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The key to success

Effective management of an increasingly complex network of KOLs

A bunch of keys hanging from the lock on a wooden doorAt least one thing seems clear about the future of the pharmaceutical industry: it will involve a titanic struggle between innovative, research-based companies and cost-cutting, patent-busting, generics manufacturers. In this battle, key opinion leaders (KOLs) will be vital allies and managing them will be essential. In a globalised market, where payers try to control prescribing, competition for influential KOLs will intensify.

To understand how KOL management will develop and what industry best-practice will look like in the future, researchers interviewed 12 of those responsible for KOL management in Europe's leading pharmaceutical companies.

The group, assembled by KOL management software supplier, Cegedim Dendrite, was perhaps biased towards more advanced KOL practitioners and particularly forward-looking ideas were to be expected. They were asked how they saw the future of the industry and, in particular, what changes imply for KOL management.

Their initial responses were surprising in their intensity, if not in their general direction. These business leaders expect life to be much more challenging for the fewer research-based firms that will emerge from continued mergers. The future market will be one in which cost constraints dominate, prescribers have much less influence and even innovative products will have to fight hard for market access and reimbursement.

In addition, the market emphasis is likely to shift, from small molecule blockbusters in primary care, to large molecule specialised products in secondary or tertiary care environments. These trends have already begun but the experts see the market reaching quite extreme conditions.

Centre stage
In such a hypercompetitive market, the part played by the KOL will  develop from a supporting  role  to take centre stage. It will be essential to facilitate market access, enable rapid penetration and to support crisis response. As well as becoming more important, KOL management will be brought in earlier in the development of launch plans. This will be especially important for the innovative, high-value products that face particular scrutiny from payers. In short, the authoritative industry professionals saw KOL management becoming, as Norbert van Rooij of Germany's Grünenthal, put it: "Our number one USP".

Whether at global, regional or national level, the best KOLs will become ever more discerning. This, in turn, implies that pharmaceutical companies will have to make themselves more attractive to KOLs by being more professional and becoming the collaborator of choice in their target market. Such distinctive, differentiated positioning is difficult in today's market but, as the executives pointed out, it will become more so as the industry continues to consolidate, globalise and move to specialised niches. This result was not surprising but the force with which the respondents expressed it was a revelation.

The second major finding in this part of the research was equally important, but less predictable. Today, KOLs are synonymous with senior clinicians, but in the future these leaders expect that definition to broaden. KOL management in the next decade will come to include the management of payers, health economists and thought leaders in fields like politics and economics. This goes beyond increasing the number of target KOLs to mean an exponential increase in the complexity of the KOL network and will make it much more difficult to understand and manage such networks.

Radical change
This huge increase in complexity will lead to the third major difference. None of the interviewees saw any alternative to a great leap in the formality, comprehensiveness and rigour of KOL management. Information will be shared across and within business units, and the entire KOL process will become far more managed. This will include closer links into the activities of different departments, more specific targets and much more accountability. Alexandre Gultzgoff, of Sanofi Pasteur MSD, likened present and future KOL to "a Model T Ford and a modern Ferrari", respectively. Frederic Ebrard of Pfizer described the shift as being "from Artisan to Industrial". Both descriptions convey the radical change that is expected as the industry tries to accommodate the fundamental shifts in the healthcare environment.

The executives were asked what particular changes their own companies planned in order to develop and implement this new model of KOL management. Here, the answers were more divergent. Therapy area interests, geographical focus and, to some extent, current practice varied. With such a mixed group, it was unsurprising that they did not all have exactly the same strategy. However, there were two common themes: organisational and technological change.

The anticipated organisational changes involved process, structure and culture. All envisaged much greater sharing of information. Some interviewees also described the need to break down functional silos and to increase cross-functional working. These process changes seem to be particularly important for marketing–medical interaction. Part of this drive to a cross-functional approach is expected to involve restructuring of traditional organisations to accomodate seamless KOL management. Complementing these structural and process changes, many saw the need to equip their key people with knowledge and skills to enable them to work across boundaries. Finally, all respondents identified that working habits would need to be adapted to support the more tangible organisational changes.

Information systems
The second, technological, set of anticipated changes reflected the earlier observations that KOL management was becoming far too complex for the relatively informal, mostly manual, systems that some businesses still use. Our executives saw investment in specialised KOL management software as essential. Further, they identified the key functions of information systems, such as:
• to facilitate data sharing across the multiple 'touch points'  where the company works with KOLs
• to enable collaborative working across functional boundaries, especially medical and commercial
• to work across the entire KOL management process from beginning to end.

Real insight
Looked at from another angle, market leaders see the KOL process as a specialised form of knowledge management, in which raw data about KOL activity is first organised into useful information. That information is then synthesised with the rest of the company's information about the market to create the firm's intangible, but vitally important, knowledge asset base.

Much of that knowledge, although functional and necessary to the operation of the organisation, will be enabling basic activity rather than competitive advantage. The ultimate value of the newly rigorous, IT-enabled KOL systems will lie in the small proportion of the knowledge base which is unique and hard for competitors to copy. This truly deserves the over-used label of market insight and will form the basis for sustainable competitive advantage.

Although they differed in detail, the research subjects all saw the need for a great deal of investment, in both time and money, in KOL management systems. Equally, they saw senior management commitment as the essential precursor to such investment. 

Delivering value
The final set of questions concerned  barriers that might hinder the implementation of ambitious KOL plans. These fell into three categories: leadership, culture and technological implementation. The group all felt that their leaders' understanding of the situation was critically important. Without their strong belief in the need for distinctive KOL management capabilities, other priorities would clash with and derail plans. Without a change in culture, especially in the traditional rivalries between different departments, even good plans would get caught up in departmental politics. Without professional and experienced project management, the implementation of KOL technology would fail to integrate with other important systems, and so fail to deliver full value.

The market is changing but early signs of KOL management excellence are already to be seen in the ideas and plans of leading pharma companies.

The Author
Dr Brian D Smith is a visiting research fellow at the Open University Business School and a consultant. He acknowledges the support of Cegedim Dendrite in carrying out this work.
To comment on this article, email pme@pmlive.com

15th September 2009

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