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Essential Oils

The current wave of NHS reforms has created a watershed in the relationships the pharmaceutical industry forges with its customers

The current wave of NHS reforms has created a watershed in the relationships the pharmaceutical industry forges with its customers.

Not only has its customer-base been expanded by the emergence of new influencers and growth in the number of service providers; the reforms are also creating an NHS that is now tasked with an increasing amount of risk management as it grapples with the change agenda.

Alongside this, the NHS has a marked skills gap, which is undermining its ability to meet the many challenges it faces, and so the risk increases. As with any market, where there is a risk there is a need. The pharma industry is well-positioned to help satiate that need, adding true value to the NHS-pharma relationship.

The key to success, however, will be found outside the traditional provider-focused relationships and services pharma has developed with its customers and will concentrate instead on opportunities created by the increasingly important commissioning function.

Strengthening the commissioning function lies at the heart of a reform agenda designed to create a patient-led NHS. The 2006 reorganisation of Strategic Health Authorities (SHAs) and Primary Care Trusts (PCTs) was the first meaningful act in the battle to provide PCTs with greater armoury to shape services to deliver agreed local and national healthcare priorities.

Restructuring gave PCTs responsibility for larger populations and, as a consequence, more negotiating power when commissioning. This was followed by the arrival of practice-based commissioning (PbC), itself an attempt to maintain the local element and include the patient voice in the commissioning process.

The overarching aim is for PCTs, in concert with the PbC consortia to which they have delegated budgetary responsibility, to commission new services (closer to patientsí homes) that meet local needs and, in the process, reduce the number of hospital referrals and control cost.

Capacity crisis

That was the theory of demand-side reform. The reality on the ground has been very different: despite substantial policy and a concerted effort to create a more robust commissioning framework, the commissioning function in PCTs remains weak. The key problem appears to be one of capacity - there is simply insufficient manpower in place to do the work to the required level.

To a lesser extent there is also a capability issue; with the majority of individuals able to perform the function already appointed into commissioning roles, the need to increase critical mass is hindered by a candidate shortage, which itself is driven by an apparent skills gap. Beyond this, a characteristic reluctance to adapt to change has meant that some within the NHS have been slow to embrace the principles of the new commissioning mindset, and progress has been slow as a consequence.

The biggest stumbling block, however, is clearly the issue of capacity. Although strategic responsibility for meeting local and national targets rests with PCTs, the ensuing workload is being pushed down to PbC level where the limitations of capacity and capability are even more pronounced. While PbC brings with it an element of local engagement, the resource and ability to undertake vast commissioning work is absent. And therein lies the opportunity for pharma.

The industry can help solve the capacity crisis, not through direct provision of commissioners but, more importantly, by providing support. Many of the skill sets pharma can provide are
complimentary to those needed at PbC level. A glance at the typical environment illustrates current needs.

At present, most PbC consortia are equipped with one relatively experienced in-house commissioning manager who is tasked, by the PCT, with the responsibility for handling all commissioning projects within their consortium. Such is the scale, volume and breadth of these projects that, unsurprisingly, the commissioning manager cannot cope. While they may be able to put in place the strategic processes to make them happen, they find themselves swallowed up by the devil of the detail.

There are currently numerous PbC consortia armed with a list of target areas but, because of limited capacity, they can tackle them only one at a time. They are unable to handle multiple projects and, as such, the speed of change is so excruciatingly slow that patients are failing to see the benefits.

What can the industry do? Primarily, it needs to think differently: pharma has historically concentrated its efforts on the 'provider side' of the NHS - it has identified clinicians, as users and providers of their products, as its main customer and focused its attention accordingly. This has always been seen as the paradigm.

Equally, beyond the provision of products and treatments, any additional support has also been channelled into the provider arena, taking the form of resources to support initiatives, such as clinical audits and switching programmes. This approach has borne fruit and will undoubtedly continue. But in the new environment, it is not the only fruit.

For the innovative pharmaceutical company, the model is changing. NHS reforms are bringing with them new opportunities to offer additional support, not directly for the user or provider of products, but for an emerging body of customers of equal importance: NHS commissioners. It is time for pharma to focus its attention equally on both providers and commissioners.

Market makers

While providers and commissioners should work together - they are two parts of the same process - there is sometimes conflict between the two groups. Such conflict is often costly for pharma companies as the resource they have deployed to drive the market at the provider end, is upset by a rejection of their products as a result of decisions made at the commissioning end.

Clinicians may not be happy with their hands being forced, but they are often powerless to prevent it. NHS commissioners are indeed a significant new customer for pharma; not only are they charged with defining the environment in which pharmaís products will be used, they also have the budgetary responsibility to determine where and how services will be provided.

In this sense, commissioners are emerging as 'market makers' for pharma, and engaging with them early on in the process can prevent heartache further down the line.

But what does 'constructive engagement' mean? What can the pharma industry provide for commissioners to help facilitate the relationship? As we have seen, PCTs and, by association PbC consortia, are currently under intolerable pressure to design services that deliver cost-effective health outcomes and meet local and national priorities. The scale of the task is colossal but worse still the capacity to help achieve it is not there.

