By Jon Haas, VP, Managed Markets, Palio

Buy-n-bill has not gone away as some had predicted. Specialty drugs are still feeding the growth of specialty distribution.

Specialty distribution is a key supply-chain partner for drug manufacturers in the growing specialty drug segment. Specialty drugs accounted for $77.5 billion or 24% of the total $320 billion prescription drug sales volume in 2011 and grew by 17%, according to Express Scripts’ latest drug trend report.

Specialty distributors serve various customers including hospitals, hospital-owned clinics, specialty pharmacies, and other distributors. But the vast majority, or 73%, of total sales from a specialty distributor are to independent physician-owned clinics* who use the traditional buy-and-bill business model. This is where the doctor buys the drug (oncology drugs represent the largest volume) from the specialty distributor, treats the patient, and bills the patient’s insurance company for reimbursement of the cost of the drug. The majority of claims are covered under the patient’s medical benefit processed through a paper claim submitted by the physician’s practice. After oncology, other physician specialties utilizing buy-and-bill, or “buy-n-bill” as it’s commonly called, include rheumatology, gastroenterology, ophthalmology, and dermatology.

According to a recent Specialty Pharmacy Times article, payers and oncology practice managers have claimed that they would like to see buy-n-bill end in favor of third-party specialty vendors. In reality, buy-n-bill has declined, but ever so slightly. There is some growth in specialty vendor handling of specialty drugs through payer contract policies and mandates. These policies and mandates require specialty drugs to be acquired through a designated entity such as a specialty pharmacy. When a patient acquires a drug from a specialty pharmacy and then brings the drug to his physician for help in administering it, it is called “brown bagging.” While this is not typical for an infused drug, it is becoming more prevalent with injectable drugs. A specialty pharmacy may also drop-ship the drug to the patient’s physician to avoid any risk of mishandling by the patient. It is not uncommon for a physician to charge a fee to the patient for brown bagging.

Other growing trends include on-site pharmacies within large oncology clinics and specialty-at-retail (retail chains utilizing central-fill facilities for specialty drug fulfillment, then delivering the drug labeled for the patient to a retail store for pick-up). A prime example of this is the recent purchase of Axium Specialty Pharmacy by Kroger.

Reimbursement of specialty drugs for buy-n-bill

Reimbursement for specialty drug costs experienced a drastic change in 2005 with Medicare Part B moving to an average selling price (ASP) + 6% model, which was swiftly adopted by most commercial payers as well. ASP is calculated using quarterly data reported by the drug’s manufacturer. (ASP calculation is much more complicated, but this abbreviated explanation will suffice for this blog.)

Prior to this, most payers covered specialty drugs using a cost plus or average wholesale price (AWP) minus method. Both reimbursement methodologies provided reasonable profitability for the physician practice. The ASP+ model has significantly reduced profitability, especially when you factor overhead costs into the model.

In the past, specialty distributors dictated pricing to physicians, allowing physicians to shop around for best pricing, which drove physicians to engage with a GPO (group purchasing organization) to have contracted discount pricing available to them. Over the last few years, some manufacturers (most non-oncology) have developed direct physician purchase contract models to protect a physician, thus taking away the ability for specialty distributors to set pricing and/or terms (length of time to pay). When contract pricing is in place for a drug, the specialty distributor is mandated to sell to the physician at the contracted price, and thus can only attempt to win new business based on service, relationship, and in some cases, terms. Of course, some manufacturers launch new specialty drugs with a closed or limited distribution model allowing the chosen specialty distributor to realize an exclusive or semi-exclusive opportunity for a period of time.

Many or most drugs have a no-return or limited return policy, thus drug waste (mistakes in reconstitution, breakage by staff) can literally cause a practice to be “upside-down” or spend more on specialty drugs than the reimbursement realized. A physician practice can also bill for the actual infusion, injection, as well as infusion nursing care. This can make up some of the overhead costs incurred of storage/inventory, refrigeration, supplies, etc.

