Refining Contracting Strategies in the Face of Competition
Analysis Group helped a client reassess its contracting strategy for an established oral product in the highly competitive cardiovascular therapeutic area. As part of a comprehensive effort encompassing commercial managed care, Medicare Part D, and Medicaid fee-for-service plans, we identified high-volume/high-control (“must have”) plans, analyzed the share impact of preferred formulary positions, and calculated maximum break-even contract offer levels by segment and account, taking Medicaid best price implications into consideration. We then developed contracting strategy recommendations for each segment under a variety of future market scenarios. We held a managed markets “war game” to reinforce the principles underlying the recommended strategy, and developed an interactive Excel-based model to simulate a range of potential rebate offers by competitors and to identify the optimal contracting behavior from both the client’s and the target plan’s perspective.