Federal Market Access - How to Sell to the VA/DOD
Cheryl Nagowski is an expert in Federal Market Access. She runs a consulting firm, Middleton Market Access, and her team helps companies with their federal market strategy and helps them obtain access to the federal markets. In this episode Cheryl shares the size of the federal markets, how they’re organized, the steps to successful access and implementation, and best practices. Having spent eight years working for the US Department of Defense, Cheryl provides unique insights and a framework on how to successfully navigate the federal procurement process.
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Episode Transcript
This transcript was generated using an automated transcription service and is minimally edited. Please forgive the mistakes contained within it.
Patrick Kothe 00:31
Welcome! Navigating a sales process in hospitals, group purchasing organizations and integrated delivery networks can be tough. But the federal government buying processes is in a class by itself. However, if you work hard and persevere, good things actually can happen. Cheryl Nagowski is my guest today and she's an expert in federal market access. Cheryl runs a consulting firm, Middleton Market Access and her team helps companies with their federal market strategy and obtain access to federal markets. She spent the first eight years of her career in the Department of Defense. And then she moved on to Genentech to help with their managed care contracting, including government contracts. And now through her consulting company, she's able to help many more companies achieve their objectives within the federal markets. Cheryl and I discussed the size of the Federal markets and what opportunity it represents to all of us how how they're organized, the steps to successful access, and implementation, and also best practices. As you're going to hear there is no one size fits all strategy. Each of our products are unique and need to be considered from our own perspectives. But what Cheryl does is she provides some great insights and a framework on how to navigate the process. Here's our conversation. Cheryl, thanks for joining me today. Thanks so much for having me. So we've got a really interesting topic today federal market access. And it's a pretty specialized area. But when I talk to different people within industry and start talking about VA, D od I get a lot of glaze looks, people shutter and they, they explain that so complex, they don't quite understand what it's all about. So today, we're going to really try and understand from you what, what it's all about, and try and demystify and simplify some of the process. So thanks, thanks so much for joining us. But to get things started, how did you find your way into this specialized area.
Cheryl Nagowski 02:57
So I started my career as a buyer for the Department of Defense. And specifically, I was a contracting officer negotiating and executing contracts on behalf of God for major weapon systems initially, and I took an opportunity as a buyer in Washington, DC for research and development assignments. And it was exciting. You know, it was basic and applied research. So very early, and we were essentially buying ideas. And if you think about the history of healthcare innovation, much of that has come out of military funding and military utilization, to include everything from technology with the, you know, the first cell phone, the first satellite, all the way to crucial medical advances. The first blood clotting agent lung transplant, you know, government dollars contributed to all of that in the interest of our strategic advantages in terms of readiness. I was working in that realm. And I had the opportunity to move over to a large biotech in San Francisco and help them integrate with another portfolio and in particular, optimize their government programs. During that time, I had the chance to work with you know, kernels from God and others who, like myself had been on the other side of the table. And as we left biotech, we started consulting in this arena for anyone trying to sell into the healthcare space for VA and God, which is what we characterize as the federal segment.
Patrick Kothe 04:45
So you're consulting in the space in it, maybe your company is, oh, it's Middleton market access. Right. So we're gonna dig into that a little bit later, but you've got a team of experts that just deal with federal law Correct. That's true. Yes. Yeah. So when you when you moved out of the do D and moved into industry, was there a big difference? Was there? Was there a lack of understanding within industry of what what happened is that the reason why you were brought in?
Cheryl Nagowski 05:19
That's true. There was I mean, I think that it was, in particular No, in fairness, I came into industry on the biologic side. And there's a large statutory component to their pricing, which immediately, I think, sets the tone that the market is a liability and not really a business opportunity. So you know, moving into more of a commodity space, it's completely different. And of course, they you know, they have some parameters they want you to operate within, and they would like it if you offer them your best price. But I think that the segment in general is probably under tapped and underappreciated. And if you think about where resourcing is invested, it makes sense to invest here for a couple of reasons. It's not only just subjectively speaking, a very large hospital system, both for ba and do D. But it's also very differentiated from all other commercial activities. So it warrants kind of a carve out strategy and approach, it warrants carve out pricing. But not only that, the just the places that you can play in commercial have become more constrained. And this is still a market with tremendous opportunity. And I have to highlight that it feels good to operate within these health systems. I mean, we've been at war for 20 years, the VA is getting younger, as a result, we have veterans having babies, we have traumatic brain injury happening. And, you know, I think that it is very meaningful to be a part of initiatives that help solve for their variety of unmet needs.