Proactive pharma companies, therefore, have a wonderful opportunity to help over-burdened commissioners by providing the project management and support to implement new services. What's more, the opportunity exists to work in partnership with commissioners on redesigning services and, in the process, building services that increase the likelihood of a product being adopted by the end-user. This approach is true market access and, managed properly, will enable pharma companies to create markets at the commissioning end, rather than simply trying to drive markets at the provider end.

Commissioning toolkit

In theory, this principle appears straightforward, but in reality exploiting fully the opportunities created through a commissioning-led approach is complex. How do you go about it? Convincing a commissioner that your proposed service design is viable relies upon providing a comprehensive set of data that show an understanding of the current environment and how your new service will shift outcomes in-line with commissioners' own targets. This requires a toolkit that provides an outline of the basic process needed to commission the service, and the potential benefits such a service would bring.

A typical commissioning toolkit would comprise:
  • An overview of the current service/patient pathway
  • Information on how to access data required to evaluate services
  • Details of a patient pathway modified to impact NHS reforms and commissioners' targets/priorities
  • Analysis of the key stakeholders a commissioner would need to engage with
  • A plan outlining how to influence stakeholders
  • A new service specification
  • A breakdown of how to implement the new service
  • An indication of what needs to be done to ensure ongoing evaluation and monitoring of the service.

Of course, the vast majority of toolkit items are very specific to the commissioner's role. Aspects such as writing service specifications, analysing data and ensuring monitoring is correct are parts of the process that commissioners are well-equipped to do and, indeed, would expect to do. However, other elements, such as engaging with key stakeholders in primary and secondary care, and ensuring communication plans are in place to aid implementation, are more about project management than commissioning.

This is where pharma can underline its value with the offer of project managers to provide support. Faced with an avalanche of work and an obvious capacity gap, commissioners will be glad of the support and will embrace the relationship.

This approach is a clichÈd win-win. Commissioners maintain ownership of the strategic direction, can be certain the process will be managed and implemented efficiently, and reassured that limited capacity is addressed. For pharma, a valuable relationship promises to yield results, rather than foster conflict, at the prescribing end.

What do marketers need to know?

An increase in commissioner-focused activity is undoubtedly a departure for traditional marketers who have, until now, largely concentrated on reaching providers and key opinion leaders. There is no doubt that this customer group retains high-value for pharma, but it can no longer be the sole focus.

Marketers should extend their reach beyond providers and into the commissioning sphere. Critically, a commissioning focus should be built into all modern marketing strategies. To do this effectively, a marketer should consider the following:

  • What is the value proposition of your drug for a commissioner?
  • What opportunities does this value proposition create for you?
  • What activities need to be built into your marketing plans?
  • Can you create a toolkit that will help commissioners design your proposed service?
  • Do you have resources, such as project managers, available to help commissioners manage the process?
  • Do you have access to data that can help you benchmark a new service against an existing one?

Benchmarking a proposed new service against an existing one is a crucial part of the process. A commissioner is challenged with designing new, improved services and, therefore, a thorough evaluation of the existing service and how it works is essential.

Accessing data that helps the evaluation process is often difficult and, for a commissioner who is unfamiliar with running queries and assessing data, it can be time-consuming. Once again, this presents an opportunity for pharma companies that are historically strong at analysing and using data.

In the newly reformed NHS, a marketing strategy that excludes commissioner-focused activity will invariably be incomplete. To exploit the opportunities presented by a greater focus on commissioning, marketers need to develop an understanding of their product beyond its clinical benefits.

A thorough appreciation of the environment in which a product sits, the stakeholders that can influence where and how it is used, and an awareness of commissioners' priorities in that therapy area are vital tools in the battle to achieve a competitive edge.

If marketers can gather this information and communicate it to NHS commissioners, drug companies will not only add true value to the pharma-NHS relationship, but they will also reap significant rewards at the bottom line.

The opportunity to become 'market makers' is tangible. Commissioners can define that market for you, and by engaging with them and communicating the right messages about how your product can align with their goals, the process of defining the market is made easier.

Get it right, and it could mean that they will support and make the market for you. And by the time your sales professional steps in with traditional clinical messages, they might not have to fight a conflict with a commissioner.

Questions a commissioner will ask:

1. Will your product reduce the likelihood of admissions through:

  • Better control of symptoms?
  • Reduced likelihood of crisis?
  • Reduced complications?

2. Will your drug cost less than the current therapy

  • In nursing time/resource?

3. Will GPs expect an enhanced payment?

4. Does your drug help move care closer to people's homes by

  • Reducing the need for follow-ups?
  • Allowing administration in community settings?

5. Will your product improve the patient experience in terms of

  • Symptoms?
  • Fewer visits or waits?
  • Reduced uncertainty?

6. Will your product lead to a saving once acquisition costs are taken into account?

The Authors
Andy Lee is business operations director at WG Consulting and Tim Jones is an NHS Commissioning Specialist at WG Consulting. For more information contact andyl@westawaygillis.co.uk or timj@westawaygillis.co.uk

17th September 2007

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