Pharmaceutical Management Science Association

This tutorial will cover primarily introductory and intermediate topics in Pharmaceutical promotion response, with some discussion of more advanced topics. The goal will be to make mathematically-inclined folks able to do their own modeling, or, at least, able to understand a response model analysis, what it means, and what conclusions you can (or can’t) draw from it.

We’ll cover the basics of ROI, test and control methods, and what it means to “control” for something... and how to select a control group. We’ll then continue into intermediate topics including response curve (regression-based) methods, and how these and the control group methods are fundamentally alike (and where they are different). We’ll examine physician segmentation for response, alternative response model mathematical forms, and optimization criteria.

We’ll work on understanding what all the parameters from a response model “mean”, and what the basic measures of statistical significance indicate. We’ll talk about some of the most common errors in this kind of work, including the all-too-easy mistake of reversing cause and effect.

Hands-on exercises will consist of basic fitting of models (in Excel) using prepared data, and discussion / interpretation of the estimated coefficients

Advanced topics to be discussed (time permitting) include threshold effects in response curves (“S-shaped response curves”) and multi-channel models, with and without interaction effects.

We promise that by the end of this tutorial, your brain will be full.

Dr. Peter Salgo is one of the country’s most respected healthcare professionals. As a practicing physician at Columbia Presbyterian Hospital in NYC, he makes rounds five days a week. Specializing in the pre- and post-operative treatment of heart patients, heart transplant recipients, and artificial heart candidates, he maintains a full-time practice in Intensive Care Medicine in the Open Heart ICU at Columbia. He is currently a Professor of Medicine and Anesthesiology at Columbia University College of Physicians and Surgeons.

Despite a multitude of business issues facing U.S. pharmaceutical executives, there is little company-level empirical evidence on what levers drive sustained commercial performance under management’s control. Our study applied a unique proprietary database collected by the pharmaceutical benchmarking firm TGaS Advisors. We statistically estimated the quantitative and qualitative effects of commercial operation functions on U.S. company-level gross revenue per sales representative of 26 companies for the period 2005 to 2011. The sample of companies included large, medium, and small-sized pharmaceutical companies as measured by annual sales, as well as specialty and biotech companies. Econometric estimation techniques were employed on the empirical model to answer research questions. We revealed that increasing company scale and sales operations spending support per representative were positively related to performance. Cultural organizational effectiveness attributes such as business innovativeness and responsiveness also significantly affected performance. These organizational attributes also worked synergistically with sales operations spending support.

Our findings demonstrated the importance of executives being concerned not only about the level, but also the focus of resource investments, and the importance of fostering organizational culture attributes necessary to sustain peak business performance. Results suggest a broader strategic vision is needed when making commercial operations investment decisions.

This presentation will lay out business practices that can allow you to bridge a variety of third party data sources with structured insight from your managed markets account teams to develop a data- & analytically-based alignment process for managed markets account teams, an approach that not only delivers an ‘alignment answer,’ but also creates a foundation for ongoing data management, reporting and resource optimization.

Like many marketing tools, a pharmaceutical brand website plays an important role in driving brand awareness, program enrollment, and providing information and education. Most businesses engage in various initiatives to drive traffic to their website. This presents the need to understand the website in more detail. Brand marketers want to know how users are consuming website content and if this website behavior has an impact on brand sales.

The Site Activity Impact (SAI) Analysis helps marketers answer these questions. In this example, the analysis incorporated all possible website activities and identified four visitor types by observing their website activity. Each user action was scored and each website visit was assigned a Site Activity (SA) score. Geo-matching was used to establish a relationship between the SA-scored visit and sales data. Relative impact of brand sales volume on SA-scored visits was than calculated using regression modeling. It was determined that the SA score was highly predictive of future brand sales volume. Our analysis indicated that higher SA scores yielded more sales volume in the following 4 weeks period.

