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Effective strategic planning

The advantages of being nimble when responding to challenges


In the current state of mounting pressure for pharma companies to deliver higher R&D returns despite rising development costs and stagnating profits, at a time of growing uncertainty regarding the future of healthcare, strategic planning is more important
than ever.

“Effective strategic planning and monitoring helps pharmaceutical companies to be nimble in their response to these challenges… and quickly adjust their future forecasts when market situations inevitably change,” Simon Bittlestone, managing director of financial analytics firm Metapraxis told PME.

However, this is not without difficulties. As Simon Bittlestone noted, “a major obstacle is that market shifts in the pharmaceutical industry are significant, fast-changing and unpredictable. As a result, local management teams are often sceptical of central strategic planning… and may not show support for [it].” But he also pointed out that, when appropriate processes and tools are in place, such teams can be engaged to validate strategic planning and scenario modelling, and therefore support the achievement of agreed targets.

Another problem, told to PME by Paul Midgley, director of NHS Insight at Wilmington Healthcare, is that pharma typically struggles to match customer needs to its own value proposition. Two important reasons for this are “a lack of autonomy in local market access teams and a shortage of staff sufficiently skilled and empowered to drive the targeting and engagement of key customers in individual localities”.

Long-term goals and development

So, how can these and other challenges be mitigated? Experience from the pharmaceutical sector and other industries has taught us that this requires a multi-targeted approach. For example, since strategic planning is inherently long-term oriented, it should begin with an objective evaluation of the organisation’s goals.

Simon Bittlestone explained: “Strategic planning should set out how achievable future targets are based on past performance, and should identify which areas of the business and drivers of value will have the greatest effect on achieving these targets.” Additionally, and crucially, planning should enable companies “to model different scenarios and assess the impact of later strategic decisions on the business”.

On the issue of long-term development, Paul Midgley added that it’s important to align the life cycle goals of a brand with the needs of key customer health economies. What’s more, he said, organisations should be able to identify innovators, early adopters, late majority groups and laggards for market access throughout the brand’s life cycle, and revisit the segmentation process regularly.

Dealing with regulatory change

Another crucial point is enabling flexibility. Effective strategic plans allow organisations to adapt to regulatory change at a national, regional and local level. Several of these changes are taking place in the UK. Take, for instance, the devolution of NHS spending power in Greater Manchester, which, effective from April last year, gives councils and health groups the responsibility to manage a £6bn health budget. Another example is the evolvement of regional health and care organisations into Accountable Care Systems (ACSs), under new plans released by NHS England.

More generally, an increased focus on good practice compliance and greater regulatory pressure from tax authorities underscores the need for “good strategic planning solutions [that] link countries of operation, sale, revenue and legal entities, supporting firms to make strategic decisions about which markets to operate in and how,” said Metapraxis’ Simon Bittlestone.

The role of system dynamics

But even a well-thought out multi-targeted approach will fail without proper modelling. In this regard, researchers highlighted in the journal System Dynamic Review that a common problem with strategic plans in pharma is that they are derived from implicit mental models. “Marketing strategies are developed based on desired expectations of their effects on drug sales and market penetration,” explained Mark Paich of Colorado Springs-based Lexidyne LLC. And since mental models are typically difficult to analyse and evaluate, “they often result in suboptimal decisions when it comes to strategy development and brand planning in the pharmaceutical industry”.

According to Paich and his team, a more effective approach is to embrace the data-driven world of system dynamics. In particular, pharma companies need to become more skilled at leveraging the wealth of data they have at their disposal on patient flow dynamics, doctor adoption of drug products and therapy option preferences within a disease market place; because the key to more effective strategic plans lies in understanding how these factors interact with one other through the development of integrated system dynamic models.

Forward-thinking data

Simon Mason, chief commercial officer at Medmeme, a global database company headquartered in New York, agrees on the importance of harnessing data.  He told PME: “Thanks to advances in data integration, data mining and metrics analysis technologies, critical information that was once stored in silos can now be filtered, aggregated and analysed to give pharma a real advantage in strategic planning.”

One of the key benefits is the ability to make predictive analyses. “Forward-thinking data enables pharma to take a more informed sales and marketing approach, and better understand how it can fulfil patient and prescriber needs, now and in the longer term,” said Mason. He cited, as an example of this kind of predictive analysis, Share of Scientific Voice (SoSV), which measures mentions of terms within scientific documents, allowing for the evaluation of competitive drugs, areas of focus and comparative launches in a particular therapy area.

On this point, Metapraxis’ Simon Bittlestone emphasised that data analytics can help strategic planning in many ways. For one thing, he noted: “It can provide indicative forecasts to begin strategic planning efforts, by taking into account all historical financial data… as well as any expected changes in key business drivers, such as market size. Additionally, it can automatically alert management to under-performing units… whereas traditionally this information may have been hidden by good average performance across the board. Finally, [data analytics] can spot new opportunities and give finance teams a head-up when strategic plans should be adjusted.”

NHS Insight’s Paul Midgley adds: “There is [also] a golden opportunity for pharma to help shape the delivery of NHS services by gathering data on how these are being used, analysing it and sharing the findings with CCGs, NHS Trusts and new emerging organisations.” Paul noted that Hospital Episode Statistics (HES) data sourced from NHS Digital, for example, alongside interviews with stakeholders such as vanguards and CCGs as well as patients, allows us “to gather insights on trends and gaps or inefficiencies in patient care in a variety of priority and non-priority disease areas. This in turn can be used to highlight the burden of disease, identify variations in patient outcomes and provide evidence for change in therapeutic areas”.

Creating a route map

All in all, data management and analytics, and the information derived from them, can help pharmaceutical firms move in the right direction to keep their business up to date with current industry tides and, ultimately, attain growth and expansion.

“High quality data and interpretation, and advanced, dynamic segmentation, combined with predictive modelling can very accurately reflect the most likely approach to optimise market access,” said Paul Midgley. This facilitates another key step in the attainment of effective strategic planning: the ability of pharma companies to “assess potential gains for both themselves and their customers, and create a clear route map of their year-by-year capacity and capability for workforce and multichannel engagement planning.

“Data and analytics provide the building blocks from which insight can be derived and conclusions drawn. Without local, place-based data relating to all the potential care settings in which patients may seek treatment, strategy is merely guesswork.”

No off-the-shelf plan

One final point is worth noting. As explained above, long-term goal setting, flexibility to adapt to regulatory changes, and data management and analytics are key to effective strategic planning. But because of the diversity of companies and organisations within the industry, the overall planning effort is bound to differ from one case to another. Tailoring is crucial to its success.

Article by
Lorena Tonarelli

is a healthcare journalist

4th October 2017

Article by
Lorena Tonarelli

is a healthcare journalist

4th October 2017

From: Marketing



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Aptus Health is dedicated to advancing health engagement. The company offers end-to-end digital health engagement solutions spanning all areas of...