OptumRx recently sent a note out to manufacturers announcing the formation of their new Group Purchasing Organization – Emisar. This structure is consistent with what has happened with the other market-leading PBM’s, ESI who created their GPO Ascent and CVS with their GPO, Zinc.
We will let others opine on the value and business case for this structure. As has been noted by others the channel, the power created by these entities is significant and creates resistance to disruption be it market-based, or government-driven. For our discussion, we will focus on the continued market evolution and the potential risk for manufacturers.
While the continued consolidation may help plan sponsors and payers by leveraging their combined prescription volume. This same structure creates challenges for small and emerging manufacturers who may lack the connections or market presence to gain attention or even get noticed by these large players.
In a market where 3 players represent most of the covered pharmacy lives, missing one of these opportunities can be devastating to a brand. As such manufacturers need to think early and often about how they differentiate, incorporating such items as clinical trial design and supply chain structures into the process. Further, manufacturers need to think about some simple questions as they bring products to market.
What is the unmet need?
What is the potential for misuse/ inappropriate use?
How does it compare to the current “standard of care?
And as we have heard many times, if you are bringing cost into my plans, what cost are you taking out? In addition, Manufacturers need to take all market segments into consideration (Commercial, Medicare, Medicaid, Federal Markets (VA, DoD), GPO’s (Hospital, Long-term Care). Each niche market becomes more important as the potential risk for missed coverage goes up.
As a final note, a reminder. Reimbursement is the key to success, effectively the pot of gold at the end of the rainbow. There are multiple critical factors in commercializing products, FDA approval, Supply Chain, Licensure, Sales, etc., however, all these efforts become mute, if a product does not attain reimbursement. Over 12 years D2 has launched 100’s of products across virtually all disease states. Our Reimbursement teams have over 300 years of experience combining payer strategy and market implementation across all payer segments. Contact us to learn more about how we can help you create success.