Multiple dimensions of SA-scored visits were captured such as referring channel, referring engine, referring keyword, and location. This helped determine the quality of media driving to the website and showed that paid search drove the highest SA-scored visits. The analysis was further used to identify search terms that yielded best estimated ROI based on the regression model. In another optimization approach, the SAI analysis was used to identify the type of website activity that had a varying impact on future brand sales. SA scores were used to optimize media campaigns by driving users to specific website content triggers which encourage users to engage with the website and increase their SA score.

Application of the SAI Analysis is broad and it is most helpful when a website has several paid media drivers. Most importantly, the SAI Analysis makes the connection between website behavior and brand sales. In today’s economy, marketers continuously face pressure to justify the marketing spend and deliver the best financial outcome from our budgets. Site Impact Analysis helps optimize the spend of media linked to our websites.

This presentation discusses how Management Science can build strong partnerships with Marketing and elevate the role of analytics within the organization. By having a valued partnership, Management Science work takes on greater importance, and the analytics are relied upon for guiding strategic and tactical decisions. This partnership at Genentech has evolved to the point where Marketing Science has become a trusted partner to be consulted before all key promotional decisions are made.

This presentation will provide guidance on how these win-win relationships can be built. In the case study, we will highlight how Genentech’s Marketing Science team was able to:

• eliminate less effective promotional activities,
• improve the effectiveness of other marketing activities, and
• initiate and increase activities with greater sales impact.

The promotional landscape in the pharmaceutical industry has undergone significant changes in recent years. Industry’s focus has shifted from an arms race of reps and the traditional SOV model, to a more efficient model that fully integrates the impact of multiple stakeholders on prescription trends. This calls for a new paradigm of sales force effectiveness that integrates the efficiencies of both a top-down and a bottom-up approach. Our proposed approach captures the influence of group practices on sales force effectiveness and recommends much more efficient resource allocation to prescribers. It achieves significant improvements over the current segmentation and response modeling practice through both expanded data usage and advanced analytics. As more providers are joining multi-provider group practices, the influence is becoming a significant determinant in the development of effective sales force models. Additionally, our case studies shows that traditional segmentation methodologies would fail to identify different underlying responsiveness, while our refined approach improved performance by reallocating detailing effort. In conclusion, the new paradigm incorporating innovative data metrics helps increased revenue by 3% or reduced cost by 13%.

Rapid evolution in US markets is changing the type of information needed to run a pharmaceutical company. Understanding the perspective of the customer has never been more important. Payers today are facing an environment of shrinking resources, increased uncertainty in insurance underwriting, expansion of price sensitive government markets, and rising input costs. Providers face an equal and unprecedented level of change – with integration changing the face of markets and pay for value increasingly common. Consumers face a rising burden of out of pocket costs. All trends that will demand the talents of analysts as executives navigate these changes.

Dan Mendelson, CEO and Founder of Avalere Health, will discuss how the buyers of pharmaceuticals are changing the way they look at the world in light of market consolidation, increased integration of purchasing, demand for proof of value, and new markets (e.g., the exchanges). Quality metrics have also added a new dimension to the thinking of purchasers as well as forward thinking pharmaceutical companies. Mendelson will review each segment of the market, highlight important topics for data analytics, and the illustrate his points with key analytic findings that show the need for looking at data differently in light of market change.

Our industry has entered a new era where providers are coming together to form ever larger organizations that cross channel boundaries to include physicians, hospitals, specialty clinics, nursing facilities, and the like. To be sure, the latest impetus has come from the ACO (Accountable Care Organization), the new entity the Healthcare Reform is touting will succeed where the HMO (Health Maintenance Organization) has failed. Payers are seeing their power wrested away and, in some cases, to the point where they have no choice but to bend to the demand of the provider organizations who know all too well their conspicuous absence from the payer’s network will squash membership enrollment. The new dynamics of the situation along with other changes that are unfolding at the same time are eating away at the premise of our current selling model. All too soon, our selling model, as we know it, will be obsolete. Unless we have a selling model spruced up to play this new game we have been ushered into, we may not have the wherewithal to carry on, let alone prosper.

