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Inner integration

Pharma companies are rejecting the silo approach to enhance customer value

A set of Russian dolls, each with their top half removed, except for the smallest one in the middleThe pharma industry is under severe pressure from a range of challenges, including potential revenue loss from brands coming off patent, the need to comply with impending healthcare reforms and the pressure to keep all stakeholders happy, from payers and providers to the Government and patients. The traditional commercial model has come under serious scrutiny to devise the right response to this industry challenge.

Currently, sales and marketing teams in pharma companies are often product-focused and work largely in brand, geographical and customer segment silos. This means that customer-facing teams — field sales, brand management, and medical affairs — interact with customers separately from other teams without adequate communication or co-ordination, and therefore pharma companies do not present a unified face and value proposition to their customers.

It is clear that a brand-centric model relying primarily on a large field sales force is ineffective in tackling these challenges and delivering the required revenue results. Pharma companies therefore need to adopt a new model to combat these issues.

Among the factors driving the need for a fundamental change in the pharma sales and marketing model are:
• Revenue pressures: With an increasing number of patent expiries, pharma companies are faced with a sharp reduction in sales revenue, which is unlikely to be compensated for by new brands. All operational costs are under scrutiny as companies brace for lower revenues.
• Low field force effectiveness: Pharma reps are unable to get quality face-time with physicians. Physicians' 'do not call' lists are ever increasing, making the likelihood of conducting face-to-face detailing less likely. Thus, pharma companies do not earn an adequate return on their significant investment in field force.
• Increasing payer control: Payers are seeking greater control over treatment choices, with safety, efficacy, and cost as their key priorities. The emerging trend of 'pay for performance' is gaining momentum.
• Growing patient knowledge: The pervasiveness of the internet, as well as increasing awareness of healthcare, product, nutrition and lifestyle choices, have created a more informed breed of patient.
• Economic and healthcare reform and the regulatory climate: The recent economic crisis, impending healthcare reform and continued concerns regarding drug efficacy and safety will keep up the pressure on all aspects of the pharma business.

The emerging marketing model
As a response to these dynamics, a new sales and marketing model is emerging. While it is difficult to predict exactly how this change will unfold, some fundamental principles are becoming clear. To survive, the industry must expand its definition of 'customer', exploit new channels of communication, employ targeted messaging and emphasise patient wellness.

1. Expand the definition of 'customer'
For years, pharma companies have regarded the physician as their primary customer. Recently, however, the physician's hold on the prescription decision has slackened, as payer control, Pharmacy Benefit Management (PBM) influence and patient knowledge have grown, and there are many key influencers in the purchasing decision, including hospitals, key opinion leaders, university medical centres and other specialised organisations. The pharma sales model needs to acknowledge that one solution does not fit all, and approaches tailored for each demographic are required.

2. Exploit new channels of communication
Customers are increasingly using the internet to research product information on their own. The positive outcome of this is an increase in reactive sales from online engagement but pharma companies cannot rely on this benefit alone and need to reach a balance between face-to-face interaction and online delivery of content. The companies will need to be proactive about investing in digital content that can be delivered through multiple communication channels which, if done well, can help them to reduce sales and marketing costs significantly while improving the effectiveness of the interaction with their customers.

3. Employ targeted messaging
As marketing teams refine their customer messaging, they must focus on messages specific to a need in any given customer segment. Though customer analysis already takes place, there needs to be significant increase in the collection of customer data, understanding of customer needs, and the ability to respond personally. From a sales interaction standpoint, the ability to respond to customers' queries through their preferred communication channel with pertinent information will dramatically improve the quality of the interaction. Collations of these inputs should be critical to forming the marketing plan.

4. Emphasise patient wellness
Today many patients are very well informed about personal health and spend considerable time researching disease conditions and available treatment options. Many benefit from support groups, especially where there is need for lifestyle change, or in long-term care. As pharma companies focus on patient education and motivation, they should also look for opportunities to reinforce compliance with prescription regimes and behaviour modification, as appropriate within regulatory boundaries. Social networking sites provide a great platform to motivate internet-savvy patients at very low cost of individual interaction. The growing interest in 'pay for performance' reinforces the focus on patient wellness and on taking a holistic view of the treatment.

