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The Non-Pharma Pharma Company?
Pharma’s commercial model is rapidly evolving. But where will it be in twenty years’ time?
Across all industries, consumers are demanding more and companies are responding, adapting their commercial models in efforts to meet their customers’ evolving needs.
Pharma is not immune to these wider changes and most companies are actively rethinking the traditional model to ensure they can compete in an increasingly multi-channel, multi-stakeholder environment.
Healthcare is going through an “amazing transformation process” driven by new media, says Tim Kneen, Executive President at Merck. “The standard pharma business model of high volume, get access, make as much noise as possible will not be relevant going forward,” he says. “Across all industries, the most successful companies offer solutions that reflect the individual needs of their customers, but especially those that recognize these needs before the customer does.”
There are three “mega trends” in healthcare at present, says Kneen – the delivery of outcomes, personalized treatment and customer engagement. Addressing each will be critical to pharma’s successful evolution.
“Healthcare is shifting from acute medicine to health management, which includes determining susceptibility to certain diseases and early interventions that improve health outcomes. The focus is shifting beyond innovative drug – right now, the best possible outcome is that the patient takes the drug as directed but, with chronic disease, lifestyle intervention can often have bigger impact than drugs themselves.”
Pharma must think seriously about extending its offering through innovative devices and patient support programmes, he says, pointing to Merck’s Rebismart, a connected device that complemented MS therapy Rebif.
“Not only can we collect information on adherence but we can see the impact of the drug in terms of quality of life,” says Kneen. “This means physician and patient can have a discussion based on data, which essentially transforms the interaction to improve outcomes.”
With personalized treatment, the use of molecular markers and advanced algorithms can help companies to identify those patients who would benefit the most from treatments. He points to Merck’s use of Crispr genomic technology for gene editing as an example, but looking more widely asks who will pay for such approaches in the short-to-medium-term.
His third megatrend is customer engagement. “Patients have unparalleled access to health information, and pharma has to respond to this changing reality. Requirements for engaging with healthcare organisations are radically shifting and pharma is constantly seeking compliant ways to engage with patients.”
Commercial teams have changed hugely over the past 20 years, he says, when pharma was based on a large monolithic sales model with commercial teams tasked to see as many doctors as possible and disseminate promotional materials. Such a single channel model of face-to-face interaction is as good as obsolete, he says, while multichannel selling is essential.
“Historically, the commercial model was repetitive and lacking differentiation, with little guideline influence, for example. The past decade has seen dramatic change; now, multiple stakeholders are involved in treatment decisions and patients are key decision-makers, in addition to physicians, guidelines, HTA, payers, and government, among others,” says Kneen.
“With an increasing number of stakeholders involved in treatment choice, commercial roles have multiplied and diversified, while traditional back-office functions have become customer-facing. Key account management to tailor the right information to the right customer is a critical component.”
Enabled by digital, information now flows through multiple channels, moving beyond face-to-face to social media and remote calls, for example. “It is bi-directional and continuous,” he says. “Now, we can listen and learn, we can provide information as it is required, and this makes a massive impact on how we function as commercial entity now and in the future.”
Integrate or die?
Amid such change, much discussion and debate has revolved around whether the sales and marketing functions should be more integrated, given the undoubted benefits.
GSK is one company that is re-evaluating traditional ways of working, moving into a more cross-functional approach to delivering customer value. “Our aim is to deliver an exceptional customer experience through an integrated approach across sales, marketing, medical and market access. This includes everything from capability building and benchmarking to business planning and execution on the ground,” says Colleen Schuller, Vice President, Global Head of Selling Excellence.
The company now has joined-up teams that look after multichannel marketing and launch excellence, selling excellence, medical excellence and market access capabilities, she adds. “What is most critical here is to be crystal clear on the strategy and how cross-functional teams will work together to deliver value for both health care professionals and patients,” says Schuller.
For Laurie Gery, Head of Commercial Operations at Sanofi Pasteur, integration means education. “We need to make people understand the value of what they bring to the commercial plan – then integration will happen more seamlessly because you are automatically aligning objectives. Integration means fewer head count but it also means that sales gets more complex. It is a matter of mindset and not who is reporting to whom.”
Sales and marketing must be “reinvented” into a seamlessly integrated, commercial outfit, says the Head of Commercial Excellence for a top 10 pharmaceutical company who wishes to remain anonymous.
Ultimately, a successful integration will be based on trust, he says. “The equation for trust is credibility plus reliability plus empathy. Often when it comes to a bad leader, one of these is missing in their role or they have all these components but everything is eroded by self-interest. You have to continually be doing things to build that trust, to ensure it is not eroded.”
A key element is to identify ‘them’ as something external, not sales versus marketing, he says. “It sounds like a minor thing, but it has a big impact on performance.”
Running a digital marathon
Digital underpins the metamorphosis of the current commercial model, with next-generation pharma adopting a multichannel selling model to reach plugged-in patients and healthcare professionals.
Pharma needs to become better at selling in a multichannel world, says GSK’s Schuller. “Reps need to become better at facilitating peer-to-peer dialogue, better at selling using the iPad, and better at virtual detailing. This will help take the sales force into the future.”
For Bogdan Rakitskiy, Associate Director of Commercial and Business Excellence at Teva, pharma must become “efficient in digital strategies through the transformation of the commercial team into powerful skilled contributors. This is the hottest topic across all industries, not just the pharmaceutical industry. Proper management and implementation could bring a quick win in our fast-changing market.”
Building a cross-functional team, with buy-in from employees, is critical. Rakitskiy cites a personalized digital multichannel campaign run internally that aimed to engage 10 percent of employees that in fact reached closer to 50 percent, demonstrating that the staff are willing.
“Modern commercial teams are running an endless marathon of digital transformation,” he says. “We need to give our employees this new knowledge and skills.” A digital manager is necessary for overseeing this process, acting as the ‘coach’ of the cross-functional team, offering skills, support, coordination and communication.
One critical issue for pharma is the need for a continuous stream of new content, he says, pointing to Snapchat stories that are only live for 24 hours. And generic messages no longer cut the mustard. “Pharma content needs constant revision in order to meet customer demand for personalised messages. Before, we could use a sales presentation for over a year, now everything must be changed and updated all the time,” says Rakitskiy. As the longevity of content decreases, so too the cost of content production must decrease.
Is the future of pharma an integration of sales, marketing and medical into a seamless, virtual selling organisation?
“Perhaps,” says Kneen, who says that pharma companies must continually revisit and redefine. “The model of commercial teams will continue to evolve at a pace aligned with the rapid transformation of healthcare systems. The challenge for the industry is to identify the solutions required before anyone else, to respond and evolve quickly. Pharma will need to develop and bring in the variety of skills and knowledge that can respond to this pace of change in our transforming healthcare market,” he says. “As we move away from a focus on volume, it is the valued solution, not the product, that will dictate future winners.”
There are three possible approaches, he says. Pharma can remain as commodity producers, become value innovators or it can become digital health integrators, providing integrated healthcare solutions that reach far beyond the traditional tablet. The latter is where the most interesting changes will occur, he says, as it would clear space for disrupters to enter the market. “Which will be the first pharmaceutical company that does not produce a single drug?” he asks. It certainly seems to be a case of when, rather than if.
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