Putnam Associates' Analysis Highlights the Impact of Accountable Care Organizations on Market Access and Utilization for Biopharmaceuticals

BURLINGTON, Mass., Aug. 1, 2013 /PRNewswire/ -- The development of Accountable Care Organizations (ACOs) has gained significant momentum recently, driven by healthcare reform initiatives aimed at changing incentives and creating new measures to improve outcomes and lower system costs. New research and analysis by Putnam Associates shows that while all ACOs aim to drive savings and improve quality of care, their scale, risk-sharing tolerance, systems sophistication, and relationship with healthcare stakeholders varies significantly between models. Given ACOs' rapid emergence, the variety of models has caused confusion and uncertainty for biopharmaceutical manufacturers. Lack of clarity around structural differences and associated decision-making power across models is profound. How should manufacturers reshape their strategies and market facing capabilities to engage with diverse segments of ACO and MCO stakeholders and effectively gain access for their products? The answer is complex.

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"Our analysis indicates that the advent of the ACOs is sparking a bigger change to the healthcare system at large," said Kevin Gorman, Managing Partner for Putnam.  "Changes being driven by the appearance of ACOs will begin to cut across all patient populations, not just ACO related lives."

Putnam's analysis, targeting Pharmacy and Medical Directors from Managed Care Organizations (MCOs) representing 55M covered lives and Directors from 10 ACOs, demonstrates the need for manufacturers to adapt their strategies and tailor their approaches for developing segments along the current ACO model spectrum. Those segments may be differentiated by scale, level of integration, ability to control cost and most importantly, relevance to the individual biopharma company's current and future product portfolio.

Despite their differences, it is important for manufacturers to understand that ACOs' and MCOs' priorities are driven by their need to achieve savings and quality improvement in the context of their payer contracts.  In this analysis, Integrated Healthcare Systems (IHSs), ACOs and MCOs alike indicated that their primary focus is on implementing initiatives to minimize admissions and readmissions, especially for chronically ill patients, to generate significant savings.  All interviewed agreed that a key element of cost reduction strategy is to leverage and optimize the utilization of pharmaceutical products to decrease the consumption of inpatient services. 

As manufacturers contemplate changes in strategy to address this evolution, it is important to understand that actions are underway. IHSs that have the scale and breadth across the health care continuum, imagined under an ideal ACO model, are already engaged with biopharmaceutical manufacturers to develop system wide risk/reward sharing agreements. These discussions reflect recognition by all parties involved that whether or not the ACO becomes the dominant healthcare model going forward, some level of risk sharing will be a necessary part of the commercial relationship in the future.

Read Putnam's complete analysis.

Putnam Associates is a premier strategy consulting firm serving biopharmaceutical, biotechnology, diagnostics, medical device, and private equity clients in the healthcare space.

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SOURCE Putnam Associates