• Intro
• Commercial Plans
• Medicare Plans
• Prior Authorization
• Step Therapy
• Quantity Limits
• Strategic Implications and Questions

Strategic Implications and Questions

While the patent protection loss for any brand signals a predictable and rapid decline in formulary access and sales for the brand, what is less clear is the impact to remaining single source branded products in the class. The resulting dynamic changes present both risks and opportunities for pharmaceutical manufacturers of the remaining brand products. Different approaches to contracting may have a significant impact on access in the resulting more competitive class.

The access changes due to a patent loss in the class may vary by therapeutic area, as well as by plan type. Brand managers and managed care pharmaceutical executives should carefully evaluate their options and develop clear contracting strategies to not only minimize the negative impact due to a new less expensive generic, but they should also evaluate whether a more aggressive contracting strategy is warranted to actually increase the market share or sales for their product.

Differences between the Medicare and commercial markets are important, with Medicare changes being implemented more slowly, at least for the tier level. Leveraging relationships and value across these plan types is something that should be evaluated carefully, especially in dynamic markets. Attention should also be placed to changes in restrictions, and the relationship of restrictions to tier status.

Plans may respond to the availability of new generics with tier changes and/or changes in restrictions, such as prior authorization or step therapy. Understanding these changes - in tier level and restrictions - is important and will impact sales. The impact, for example, of a new PA for a product on tier 3 is generally of much less concern to the manufacturer than a tier 2 product.