Patrick Kothe 07:07
So Cheryl, let's talk about the market market size for federal what is included in in the federal market, and what is the size of that market.
Cheryl Nagowski 07:20
So the VA is a 9 million enrolled life market, there are 21 million veterans nationwide that are eligible for care through that system. It is largely those who have served family members are really only part of a carve out plan if the veteran endured a completely disabling service connected injury or was killed in the line of duty. The way to think about VA is that its former active duty. God, on the other hand, is very similar to a commercial plan, it's nine and a half million lives. It is a good mix of beneficiaries in terms of about 17% active duty, something like 25% spouses and children for active duty and the rest of the population is 20 year military retirees and their dependents so that that pool of beneficiaries looks very much like a commercial plan. And it's also important that for the purposes of this podcast that I just highlight to each of those has two channels of care. So the VA and the god manage their own health plans, and each have a large hospital network. And then they both have a health plan that they actually allow commercial payers to adjudicate on their behalf. And what we're focused on is really the hospital network, the VA specific integrated delivery network delivers care to about 90% of their enrollees. Whereas on the TRICARE side, the hospital network, which is the military treatment facilities, is about 1/3 of their total population and care.
Patrick Kothe 09:15
So the amount of hospitals so we're gonna focus on hospital products today, the amount of hospitals in the VA system, but how many are we talking about?
Cheryl Nagowski 09:25
It's 170 and VA. And if you think about that scope compared with say, Kaiser, which has 38 it's a very large network. So VA is 170 hospitals 1200 outpatient clinics. God is 55 military treatment facilities and 400 clinics.
Patrick Kothe 10:17
So we're talking about a substantial population that's covered by either do D or VA. I mean, it's a fairly large percentage of healthcare dollars spent in the US, isn't it?
Cheryl Nagowski 10:29
It really is, I mean, VA and God combined fifth largest payer market overall. In particular, VA is one of the largest purchasers actually of surgical implant to and that and when I say surgical implant, that's everything from bone grafts to non biologics, like the pacemaker or an orthopedic or prosthetic and we've actually had the opportunity with our device clients for things like Bell evacuation systems, or continuous glucose monitors, nerve stimulators, implantable and external, we've had the opportunity to engage in discussions around trial of those in VA duty populations, in particular things like the centers of excellence. So beyond just the sheer Yes, you know, the scope is quite large. And the business opportunity is usually there rich patient populations and certain disease states, there's a variety of unique opportunities within both markets as well.
Patrick Kothe 11:35
So strategically, it really makes sense for medical device companies to have an effort and a strategy to address these markets. And in many times as I started off kind of joking, that people are a little bit confused by that. So let's demystify that. demystify a little bit. So we're, with federal market access, we're talking about those two main programs. There's some other programs like Indian health and some some other programs that are associated with that, too. But the majority of the Federal is do D and VA, right? True. Yes, right. Let's take it from the customer's standpoint, it's always best to do that. What are they trying to accomplish? When they're bringing a technology into Dubai within within those two, those two markets? Sometimes people have the thought I want the lowest price, sometimes it's a total cost of care. Sometimes it's I want to get down to a certain number of vendors, or I want to have access to all technologies, because I'm teaching. So what are what are the main objectives that these federal programs have when they're acquiring technologies?
Cheryl Nagowski 12:50
So I think it's so therapeutic space specific and product specific, right? I mean, I think all of what you've described is true, in some instances, and uncertain commodities is lowest price. In fact, they'd run a med search formulary for anything consumable. In other arenas, there are opportunities for them to embrace new and novel experimental treatments. And even for some of their very desperate populations, you know, they're they're willing to engage in formal and informal arrangements. So I think, you know, they have both the innovation side, and they have a variety of outlets for device manufacturers to tap for that. And in fact, they have initiatives through Congress, their own internal goals and objectives. It could be anything from certain orthopedic goals to women's health objectives. I mean, they every year they release publicly their strategic plans. So to align with one of those, if you have an emerging technology is always a good idea. You know, a lot of times we do find ourselves up against being the loss leader. Other times, we have to have a very firm, federal specific value story, which often to what you mentioned earlier includes a budget impact model that demonstrates cost offsets, specific to the way that they'd buy and their unique pricing structures.