Medical doctors, who used to be small business owners, are rapidly giving up private practice and becoming salaried employees of hospitals and networks. This change poses both a serious opportunity and threat to the biopharmaceutical industry. At a macro level, the issues are clear but the immediate actions are far from clear. Where is the consolidation taking place? What are the local business models? Which customers have declared to be an ACO? Is this affecting drug utilization? Are we losing prescriber access? How impactful are our current offerings in these local areas? How important is it to develop newer offerings now? In this session, we will be presenting insights from studies that we have conducted across the industry. They will address several of the questions posed above and will present a roadmap for management science professionals to actively drive change in their organizations.This evolution will take place over years and adapting to it will take longer. However, this is already here today in many local areas. Learning from those local areas and making important changes today will be a crucial competitive advantage for any manufacturer. Management science professionals have a unique opportunity to be the shepherds of this change.

Specialty drug sales are seen as the key growth driver for the pharmaceutical industry. One key distribution channel for specialty pharmaceuticals is the “buy-and-bill” process. In the buy-and-bill process, physicians have to act both as healthcare providers and as financial decision makers. Doctors need to purchase drugs, manage their inventory and administer the products. Payer can also force prepay and have the drugs delivered to their home (brown bagging) or the clinic (white bagging) before receiving treatment. Provider preference in Buy-and-bill process has financial implications on all stakeholders in the highly intertwined healthcare market place. This paper is focused on investigating the impact of financial risk factors on providers’ willingness to buy-and-bill. We use Agent-Based-Simulation (ABS) approach to study provider decision behavior by mimicking the real world healthcare market. The simulation study detailed in this presentation can identify a quantifiable list of factors that drive physician decision in the buy-and-bill process. These factors provide foundations for payers and manufacturers alike in designing innovative marketing strategy.

It has been long established that Managed Care Organizations (MCOs) have a great deal of influence on healthcare provider’s retail prescribing behaviour. To manage the relationship with this key stakeholder, pharmaceutical companies spend considerable amount of resources on pricing, contracting, and branded and non-branded promotion. Pharmaceutical companies also came to realize that they need to work collaboratively with organized providers (OPs), namely IDNs and medical groups, to promote their products and improve health outcomes of patients. OPs and MCOs become increasingly interactive to each other, and in some case, become fully integrated. In this presentation, we propose an analytic framework for estimating the influence of both payers and organized providers. The framework allows us to quantitatively test the hypotheses that different types of OPs and MCOs exert influence on doctors’ prescribing behaviour differently.

The pharmaceutical landscape is changing; Morphing business realities mean that “business as usual” no longer works. As physicians consolidate into group practices, group practices merge, and the influence of IDNs (Integrated Delivery networks) and ACOs (Accountable Care organizations) increases, the conventional physician centric engagement model is breaking down. As the industry explores alternatives, account based customer engagement models are emerging as a leading option.

Account focus allows companies to align their brand and portfolio promotional needs with the business needs of their customers. Accounts can be segmented based on their value, growth opportunity, IDN influence, physician access and formulary access. Combining account segmentation with promotion response modeling, alignment and call planning, results in improved reach and frequency at the same or reduced sales cost. The account based model also increases the likelihood of reaching low decile physician targets with minimal incremental cost.

The new model comes with its own challenges:

• Accurate affiliation information
• Gross Visit Value (GVV) vs. Gross Call Value (GCV)
• Managing geographically distributed accounts

But the outcomes are well worth the effort. Shifting to an account based sales model has enabled companies to “do more with less” and evolve to the next stage of their customer engagement model.

In response to access limitations enterprises might also consider to optimize all other potential communication channels with their different customers in order to develop a cost effective customer engagement model.

