Digital Pharma Discusses Pricing Strategies When Selling to ACOs

With all that is going on in the healthcare realm today, it almost seems like an understatement to say that, “things are a changing.” However, understated or not, it is an honest assessment. Several of the elements behind the change are the Patient Protection and Affordable Care Act (PPACA), the new Centers for Medicare & Medicaid Services (CMS) incentives and the formation of Accountable Care Organizations (ACO). Collectively, they are forcing pharmaceutical companies and others to change their sales tactics. Here’s more:

Prior to the PPACA and CMS’ push for the formation of ACOs, healthcare participants utilized an individual fee-for-service model that inherently encouraged long supply chains and volume. As such, individual physicians often held great influence over others’ buying decisions and were wooed consistently by pharmaceutical company’s sales reps. Furthermore, the methods used to influence the individual physicians were a matter of company business and not made public. Pharmaceutical companies also took assorted actions to keep generic drug manufacturers from entering the playing field.

Now, all of those things have been altered. ACOs are focused on streamlining the supply chain, reducing Medicare program costs and improving care. If the ACO is successful in doing so, its members will receive financial incentives. Failure to do so, on the other hand, will result in financial losses. In addition, groups of non-clinical and clinical people are making the buying decisions as opposed to individual physicians. So called “wooing methods” are being made public and generic drug manufacturers are making significant inroads into the healthcare marketplace as well.

Therefore, a pharmaceutical company’s pricing strategies when selling to ACOs will need to reflect those market changes. Ideally, the pricing strategies will need to be tied to marketing strategies that focus on differentiation from lower cost alternatives and multiple buyers’ needs (i.e. clinical and non-clinical). Those strategies should also focus on evidence driven value-assessments that show the potential for system-wide savings, shared risk, a reduction in the need for additional treatments and improved patient outcomes.

To discuss pricing strategies when selling to ACOs further, pharma sales leaders should consider signing up for the next Digital Pharma Sales event, taking place in Princeton, New Jersey, November 12 through the 13th. Additional details about the event may be found on the Digital Pharma website.

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