Patrick Kothe 14:58
So Cheryl, we've got When we're talking about federal market access, we're not talking about one system that you're getting into do D is different than VA, right? They're two different systems. Sure. Great. So we got two different systems when you're consulting with a company, and they've got it, they've got a product and they say, hey, Cheryl, we need we need some help getting into these systems, what's the first thing that you do with them to decide how you're going to attack the federal market?
Cheryl Nagowski 15:30
So I think it depends on their goals and objectives. I think that, you know, clearly there are differentiated populations. The good thing is that there are a variety of buying agreements that serve both. So if a manufacturer you know, but the typical first step that we take is, what's the business opportunity, we do an assessment, it doesn't have to be anything huge, but at least understand what population is there? How is the disease state managed, what's the revenue potential, usually, step two is kind of us testing the market. So reaching into it and asking questions. And in parallel to that will say, you know, set up your purchasing pathway, we have a good idea, from our market research that there's business potential, but in order to really tap any of that, we need to set up a purchasing pathway. And that's mostly the contracting piece. But outside of that, there's also you know, to other considerations, which I won't get into deeply here, unless you want me to pet but it's, it's, you kind of really need to participate with their designated distributors, and probably take a look at the treatment algorithm and try to guide that if you have studies or data that proves you could be better positioned. So there's three pieces that we look at, it's both its purchasing, its distribution. And then it's where you are in, you know, the course of therapy and how you're viewed and treated by their committee, because they don't do traditional annual reviews, they review as the need emerges, or as new technology interests, the market. So sometimes we can help them, you know, refresh, or better position those. So I think and just closing the loop on that, you know, our first step is usually the market sizing beyond that, it's getting the baseline purchasing agreement set up, which is critical, and it serves the company Well, in terms of adding product taking product away. I mean, it's these are long term arrangements, and well worth the investment.
Patrick Kothe 18:10
So that baseline contracting that gets established. So let's assume that you've got a product and that product is applicable for both do dva. Maybe maybe one market slightly larger than the other one? Are you going to go and and attack them both at the same time? Are you going to do one first than another? One second, how does how does that work,
Cheryl Nagowski 18:34
you can set up one Blanket Purchase Agreement that allows for buying by all federal entities, right, so the federal agencies included within that agreement, but in particular, VA and DOJ are both there. And they also have sharing agreements, they have national standardized solicitations they send out so in general, they try to leverage the combined volume to get a better deal. The complicated piece is they award diagnostics, separate from equipment separate from dental and so oftentimes, our clients will get locked into Sam that search agreement and then because you know a product or adding to the portfolio falls more under laboratory we'll have to secure that schedule as well. Now certainly having your baseline agreement in one therapeutic area is helpful when needing to cut additional contracts but the long and short of it is the the parameters with the vehicle you sell under can be complex, but your reach within each vehicles is pretty vast. And you can almost always tap both VA and do D with those instruments. Now if you were to come and say I don't want to do that and I have very military specific device that I need them to be able to buy. There's an arrangement for Do you own Call the data. And they have two separate pathways. They have one for med surge consumables non DMA, and then one for DMV.
Patrick Kothe 20:09
The first step is you said, to find what the market is to decide where where I'm going to go to. The second step is, is what is it determining which pathway is going to be appropriate?
Cheryl Nagowski 20:21
That's right, determining how your purchasing pathway will be smooth. So we have to reduce the hassle factor. And nowhere is that more important than federal, because their hassle factor is huge when they don't have a pre determined price, and a pre order that you're not participating with their designated distributors,
Patrick Kothe 20:45
within other hospital groups or other ID ends. Sometimes you go to supply chain first, sometimes you go to the physicians first and get a champion that can help you establish that there's need for the product, as well as having someone internally be that champion and help move through the system. Is the federal system different? Or is it similar that you need product champions when you're starting out as well?
Cheryl Nagowski 21:12
I think it depends, I it's certainly helpful. I mean, these are top down systems. That's part of what we call kind of our strategic and tactical plan, it's determining is a top down approach going to be more effective, so that as we gain awareness that physicians can get to the product, right? So do we need to adjust treatment algorithm? Or is it just strictly that we need champions to help us build awareness and a groundswell within the health system? What's great with VA doody is that they do have these kind of broad reach platforms that you can participate in. So we've we've had clients that have participated in a Walter reads grand rounds, where they have the opportunity for, say, you know, the entire endocrinology community for a diabetes product, to present their new technology and what it's going to do within that therapeutic space. So there's unique opportunities for reach. In general, it's nice, if you have both you smooth a pathway at the top, and then you have a couple of champions at the bottom. And that all goes a long way.
