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PFIZER HMO SURVEY SUGGESTS MARKETING ANGLE FOR HMOs HIGHLIGHTING OPEN DRUG POLICY; LOUIS-HARRIS POLL IS EARLY PRODUCT OF PFIZER MANAGED CARE SALES GROUP

Executive Summary

HMOs may be able to use competitors' restrictive drug management policies as a marketing opportunity to attract additional members, Pfizer Pharmaceutical VP-National Healthcare Operations Stan Benson suggested at a conference on pharmaceuticals and the managed care environment on Nov. 15. The meeting in Baltimore was sponsored by the American Medical Care and Review Association (AMCRA) and the National Pharmaceutical Council (NPC). Explaining the results of a study conducted under contract by Louis-Harris Associates, Inc., the Pfizer exec maintained that an "aggressive marketer...could go in very strongly with a very strong marketing campaign and say `that HMO has lots of restrictions, our HMO doesn't." Benson noted that since most HMO customers "are pretty happy with HMOs in general, they most likely will flock to another HMO that offers similar kinds of features without the drug restrictions." The Pfizer HMO report is one of a series of studies the company's new managed care group is developing for distribution to top echelon HMO decision-makers. Pfizer wants to use the studies as the basis for establishing an educational/consulting relationship with managed care customers emphasizing drug policies. The first phase of the two-part study surveyed 1,000 HMO households to identify preferred plan characteristics that would encourage satisfaction and re-enrollment, including their enrollee attitudes toward drug policies. In phase two of the survey, 512 phase one participants were asked to make trade offs between various plan characteristics and benefits in a conjoint analysis of factors influencing HMO choice and re-enrollment. Results of phase one revealed that 60% of consumers polled favored generic substitution. However, about the same number opposed restricted formularies. After being made aware of drug management policies during the second phase of the study, the report found the probability of re-enrollment by HMO members dropped from 70% (in a plan with a $5 co-pay) to 62-63% when generic substitutions, restrictive formularies or step care are added as program characteristics. "You're going to lose 8% of your people by implementing one of these [alternatives]," Benson noted. "The calculation you have to do as an HMO manager is - Is it worth losing these people for the money I save in these various alternatives here?" Benson favored an increase in co-pay to cover growing drug expenses. Pfizer's National Healthcare Operations is a group of 15 marketing and sales personnel headed by Benson, who reports directly to Pfizer Pharmaceuticals President William Steere. Founded over a year ago, the group includes eight senior sales representatives who maintain contact with managed care accounts, and seven administrative and marketing employees based in New York City. A second Pfizer cost analysis project is a review of physician prescribing patterns for injectable antibiotics to determine the most cost-effective alternatives. The managed care unit will likely pursue more product-specific cost effectiveness studies within the managed care setting. Pfizer has several products, including the third generation cephalosporin Cefobid and the once-daily anti-inflammatory Feldene, for which the company would like to establish as cost effective on a total cost basis although they are more expensive per unit than some competing products. A recent Pfizer press release explains that the company's National Healthcare Operations' goals are to develop "enhanced and expanded support services for the managed care marketplace... [as well as] a broad range of programs to help healthcare managers deal with the changing economics of pharmaceuticals purchasing and quality care delivery."
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