Resurrecting Overlooked Commercial Channels

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For decades, many pharmaceutical battlegrounds have been dominated by the drug companies with the largest army of sales reps. If sales started to dip, they simply hired more primary care sales reps, and presto, they were back on top, says Matt Wallach, executive VP and general manager at Verticals onDemand. Undoubted ly, an effective product was underpinning the sales effort. But there was very little pressure to develop truly innovative marketing strate gies to improve sales or to tap into smaller, ancillary commercial sales channels to gain market share. It was all about critical mass. “It’s no wonder the pharmaceutical world is so shaken by the tremendous changes rippling through the industry right now,” Mr. Wallach says. “We’ve all been big, fat, and happy for so long that we don’t really know how to adapt, what strategies to try first, or what new tech nologies to implement. Some companies are trying new strategies such as investing in the development of specialty drugs — products that are difficult to replicate and more likely to sell at a premium. It’s a strategy that is work ing so well, in fact, that major pharma compa nies are acquiring their own specialty businesses, such as A s t r a Z e n e c a ‘ s acquisition of MedImmune.” Others are throwing lots of money into their existing information tech nology (IT) systems, hoping that in doing so, they will improve efficiency and thereby increase profitability. Unfortunately, Mr. Wallach says many are now throwing good money after bad, since it takes so much time and money to try to transform these IT dinosaurs into something that can keep up with today’s changing business. Still other pharmaceutical companies, Mr. Wallach notes, are making highimpact changes like refocusing on commercial sales channels, such as managed markets teams, to help stimulate revenue growth. “Each of these commercial subgroups — defined as all of the channels that do not sell to primary care physicians, i.e., specialty sales, managed markets, and key opinion leader managers — have had increasingly larger roles in generating revenue as of late,” he says. “Indeed, executives are starting to see the incredible potential that these previously over looked commercial channels offer.” WHEREHAVETHEYBEEN? Until recently, these subgroups have largely gone unnoticed and received relatively little in terms of technology support. This is especially true in the area of customer relationship management (CRM), according to a Gartner Group research report and many lifesciences industry analysts. According to Accenture’s Life Sciences Partner, Shawn Roman, even though there has been a significant rise in specialty care sales forces and other smaller sales teams outside of the primary care area over the last five years, technology hasn’t caught up yet. So while the primary care salesforce has received huge investment in CRM technology to help them efficiently target primary care physicians, specialty care reps, for example, have been stuck using tools that are designed to support the one to one selling model of the primary care sales team. “These client/server CRM systems do not offer the unique features and functionality required by, say, a managed market account executive or a KOL manager,” Mr. Wallach says. “As an example, formulary position man agement is not a function available in most traditional CRM systems, but it’s vital for managed market AEs who are on the front lines vying for a better formulary position. Specialty care reps need reimbursement infor mation readily available but these data are not easily accessible through most existing CRM systems. KOL managers need to fully under stand each physician’s sphere of influence. Generalist CRM systems simply don’t offer these types of unique features that empower smaller commercial teams to succeed. So, they’re trapped — it’s the classic `square peg in a round hole’ problem. “And because the expensive client/server applications already installed are not useful to smaller commercial channels, they simply don’t use them,” Mr. Wallach continues. “Instead, teams waste time with grossly ineffi cient sales methods. For example, hospital reps may target physicians by walking around — literally. They walk to the operating room in a hospital and look at the names on the board. They walk to the emergency department and look at the names on the board. They walk up to the hospital pharmacist and ask who is ordering the most of Drug A or Drug B. They walk outside for a break, and so on.” To remedy the problem, some pharmaceu tical IT departments have customdeveloped expensive systems to accommodate these sub groups’ unique needs, but homegrown sys tems have only solved some of the problems and are pricey to build and maintain. Still other companies expect their reps to work with spreadsheets, printed reports, and Filo faxes. Not only are these tools little more than data repositories, but they also do not allow for the best practice sharing that’s so important in today’s marketplace. The reason so many commercial channel F Matt Wallach SaaS — software as a service — is the miracle drug to remedy the pharmaceutical world’s ailing sales performance and shrinking commercial budgets.

MATTWALLACH IS EXECUTIVE VP AND GENERAL MANAGER AT VERTICALS ONDEMAND INC., PLEASANTON,CALIF.,WHICH OFFERS INDUSTRYSPECIFIC SAAS CRM APPLICATIONS BUILT ON THE SALESFORCE PLATFORM. FOR MORE INFORMATION, VISIT VERTICALSONDEMAND.COM. COMMERCIALCHANNELS RESURRECTING OVERLOOKED 80 M a y 20 08 PharmaVOICE PV0508 Issue Proofs 4/25/08 9:35 AM Page 80

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