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BY ROBIN ROBINSON
One of the driving factors to find new new solutions is the looming loss of patent protection for several blockbuster drugs. “We are two years away from Lipitor going off patent, which means we are one year closer to Armageddon, and things are going to get really ugly,” says Matt Wallach, VP of sales and marketing at Verticals onDemand. But the industry is slowly moving in the right direction by investigating how to approach sales differently. Taking steps to improve segmentation, using predictive modeling, and reducing salesforces are all proactive ways to deal with the increasingly competitive marketplace. But those steps are only part of the total equation. “After reducing the salesforces, companies are going to have to operate leaner and meaner, and this will require a retooling of the infrastructure,” Mr. Wallach says. “While a ton of work has been done in reallocating sales forces, segmentation of audiences, and data mining and management, the “The industry is famous for being the first to be second in adopt ing new trends,” says Kelly Myers, CEO of Qforma. Some of this reluctance could be due to an “if it ain’t broke don’t fix it” mentality in the business, but it is more likely to be due to shortrange thinking. “Human behavior is such that if business is going well, no one has the initiative to change it,” says Jim Mercante, partner at TGaS Advi sors. “What the industry doesn’t always do is take a longterm view to determine if the same business model will work in the next five years. Depending upon where the company is today and where it wants to go, bridging that gap could involve quite a bit of change for the orga nization.” The move toward change is afoot as pressures from all sides crash in on pharma. to Navigate NEWTERRITORIES ver the past decade, the industry has invested in new tools and technologies to meet the rising pressures of meeting sales goals caused by drying pipelines, patent expirations, managed care, and dwindling salesforces. The real need,however, is for a dramatic shift in thinking around processes, and that will occur slowly as companies are forced to deal with marketshaping factors. O Although the industry is not known for being quick to adopt new ideas, it may be reaching a tipping point of change. Redefining the Salesforce Landscape 30 J un e 2 008 PharmaVOICE PV0608 Layout FINAL2 5/20/08 12:45 AM Page 30 SALESFORCE tools foundation of the solution lies in going back to square one and overhauling the process. “If a pharmaceutical company was being built from scratch today, its business model would not look anything like those of today’s top 25 companies,” he continues. “That obser vation, in and of itself, is a huge indication that the industry needs to change the way it is doing business. It’s not so much about crunch ing the data differently as it is talking about doing the job differently.” Small companies may be in the best position in these changing times, because larger compa nies have too many layers to change easily. “The difficulty lies in trying to recover from the excesses of the 1980s; we have a hangover of reps,” Mr. Wallach says. “Once a company builds a large infrastructure of reps, it is very hard to reduce that salesforce quick ly, because too many things change too fast. But a specialty pharma company that calls on 2,000 docs has nothing to fix. Specialty orga nizations will do fine in the future.” Reallocation of the salesforce is an impor tant move, but what pharma needs to learn is how to do more with less, he adds. Sales reps need to be trained with new skills, such as learning about all of the information channels available to physicians and providing the information in a way that the physi cian prefers. Changing the mechanism and the medium by which sales reps pro vide information to accommodate the physician’s needs is a step in the right direction, Mr. Wallach says. “I’m not talking about introduc ing closed loop marketing on a Tablet as that is not a fundamental business process change,” he explains. “To me, the change is providing the physician with the option for a stop by, for a call, or for a click. If a physi cian says he or she wants to see a rep, then send a rep; if a doctor wants to phone into a call center and learn about a drug at 9 p.m. on a Saturday, there has to be somebody qualified to answer the phone who has the answers; if a doc tor prefers to check the Internet for drug infor mation, the site and the relevant information need to be there. In this way, a rep can have 1,000 docs in his or her territory and still man age them. They don’t visit them all face to face; instead, they act as the quarterback between the physician and the company. The sales rep of the future needs to be able to transverse multi ple communication mediums.” All is not lost, however. There are ways for the industry to turn itself around, but dramat ic changes must be made in small steps — product by product. Pharma companies of all sizes are looking for ways to operate leaner, and it may take several years for a large pharma company to adapt its processes to become flex ible enough to meet the needs of the ever changing environment. The industry has functioned within inflex ible systems that have forced it to have inflex ible processes for so long; one cannot be changed without changing the other. “Inflexible software systems have become a real barrier in getting things done and have forced companies to build customized applica tions to accommodate the information that is now being collected and disseminated,” Mr. Wallach says. “Companies need a flexible technology platform that allows the possi bility of change or the necessary data will never be able to be pulled together quickly.” With the flow of new products greatly diminishing, big pharma is forced to look at how to maximize its efforts in ways it never has before, creating a real need for effective sales strategies that are implemented early in the process. “Companies need to think strategically about how they can better deploy their most valuable resource: the sales representative,” says Rick Keefer, chief operating officer of Publicis Selling Solutions Group. “The indus try appears to be returning to a common approach from the 1970s and 1980s, which is to assign more accountability at the single representative level and use a variety of tools synergistically to educate physicians.” TOOLS OFTHETRADE: SEGMENTATION,PEER INFLUENCE MAPPING,OUTSOURCING As part of the overall process change, a tool that is gaining traction throughout the indus try