A bottom-up, patient-based modeling and forecasting system for measuring promotional effects on Rx sales for new and established brands provides major advantages that address key pharmaceutical business problems:

• Making long-term sales forecast for a new molecule based on the first weeks of launch
• Measuring the productivity of MD and consumer promotion for detail messaging, call targeting and frequency, patient sampling, DTC copy and media to optimize their mix for maximum sales/ROI achievement
• Monitoring the productivity of promotion to make rapid course corrections to achieve maximum sales/ROI

Measurement of effects is isolated on the basis of patient penetration versus refill scripts. This reflects the sales equation that prescription sales growth is equal to the number of new starts times their adherence refill behavior. Case studies will illustrate:

• Understanding and removing “noise” from data to enable casual analysis
• Isolating the timing and magnitude of a change in detailing activity, measuring the longer-run consequences of that change
• Monitoring the launch of a first-in-class molecule and forecasting with <1.8% error
• Measuring the impact of a major competitive entry

Background: With issues spanning from REMS to corporate integrity agreements, compliance is a growing concern among pharmaceutical organizations’ marketing departments. Some companies are turning to the field of Marketing Science to safely navigate these complex issues.

Presentation: Prescriber Specialty was the ‘go-to’ method for targeting ‘appropriate’ physicians for many years; however, advanced analytics and longitudinal data opens a new toolbox of methods for improved targeting. Some of the issues that can be addressed: narrow and complex indications, prescriber experience with potentially dangerous medications, and high-risk prescribers.

The presentation will discuss the growing role of compliance in pharmaceutical marketing and describe how advanced analytics can be utilized to improve prescriber targeting for promotional activities. Specific examples will illustrate ways that patient level data can provide insight to improve accuracy when targeting on-label users of a product and ways it can be used to target away from ‘high-risk’ prescribers.

Pharmaceutical forecasting presents several challenges. In order to improve the accuracy of market forecasts, primary market research typically informs a variety of inputs to these models including market share, price, and sensitivity analyses. Industry requires an approach to analytics which more readily integrates the gathering of primary market research specifically for the purposes of informing forecasts. This will reduce the reliance on additional and arbitrary assumptions which are often used to integrate market research findings into forecast models today. We will present a case study of an integrated approach built on the principles and insights of Decision Analysis which proactively determines the information requirements of the forecast model and constructs the primary market research around this model.

Typical targeting strategies, even if they account for group practice dynamics, often do not reflect the true time that is required to manage a territory. This is because the calculations utilize average travel time per call and average number of calls per day, when in reality the time needed varies from target to target.

While no model can fully account for all of the complexities involved, a model that accounts for routing (physician availability and road networks) allows for a more accurate accounting of time and has a better chance of being usable by a sales rep. While algorithms used to create routing basted targeting are complicated, the results can be presented in an easy-to-use schedule.

In routing based targeting, the average number of calls per day, market coverage and sales force contribution to revenue is a function of territory design and rep location. Two important applications result from this: the quantitative comparisons of alignment scenarios and the evaluation the best cities to recruit sales reps from. This presentation will provide examples of the results of these applications.

The pharmaceutical industry is entering a new era of incentive compensation. How does incentive compensation need to evolve to keep up with changes in the health care industry? This panel will comment on several high-level questions on new selling models and best practices for incentive compensation, including:

• How can incentives be used to increase the impact of managed care access gains and marketing initiatives?
• How can managed care be incorporated into incentives?
• What happens when physicians are no longer free to make their own decisions, and must follow mandates from their corporate parent?
• How do you structure incentive compensation for specialty products, such as Infused or Biologics?
• What steps should an incentive compensation plan take to encourage compliant behavior?

