Setting the Stage for Pharma Commercial Operations Transformation
Mark Degatano on the primary challenges facing commercial operations teams and the future of pharma.
The commercial operations landscape for pharma is changing rapidly. For an industry built largely around primary care physicians and blockbuster products, new trends and big data is turning the industry on its head. We talked to Mark Degatano, a seasoned pharmaceutical expert with over 30 years of commercial operations experience in pharma, from Merck and from the supply side (SHS, ImpactRx, and Medivo). He is also the newest advisory board member for Verix.
eyeforpharma: In your opinion, what are the main challenges commercial operations teams face nowadays?
Degatano: It’s an exciting time for commercial operations, as there’s lots of change. Teams need to be very flexible in addressing highly dynamic organizational and market scenarios. Downsizing, mergers, new product launches, patent expirations, new competition – these are just a few of the factors that challenge pharma commercial operations. For Sales, Managed Markets, and Brand teams to succeed, everyone needs to be on the same page; it’s imperative that teams are agile with data integration and application to their field forces, so they need up-to-date, accurate, trustworthy and timely data sources.
eyeforpharma: How do you see Big Pharma evolving in the next 3-5 years? What will be the most influential trends?
Degatano: A number of trends are taking center stage and will evolve pharma over the next several years.
Blockbuster specialty products
There’s the old adage that the world of big pharma or the big blockbuster is dead. There is much truth to that with regard to primary care products. But the rise of blockbuster specialty products is set to smash that myth.
Pharma is focusing on higher-valued specialty products in HCV, Oncology, MS, and other therapeutic areas. This focus causes substantial changes in commercial operations, such as smaller sales forces combined with an account or team approach to their customers.
These specialty products call for different handling. Oftentimes, these products require a “buy and bill” approach so the rep has to be highly knowledgeable in both the science of the product and the reimbursement implications.
Biosimilars are emerging
Biosimilars present an entirely new set of challenges than generics ever did because they will compete with the original brand on all marketing components, not just price – although price to managed markets will be an intense battleground. Biosimilars will be branded products that physicians can switch to; however, it is expected that the pharmacist will not be able to substitute products without physician approval.
Personalized medicine
The explosion in new diagnostic tests that uncover a patient's propensity for certain diseases, status of condition, and expected responsiveness to specific treatments is a terrific advance for healthcare. For example, Biogen’s Tysabri for MS was almost doomed when a severe cerebral infection occurred in certain patients. When the relevant biomarker was discovered, it unlocked the great benefit of Tysabri for patients not at risk and eliminated the risk of giving it to those who could be harmed. There are numerous current examples and many more on the way. The use and application of these biomarkers will inform new product development and all subsequent commercialization activities.
Big Data initiatives
The development and commercialization of a product depends on leveraging the vast amounts of data that companies are obtaining from a wide array of current and new data suppliers. The rapid expansion in new data sources is all about the patient. New data assets are rapidly emerging and data aggregators are seeking to “link” them, in a HIPAA compliant way, for creating a more robust and longitudinal view of the patient. As a result, Big Data initiatives are becoming Big Applications.
But just gathering the data from social media channels, personal devices and patient monitors isn’t enough. Pharma has to harness insights for development and commercialization. To more effectively drive commercialization, pharma will use the data and the insights generated to communicate the right message to the right customer at the right time and via the right marketing platforms.
Flexible field deployment models
The days of the one-size-fits-all field force is gone. In the past, reps were deployed based on the organization’s promotional needs, such as call reach and frequency, across brands, “how many products in the bag”, and according to the logistics of rep travel within a proposed territory alignment.
Managed care, physician practice size and structure, and other issues are driving the need for highly dynamic deployment schemes. Many physicians don’t have time to see reps, and the promotional needs of each brand are often determined by its access in a given locality due to managed market implications. Commercial operations must be flexible, able to shift approaches quickly and aligned to local needs in order to deploy and manage ever-changing sales forces.