The buy-n-bill sector is clearly a complicated, dynamic market. Because of this, many or most specialty pharmaceutical manufacturers have field-based people to help support practices, with particular attention on the practices’ support/nursing staff, focusing on the billing or office manager. These field-based representatives help the physician practice manage the reimbursement landscape and provide assistance and problem solving. Most specialty drugs are also supported by a hub or call center, which provides reimbursement assistance (benefit investigations), support for co-pay card programs, patient assistance program, prior authorization, educational programs, nursing/clinical and other patient- and practice-targeted programs. A customer-focused, highly functional hub service offering can make a tremendous impact on product pull-through.

So what is the future of buy-and-bill?  

Specialty drug launches and overall volume will continue to grow into the foreseeable future. Many of the agents in the pipeline are self-administered or oral, but until payers make a wholesale decision to move all specialty drugs under the pharmacy benefit, there will still be a significant buy-and-bill market. Specialty distribution providers will expand their offerings of hub service programs such as call centers, reimbursement/claims support, and patient financial support programs, as well as REMS management. Although clinical differentiation messaging to HCPs and payers are of utmost importance, the right access and channel/distribution strategy can certainly drive success of a new specialty product launch.

*Source: Center for Healthcare Supply Chain research, 2012 Specialty Pharmaceutical Facts, Figures and Trends.

Managed Markets Monday is a weekly series that provides insight into what we think it takes to meaningfully and effectively communicate in the managed markets space. Follow up with Jon Haas at jon.haas@palio.com.

Palio is an advertising agency revolutionizing pharmaceutical and healthcare marketing to create experiences that will Never Be Forgotten.

In this week’s #ChalkChat, Maureen Wendell, Senior Vice President, Account Services at Palio, defines key terminology used around business planning.

#ChalkChat is a weekly video series that brings you insights on branding, marketing and multichannel integration within the pharmaceutical industry. Follow us at #ChalkChat. Follow up with Maureen at maureen.wendell@palio.com.

Palio is an advertising agency revolutionizing pharmaceutical and healthcare marketing to create experiences that will Never Be Forgotten.

In this #ChalkChat, Sacha Schroeder, VP, Account Services at Palio, discusses 5 key qualities to consider for change leadership.

#ChalkChat is a weekly video series that brings you insights on branding, marketing and multichannel integration within the pharmaceutical industry. Follow us at #ChalkChat. Follow up with Sacha at sacha.schroeder@palio.com.

Palio is an advertising agency revolutionizing pharmaceutical and healthcare marketing to create experiences that will Never Be Forgotten.

By Marcelle Rockwell, VP, Account Director, Palio Managed Markets

When planning a booth at a payer convention, the No. 1 tenet to remember is “plan your work, and work your plan.”  Define and outline what you’re trying to accomplish and give yourself enough time by planning ahead. Planning ahead allows you to save on budget and to include additional elements that become impossible to include if you wait until the last minute. A successful booth is one that accomplishes the goals you establish prior to the event and is more likely to be achieved if you:

Set your objective. Are you launching a new product? A new indication? Are there new, compelling data being published? Maybe a new competitor is entering the market and you need to re-establish your position? Whatever the reason for your presence at the convention, be sure to clearly define that reason internally and set goals for the event. Include key stakeholders in the process to gain internal alignment. Once you set your objective, you can measure the success of the event.

Identify your target audience. Whom are you trying to reach? Which conventions do they attend? And once you’re on the floor talking to attendees, ask them about their role in their organization. If you’re targeting P&T committee members, ask if they’re part of the formulary decision-making process.

Decide the scope of your presence. This will help determine your budget, or vice versa. Do you want the largest booth possible? Do you need a separate area for medical information? Are there any components (panels, structures, materials) you can repurpose from your brand counterparts? Should you allocate budget to sponsor a breakfast or cocktail hour? What about a symposium? Are there key points about your brand you can showcase during a presentation?

Choose your partners. There are teams of people who do this for a living—tap into them. There are planners, booth designers, and creative and strategic teams that can help build your customer-facing materials. Partners can also develop timelines and be liaisons with the convention organizers, alerting you about deadlines, early-bird rates, registrant lists, and other key information. They can also participate in your weekly planning meetings to help keep everything on track.