Patrick Kothe 22:26
So in general, if you've got, let's say, two separate types of products, one is the revolutionary product and emerging technology, something that that doesn't exist. And the other type of product is the fifth type of some type of some type of device. So which one is better for a top down approach? Which one is better from a bottom up approach?
Cheryl Nagowski 22:51
So if we have a commodity and a multi source market, we will oftentimes as we kind of, do our market research, just outline, pricing scenarios and what the players can we gain regional domination and completely own one of these 18 visions? What are they buying today? What's the pricing? What do we think the future will look like? Is there a conversation to be had at the national level where we can make a case for sole sourcing this? I mean, the deal there is, it's difficult because no matter what we will be spurring competition in order to get to that outcome of kind of owning that market. On the other end, it's complicated, because these are difficult practitioners to reach difficult decision makers. Believe it or not, you know, it doesn't sound savvy, but we have two channels, where if we need to have a budgetary discussion we start. One is the medical director, and one is prosthetics. And if we think that we could get locked out by those budget holders, we'll start with prosthetics. And this is all by the way for that kind of new and novel scenario you mentioned. So we we sometimes will start there and make sure that we have their endorsement, and that they understand the budget impact before we move on to the medical director and then eventually the clinicians. So it really depends, I mean, there's a variety of ways to get it done. It depends both on the manufacturers appetite for investment, as well as just what's going to achieve the highest ROI. I mean, everyone kind of knows the contracting game. We can initiate contracting activity, but that's going to result in low margins normally. Or we can try to you know, maybe the opportunity is limited to us wanting to point to the fact that Kessler is using this in these experimental scenarios which we can talk to oftentimes, and maybe we think that helps our commercial value proposition that that's enough. And you know, we'll let the market adopt the product in its own time. So that's the kind of a crucial piece about, it's not just setting up a contract and walking away or hitting 90 VA facilities, it's really developing a tactical strategy. That's that number one, you can implement realistically. And that's going to yield results. That's one of the things that we try to hone in on, that's our, that's where we try to specialize is, you know, is the juice worth the squeeze kind of thing?
Patrick Kothe 25:32
So the second step is to decide where you're going to submit and and who is going to be making that decision. So if you're submitting your your company and your product, what are the steps to do that? And are you establishing a relationship with somebody, and when you're doing that, are you sending paperwork in
Cheryl Nagowski 25:56
both, I think both are very important. And I think you know that, so the VA does contract on behalf of God as well. And again, there are opportunities to sell just to God. But, you know, most of this information is public. And that's one of the things that makes navigating this market very unique is that we have a variety of information we can leverage that you simply can't get elsewhere. So you're, if they're going to lay it out for you, you know, what kind of agreement is appropriate for various products, within that they're going to have numerous points of contact. Beyond that you can issue data request to find out where you know, certain diagnoses are, that are that the patient type that you're looking for, or where, you know, there's a bolus of of a physician type that you want to target so that you can really hone in on your approach to the market. So you have resources, information, research, really publicly available right at your fingertips, you just kind of have to know how to get to it. And then also you can pick up the phone and just generally ask questions, to figure out how to best navigate that.
Patrick Kothe 27:14
So once you decide where you're going to go, then I assume that there is some paperwork to be able to be able to do this, and some justification for for your product. So is that? Is that something that you're just providing? Are there specific things that they're asking for in terms of economics? Or in terms of market? Or benefits? How does how does that play out?
Cheryl Nagowski 27:43
Good question. And so just to let me encapsulate this quickly, so the steps are number one business case to purchasing pathway three strategy for implementation. And that's basically it. In terms of getting back to that pathway, you know, the contract is cumbersome, mostly, regardless of which buying agreement is appropriate for your product, it's a lot of boxes to check, it's a lot of administration, essentially, the the main area to consider and protect is the area around pricing. And one of the things manufacturers should be prepared for is that there are disclosures around your commercial pricing, and your commercial volume, those types of things. It doesn't mean the government's entitled to that price. There are a variety of ways to illustrate why that's not fair and reasonable, and that the government shouldn't have that meaning they can't provide the volume, or you know, they're not making the commitments that the other health system made. So like they're going to prefer you or buy, you have a certain volume, there's a variety of reasons.
