Three ways ACA (Obamacare) changes pharma marketing

The Affordable Care Act (Obamacare) will dramatically alter the way pharmaceutical marketers approach their business. In this article, Dorothy Wetzel outlines three major marketplace changes and details ways to thrive during healthcare reform.

There’s no denying it. The Affordable Care Act (affectionately referred to as Obamacare) is a reality, despite recent efforts by some members of Congress to kill it. Consumers are enrolling in Health Exchanges. But Health Exchanges are just one facet of the Affordable Care Act (ACA). As ACA rolls out in its entirety, pharmaceutical marketers will be facing a new reality including:

1. It’s a payer-patient world

2. Multicultural marketing is mandatory

3. Value takes center stage

Here’s what to expect and what to do about it:

1. It’s a payer-patient world

Physicians are losing influence over the choice of medications prescribed for their patients. Payers continue to tighten reimbursement rules. But the biggest change is that almost 2/3rd of physicians are employees not owners. That means HCPs play by the rules of the hospital systems and large group practices that employ them. And these rules increasingly limit their access to pharmaceutical representatives and the choice of pharmaceutical products they can prescribe.

 

“Physicians are losing influence over the choice of medications prescribed for their patients.”

 

Patients are also weighing in like never before. Prodded by growing co-pays and enabled by increasingly transparent healthcare costs, patients are adopting a shopper mentality towards all healthcare purchases, including medication. Patients will be increasingly making the decision about whether the branded drug is worth the price premium over the generic.

With this shifting balance of power in the marketplace, there needs to be a corresponding move within brand teams and their budgets. With few exceptions, physician marketing has traditionally garnered the most FTE’s and highest budget levels. Marketers now need to take a zero-based budgeting approach and allocate more resources to the customer groups that drive the business, namely payers, health systems and patients.

2. Multicultural marketing is mandatory

Historically, funding for multicultural marketing programs adhered to the LIFO accounting principal, last to be funded, first to be cut.

However, ACA brings multicultural marketing front and center. It is estimated that over 40% of the 33 million newly insured Americans will be multicultural consumers. There are a multitude of ACA initiatives aimed at the different healthcare stakeholders designed to better serve the multicultural consumer including:

• Patient surveys: There are Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys specifically designed to assess the cultural competency of providers. It now matters that consumers feel respected and actually understand what the HCP is telling them. Materials in multiple languages will no longer be a “nice to have”. Your payer and HCP customers will demand them.

• Multicultural HCPS: ACA expands initiatives to increase racial and ethnic diversity in the healthcare profession. What are your plans for communicating to an increasingly diverse HCP universe?

• Government offices: ACA elevates key multicultural health organizations within important governmental offices such as the National Institutes of Health (NIH) and the Department of Health and Human Services (HHS). That means these multicultural organizations have more power to put policies in place that effect drug coverage and marketing. Better get to know these folks.

As the marketplace shifts to better serving multicultural consumers, so should pharmaceutical marketing departments. Consider taking the CAHPS cultural competency questionnaire and brainstorm how your product and service offerings can benefit the patient experience.

“As the marketplace shifts to better serving multicultural consumers, so should pharmaceutical marketing departments.”

 

3. Value takes center stage

Gone are the days of creating 20-page detail aids that parse the minute differences between a drug and its competitor. Any new product has to provide a demonstrable health benefit. The decision to launch a product now comes down to one question “Is there enough value in this product for payers to pay for it?” If not, don’t bother launching.

Value can also be found outside the pill, but pharmaceutical companies must invest in studies that prove the impact of their patient support programs. In many cases, this means creating the support program as part of the drug development process.

Another option is to work with individual payers and clinics to adapt the patient support program for use at point of care. This approach can generate a case study and data that can be shared with other payers.

With ACA, pharmaceutical marketers will need a radically different game plan.

What is important to remember however is that even without ACA change was inevitable. The outsized and often irrational costs of our current system have brought the country to a place where the status quo is no longer sustainable. As the popular saying goes, “people don’t change when they see the light, they change when they feel the heat”. All ACA does is turn up the heat.

 

About the author:

Dorothy Wetzel is the CEO, Chief extrovert, of extrovertic, the health care agency and consultancy she founded in 2009 at the height of the recession. Extrovertic is the agency to use “when deciding what to create is as important as the creative itself.” According to extrovertic clients, no agency comes close to offering extrovertic’s exceptional level of strategic support.

In addition to her agency career with Saatchi & Saatchi Healthcare / Publicis, Ms. Wetzel spent over 20 years on the client side, most recently as the VP, Consumer Marketing at Pfizer Pharmaceuticals. At Pfizer, she led transformation of Pfizer into powerhouse consumer marketer.

Ms. Wetzel was named one of the 20 Most Influential People in DTC by Medical Marketing & Media, and was inducted into the Hall of PhAME in 2004 and the DTC Perspectives Hall of Fame in 2010. In 2012, Ms. Wetzel was an Ernst & Young Enterprising Woman finalist. Dorothy can be reached at dorothy@extrovertic.com. She authors the Thought Bolts blog on innovative pharmaceutical marketing practices.

How do you think ACA will affect pharma marketing?