Get the word out. This is where planning ahead becomes important. Send invitations to attendees, inviting them to come by your booth, your cocktail hour, your symposium. Account managers can also make invitations more personal by hand-delivering them. Let attendees know you have information they will be interested to hear. Consider advertising in a journal relevant to your audience or in the program guide and city guide. If you’re thinking really big, you could create bus wraps, airport presence, and other outdoor advertising opportunities.

Have a plan for your booth. What experience do you want to give your customers? Consider the perimeter and the flow of the interior. Can you create interactive screens with thought-provoking questions or information? You want to draw your audience in and create opportunity for conversation. What materials should you have on hand to detail from and to give away? Will you need Internet connectivity, a demonstration area, or any other special needs?

Train your on-site team. All the preparation in the world won’t help if your on-site team is not prepared. Outline your objectives for the booth and convention, coach your team on how to identify your target attendees, and familiarize your team with the on-site materials. Assign your team’s attendance at other events on site so you know what your competitors are doing and what industry information is being showcased at the convention. Your team’s collaboration and camaraderie contribute to the vibe of the booth, so be sure everyone understands and has the same goals for the event.

Follow up with attendees. Any leads generated during the event should have an immediate follow-up the next week. If the attendee asked for more information on a topic, be sure to provide it thoroughly and in a timely manner. Share attendee information with your local territories so that they can continue the conversation.

Being organized and having a plan will go a long way toward a successful convention. Define what you want to accomplish and use your resources. Ultimately, you want to create opportunities for your target customer to hear your message, and then, you want to continue the conversation beyond the convention. Plan properly and you’ll be more likely to succeed.

Managed Markets Monday is a weekly series that provides insight into what we think it takes to meaningfully and effectively communicate in the managed markets space. Follow up with Marcelle Rockwell at marcelle.rockwell@palio.com.

Palio is an advertising agency revolutionizing pharmaceutical and healthcare marketing to create experiences that will Never Be Forgotten.

By Riagan McMahon, Guest Blogger

Riagan McMahon was nominated to participate as a National Youth Correspondent, representing Saratoga Springs High School and New York State, in the Washington Journalism and Media Conference held July 8 through 13. As a National Youth Correspondent, she was recognized as one of the most promising young leaders in journalism and media and joined scholars from across the country to share in this experience.

As part of this elite group, she participated in hands-on learning projects that challenged her to solveproblems, as well as dive deep into the creative, practical, and ethical tensions inherent in journalism and media. If she was interested in communications and public relations before the conference, she is downrightcommitted to the field now.

Riagan reached out to Palio for corporate sponsorship and we made a deal: We would gladly sponsor her if she agreed to write about her experiences. In the next series of posts, Riagan shares the insights and moments that most impacted her during the conference. In this post, she describes meeting Hoda Kotb.

Hello, I am Riagan McMahon blogging about the experiences I was fortunate to have at The Washington Journalism and Media Conference. I am a senior at Saratoga Springs High School and an aspiring communications and public relations major.

Hoda Kotb, co-host of the fourth hour of NBC’s “Today” and New York Times bestselling author of Hoda: How I Survived War Zones, Bad Hair, Cancer and Kathie Lee, was the keynote speaker during our visit to The National Press Club in Washington, DC, on July 10. Besides Kotb, the press conference panelists included the following political experts: Chief White House Correspondent Chuck Todd of MSNBC, Senior Congressional Correspondent Dana Bash of CNN, American political reporter Chris Cillizza of the Washington Post, and White House Correspondent April Ryan of American Urban Radio Networks.

All of the speakers were phenomenal in describing their successes and how they made it possible. But it was Hoda Kotb’s emotional story that impacted me most. Her story is triumphant. Kotb began her discussion by describing the hardships she faced before she had her first break, detailing how she received 27 rejections in her early hopes of being on the air as a news reporter. Kotb was then led by fate. She focused on her passion and was aggressive in making her dreams reality. Kotb’s eagerness to make it as a journalist proved to me that the level of fervency and determination one has really does separate one from the competition.

The quote from her keynote that stays with me is, “This business is so subjective, people quit because they don’t have enough stamina.” Hoda never stepped down. She worked harder than everyone else in her field to come out on top. She holds this work ethic accountable for her success, and knows that without her inner drive she would never have made it to where she is today.