In an effort to reduce unnecessary medical and drug utilization through greater involvement in healthcare purchases while controlling healthcare costs, consumer-driven health care plans (CDHP) have grown in popularity. According to a recent Aon Hewitt report that surveyed 1,800 US employers, consumer-driven health plans with high deductibles have surpassed health maintenance organizations to become the second most common plan design offered by U.S. employers. Large employers such as General Electric, J.P. Morgan Chase, Chrysler Group, Wells Fargo, and Whole Foods Market have all adopted CDHP to manage health care costs . With consumer’s increased involvement in their healthcare purchases under a CDHP, there may be a subsequent reduction in drug utilization as consumers seek to reduce their out of pocket drug costs, especially during the 2008-2011 US economic downturn. Using data from one of the largest managed care organizations, we will analyze changes in prescription drug usage and other metrics amongst patients enrolled in CDHP’s by comparing patient drug usage before enrollment in a CDHP with drug usage after enrollment in a CDHP.

In the face of patent expirations, vanishing blockbusters and shrinking sales forces, new product launches are more critical than ever—yet less than 10% of all brand launches achieve 5% market share in the first year. Ensuring market access—and the right type of access to the right payers—is critical to a successful launch.

Market access today requires much more than throwing money at rebates. Copay differentials have doubled in the past decade, the number of drug restrictions has risen, and authorization/formulary barriers are tougher than ever. Yet common gaps in launch market access strategies persist. We often see an overreliance on history and “successful” analogs. And while aggressive access objectives are set, there is little discipline around the detailed plan for achieving those objectives. The end result may be post-launch fire drills and general confusion.

This session will present a disciplined analytical approach for developing the launch market access plan:

• Improve access strategies by focusing on the fundamentally predictable aspects of different payer segments in developing tactical access action plans
• Develop a pertinent segmentation of payers for launch planning
• Ensure appropriate internal stakeholder involvement in the development of the launch access roadmap

Reviews the growth of electronic prescribing in general, and describes one specific provider messaging program implemented in an electronic prescribing environment. Program goals, business rules for appearance of the messages, and message content are described in detail. The effectiveness of the program was evaluated by key metrics such as change in prescribing and ROI. To measure incremental change, a control group of like physicians was selected. Physicians exposed to the messages showed an increase in TRx and NRx (P<0.01); 31-36% of physicians who were non-writers before the program became writers during the program (vs. 22-28% of control physicians); differences were observed by specialty. The program had a positive ROI. Given the growth in electronic prescribing in the US and the effectiveness of this program, messages delivered through electronic prescribing systems represent an important new media for pharmaceutical marketing.

Revolutionary analytical tools built off new, sophisticated clinical electronic data sets are now available to help pharmaceutical and biotechnology brand teams better identify winning strategies for their drugs. The era of Big Data has arrived in healthcare. Now comes the challenge of leveraging it and understanding how to drive value across healthcare to gain competitive advantage from it. The challenge is one well worth embracing: once the power of this data is harnessed a host of complex issues facing Pharma marketers can be addressed more successfully than ever before.

Products that leverage the revolutionary data currently available to the industry will maximize their opportunities for long-term success. The ideal is to map out a plan, well ahead of launch, that will take advantage of clinical data and unprecedented access to physician/patient insights. The presentation will include views into actual data that help provide answers to the most pressing product marketing questions. Specifically, a business case centered on the Tradjenta introduction into the Diabetes market will illustrate the evolving strategies required as a product moves from new entrant toward maturity. The unique methodologies required to tie structured clinical data to healthcare prescribing decisions, as well as unstructured Physician Notes information to quantify the subjective factors influencing these healthcare decisions, will be detailed throughout the presentation.

This tutorial is an introduction to indexed-based targeting of office-based prescribers for sales forces with multiple products. The tutorial will cover the concepts of an index-based targeting methodology and the components that can or should be incorporated, such as responsiveness to promotion, payer coverage, and ‘no-see physicians,’ so that attendees will be able to develop and implement their own indexed-based methods for scoring potential target physicians. Many operational aspects of the targeting process and best practices will be introduced and the session will touch upon measurement and reporting. Lastly, the tutorial will include a hands-on exercise using EXCEL during which attendees will create their own indexes using sample data—attendees should bring laptops to work independently or they can work in a small group setting with the instructors.