Patrick Kothe 28:57
So what you're, what you're saying is the government has has language in there, it says that they would get preferred pricing, our lowest pricing equal to whatever else is out in the marketplace. But it's always, it's always an interesting thing, because it has to be under the same terms and conditions. Correct. That's
Cheryl Nagowski 29:18
true. It's all about fair and reasonable. And manufacturers I think are afraid to advocate for themselves. They want to secure the agreement. And really, it's just an education process. Sometimes it's just tactically, they like to go back and forth, maybe two or three times. Even if you're almost restating the same position a different way. It's oftentimes effective. Just let that process play out. It doesn't mean that it's fair for the government to receive best price. It's, you know, it's it's what's fair and reasonable and that needs to be justified in an articulate way and in government language as much as possible. So if you read their guidelines, their award criteria They'll give that away. And if you can help them with their documentation, it can smooth that process.
Patrick Kothe 30:06
And general pricing strategy within a company, it's always best if it's volume based and committed volume based, so that you can stand up to another place of place and say these, this customers committed to X amount of volume, therefore, their prices different than yours. And in such a way, will the government commit to certain volumes? Or is it not a committed bid?
Cheryl Nagowski 30:32
Generally, it's non committed, it will be kind of in what it's an open ended arrangement. There are instances that are solicited by the government where you can submit competitively Of course, for a preferred position, so to either own all volume in a region or at the national level. So in those instances, yes, but you know, it's typically winner take all or you need to maintain not only your clinical advantages, but also as new market entrants come or among your existing competitive market, you need to remain advantageous in terms of pricing.
Patrick Kothe 31:13
It really points out that you need to understand your particular market, you need to understand what your competitive landscape looks like, what choices are out there, and where where pricing is not only within the government, but where it is within other places within within the country. So really to understand all of those things in order to make a qualified pricing decision within the government. And it's gonna be different if you've got a commodity product versus something else. But the main thing is we're trying to be fair and equitable to our fellow citizens and fair and equitable to the government. Right? Absolutely. negotiating a contract, who are you negotiating with
Cheryl Nagowski 31:56
the government contracting officer at the VA. So there's the GSA has delegated authority for health care needs for VA duty to the VA, so they contract on behalf of the federal entities like Indian health, Federal Bureau of Prisons is often included Department of Defense.
Patrick Kothe 32:19
Within many ID ends, they have an award for X amount of time to your award three year award, primary vendor secondary vendor, how does that work within the government? Is it the same is it different.
Cheryl Nagowski 32:34
So typically, these are five year contracts. And that's largely because they just simply can't operationalize anything more frequent, you'll be limited each year to essentially CPI you in terms of out your pricing. And when they evaluate you, they actually will add kind of those contract escalations into the overall picture of how you compare and how fair and reasonable your pricing is. So it's a long term commitment, you know, unless you enter into something casual, like adapa, which, you know, won't necessarily get you as much and certainly doesn't cover as many lives or facilities, then, you know, it's five year or something like that, but it's 12 months.
Patrick Kothe 33:18
So you mentioned earlier, so we got five, five years, 12 months, we got a got a some of your customers have been waiting for two years. What what is the average time from when you start the process to know whether you've got a contract or not?
Cheryl Nagowski 33:38
Superman surge, right. So medical equipment and supplies, I think it's fair to say six months. And I caveat that with if you've been on the market for a while, if you have a large number of commercial transactions, it could take a little bit longer in order to synthesize the pricing in a way that at least tells the story for them. In terms of disclosures, even if you are able to of course not offer that price, you still need to be able to characterize it disclose it. It can take a while to prepare the package. But I would say you know, within three months, you can submit and then usually it's another three months until you'll make an actual award, sometimes longer
Patrick Kothe 34:27
if if you've got a new technology, and it doesn't exist, so it's a novel technology. And no one in the federal government is used that before is there. Is there a mechanism to get pilot awards or pilot orders that are in there to get people to try things or do you wait and wait the six months process in order for it to get into the system? No,
Cheryl Nagowski 34:51
of course and I'm glad you asked that. And even if you are already commercialized, you can still take advantage of some of those kind of more local trial opportunities, the majority that we've been successful with have been at a large facility that specializes in a therapeutic area. But you know, if you can get a Centers of Excellence to take interest in the product, you can certainly set up a variety of arrangements with them to explore how it could serve the veteran and Warfighter, and the general population actually.
