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Account Management: Adapting to new needs

As a result of changes in the NHS. account management in the pharma industry faces key challenges. How can companies meet these challenges while working within the Codes of Practice

NHS pharma account management key code of practiceAccount management is one of the industryís current buzz phrases. Everyone seems to be talking about account management and everyone seems to have a different view about what it means.

The NHS is changing; everyone tells us that and, in theory, the changes are creating a natural environment for an account management approach to business by pharma. The challenge, however, is to identify how this can be achieved within the Code of Practice.

The principle of account management itself is actually relatively simple. Identify who does what within an organisation, and who and what those individuals are influenced by. Then make sure that the necessary influence is exerted ñ the application of an ëinfluence mapí, if you will. A single company employee takes overall responsibility for the entire account and coordinates all account-facing activities.

Therein lies the rub. The way influence is exerted in other industries is usually by adapting aspects of the product offering to meet the needs of the account. For example, if the product was a washing machine being sold to various retail accounts there are several ways the offering could be adapted to meet their local needs without significantly altering the fundamental product.

It could be personalised with specific logos, unique colour schemes and cheaper (or more advanced) components. The delivery schedule could be changed so that the size of order was more suitable for the retailerís warehouse and delivery could be made on a day and at a time that meets the customerís warehouse scheduling. There is considerable scope to develop specific after-sales support, unique to each account, with customised training programmes for staff and helplines for end-users.

In the pharma industry, however, there are considerable barriers preventing us from operating account management principles in ways similar to other sectors. For example, any changes in the basic ëproductí would require formal regulatory approval and a long and complicated research programme. It is not practical to adapt the product for each account.

Pharma has historically focused on offerings that in other industries might be considered as ëafter-sales serviceí. These offerings frequently include sponsorship, educational support and therapy review services. Of course the major problem for pharma is that none of these offerings can actually be linked to the sale itself, because this would be a breach of the Code of Practice. This means that any offer of support to an account must be independent of any commitment to a sale.

Strategic approach

The Code does allow for the fact that pharma companies are businesses with a right to be profitable and it is about standards, not restrictions, as the Prescription Medicines Code of Practice Authority (PMCPA) will tell you. However, there are some fundamental elements of the Code that directly challenge the principles and viability of account management.

Letís look at how account management could work in practice using an imaginary company, SGC Pharma, which has a team of account managers. These account managers each have a budget to help them develop their local accounts and have access to all the services the company usually offers customers.

The account managers are expected to increase sales of SGC Pharmaís anti-hypertensive product, Goodblood. All the account managers are eligible for an annual bonus which is dependent on achievement of annual sales targets in their specified acounts.

The strategy of the account managers is very simple: decide which business units have the greatest potential for increasing sales and then identify how to release that potential. They develop an ëinfluence mapí for each account and use this to help them direct appropriate resources. For example, one of their accounts is a General Practice which is developing its own formulary.

The account manager has discovered that, in addition to the GPs themselves, the pharmaceutical adviser (PA) at the Primary Care Organisation (PCO) and a local retail pharmacist will both influence formulary content. The retail pharmacist will develop the first draft, for review by the practice GPs; the PA is an adviser to the practice on the formulary project and will fight to keep the list of options short and, where possible, generic.

Obviously, the local account manager develops a range of tactics for this account. She works with SGCís in-house health economics team to develop a model, which explains the cost-effectiveness of Goodblood using local population data. She invites the retail pharmacist to a sponsored meeting where the topics of discussion include strategies for reducing the burden on overworked hospital units through increased community care.

With these and similar activities she develops the account by providing relevant information to the right people, possibly agreeing a local price offering. Aligned with this, of course, she makes sure that SGC primary care reps regularly visit the practice GPs and nurses to detail the benefits of Goodblood, so that the product has a suitable profile in the minds of the GPs when the final  decision is made.