Palio is an advertising agency revolutionizing pharmaceutical and healthcare marketing to create experiences that will Never Be Forgotten.

By Riagan McMahon, Guest Blogger

Riagan McMahon was nominated to participate as a National Youth Correspondent, representing Saratoga Springs High School and New York State, in the Washington Journalism and Media Conference held July 8 through 13. As a National Youth Correspondent, she was recognized as one of the most promising young leaders in journalism and media and joined scholars from across the country to share in this experience.

As part of this elite group, she participated in hands-on learning projects that challenged her to solve problems, as well as dive deep into the creative, practical, and ethical tensions inherent in journalism and media. If she was interested in communications and public relations before the conference, she is downright committed to the field now.

Riagan reached out to Palio for corporate sponsorship and we made a deal: We would gladly sponsor her if she agreed to write about her experiences. In the next series of posts, Riagan shares the insights and moments that most impacted her during the conference. In this post, she discovers the power of photography:

Hello, I am Riagan McMahon blogging about the experiences I was fortunate to have at The Washington Journalism and Media Conference. I am a senior at Saratoga Springs High School and an aspiring communications and public relations major.

The Newseum in Washington, DC, provides visitors with delicately constructed exhibits that exemplify journalism at its best. The exhibits are amazing, and one in particular astounded me. I was drawn to the quote by the late photographer Eddie Adams immediately after entering the Newseum’s Pulitzer Prize Photographs Gallery: “If it makes you laugh, if it makes you cry, if it rips out your heart, that’s a good picture.” It proves just how complex and powerful a photograph can be. The power of a photograph can touch upon each and every emotion we possess and make us feel each one.

The Pulitzer Prize Photographs Gallery touched me, and it’s here that I found the poignant aspect to a career in communications and media. The Newseum Gallery provided award-winning photographs not only as collages, but also with descriptions of the environment of the print and interviews with several of the photographers.

Each of the photos displayed iconic images that documented our history and included the photographer’s explanation of the image. It was powerful. Part of the exhibit included a series of televisions that created a montage of several of the artists sharing what they found extraordinary about the Pulitzer-winning photos.

One photographer, Carol Guzy, shared a message that I hope to take with me as a grounding piece of advice for my future: “I think it’s a gut level connection that people have with photographs, unlike a lot of times stories or even video. There’s something about the still moment, that moment in time that does touch people. It’s very visceral, and I don’t think it’s intellectual a lot of times at all. And, I think that – as a photographer, that’s what you need to strive to do, is try to have the empathy – and one time someone told me empathy is not imagining how you would feel in a particular situation, it’s actually feeling what the other person is feeling.”

Not only is it essential for the person behind the lens to understand the feelings in front of the camera, but to also feel the power in the subject of the photo and go beyond relating to their expression. The skill of capturing a Pulitzer-winning photograph is to feel as if you are inevitably attached to the scene you are capturing.

There were several photographs of war, terror, and misfortunes, but the pictures exhibiting simple joy were the ones that touched me the most. These Pulitzer photos give observers the ability to feel the emotions of the subjects through the lens. “Moments of Life,” taken by photojournalist Brian Lanker, was exceptionally touching. The miracle of childbirth captured on film was what won Lanker the 1973 Pulitzer Prize.

Palio is an advertising agency revolutionizing pharmaceutical and healthcare marketing to create experiences that will Never Be Forgotten.

by Mary Kate Hallahan, VP, Human Resource Manager

Should your Facebook password be fair game for your employer? If you care anything about your privacy and the value you bring as an employee, the answer is no.

The expectation of privacy in a digital world is sketchy at best – we’re a culture of over-share, with many people posting every detail of their lives online. It has become natural to meet someone, whether it’s a vendor, job candidate or colleague and hit the search engines and social networking sites to see what they look like and what they post.

Even as informal background checks become the norm, employers need to tread carefully and employees shouldn’t be afraid to take a stance toward protecting their privacy. For employers, there are legal and cultural reasons to think twice about asking employees for their password.

