2008 Annual Conference

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April 27, 2008

1:00 p.m.- 5:00 p.m.

Conference Tutorials

Pre-Conference Tutorial: Metrics for Consumer Relationship Marketing in Pharmaceuticals
Ira Haimowitz, Wunderman

Pre-Conference Tutorial: Pharmacy Claims Adjudication
Dave Cole, ClaimTrax, LLC

The claims adjudication program provides insights into the dynamics of claims processing and the formulary controls utilized to provide incentives or disincentives for product selection. Screen prints from a pharmacy software system will profile the various co-pay levels, product rejections (prior authorizations, step therapy edits, and product locks), formulary edits, and other formulary controls. The results of these third party interactions with patients and physicians will be discussed that have an impact on product selection. Claim reversals and reimbursement reconciliation will also be reviewed.

6:30 p.m.- 9:30 p.m.

PMSA Reception

April 28, 2008

8:00 a.m.- 8:15 a.m.

Welcome & Conference Overview
Chung Ma, PMSA

8:15 a.m. - 9:30 a.m.

Keynote Speech: Current and Emerging Forces Transforming Pharmaceutical Marketing
Murali K. Mantrala, University of Missouri-Columbia

9:30 a.m. - 10:15 a.m.

Analysis-> Decisions-> Actions & Results: Role of analytics in getting the organization ready for launch
Julia Brodsky, Wolters Kluwer Health and Khasha Dehnad, Organon, a division of Schering-Plough

As part of the launch preparation process, Pharma companies typically look for answers to the following questions:
    Which physicians/institutions should be targeted?
  1. Who is likely to adopt early?
  2. What influences customers' decisions?
  3. How should the customer value be determined?
  4. How responsive our customers to promotions?
  5. How large sales force is needed, and how it should be structured?
  6. What is the appropriate share of voice
  7. How many representatives are required?
  8. What sales force structure will best address the customer base?
  9. What types of representatives are needed?
  10. How will the sales force structure need to change over time?
  11. How should territories be designed?
  12. How should workload and potential be balanced best?
  13. How should referral pattern be incorporated?
  14. How should the call plans be constructed?
  15. How can the optimal call plan be designed for each territory?
  16. How to design a dynamic call plan?
This presentation will focus on innovative data-driven approaches to these Sales Resource Optimization questions with a view of maximizing Sales Force Effectiveness. Typical industry approaches and some of their shortcomings will be introduced. Also discussed will be detail results of an actual case study.

10:15 a.m.- 10:45 a.m.


10:45 a.m. - 11:30 a.m.

Modeling the Competitive Relationship of OTC and Rx Products
Karin Hayes, Wolters Kluwer Health

Long considered very different and separate markets, the Rx and OTC arenas now compete for the same patients and consumers. A number of Rx brands have recently gone off patent and are now sold as OTC products. Other factors drive interest in understanding the dynamics of Rx/OTC markets including:
  • Managed Care Organizations incorporating OTC products into their formularies
  • Patients asked to take greater control of healthcare decision-making and payment for medications
  • Evolution of "Behind-the-Counter" medications – including a potential OTC statin
Blending of these markets requires a commensurate integration of data sources and analysis techniques. Methodologies for combining Rx and OTC data assets as well as a case example will be presented to address key business questions for Rx and OTC manufacturers:
  • For patients that matched between the two databases, what are key demographic and treatment differences such as age, specialty, geography, treatment regiments etc. that distinguish OTC from Rx users?
  • What are the relationships between Rx/OTC product use and treatment patterns or disease severity?
  • Do visits to the store to fill Rx prescription result in more/less total sales than an OTC visit? Are there differences in the type of purchases between those that purchase Rxs as compared to OTC users?
  • Does formulary status or availability of new generic Rx drugs lead to increase/decrease of OTC utilization?

11:30 a.m. - 12:15 p.m.