In addition, the account manager will identify opportunities to increase the value of the account to the company. She plans to employ a team of nurse advisers to conduct therapy reviews. While the nurses will not be allowed to switch patients directly onto SGCís product, if a patient is not adequately controlled, it might be appropriate to take action to improve their control. The treatment choices would include increasing the dose of the existing product and switching the patient to an alterative. Since Goodblood is on the formulary, it is likely that a good percentage of patients will have their treatment amended and will end up on Goodblood. The account manager has complete control over the placing of the nursing service and typically sends nurses into those practices that have a high market share for Goodblood or which already have the product on the formulary.

So, that is the scenario. Elements of this will be familiar to many companies which have similar programmes in place at present. But just how much of this scenario is actually compliant with the current ABPI Code of Practice?

Code compliance

It is perfectly acceptable to provide clinical information to the stakeholders to ensure they have appropriate information about the product. It is also perfectly acceptable to offer the nursing service, whether it is to a single practice or to an entire PCO. However it is, of course, not acceptable to make the availability of the nurses dependent on the inclusion of Goodblood on the practice formulary/ While the SGC account manager in the example above could argue that they were not asking for actual prescriptions, the linkage with the formulary listing could be perceived as an inducement (Clause 18.1). Such a tie-in could potentially even be considered a breach of the Foreign Corrupt Practices Act too, if SGC has a division in the US!

In the above example, SGC limits the offer of nursing support to those practices that are positive to Goodblood. In doing so, SGC is effectively admitting that the provision of the nursing service is directly linked to a potential sales increase. Previous interpretations of Clause 18.1 have clarified the need for product and service to be entirely separate. It might be possible for SGC to mitigate the accusation by making the service available to any practice that requested it (obviously at the same time as offering it proactively to their target units). However, SGC would have to provide the service to non-profitable accounts and without question.

Companies should also consider the impression created if they do not allow sufficient budgets to support non-target accounts. If the company limits the availability of support, then there is a risk of breaching Clause 18 of the Code, even if the account is not offered the support until after the outcome of the formulary decision is known.

Any defence that SGC might use to claim it is offering services independently of any sales consideration is weakened by the fact that the account managers receive an annual sales-related bonus. By definition, this means that they have a vested interest in targeting the services where an increase in sales will result.

SGCís defence might be strengthened by changing the account managerís performance bonus to sales over a longer period, say three years, or to overall account sales (ie, the companyís entire portfolio of in-patent and post-patent products). In this way, the companyís explanation that the service was linked to the growth of the organisation rather than the growth of a product would have more credibility.

There are many routes to operating account management within the Code. For example, SGC Pharma could implement account management at PCO level, rather than at practice level. This mitigates to a degree by removing the direct link between prescriptions and the provision of extra services, such as therapy reviews. SGC could also target the provision of services on the basis of clinical need, limiting it to practices with low Quality Outcome Framework points.

A need for realignment

Pharma will need to realign some of its thinking in order to make account management successful and to achieve this success within the scope of the Code. But the Code is not the only challenge facing companies that are in the process of adopting account management. In the current climate, the two biggest challenges are timelines for return on investment assessments and product brand alignment.

True account management is about the development of trust and the establishment of long-lasting partnership between two groups. If pharma could accept that this takes time ñ and rarely generates returns inside a 12-month planning cycle ñ then the entire offering to customers might be presented, and perceived, differently.

Customers (and employees) need to genuinely believe that pharmaís interest in account management is about the whole business and that it values the long-term success of the company more than the short term sales of a single product.

The development of medicines is a long-term investment. So is the development of relationships; while as marketers we may want the customer to have a relationship with the brand, as account managers, we need the clients to have a relationship with the company. Successful companies will be those that find a way to make traditional brand marketing work alongside the new paradigms of ëaccount marketingí.

The Author 
Stephen Gray is a chartered marketer and former compliance officer who specialises in providing compliance services to the pharmaceutical industry. www.stevengrayconsulting.co.uk.

11th June 2007

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