From a legal perspective, organizations expose themselves to risk by asking for access to personal information. For example, if an employee sends a message to six of her friends that she is expecting, and her employer passes her up for a promotion, she may be able to prove discrimination in court.

From a cultural perspective, it’s like telling employees their privacy is meaningless. Even requesting that employees “friend” their manager crosses the line between personal and professional, but an employer asking for an employee’s Facebook password is equivalent to asking for house keys or to peek in their medicine cabinet.

It’s true that the actions of employees in and out of the office are more transparent today and it has created new concerns. But, if employees are trusted to interact with customers or business partners on behalf of the business in the real world, they need to be trusted online. After all, there are no great companies that were built on a culture of fear.

If you’ve hired the right talent then they’ve proven that they exhibit the company’s values and behaviors. That also gives testament to the ability of hiring managers to use traditional screening support – resume review, interviews, reference checks, etc. — to make good hires.

Responsible users take time to lock down their profiles, including their personal Facebook page, and they have a right to privacy when it comes to personal property. Plus, employees who stick to their guns and keep their password protected not only demonstrate self respect — they also show they understand the boundaries of privacy.

Many companies have policies in place prohibiting employees from sharing email passwords, security cards, etc. Unless companies are using this question to screen out employees who would breach other security protocols, it’s best to respect an employee’s personal life.

Palio is an advertising agency revolutionizing pharmaceutical and healthcare marketing to create experiences that will Never Be Forgotten.

by Paul Johnson, SVP, Managing Director, Account Services

In our “Client vs. Agency” series, we’ve looked at the differing views that can be taken regarding time,  money,  expectations, collaboration, creativity and getting started. I’m here now to give you some hidden secrets to a successful partnership.

Plan. No, more than just plan. Plan, plan and plan some more after that. And then, if you think you haven’t done enough, you’re still right. Agency leads must know the vacation schedules of their teams, they must know the contact information for everyone involved in the project, they must have already budgeted time and funds to prepare for every event that there’s foreknowledge of, and they must have done scenario planning with the client in case of the three likeliest crises they may confront. And those are just for starters. Clients aren’t off the hook on this one, either: Clients need to plan just as much.  Like, for instance, make sure you’re not asking for next year’s budget at 4:55 p.m. Friday?

Ask the right questions. This makes it possible for parties to do all that planning properly. Nobody’s going to always remember to keep you in the loop if you don’t ask. You need to insert yourself into the discussions sometimes. You’re going to have to be prepared to pound the pavement to find out what the future holds.

Remember the “partner” in partnership. This isn’t a dry-cleaning service we’re talking about here; it’s your creative partner in the most important projects of your professional life. Your work with your agency isn’t a series of brief transactions separated by lengthy periods of non-communication. Or, at least, it shouldn’t be if you want it to be anything like successful. This is going to sound a little Dr. Phil, but it’s true nonetheless: You both need to be present for each other.

And as a corollary to that, trust. Clients need to believe in their agencies. They need to trust that they made the right decision in hiring people to provide strategic recommendations and tactical accomplishments. If they don’t do it, then you need to address that – but make it possible for them to give it their best shot. Agencies also need to trust their clients. It can be very easy to become jaded and think that you know what your client will say before it’s said. Don’t let the times you’ve been shot down before make you not want to try anymore.

Palio is an advertising agency revolutionizing pharmaceutical and healthcare marketing to create experiences that will Never Be Forgotten.

Peter Hopper, Sr Dir, Integrated Client Services, Palio

Couldn’t sleep last night, so I ended up reading an article on my iPad that asked the question: mobile Web site or mobile app? I know. I had options, but it popped up in my RSS feed.

The article (published in RAIN, the Radio and Internet Newsletter) was a brief review of a column written by Jakob Nielsen, a Web usability expert, for AlertBox. Nielsen is predicting a strategic shift, based on his research on how end-users use their mobile devices. He claims that, hands down, the mobile app currently beats the mobile Web site from a user-performance perspective. But, in time, that will change.

