustrative

Think different



Plan A Plan B

Members 5,000,000 5,000,000

MCBD $30-$50 $30-$50


$3.60 $3.60

Benefit Design Distribution

Skewed to low co-pay differentials

Skewed to high co-pay differentials

Illustrative

Think different



Plan A Plan B

Members 5,000,000 5,000,000

MCBD $30-$50 $30-$50


$3.60 $3.60

Distribution Skewed to low co-pay differentials


Share at Tier 3 15% 13%


Illustrative

Think different



Plan A Plan B

Members 5,000,000 5,000,000

MCBD $30-$50 $30-$50


$3.60 $3.60

Distribution Skewed to low co-pay differentials




Gain from Rebate -6.0M +20M

Without a more nuanced view, money is left on the table

Illustrative

Think different


Set & Communicate Access Objectives Differently

• Have you set thresholds for Tier 2?

• Is your threshold appropriate for your product?

− Absolute co-pay level

− Co-pay differential

− Tailored to geography

• Are you effectively applying other co-pay

levers?

Do not contract

Co-pay Differential

Ab

solu

te

Tie

r 2

Co-

pay

Move from “Tier 2 or Bust”

To “Strategic Investment in T2”

Low High

Low

High

1

Act different


Measure Success Differently

“% of lives on Tier 2” simply won’t tell you these things

If you don’t include financial metrics, how do you know:

If you paid too much for access?

If your sales performance met access adjusted expectations?

Whether the access you have is delivering as

expected?

2

Move from: measuring access

success solely on % of T2 achieved

To: metrics that

incorporate a financial component

Act different


improving us access success indicators: testing...

Documents