Patrick Kothe 35:26
So if you identify that your product would be a good candidate to do that, are you working with the people at the hospital? Are you working with the people in contracting in order to make that happen?
Cheryl Nagowski 35:38
So if you are one of those trial opportunities, you would work with the hospital r&d team. And you wouldn't have very many touch points with contracting and it would be local. If you are, of course an early market entrant, then you're going to navigate solely with the contracting team until you're awarded. And we actually advise our clients, it doesn't make sense to even initiate conversations with practitioners until you've been awarded the contract. Because if you're a new market entrant and you might be a great solution to an unmet need. The first question is, what's the price? And how do I get it? And if we can't answer that, according to government parameters, it's just too difficult. And the walkaway factor is real. I mean, we have either the hassle factors misunderstood or it's that difficult, and they're not willing to navigate it. And we actually have specialists walk away from our clients on a regular basis due to what it would take to get the product. If that makes sense. They might like it at Duke when they're teaching and practicing medicine. But as they do their their part time care on Veterans, which is a lot of the specialists in the VA, they do part time assignments, both community especially teaching institutions, they go over to the VA, they know they can't get the product that they like, because it's just too difficult. And so sometimes, oftentimes they'll use alternatives. And of course, the VA does like to flex to those specialists and make sure that they have the tools and resources they need. The key is, is it a luxury benefit? Right? Is it something that is a nice to have, it truly just isn't really feasible on a broad scale for a public payer to provide. And that's something that really needs to be refined and the value proposition.
Patrick Kothe 37:33
So what is it? What is the term to be on contract? What is the term that says I'm going to order it at a hospital and I needs to be on Federal Supply schedule needs to be at what is what is that term that it needs to be caught? There needs to be contract.
Cheryl Nagowski 37:51
I think that both are fair, you if you say it needs to be contracted, or it needs to sit on a minimum minimum of Federal Supply schedule. That's the starting point. And that's the most that most achieve. I would say that that's fair. If you are more of a commodity or consumable, and you want to reach that next level, you need to sign up with their preferred distributors. And that kind of puts you in that med search catalog. And then further refining can happen from there.
Patrick Kothe 38:21
So let's transition now to talk a little bit about that distribution and med search catalog and distributors. What are we talking about when we're talking about that that distribution? And why is it so important?
Cheryl Nagowski 38:35
I am not sure what the arrangement the government has with their med surge distributors. But typically, they're favorable terms. So they'll say you know, like in the case of VA, it's it's Cardinal Health, greasers, Medline, they'll own different regions of the country. And they'll have a more favorable arrangement to be that sole supplier of a particular region. In the case of drug, it's a negative, you know, 14% distribution fee on everything that VA buys from McKesson, it looks different and not as severe on the kind of regional medical device distribution platform. But whatever the favorable terms are, the government wants to recognize that as part of the overall value for what they're buying. And so in order to kind of become a part of that purchasing process and catalog they want their clinicians to go to first you need to set up the buying agreements.
Patrick Kothe 39:40
So if so, they would prefer to have it through one of those suppliers. But if you're not in that supplier, they will still purchase it. If it's unique enough,
Cheryl Nagowski 39:51
that's true. And if you're not on FSS, they can, of course, get the clinician what they need. It's just incredibly difficult. So you really They need to be sole source and very therapeutically impactful.
Patrick Kothe 40:06
You mentioned before about the six months. And I want to dig into that for a second. Because when people hear about six months, that means it's six months worth of continued activity that's different from having some activity and then waiting. So can you explain a little bit about what happens in that six months, what the activities are, what the what the company is doing, to move that along, of course.
Cheryl Nagowski 40:36
So it's certainly touch and go, it is absolutely not a continuous effort. And for you know, I have a team that completely specializes in this process. So So basically, we can either do it for you, we can tell you how, or we can show you how. So let's say worst case, the client just wants us to tell them how and not be involved in the process. They walk away with a checklist that's oftentimes somewhat difficult to understand. And it takes time to gather and compile the information from the various departments in the organization. If you were to say to me that I have a one man shop, the CEO is the innovator and runs everything. And he's or she is all in on getting this on a contract, I would say it can be done in a couple of weeks, you would be surprised how difficult it is to get a CEO to complete a required training, or to get a signatory to sign up for the the pieces that they're responsible for. So just getting the basic certifications down and navigating, that takes time even for the smallest company, then there's gathering the sales data and properly, you know, positioning it within the government format, writing an adequate narrative that tells the story and also helps the government understand appropriate pricing for government, buyers, and then legal clearances. So I think it's fair to say I mean, your best case scenario with a very motivated team is probably three months, all the way up to realistically an award time of 12, from start to finish. And what's great, though, is there are things you can do in the meantime, as you as you establish that purchasing pathway, you can build other strategies, like, you know, is getting that enough, do we just need to smooth access? Or do we need to also build awareness and adoption? And how are we going to do that these, you know, health systems are competitive, difficult to get into. So you can rather internally with a consultant, you can do the market research and develop a pathway so that once all of that is established in terms of the buying process, you can go.
