Pharma’s 5 Minute Guide to Succeeding under the Affordable Care Act
Interestingly, some pharma strategists don’t seem to be particularly concerned about keeping up with the Affordable Care Act — Mason Tenaglia of the Amundsen Group has declared it little more than a “paper tiger” with little cause for celebration or alarm.
“The ACA will not amount to much more than "business as usual" for most of big Pharma and its brands,” he claimed earlier this month.
While tens of millions of uninsured consumers stand to gain prescription drug coverage through the expansion of Medicaid, the focus on cost containment will temper growth opportunities for those Rx brands with generic competition or lower cost (“good enough”) alternatives. And there’s always the taxes levied on pharma to help pay for the ACA, which are not insignificant.
So is there a silver lining for branded Pharma?
Engaging Health Care Consumers
The pharma industry has invested much in its professional sales capability, calling on physicians with armies of representatives and pursuing positive formulary status through Account Management and increasing discounts. But what if pharma invested similarly against consumer-centric approaches, designing its R&D and marketing strategies according to the wants and needs of consumers?
This extends beyond the Direct-To-Consumer (DTC) efforts many pharmaceutical brands execute though TV and print advertising. With some exceptions, these campaigns look the same, with the same depictions of smiling patients engaged in activities like gardening or picnics, or celebrating their “freedom from/control over” disease X with their arms raised in the air.
These executions are likely developed with focus groups and other traditional market research, or segmenting consumers according to demographics or life stage. These efforts only scratch the surface of consumer psychology, and assume everyone of similar age/education/income/ethnicity/health condition/etc. think and act the same.
This isn’t to say these efforts don’t work — if the ROI was not there, pharma wouldn’t (presumably) undertake these activities. However, there is a big opportunity to enhance consumer engagement, especially in the ACA environment. It involves deeply understanding the motivations, desires, and unarticulated drivers of behavior among consumers, which transcend demographics and socioeconomics.
This kind of in-depth consumer profiling necessitates a different approach to market research.
Psychographic Segmentation of Health Care Consumers
c2b solutions has developed a psychographic segmentation model that is 91.1% predictive, and examines consumers’ motivations based on their values, beliefs and attitudes regarding health and wellness. The psychographic segments are distributed across the General Population:
Balance Seekers (18%): Proactive; wellness oriented; weighs options and defines own success
Willful Endurers (27%): Reactive; not invested in — but can be overwhelmed by — health issues
Priority Jugglers (18%): Reactive; focuses on others’ health vs. own; many responsibilities
Self Achievers (24%): Proactive; prioritizes health and image; task and achievement oriented
Direction Takers (13%): Defers to physicians; needs directive guidance; high healthcare utilizers
Each segment has its own, unique motivations and priorities, and respond to different propositions and word choice. The incidence of health conditions also varies across segments. For example, looking at depression and diabetes (among 44 health conditions included in the c2b Consumer Diagnostic, the study of the U.S. healthcare consumer):
Self Achievers and Direction Takers are statistically more likely to have diabetes, while Willful Endurers and Direction Takers are statistically more likely to suffer depression (95% confidence). A pharmaceutical company marketing brands that address diabetes or depression needs to understand the consumer segments with whom these conditions are overdeveloped.
Also important to understand is which segments prioritize brand prescriptions over generic drugs:
Willful Endurers and Self Achievers are statistically more likely to prefer brand name prescription medications, which could be a key to patient satisfaction.
Affordable Care Act May Present Big Opportunities for Pharma
If Medicaid is expanding under the ACA, and tens of millions of uninsured consumers will gain access to drug coverage, what do these populations look like across the psychographic segments?
As the chart above shows, Willful Endurers are strongly over-represented among the Medicaid and uninsured populations. Given their stronger affinity to branded medications, a pharmaceutical company would be well-served by targeting and engaging this segment, specifically. To do so requires a depth and breadth of understanding that traditional market research will not achieve. Messaging that works for the other four segments may turn off the Willful Endurer, and vice versa.
It also goes beyond advertising. A pharmaceutical company needs to be a service innovator, wrapping its products in value added offerings that support the unique needs of the targeted consumer segment. While one segment highly values coupons and samples, another segment will prefer an educational program that empowers the patient.
Meeting consumer needs in ways that other companies do not (or can not) will enable a brand pharmaceutical company to differentiate versus competition, including generics. Admittedly, there will still be a continued move toward generics among all consumer segments, but effective application of psychographic segmentation can help a brand medication achieve incremental business or protect it from some degree of generic erosion.
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