The Sky Is Falling: Factors Contributing to Generic Erosion
Daniel Feldman, Bristol-Myers Squibb and Laura Jirele & Jeff Kanis, Wolters Kluwer Health

Generic erosion is an event that most forecasters try to estimate for their prescription pharmaceuticals, regardless of where the product is in its lifecycle. By analyzing 27 generic launches from 2005 thru 2007, we are able to assess the relative influence of various factors on generic erosion within class of payment plans (including Medicare Part D, HMOs, PPOs, and Cash). Time-aligning the generic events, generic erosion within each payment plan is captured as discrete observations for the analysis. The following independent variables are analyzed: 1) generic erosion of brand X in the previous month, 2) chronic vs. acute markets (average days of therapy in 1 year), 3) number of generic entrants, 4) difference in average copay of brand X and generic X, 5) maximum brand X share within the plan 3 months before the launch of generic X, 6) market concentration (# of products in the market (n) with market share greater than 1/n), 7) size of market (MAT TRx $'s), 8) DTC spend of brand X (MAT 6 months prior to generic X launch), 9) generic share of the market prior to the launch of generic X plus their 72 2-factor interaction terms. In conclusion, this study clearly demonstrates the relative influence of factors contributing to generic erosion in the current pharmaceutical marketplace. Attendees will be able to take away an understanding of what to look for in an analog generic launch to use in their own forecasting processes. Particularly, they should have a much better understanding of managed care dynamics on these important lifecycle events.

12:15 p.m. - 2:45 p.m.

Lunch and Vendor Fair

2:45 p.m.- 3:30 p.m.

Sizing Methodologies for a Dynamic Environment: Capacity planning for ancillary field forces
Arie Grossman, Genentech and Barbara Meyers, The Alexander Group, Inc

This presentation will cover methodologies used to design coverage strategy and determine capacity requirements of specialized field forces such as managed care resources, key opinion leader liaisons, and institutional account managers. The presentation will cover several case studies with high level findings on applications at Genentech.

3:30 p.m.- 4:00 p.m.Break and Vendor Fairs

4:00 p.m.- 4:30 p.m.PMSA Business Meeting

4:30 p.m. - 5:15 p.m.To Listen or Not to Listen: An empirical study on physicians' prescribing response to unexpected negative information release
John Moran, IMS and Partha Anbil, Temple University

On May 21st, 2007, the New England Journal of Medicinepublished an article, stating patients taking Avandia were associated with higher risks of heart attack. Since then, although the overall sales of Avandia have dropped sharply, many physicians continue to prescribe Avandia to their patients. This is quite counterintuitive, therefore, presents many interesting research questions. For instance, with the unexpected negative information release, who continues to prescribe the focal brand and why? How does the negative information release influence physicians' learning about product safety for each patient?

In this study, we proposed a multivariate Probit model to capture physician's multiple simultaneous prescribing behavior at the patient level after the release of negative information. We empirically estimated the model using unique doctor-patient-level longitudinal data. Based on the preliminary analysis, we found that physicians with high expertise or adopting the focal brand early tend to ignore the negative information release. Marketing contacts seem to strengthen physician's learning about product safety and hence alleviate the impact of negative information release. At the patient level, physicians tend to drop the focal brand for patients with less severe conditions while the opposite is true for patients in serious conditions. Pharmaceutical companies can utilize these insights to defend their brands with the advent of unexpected negative information release.

5:15 p.m.

Housekeeping Items

6:30 p.m.

PMSA Special Event/Dinner

April 29, 2008

8:00 a.m. - 8:45 a.m.

Track A: Promotion Mix Modeling - Modeling Response of Multi-channel Promotions: New methodologies for a new era
Mark Rose, Pharmetrika LLC

Mark will present an application and extension of novel econometric approaches (by Mizik/Jacobson in Dec 2004 Mgmt Science paper as well as ridge regression ) to estimate promotion response for a brand across a spectrum of personal and non-personal channels for several specialty/market segments using physician level Rx and promotion histories. Comparisons are made across channels as well as specialties and market segments. Also included will be several other methods to calibrate promotion response when "real world" data issues are encountered.

