What is Contract Pull Through?
The pharma sales team engages in contracts with brands, hospitals, clinics, infusion centers, doctor offices, IDNs, ONA, GPOs, and other networks. These networks are often referred to as pharma accounts, and contracts are lined up to improve overall sales, market share, and profitability. Contracts with these accounts are based on various factors such as rebate percentage, formulary tiers, and performance-based fees.
Now, the current size of pharma gross contracted sales is to the tune of 50B USD and projected to grow to 85B USD over the next 5 years[1], making this a big area for the pharma commercial team to have a close look and improve sales effectiveness while engaging with these accounts. Pharma companies are interested in the contracted sales, rebates, terms, and tiers data from the accounts to measure effectiveness. Mainly to figure out which of the existing accounts are underperforming, and which are performing above benchmark – and this aspect of pulling contract data across accounts to measure account effectiveness is the key objective of Contract Pull Through.
We may define Contact Pull Through, as the analysis of –
- How much an account has purchased (sales) by contract program and by brand;
- How much they’ve received in discounts (rebates, chargebacks);
- How they are doing against their baselines; and
- Where are the opportunities to buy more and save more?
Why does pharma need to focus on Contract Pull Through?
Large and mid-size pharma companies have Contract Pull Through from the accounts, as the top-of-mind problem, as even increasing effectiveness by 2-5% would mean savings to the tune of millions of dollars.
Based on our experiences working with the client’s market access team – we realized that the organization delegated the task of supporting field pull-through entirely to its payer account managers. These executives reported spending 75% of their time creating and pulling reports, time that could have been better spent with customers or in more strategic dialogue with the field members.
The key stakeholders for Contract Pull Through are the field team members i.e., Business Engagement Managers (BEMs) and Healthcare Market Directors (HDs), who need to focus on Contract Pull Through for –
- Generating contract awareness and pull through for major providers in their ecosystems
- Creating awareness around the contracts/terms offered by pharma firms for the products
- Engaging with customers to show their historical performance and current performance
Some specific Contract Pull Through use cases the pharma account team focuses on include –
- A portfolio purchasing summary of the account, which enables the account to understand how much volume the account has bought, and the savings received from pharma products
- Product contribution at an account level, which enables the understanding of how much volume is coming from each pharma product
- Contract eligibility of an account, to understand which contracts are available at a certain account
Other business insights that Contract Pull Through data may help pharma companies are around –
- How is the account performing as compared to others, in their ecosystem/region?
- Which is the account’s dominant payer, and how does that payer work at a national level?
- How much this account can purchase to reach the next tier?
Use case deep dive: Portfolio purchasing summary of an account
A portfolio purchasing summary of the account is one of the critical use cases handled through Contract Pull data – what the Contract Pull Through team is looking for is to understand a particular account within a regional ecosystem, across all periods of the contract or for a particular period –
- What has been the number of gross sales? Has that gone up or down compared to its last quarter?
- What part of the total gross sales is contracted vs non-contracted? What part of sales is attributed to specialty pharmacy? What percentage of account savings is attributed to contracting?
Also, another key insight to look at for portfolio purchasing summary for the account is to identify the product mix/segment mix (GPO, 340B, NCCN, etc.) across the portfolio, and double click on which product/ segment contribution has gone up, or down over the previous periods, and how does it fare against its anticipated baseline numbers.
Insights of this degree can immensely help the field team members understand how much volume the account has bought and the savings received from contracted pharma products, how are the accounts performing against their expectations, and where there are opportunities to buy more to save more.
How to generate the pull through business insights from data?
To arrive at these insights- the key data elements that must be looked into are contracts, chargebacks, 867 Sales, non-contracted sales, rebates, terms and tiers, account hierarchy, and zip to territory-mapping data.
These data sets coming from different source systems are ingested, assimilated, and presented as output for improved decision-making –
- Firstly, it needs to be ingested into cloud-based or on-prem databases by using RPA tools like UIPath
- The ingested data then goes through a set of data quality engine checks to ensure data is of expected quality.
- The clean dataset then is transformed through the ETL process, where complex calculations through business-defined rules are applied, and
- Presented through BI tools reports providing visualized/graphics and tabular data on gross sales, savings, performance, opportunities for an account, and other pull through insights.
Conclusion: CPT – Top of mind for strategic and financial objectives
BEMs/ HDs have Contract Pull Through insights generation as a huge part of their mind share. Thus, large and mid-pharma organizations are, or should invest in building a robust Contract Pull Through system to enable them to understand how the accounts are performing against their expectations, and in turn, identify the opportunities for them to sell more to optimize rebate payments. By doing that they have financial benefits to the tune of millions of dollars in terms of optimized rebates, and savings. As also the strategic incentive to understand the top accounts to concentrate on, and the key underperforming accounts to re-negotiate the contracting terms and tiers.