Patrick Kothe 42:54
So I kind of refer to that as you get a license to hunt, and then you've got to go out there and and do that. So let's talk about that implementation for a second. Because let's assume that in six months, you get you get contracted. And and now it's available. What is the mechanism that the federal government has to let their clinicians know? Or do they have a pathway to let their clinicians know that this is now available? And do they get involved in training at all? Or is that just the company company's responsibility to say, Hey, you know, we're here, this is this is the start of the sales cycle. On the clinician side.
Cheryl Nagowski 43:33
I think there's really kind of three inroads. So I think that if you are incredibly cost effective in the therapeutic space, they will push that angle, they'll push it from the top down. Okay, so, so that's one messaging route. The other top down would be that it's in the interest of the patient. So this is really critical, important device. And, you know, we've had to cut purchase orders and go through a lengthy process to get it. Now, this is how you buy it, and they will actually push specific instructions. Otherwise, I think what is standard is that it's physician driven.
Patrick Kothe 44:15
Sure, you've been in this for a long time, and I'm sure you've seen companies that have done things really well and some companies that haven't done things so well, what makes a successful interaction with the government, what are companies doing, right? That makes the probability of success go up?
Cheryl Nagowski 44:34
Well, a good product doesn't hurt. So that's one of the best, obviously, you know, so you've got either a great product and you've second, you've got a great product just on its own merit. Next, maybe you have something that is very focused on a VA or do you do specific disease, state VA, you know, maybe you have something that's a solution and long term care. Maybe Maybe for active duty, you have something that helps with post traumatic stress or you know, like the nerve stimulation devices, things like that. So if you can address something that's very unique to almost service connected elements, that's always something that they listen to, you need to have a value proposition that is different from your commercial value prop. And I can't stress that enough, right? That could be something just as simplistic as leading with the customers perspective, help them refresh on what you're seeing publicly available as their population scope or their unmet need, how this product satisfies that, also stressing that you want to be a good government partner that the best interest of the warfighter and veteran are top of mind for the company. So those kinds of things are important. Next, is really, there are rules of engagement with every element of navigating these channels. And it's, it's important that you understand the official protocol, the unofficial protocol. So I think that it's problematic to have a physician who is already tapped out and to have a wandering device representative in the hallway, who hasn't had an appointment, who hasn't gone through the protocol to promote the device. So, you know, there's there's those kinds of things, but in terms of the real tangible, I would say it's a focused approach, there is no reason I really would never look at it this ground up, it would be who are the key opinion leaders? How can we bridge government key opinion leaders with commercial? So which which of these you know, we've identified the the top transplant physicians for this therapeutic space in VA, we see who they are and where they're operating, which of those are VA owned, meaningful time, and which are part time specialists from the community setting or from academic institutions? That are also targets? And how can we develop champions out of those specific individuals? And then what institutions within VA and duty have they designated in charge of advancement for certain disease state? And how can we best partner with them? What are they trying to do this year? What's the overall strategic plan? Say? And how can we bridge to that to be a good partner? It's just looking beyond the sales opportunity, right?
Patrick Kothe 48:00
Really partnering? Yep, it's getting getting inside of their priorities, not your priorities. True. So Middleton market access. So you, you've done a good job of explaining strategically, you know, why it's important, the different steps within it, your team has gotten a lot of a lot of experience within within the space and from the other side, not only in this industry, but inside. So when you are engaged with with, with companies, what are some of the general themes that you run, run across when you're dealing with a company?