Track B: Mixed Topics - Simultaneous vs. Sequential Event Valuation in Forecasting
Lars Nordmann, Organon, a division of Schering-Plough

This talk presents a novel approach to event valuations and Events Summary Analyses. An events summary analysis is typically conducted as part of summary presentation of any given forecast; it bridges the gap between a pre-events dollar forecast (aka baseline forecast) and a post-events dollar forecast by computing each event's dollar value. As such, events summary analyses are often used as a communication tool and as a basis for strategic planning and resource allocation.

Seemingly trivial, in praxis events summary analyses are usually executed incorrectly by evaluating events sequentially. As a consequence, event valuations are impacted by the order in which they are evaluated within the forecast software. Events lower in the list of events are generally undervalued while events higher in the list are generally overvalued. Since event valuation summaries are often used as a communication tool and as a basis for strategic planning and resource allocation, this order-induced valuation bias can easily yield misleading conclusions and wrong business decisions.

A conceptually simple analytic approach is presented that provides a sound mathematical basis for event valuations. The approach has a number of analytical invariance properties that make it especially attractive for many reasons. In addition, the approach can be used as a stand-alone fix easily piggybacked onto existing forecasting platforms. Furthermore, the very same approach presented for the events summary analyses also solves the closely related analytical problem of a Net Sales Gap Analysis, commonly encountered in countless financial analyses.

8:45 a.m. - 9:30 a.m.

Track A: Promotion Mix Modeling - Quantifying the Impact of Product Messages and Their Delivery on Demand
Brian Dawson, Abbott Labs; Ashish Kathuria & Cindy Ruiz, Health Products Research

The presentation will highlight the value of integrating quantitative analyses and primary research in assessing the impact of different messages on a product's sales.

Track B: Mixed Topics - The Calibration of Preference Share
Venk Ramakrishnan, The Ziment Group

Pharmaceutical companies have faced the challenge of understanding the true potential share that comes from quantitative primary market research. They would like to understand how the preference share determined by research respondents translates into actual marketplace behavior. The preference share to market share adjustment is not always done scientifically in the real world. Many times, product teams have cut the preference share in half or a third to more accurately predict these future outcomes. On other occasions, assumption based factors were used to discount the preference share value. These factors have frequently had little to no scientific backing. For a 2 billion dollar marketplace, each share point is worth 20 million dollars. Any imprecise assumptions can have big implications to the forecast. This conversion to market share can also impact many go/no-go decisions to launch a product and affect the future direction of a company. It is crucial that we appropriately calibrate the preference share accordingly to reflect the true behavior in the market. The overarching issue is that the respondent input is not accounted for correctly. Utilizing a more comprehensive calibration algorithm can eliminate the need for making assumptions to allow more accurate and defensible forecasts.

9:30 a.m. - 11:00 a.m.

Break and Poster Sessions

11:00 a.m.- 11:45 a.m.

Track A: Promotion Mix Modeling - Evaluating Group Practice Level Response Modeling: Does an Account Based Approach Bring New Economies to the Pharmaceutical Selling Model?
Katherine Cooley, Market Analytics Group

This presentation will explore, via a case study example the pros and cons of group practice level response modeling to determine appropriate sales activity. It further investigates some of the possibilities presented by a "Large Account" (aka Group Practice) approach to developing overall sales and marketing strategy. Specific topics discussed will include: Group Practice Data Sources, Best Practices in Customer Groups Data Collection, Method of Analysis Employed in Case Study, Implied Findings of Analysis, Difference in Optimals for Individual Physician vs. Group Approach, Resulting Economics, Suggested Construct for Employing Group Level Analysis, and Implications for Overall Marketing and Sales Strategy.

Track B: Mixed Topics - Applying Prizim Clusters to Traditional Data Sets to Enhance Targeting
Paula Fullman & Joseph Markman, Wolters Kluwer Health

This presentation will describe how combining Prizim Clusters, prescriber level data, and national Rx audit data can enhance targeting and understanding product selection influences between physicians and patients.

11:45 a.m.- 12:30 p.m.