Going forward, pharma companies must focus on the safety, benefits, cost effectiveness and personalisation of products to remain competitive and ensure payment for their product.

Moving to the emerging model will result in significant benefits both for pharma companies and for patients. Patients will have access to, and control over, information, improved outcomes and greater accessibility (Figure 1). For pharma companies, using the new model will encourage increased revenue from new prescriptions, better patient adherence, and customer loyalty despite availability of generic products. There will also be a cost saving for the sales and marketing teams, as fewer resources will be needed to support the field force operations. In the long term, there will also be an improvement in healthcare overall, with better health and wellness of patients.


Figure 1: Benefits for customers 

Pharmaceutical company



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•  better information
•  timely delivery
•  'pull' mechanism, not 'push'

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•  improve outcomes
•  increased comparative study
•  better product pricing

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Managed markets

•  improve product safety and efficacy
•  improve motivation
•  improve affordability

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Medical ops, etc

•  single point of contact
•  better product information
•  improve relations

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Hospitals, UMC, KOL...


Making the case for change
Moving to this new sales and marketing model represents a very significant transformation. The first step is to establish the case for change and secure senior management buy-in. As part of this first step, there is a need to:
• Establish a robust business case for investment and justify how value will be created for customers and for the company.
• Define the business capabilities underpinning the realisation of value.
• Define the implications on sales and marketing processes, among them the impact on the organisation, the need for new technology, data requirements, and so on.
• Identify appropriate change management and communication steps to ensure adoption and accountability of the new model.
• Make strategic choices on prioritisation and sequencing, resulting in a practical implementation roadmap.

The next step is to ensure that the estimated value can be delivered through the new model. Choices must be made regarding leveraging a company's existing capabilities and assets, and what new capabilities will be needed to build this from scratch. Key elements across the sales and marketing model are described in Figure 2.


Figure 2: Key elements in the sales and marketing model 

Key elements in the sales and marketing model


Ensuring adoption, realising value
A change of this magnitude has many moving parts, encompassing multiple functional domains in terms of sales and marketing and different aspects including people, data, technology, and process. These separate parts must be synchronised for successful value realisation.

Bear in mind the following themes:
• Customer first: Keep the customer in the forefront of all decisions and adopt an outside-in perspective to the programme.
• Stakeholder adoption and accountability: Ensure adoption and accountability across the key stakeholders through clear and consistent messaging as well as deliberate change-management activities. It is very important that customers look at this as a value-added interaction rather than a sales push.
• Technology choices and execution: Upfront strategy is needed to make the right technology choices, such as selecting the right tool set, and to leverage existing assets for flawless execution. Companies should consciously look to leverage third party platform and service offerings in areas such as digital marketing, which can help get to market faster, bring capabilities that have been honed in early adopters of digital marketing (for example, retail goods) and minimise the risk and investments to keep the platforms current.
• Data quality and governance: Good data — about physicians' touch points, prescription behaviour, preferences and so on — allows delivery of personalised messages to the right target segment. Collect data about activities, outcomes and behaviour to refine this continually, establishing a 360 degree feedback loop.
• Incremental business value delivery: Bring early momentum by delivering value to key stakeholders incrementally. Sales and marketing is a multi-year journey but internal and external stakeholders need to see tangible benefits from the outset.

Pharma companies must evaluate their current sales and marketing models if they are to be successful in tackling the industry's current challenges, but they must take a holistic approach to this transformation to realise benefits.

The Authors
Kamal Biswas is a senior principal in the life sciences practice in Infosys Consulting, Inc
Srikanth Srinivasan is the managing partner of the insurance, healthcare and life sciences practice at Infosys Consulting

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27th May 2010


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