Mark Davies and Paul Riley have developed a blueprint for optimising the way brand value propositions are developed to meet the needs of payers as well as clinicians. The short article below presents an extract from the blueprint: three simple rules that companies must follow if they are to leverage the full potential of their value propositions.
Brand value propositions and payers
The Oxford English Dictionary defines a value proposition as 'an innovation, service, or feature intended to make a company or product attractive to customers'. Since the inception of the pharmaceutical industry, building a story around what makes brands (or indeed the company itself) attractive have been core marketing and medical activities, driving customer engagement and uptake of the product. The focus has tended to be on clinical safety and efficacy, reflecting the studies undertaken during the medicine development phase. This is all well and good so long as the customer is a healthcare professional.
However, if the customer is a payer, the brand story requires a different focus, one that gives priority to the economic aspects. Companies understand this, but our experience suggests that many companies continue to provide payers with value propositions that feature a preponderance of clinical detail which masks or attempts to substitute for the economic value proposition. Not uncommonly this fails to meet the needs of payers, sometimes leading to disengagement. This is a critical issue given the potential value of payers, and the logistical challenges of getting in front of payers in the first place.
Familiar story? As payers have become more prominent in the strategic decision-making and funding process for brands in the healthcare market, engaging this group of customers and getting the ‘pitch’ right has become critical to brand success.
So how can companies ensure that value propositions are fit for purpose for payers as well as clinicians?
Optimising value propositions for payers – some simple rules
As a starting point, building a compelling value proposition relies on all aspects of a company to work together in an aligned manner. For the marketing team, the value proposition is the active ingredient in connecting customers with the company representatives and the brand. For medical affairs, the value proposition is a statement of scientific excellence which binds the brand with best practice and high standards of research. For the company, the value proposition is the force behind revenue generation. So, spending some time getting it right is worthwhile. Below are three simple rules for achieving this:
Understand who payers are and what their needs are
The term ‘payer’ (or payor) is a term used by industry to refer to an often-disparate group of healthcare stakeholders who are likely to directly or indirectly have significant influence over the funding and permissions around use of a branded medicine. This group usually includes senior pharmacists, senior service leaders such as managers and clinical heads of department, and commissioners who often differ from their clinical colleagues because they tend not to have clinical backgrounds. What binds this disparate group together is a common thread of managing resources across a population and ensuring that all spend (on medicines or otherwise) complies with national and local policies and best practice, and ultimately provides value for money. Companies need to proactively engage members of this group to develop a deeper understanding of how they make decisions and their specific needs in relation to information and data.
Ensure value proposition evidence is payer orientated
Clinical research underpins the core value of a brand in improving patient outcomes for a particular disease area and usually underpins the value proposition for a brand. However, payers (and increasingly clinical customers) need to know the real-world impact of medicines on local services and local budgets as well. Such real-world evidence is increasingly important for a value proposition to satisfy payers; it enables them to justify broader reimbursements and formulary positioning for brands, thereby increasing patient access. As such, companies need to go further to collate the real-world data available for their brand, presented in a format that payers can use to assess economic value. This may seem obvious but failure to engage payers in this way is not uncommon.
Combine needs analysis and real-world evidence into integrated value propositions
By understanding the needs of payers (rule #1) and collating real-world evidence (rule #2), companies are able to develop value propositions that integrate local disease epidemiology and population-level budget impact models, with direct reference to key national, regional and local policies. This integration should be complemented by upskilling the key account team on the payer agenda and how to deliver the brand story using the new, improved value proposition. Real value is created when companies link these stories to the particular challenges facing an individual payer customer – for example, a company with a product and/or service offering in diabetes which helps address the specific professional challenges facing a diabetes commissioner or senior pharmacist (with a payer role).
Dr Mark Davies is an NHS consultant and director of Res Consortium, Dr Paul Riley is director of Glasshouse Health