Challenging markets, challenging times



We recently had the chance to chat with Ian Thompson, Managing Director Australia and New Zealand, Amgen about his experiences in Australias pharmaceutical marketplace. Ian will be speaking at eyeforpharmas upcoming Sales Excellence and Business Intelligence for Pharma Australia conference in Sydney, September 1-2 on building more customer-centric organizations.

eyeforpharma: What makes the Australian market uniquely challenging?

Thompson: The key challenge is the fact that there is effectively only one payer- the Government. There is no real private market, and the subsidized market is a highly regulated and complex HTA (Health Technology Assessment) market, which makes the path to reimbursement challenging. From a sales and marketing perspective much of this is out of your control, but you need to be close to your health economists and your government relations teams to understand how theyre approaching the key payer and how theyre working to achieve reimbursement.

The question is what do you do in the pre-reimbursed environment? Do you do a soft launch? Do you wait for your PBS launch? These are some of the biggest challenges, because the impact of entering the private market and then experiencing delays to reimbursement can be profound, in particular to the equity of the brand which can be damaged because its been sitting out there in a pre-reimbursed environment for so long that physicians tend to make up reasons, other than the cost of the product, not to prescribe it in favor of other brands.

Once reimbursement is achieved the Australian market is positive. Most would agree that physicians in this country are relatively rapid adopters of technology, and as a result, there is fast uptake of new medicines. Theres a mix of experience-based and evidence-based prescribers you get the rapid adopters and the followers. There is also relatively good access to customers GPs and hospitals particularly when compared to some European markets. The market is well regulated market in terms of the Medicines Australia Code of Conduct in that it is essentially self-regulated.

eyeforpharma: How do you see things changing over the next few years?

Thompson: Medicines Australia has three priorities that address the industrys future challenges and priorities. The first is access. How do we continue to get access to innovative new medicines at a price thats acceptable to both the innovator and the government? Theres been significant reform in this area through the changes to the PBS which occurred in 2007 and more is likely. There also are new challenges that are particularly relevant to a company like Amgen. The rapid emergence of biologics, presents challenges for both government and industry in terms of securing access for the community, and it will require some innovative thinking and approaches. Amgen would like to see Australia use its excellent reputation in the regulatory arena and its record in shaping directions for reimbursement policies to become a world leader in how to secure access to this next generation of medicines.

Second, the image of the industry continues to be challenged. A number of initiatives are working towards improving our image, for example transparency around customer education and entertainment. There will obviously be skeptics about our promotional practices and our disclosure of these. Building trust with the general public requires us to purse a strategy that enables groups to understand more about what we do, why we do it and how we do it. This will be important in improving our image.

Last and most obvious is innovation. This market is driven by innovation and we have to find ways of delivering innovation in healthcare more effectively. That is our biggest challenge: discovering innovative new medicines, making them cost effective and supporting them with innovative healthcare support initiatives. This challenge has been compounded by the world economic crisis because the venture capital for innovation is down, as are budgets to drive innovative healthcare support programs.

eyeforpharma: Can these problems be solved by individual, one-off efforts or will it take industry-wide initiatives?

Thompson: Its a combination of both. There will be some companies who take the lead when it comes to innovation, there are pioneers of innovation in therapeutic areas like diabetes, mental health, cardio-vascular health, bone health etc. We all have to work together as an industry on image, because if youve got one detractor in the industry then it affects the whole industry. Similarly, with access, we need to work together as an industry.

eyeforpharma: We talk a lot in the industry these days about being customer-centric, but what does it really mean?

Thompson: Its about stepping into the shoes of the customer and appreciating the demands that are placed on them and then really adapting and developing our service delivery to complement their needs.

To be customer-centric you have to answer some simple questions such as: How do we make a clinicians life easier through what we do, rather than being an irritation or inconvenient interruption to their day? How can we help them help better care for their patients? If a customer is not responding to our offering we need to understand why and do something about it. We have a choice, we can be considered spam or value adding partners in healthcare. To be the latter you have to deeply understand your customer.

eyeforpharma: How close are we to getting to the level of customer-centricity we need to be at?

Thompson: The challenge is that the old models have worked pretty well until recently and as such are entrenched. There is always fear associated with changing something that has worked for a long time. There are also plenty of examples of failing to change in the face of significant environmental shift General Motors is a visible example. Getting alignment internally can be very challenging.. Many brand managers and sales people are good at listening to our customers and hearing what theyre asking for and trying to get that message through. But the message gets killed as it travels up the organization if the argument is not well articulated and compelling.. Sales and Marketing skills are as important internally as they are externally!

eyeforpharma: What other industries might we look at as a model for getting this right?

Thompson: Banking and finance is one that springs to mind. Notwithstanding some of the mess banking is in right now, my own experience with a local bank when they they assigned a customer service individual to me was very positive. They allowed me to channel all my questions and needs through that person who does all the legwork for you within the organization. Its very obvious that theyre using some sort of CRM system. Its clear they have a lot of information about you, your loans, etc. They do seem to understand and offer services that compliment where you are in your lifecycle of wealth/debt. They even track where youve been traveling and offer services related to that, for instance. Theyre just getting smarter at understanding what youre doing and how youre doing it.

eyeforpharma: With your experience as a rep in your early career, how do you think sales and marketing might work more effectively together?

Thompson: You can have the best marketing or brand strategy in the world, but if it cant be executed by a rep in front of a customer, then its probably redundant. And its got to fit the channels that youre able to operate in I think thats the most important thing. We cant go directly to the patient in most markets in the world, but we have to get to the customer in a clear, consistent, valued way in the major channels and obviously the rep is still a major channel the major channel.

eyeforpharma: Is improving communication between sales and marketing a simple matter of just getting them together at the same table?

Thompson: Its common sense really, but it may not be happening as much as it should. When it comes to things like message management, strategy review and cycle review you need the reps and regional managers at the table. They are the ones talking on a day to day basis with your customers it takes an enormous amount of market research to get the same level of insight.

eyeforpharma: What else are you and your teams focused on?

Thompson: Key account management is critically important, particularly if you are in the hospital setting. KAM starts holistically then drills down to the areas of greatest impact understanding the hospital and the environment in which it sits. Good KAM models identify the key stakeholders, the key connectivities, patient flows, bottle necks in the system and critical decision maker needs. Integrating KAM cross functionally is the key to success. When you see it working well it looks like a SAS or SWAT team in action.

To learn more, be sure to hear Ian Thompson speak at the Sales Excellence and Business Intelligence for Pharma Australia conference in Sydney, September 1-2. For more information or to register, visit the conference website at www.eyeforpharma.com/au.