The driving factor is the user-experience environment. It’s not news that the desktop and laptop real estate, computing power and user-interactivity (keystroking, mouse and track pad precision and functionality, etc) currently overwhelm the smart phone and tablet. And that is the point: the mobile device requires the smarter optimization gained by creating an app, while Web site optimization for the mobile device is currently limited. This smarter optimization makes the mobile app a better user experience. “An app can target the specific limitations and abilities of each individual device much better than a Web site can while running inside a browser,” states Nielsen.

But we are approaching a crossroads. The app benefit may indeed be short-lived. One factor: the expense of developing mobile apps will likely increase. Currently, the primary mobile app platforms are Android, iOS and Windows Phone. But these platforms are sub-dividing, iOS for iPhone and iPad, Android for smartphones and the Kindle Fire, for example: separate apps required for unique user experiences per mobile environment. Development technology, again, will likely step up to help alleviate some of this cost burden. But there are other factors, as well, including e-commerce and richer content that favor the mobile Web site, down the road.

What’s at risk? Letting your audience down.

Turning the corner, new Web technologies like HTML5 will drive better mobile site capabilities and user experiences. Add the benefit of a richer integration with the Web via a mobile site than within a mobile app.

When will this predicted strategic shift take place? Great question. No clear answer on the immediate horizon according to Nielsen. We know HTML5 and other Web technologies are advancing rapidly. However, the take-away from this discussion is recognizing the balance and the compromise when building your digital recommendations for your clients in the mobile environment, helping them understand that there is indeed a shift on the horizon, the unique implications of what and why you consider development options, and helping them evaluate the best road to take.

I hope this didn’t put you to sleep, but I did rest better last night after becoming a little more enlightened.

Palio is an advertising agency revolutionizing pharmaceutical and healthcare marketing to create experiences that will Never Be Forgotten.

Paul Johnson, SVP, Managing Director, Account Services, Palio

“The day you sign a new client is the day you start losing them.”

Fictional ad men Don Draper and Roger Sterling (from the AMC drama Mad Men) cautiously celebrate a new client win by agreeing that the beginning of a client engagement is often the start of the end. Still, relationships matter – even those that are destined for separation at some undefined moment in the future.

At Palio, we appreciate the longevity of our client relationships. But even good relationships can meet an untimely demise because things change. Reorganizations, mergers, takeovers, downsizing and economic circumstances can impact even the best relationships. In other cases, the relationship was destined to be short term – for a project, a season or to achieve a specific business goal.

Breaking up is hard to do, especially when it’s not the result of dissatisfaction with work product or team members. But, since goodbyes are destined to occur, it’s important to have a strategy that supports a graceful exit and keeps your reputation intact. Properly managing a departing client can be as important as attracting new ones and how you handle that transition can determine future success.

Good manners prevail. While it seems simple, remember to say “thank you for your business.” The relationship has contributed to the betterment of your company – perhaps you made connections with new resources, learned a different facet of an industry, developed a capability you didn’t have before or simply kept the lights on. People may not remember what you’ve said or done, but they’ll remember how you made them feel.

Maintain status of professionalism. If you’re parting under less than stellar circumstances, keep your emotions at bay. Stay the course and be as professional as you were the day the relationship commenced. How you handle challenges and difficulties can say a lot about your strengths and character. Today you’re saying goodbye, but who’s to know when your paths will cross again?

Facilitate a smooth hand-off. A commitment to excellence in a partnership means you leave each other in a better position than when you started. In our knowledge-based economy that requires a plan for knowledge transfer so the client can maintain business momentum after you depart. Provide clients with pertinent files, ask what format they’d like them in, and do what you can to ensure they’ll be put to good use.

Keep the lines of communication open. A substantial amount of communication about performance and deliverables took place at the start of the engagement. Ending a relationship requires that same level of communication. Find out what you can do to make the transition easier as well as ways to improve your own performance.

Many times, clients return to former partners for the same reason they leave – circumstances change. If you’ve let go gracefully and leave them with the impression you’re a class act, you might be able to take advantage of future opportunities and continue the relationship at another point in time.

What are your tips for successfully moving on?

Palio is an advertising agency revolutionizing pharmaceutical and healthcare marketing to create experiences that will Never Be Forgotten.