Track A: Promotion Mix Modeling - Addressing Reverse Causality in Promotion Response Models
Jean-Patrick Tsang, Bayser Consulting

There is no question about it: Promotion drives sales. While this sounds like a fair statement, it may not always be true as the two real-life examples in this article attest. This is not good news since the promotion response models we routinely deploy to make segmentation, targeting, call planning and sizing decisions may be leading us down the wrong paths. Why would that be? Because promotion response models, having no room for reverse causality, cannot recognize cases where a drop in detailing effort may be the response to the realization that there is no sales to be had or conversely that the observed "incremental" sales have nothing to do with the extra detailing effort. This presentation will describe a new model that brings time back in the promotion response models along with a logical framework that allows us to assess both the significance and relevance of reverse causality. The presentation goes on to describe corrective measures to effectively take into account reverse causality.

Track B: Mixed Topics - Claims-Level Data: Is it worth your effort?
Vladimir Velednitsky, Pfizer

Claims, or co-pay, data, if used for the right markets in a right way, may be a valuable source of managed market insights. This presentation will focus on data interpretation and on two major opportunities this data provides: uncovering observed formulary designs and analyzing the ways managed market players are driving product utilization.

Observed formulary design and co-pay structure are complementing our knowledge of stated or contracted formulary attributes. The area of applications ranges from contracting compliance monitoring to marketing analytics. Knowing observed benefit design and co-pay structure helps us to better understand the market, better understand specific managed care customers, and to develop sales and marketing programs.

Claims data can also provide a number of factors reflecting managed care organization's ability to control product shares. Some of these factors are: co-pay levels and differentials, formulary status, prior authorization or step edit restrictions, pay-for-performance initiatives, ease and effectiveness of pharmacy operations. Many of these factors would not be available for researches without claims data, and in some markets they open a door for a whole new level of managed market analytics. This presentation will also cover some practical aspects of using claims data.

April 30, 2008

8:00 a.m. - 9:30 a.m.

Payor Power: How Pharma is Impacted by Managed Care and Medicare Part D
Keith Mandia, Verispan and Glenn Sabin, ZS Associates

9:30 a.m. - 10:15 a.m.

Quantifying Managed Care Impact on Product Performance: Measuring patient copay sensitivity and designing optimal managed care contracting strategies
Nawaz Merchant, Johnson & Johnson and Devesh Verma, marketRx

Pricing is a critical component of a pharmaceutical marketing mix strategy. Pricing is complicated by a tangled interaction of patients, physicians, MCOs, and pharmaceutical companies. Physicians often consider patient expenses when determining a course of treatment. Patient expenses, in turn, are critically dependent on copay tiers set by MCOs. Where patient copays are high, patients may substitute generic equivalents or switch to preferred (i.e. cheaper) branded products. While MCOs determine the formulary status (affecting patient copays), pharmaceutical companies can influence patient copays by offering MCOs financial incentives that lower MCO purchasing costs.

Increasingly robust claims data provide critical information about method of payment, patient copays, substitutions, and payer rejections. With greater visibility into the pricing decisions facing patients, pharmaceutical companies can design better MCO pricing strategies reflecting how patients react to various copay levels, and how MCOs encourage greater use of generic and/or preferred brands

This presentation discusses how to quantify the sensitivity of product demand to patient copays. As economic theory predicts, there is an inverse relationship between average copay levels and demand for a given product. The intensity of this relationship varies by product and therapeutic class, level of sales promotion, degree of pricing competition from competing products, and type of MCO. Differential contracting strategies can be developed to reflect these important differences in market dynamics.

10:15 a.m. - 10:45 a.m.


10:45 a.m.- 11:30 a.m.

Commercial Excellence Strategy in Pharmaceutical Industry: An integrated marketing & sales approach to improve field effectiveness
Partha Anbil, Temple University & John Moran, IMS Management Consulting

As the industry faces continuing pressure to improve return on investment from its sales and marketing investment for in-line and launch brands, strategies for achieving new value are being tested and evaluated in the market. In this discussion, IMS Consulting shares results of these new strategies, reasons for their success or failure, and recommends improvement priorities for the commercial organization spanning business intelligence, marketing, managed markets, sales, and sales operations.

11:30 a.m. - 12:00 p.m.

Wrap up and raffle