New commercial models
New commercial models for account management and team approaches to physician practices, hospitals, IDNs, ACOs, MCOs, and all payers are creating another new dynamic. Physician practices are more structured and shared services mean more accountability and performance management. These factors are driving new commercial models, such as educational, patient adherence, and disease-management programs that help drive brand use by providing a more holistic, or outcomes-based perspective on the brand’s role in overall healthcare. For commercial operations, there are many implications that arise from these new commercial models, including the deployment and performance management of account teams.
eyeforpharma: Many times, it seems that no matter how good the BI solution is, it fails to deliver the results intended for commercial operations to optimize performance. Is that true?
Degatano: Yes, it is true. My experience from both the client side and supplier side is that pharma struggles to break down the silos across Sales, Marketing, Analytics, Commercial Operations, and IT. Here’s what happens: Each department has its own agenda.
While marketing is focused on national brand performance trends, analytics wants to improve the effectiveness and efficiency of responding to queries and reconciling disparate data sources. On the other hand, commercial operations needs data to monitor sales execution and revise planning and support (for budget needs) accordingly. IT is tasked with fixing data problems and addressing internal requirements.
All of these conflicting needs does not bode well for a successful BI solution. You see, BI solutions are always well intentioned, but they inevitably fall short. The development process makes too many compromises to address each constituents’ needs. Business rules, time schedules, applications – these are just a few of the shortfalls.
I’m optimistic, because new tools for data integration and user interface are emerging. Fewer compromises are required and the solution has a better chance of meeting end-user needs.
eyeforpharma: In 2015 and into 2016, many new drug approvals are expected. What is your recommendation to pharma companies launching new drugs, specifically specialty drugs?
Degatano: Even with all the changes in the industry, pharma can hold on to these two truths: (1) new products are the lifeblood of any company, and (2) the first six to nine months of a product’s launch ultimately determine its success – or failure. These truths remain because physicians are keenly focused on providing great patient care. If a new product is shown to work, a physician will keep using and recommending it. If it doesn’t, physicians will quickly move on.
Specialty products are unique, however, for commercial operations. Because of their higher price points, lower promotional expense and smaller field support, they hold great opportunities. But they are not without challenges. The science, and as a result the messaging, is more complex. Organizations must employ focused and targeted resources. Namely, a well-trained and supported sales force is needed to handle explaining the treatment, its side effects and reimbursement paperwork, for example.
Timely and accurate performance monitoring is usually a significant challenge, too, due to specialty pharma’s wide range of therapeutic areas like Oncology, Orphan Drugs, Vaccines, Infusion therapies and HCV – generally expensive products that require complicated data capturing. An additional consequence of these data challenges is the difficulty in finding the right targets – that is, if reps do not have accurate utilization data at the physician level then how are they going to find the ones with greatest brand potential?
eyeforpharma: The global market for cancer drugs has hit $100 billion in annual sales, and could reach $147 billion by 2018, according to a new report by the IMS Institute for Healthcare Informatics. Where do you see the market headed? Which kind of data analytics solution can support specialty pharmacy data together with giving clarification on the patient journey?
Degatano: The global cancer drug market is continuously coming up with new options. The future is exciting, as diagnostic tests, biomarkers, and disease indicators are ultimately helping physicians offer better treatment. However, it’s also becoming more important than ever to capture data and help pharmaceutical companies target oncologists and hematologists in a timely manner and with the right messages.
With timely and highly relevant data analytics and insights, the rep could say to the doctor, “We have a suitable product for your patients who were recently diagnosed and are in need of treatment. Here’s what it does, and here’s why it’s the best solution.”
About the Author:
Annie Reiss, Vice President Marketing, Verix
Annie is a seasoned marketing executive with over 20 years experience creating and developing brands in a variety of industries. She joined Verix in 2013 as VP of Marketing, bringing a wealth of experience working with high-tech and consumer companies in B2B and B2C markets. Annie regularly writes on topics related to commercial operations/sales effectiveness, such as drug launches, managed markets, brand and sales collaborations, and big pharma trends.