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Medical benchmarking…

…offers companies a valuable opportunity to evaluate activity, resourcing and strategy

A stethoscope laying on a print out of a set of graphsThe constantly changing environment for pharmaceutical companies, typified by mergers, acquisitions and restructuring, requires strong evidence to support the important decisions which need to be made on structure, strategy and resourcing levels. Robust benchmarking can greatly facilitate this process.

Intuitively, one would expect larger companies to employ more staff than smaller organisations and could assume that this is proportionate to workload but variations in organisational structure, differing processes including regionalisation and outsourcing strategy impact significantly on both resource and cost. It is necessary to consider all these factors to make benchmarking a useful process.

To be successful, benchmarking requires sound methodology, ease of data collection and absolute confidentiality. In addition, the data analysis and presentation must be robust and relevant. For these reasons an experienced consultancy can bring significant value to the process.

The recent benchmarking exercise of UK Company Medical Divisions is an excellent example. In December 2009, 10 leading UK pharma companies participated in a benchmarking exercise to examine activity and resource levels of various departments within the medical function.

The departments included in the research were medical information, regulatory affairs, pharmacovigilance, quality, medical affairs, clinical research, health outcomes and regional medical/scientific advisers.

 

Number of full-time equivalents (FTEs) by annual sales 

Number of full-time equivalents (FTEs) by annual sales


Objectives

The key objectives were to:
• Provide an opportunity to share best practice and strategy
• Obtain evidence with which to make informed assessments on the optimal level of resourcing
• Track changes and trends over time.

Methodology
The data collected included outline organisational design, resourcing levels and the type and volume of activities for each department within the medical function, as well as the extent of outsourcing and regionalisation of activities.

A bespoke questionnaire was developed and agreed by the participating companies and the data were entered via a web survey for ease, speed and accuracy of data collection. Data validation was undertaken to identify any discrepancies and this gave an opportunity for data clarification by the submitting companies.

Each participating company received a graphical, individualised report showing how they compared across a wide range of parameters. Although the participating companies were known to all, it was not possible to match data to individual companies.

Results
As expected, the results showed a positive correlation between activity levels (eg, number of medical information queries received per year) and resourcing levels. There was also a strong relationship between sales and activity levels.

Interestingly, differences in 'leanness' across companies were observed.  However, caution needs to be taken when interpreting the findings. For example, a company with several blockbuster 'cash cows' but a weak late-stage development pipeline may appear to be more efficient than it really is if these measures are taken in isolation.

It is important, therefore, to interpret the data using the contextual information regarding the company's portfolio and organisational structure.

Other differences included variation between companies with regards to:
• Level of centralisation/regionalisation
• Outsourcing strategy, which was more extensive in some functional areas than others and also differed significantly between companies
• Types of people employed; medically qualified, pharmacists, other professionals.

Web conferences
In addition to the individualised reports, each participating company was invited to attend a web conference to discuss the results and share experiences.

This was found to be a valuable exercise as it provided an opportunity to discuss best practice and broader issues impacting resourcing decisions.

Further web conferences are currently being organised to allow representatives from individual medical functions to discuss the findings for their particular function in more detail.

Feedback from the exercise has been very positive. The information is being used for a wide variety of purposes within the various organisations, such as organisational design and outsourcing strategy.

 

Web conference de-brief screenshot
Web conference de-brief screenshot

 

Feedback
Feedback from participating companies has also been very positive. The information is being used for a variety of purposes, such as organisational design and outsourcing strategy.

The results of this exercise have been illuminating for the participating companies. Important differences in structure, resourcing and activity have been identified and this information is actively being used to guide decision making during this period of change in the industry.

With regard to the process, the exercise was seen as a success in terms of:
• Level of participation
• Collaboration on the questionnaire design
• Ease and accuracy of data collection
• Confidentiality
• Format of results
• Interactive web conference debrief.

Further improvements to the project could be considered, including increasing the number of participating companies, collecting additional metrics for each medical department, incorporating attitudinal questions in addition to the more quantitative data currently collected, eg, "What do you see as the greatest opportunities and challenges for your function in the next five years?"


Percentage of medical information activities resourced at the central level
(companies in random order)

Activity Avg. A B C D E F G H I J
Enquiry management 1% 0% 0% 10% 0% 0% 0% 0% 0% 0% 0%
Promotional materials review & approval  7% 50% 0% 0% 0% 0% 0% 10% 10% 0% 0%
Brand team support 0.5% 5% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Managing standard responses 19% 100% 30% 10% 0% 0% 0% 20% 20% 0% 10%

 

Percentage of medical information activities outsourced
(companies in random order)

Activity Avg. A B C D E F G H I J
Enquiry management 21% 5% 2% 0% 20% 2% 30% 75% 40% n/a 20%
Promotional materials review & approval  0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Brand team support 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%
Managing standard responses 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

 

Lean and mean
Benchmarking can be conducted in an efficient and effective manner using data which are largely already captured within the company and, therefore, require minimal incremental information gathering.

The success of this project resulted from a shared view by participants of the value of the exercise and collective involvement in the selection of data to be gathered and the mode of collection. The web conferences maintained this engagement and provided a valuable opportunity to discuss the results and validate the data.

The results confirmed some assumptions, such as the anticipated relationship between activity/sales and resource requirement, and introduced some interesting findings such as the variation in outsourcing, centralisation/regionalisation of activity and differences across companies in recruitment strategy regarding physicians, pharmacists and other graduates. The data also highlighted the rapid establishment of the relatively new function of field-based scientific/medical advisers demonstrating the constant evolution of pharma communication and the importance of medical functions within this.

The planned follow-up benchmarking in future years will provide trend data from which to track the evolution of medical division functions over time.

The success of this project encourages consideration of extending this approach to other areas of the business.

Next steps
All 10 companies have agreed to participate in the next update in January 2011. Other companies are encouraged to participate as this will increase the data sample. It may be helpful to perform separate benchmarking for different sizes and types of company, eg, biotech firms.

Similar exercises may be considered for other functions such as sales and marketing, as well as support functions such as IT, finance and HR.

The Author
Dr Tony Whitehead is UK medical director at sanofi-aventis

To comment on this article, email pm@pmlive.com

28th April 2010

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