Cheryl Nagowski 48:39
So I think they're all curious. And I think that they are seeking an education, different levels of the leadership team, of course, you know, we get the warning from the CEO, please don't do more than is necessary. Let's figure out the business opportunity walk away if we have to. Next are those who want to drive awareness and adoption, and they're very interested in what are the full range of levers I can pull to make an impact for this product. And they are typically very interested in partnerships that they can simply point to, or to really drive meaningful sales volume or both. They kind of want to just understand the range of solutions. And then tactically speaking, it's, it's helpful because everyone on our team has been on the inside and understanding how to navigate the systems is critical. So you know, we find out that traditionally, prosthetics would buy this, but they tossed it over the fence to pharmacy because they had a rich budget last year, and they thought it would be beneficial to have it procured through that channel, even though it's not a prescription device. So being able to figure out those things by picking up the phone and answering a question saves a lot of time and money. And I think that's one of the things that We bring that's very helpful. But I yeah, I think they they, as you said earlier, they certainly want us to demystify it. And then they very much want us to keep it real. You know, what, what's achievable? And what does it take to recognize that
Patrick Kothe 50:15
the size of companies that you're working with? Do they range from startups to large multinationals? Or do you have a sweet spot?
Cheryl Nagowski 50:23
We certainly have a lot of one product companies, we have the biggest and you know, we've helped in a variety of capacities. But largely, I would say it's mid cap or small.
Patrick Kothe 50:36
And are there any differences in what they need, when they're small company versus larger companies?
Cheryl Nagowski 50:43
I think so I think that, you know, the larger companies will often already have federal teams. So we are just kind of there to bring the latest and greatest, or leverage our relationships to achieve a very specific outcome. Whereas the smaller companies are more open to letting us kind of define what their goals and objectives should be. Cheryl,
Patrick Kothe 51:10
this has been a fascinating discussion on a very complex topic. And we just scratched the surface on a number of a number of different things. But it will get people thinking about the opportunity, as well as the tactics and strategies in order to support attacking attacking this market. Is there any message? Or do you have any final thoughts that you'd like to leave with our listeners,
Cheryl Nagowski 51:39
I think my biggest recommendation would be Don't be afraid to start a conversation. So regardless of how you think you would be positioned to this market, it can't hurt to touch base with even a local level facility, and understand how they're buying, what they're buying, and maybe what some of their unmet needs are. So don't be afraid to start a conversation. And and the other thing I would say is, it's a very rewarding place to play. This is not really a social responsibility, but it is very rewarding to help those who have served and who as a consequence of that are living with a variety of disease states and comorbidities that, you know, the average civilian doesn't have to navigate. And those ailments affect families and generations. And so if you can offer something that improves the quality of life for these individuals, and you know, is obviously operational from a business perspective, it's a good look for the company from a PR perspective, but it's also probably the most meaningful work a manufacturer will do.
Patrick Kothe 52:57
As I said at the beginning, there's no one size fits all strategy when it comes to federal access. But Cheryl gave us some great things to think about. And also a framework to consider with our own products, a few of my takeaways. First, the market size, it's substantial. As Cheryl said, the VA system is 9 million lives 170 hospitals 1200 outpatient clinics, and do D is nine and a half million lives 55 millimeter a military treatment facilities and 400 clinics. So it is a significant opportunity to bring your products in. And it's not just as she said, not just the the young soldier. The second thing is she explained that this is a top down system, and she went so far to say is that it doesn't make sense to even initiate conversations with practitioners until you're awarded a contract. And I think that this is a good place to your stop and consider that this is a different market. It is not your standard idea and marketplace. It is a different type of sale. And you can't do things the same way that you do in a in an IDN as you do with the federal government. And finally, the last thing and it's it's her steps, it's a bit you know, the four steps to business case, the purchasing pathway, the strategy, and then implementation. And there's so much that goes into this. And this is really one of those spots where if you have expertise in this area, it goes a long way. Because in my experience, even though you can do it doesn't necessarily mean that you should do it. And what I mean by that is that so we spend so much time learning what we're doing, where somebody else can give us assistance in that area and really cut down on the timeframe and the probability of success because they've done it before they know the right places to go at. And I thought it was interesting when she talked about the, you know, the large company, they've got that expertise, the mid cap small companies, they don't, and and they can do it on their own. But man, it's gonna be a long time. Thank you for listening. Make sure you get episodes downloaded to your device automatically by liking or subscribing to the mastering medical device, podcast and Apple podcasts, Spotify, or wherever you get your podcast. Also, please spread the word and tell a friend or two to listen to the mastering medical advice podcast as interviews like today's can help you become a more effective medical device leader. Work hard. Be kind
