By Lisa Seachrist

Washington Editor

WASHINGTON — In the movie "Field of Dreams," Kevin Costner's character was encouraged to build a baseball stadium in the middle of a corn field by the mantra, "If you build it, they will come."

The promise of biotechnology leaves many companies with the belief that if they successfully take a drug to market "someone" will pay. However, as managed care and capitated reimbursement plans have become commonplace, that assumption could prove fatal to the success of a product.

Instead, biotech companies are increasingly marketing their products directly to third-party payers in an attempt to assure that the drug will be covered.

"Considering the fact that biotechnology drugs tend to be very expensive, this is absolutely the direction that these companies will have to take," said Craig Stern, president with Pro Pharma Pharmaceutical Consultants Inc., in Northridge, Calif.

For example, when the FDA cleared MedImmune Inc.'s RespiGam for marketing as a prophylactic against respiratory syncytial virus infection, the company designed its launch and product marketing with an eye to the reimbursement environment.

"When it came to RespiGam, it wasn't a situation of here is the drug, show us the money," said Stephen Collins, director of managed care for the Gaithersburg, Md. company. "We went out and found the money."

RespiGam gained FDA approval in January 1996 to provide passive immunity to children under 2 years of age with either bronchopulmonary dysplasia or a history of premature birth. RespiGam reduced the number of hospitalizations caused by respiratory syncytial virus (RSV) by 41 percent.

Even so, as Collins described it, RespiGam * purified gamma globulin specific for RSV — was going to be an extremely hard sell: the product was a prophylactic, not a cure; it was administered seasonally; and, as an infusion, at least the first dose must be administered in a hospital setting.

"We had to work with the neonatologists and the hospitals to understand the variety of reimbursement schemes that they were operating under," Collins said. "And, we had to show that the product was worthwhile because it reduced expensive hospitalizations."

Immediately after RespiGam received approval, Collins organized an experienced team of marketing managers. Members of this team, many of whom had previous experience with managed care organization such as Kaiser Permanente, were responsible for setting up individual business plans for the specific needs of the regions that they covered.

Collins pointed out that it was important to find out whether the hospitals in a particular area received fee-for-service payments or capitated payments. The company helped hospitals and physicians develop treatment plans that were most cost effective. For example, a hospital that received an up-front payment based on diagnosis could deliver the first infusion on an inpatient basis and the subsequent monthly infusions at the doctors office.

Medimmune's Reimbursement SWAT Team

In addition, the company had to work with the Medicaid systems for each state — an undertaking that Collins called the company's "biggest challenge." Because Medicaid has four different reimbursement strategies based on whether care occurs in the hospital as an inpatient, an outpatient, at the doctor's office or in the home, each aspect of coverage had to be addressed.

"We formed reimbursement 'SWAT' teams for states that were resistant to covering RespiGam to inform them about the product," Collins said.

For managed care plans, the company's representatives contacted pharmacy managers in order to make sure that drug would be included in formularies and worked to convince benefit managers of the drug's importance. Collins noted that having marketing managers that knew how HMO's operated proved vital to this operation.

"At every point, we paid attention to the reimbursement environment and worked to get the maximum reimbursement for patients," Collins said. "If you can't get it covered, you can't sell it."

In addition, Collins worked with Covance Health Economics and Outcomes, a company that specializes in reimbursement strategies, to help plan the proactive marketing strategy. Covance also runs the company's reimbursement hotline to help patients get coverage for RespiGam.

"MedImmune certainly isn't the only company that is factoring managed care into its marketing plan," said Wayne Roe, chairman of Covance, who pointed out that his company has helped both Amgen Inc. and Biogen Inc. with reimbursement issues for some of their products. "But, they incorporated the best practices of the industry and are among companies at the leading edge of a trend that will only gain in momentum."

ProPharma's Stern agreed that companies will need to pay attention to the reimbursement environment as well as provide pharmacoeconomic data in order to launch a drug successfully.

Pharmacoeconomic Data Is Imperative

"It isn't enough to produce an expensive drug that is similar in effect to another drug on the market and expect that managed care will automatically cover it," Stern said. "Clearly, breakthrough drugs are always in the interest of the managed care organization, but plans are going to scrutinize a drug that costs a lot and has questionable or negligible therapeutic advantage."

Mark Simons, an analyst with Robertson Stevens & Co., in San Francisco, agreed that biotech companies need to pay more attention to the economics of their products. "Management spends so much time on designing clinical trials that they underestimate the importance of pharmacoeconomic data to managed care plans," Simons said.

MedImmune's RespiGam got a boost when the American Academy of Pediatrics released a "Dear Colleague letter" to its members noting that RespiGam was an effective prophylaxis. The AAP indicated that the RespiGam treatment was likely to be cost-neutral or the cost of administering the drug was similar to the cost of hospitalization for those children who became ill.

MedImmune's proactive strategy resulted in one major managed care provider creating a data base of children who are potential candidates for RespiGam therapy and actively notifying their primary care providers of the plan's willingness to cover treatment.

The company achieved bittersweet success for all of its efforts; halfway through the 1996-1997 RSV season, the company had sold every vial of RespiGam. "Now, we are up against a credibility issue," Collins said. "And, we will have to work hard to regain that, but it will not be a problem next year." *

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