is segmentation, which is breaking down the target audience to cull the most valuable consumers to make sales optimization more manageable and fruitful. According to TGaS Advisors’ Mr. Mer cante, in some ways the pharma industry can compare itself with the consumer goods industry, only it has the benefit of a smaller consumer network and more unique products. “In pharma, we are starting to look at tar geting consumers in much the same way as the consumer packaged goods or financial industry does, recognizing that identifying the best customer is a continuous process,” he says. “The difference is that our companies are calling on the physician to influence their per spective and attitudes toward our products and advise the patient accordingly.” Mr. Mercante suggests that companies ana lyze the universe of physicians and narrow the field to those who have the highest potential. This used to mean calling on physicians only in the highest decile, but the emerging trend takes into account physicians’ behaviors and attitudes, We have moved beyond using the same message in the same medium for all physicians.The timehonored analogy `when all you have is a hammer,everything looks like a nail’ no longer applies in today’s environment. Kelly Myers, Qforma Jim Mercante, TGaS Advisors We consistently find that 10% to 30% of local action leaders who we identify as the most prominent leaders in their network are either not targeted at all or considered low priority targets. 31 PharmaVOICE J un e 200 8 PV0608 Layout FINAL2 5/20/08 12:45 AM Page 31 32 J un e 2 008 PharmaVOICE SALESFORCE tools along with other variables such as market events and competition. With thorough analysis, an organization can more efficiently build process es and procedures that will ensure the salesforce is optimized. “An emerging best practice is one that seg ments physicians by attitude,” Mr. Mercante says. “Some physicians may be more prone to look at therapy based on its efficacy, while some may be interested in a more rapid response, and others may be interested in side effects. There is a whole litany of characteristics that can be deduced through primary research about why physicians write or don’t write a prescription.” The Internet is a very costeffective way to reach a customer base and at the same time allows the ability to capture behavioral and atti tudinal information and store it in a repository that can be used to produce a model — based on both historical and predictive trends — that will help identify where to direct the salesforce, Mr. Mercante says. Additional data that could be key in the evaluation of physicians and where the sales force should best direct its efforts can also be obtained through partnerships with market intelligence and research firms. “Another best practice is to determine the right way to deliver the right message to the right person at the right time in the right for mat,” he adds. “In other words, sales managers need to figure out if physicians are more prone to get on the Internet to learn more about a drug or if they are more likely to respond to some other tactic. We have moved beyond using the same message in the same medium for all physicians. The timehonored analogy `when all you have is a hammer, everything looks like a nail’ no longer applies in today’s environment.” Predictive modeling, another tool being used to help pharma companies more costeffec tively target their efforts, takes segmentation to the next level. This involves identifying net works of physicians who operate on a regional and local level that were not previously seen as influential. “Professional relationship network mapping is being used more by smaller organizations — the Davids against the Goliaths,” Mr. Myers says. “Although as large companies are pressed to look for ways to do more with less, they are beginning to evaluate analytics that target with greater precision. Traditionally, organizations target physicians primarily by their volume of prescribing, but virtually every company, large and small, is saying it can’t afford to call on these large physician universes anymore.” Instead of placing most effort on highvol ume prescribers, companies today are seg menting physicians by their impact on peer prescribing decisions. “A certain physician may write very few pre scriptions, but have more impact over the actions of others than a highprescribing physi cian,” Mr. Myers says. “These physicians are local action leaders, as opposed to national thought leaders.” Mr. Myers admits that it may be difficult Sound Bites From The Field PHARMAVOICE ASKED EXPERTSTHROUGHOUTTHE INDUSTRYWHETHER SALES OPTIMIZATION CANBE ENHANCEDBYVARIOUSTECHNOLOGIESANDTECHNIQUES, ANDHOWTHE INDUSTRY SHOULDMOVE FROM ITS FOCUSON PRODUCTSTOAMORE CONSUMERCENTRIC PROCESS. ALANBIRTCHET is Chief Operating Officer of inVentiv Selling Solutions,Somerset, N.J., which is a division of inVentiv Health,an insights driven global healthcare company that provides dynamic solutions to deliver customer and patient success.For more information,visit inventivhealth.com. “ It is indisputable that the use of technology can have a significant impact on salesforce behavior and effectiveness.But the effect is limited by the nature and accuracy of the data used to drive decision making.As an industry, wehaveoften used old data to drive old thinking and ended with the same results as in previous years. The application of technology to identify how to best communicate with healthcare practitioners (HCPs) allows us to maximize their time and our impact through catering to personal preferences.We can marry personal and nonpersonal approaches to optimize the application of resources and ultimately deliver ROI.As an industry,we need to capture insights of our customers and adjust accordingly. If we knowwhat they want and how they want it, we can sell them as they want to be sold.A consumercentric process that harnesses technology will ultimately drive increased effectiveness. ” STEWARTROSEN,M.D., is VP of Medical Affairs and HMS Operations at Innovex, Parsippany,N.J.,a contract sales organization that pro vides pharmaceutical, biotech,and medicaldevice customers with a range of flexible,highquality sales solutions.For more information,visit innovex.com. “ With an aging population and spiraling healthcare costs, it is vital that wework together with healthcare providers to drive the best possible patient outcomes.Many patients are not wellinformed about their diseases.This, coupled with poor patient compliance, negatively impacts patient outcomes.Therefore, it is essential webecomemore focused on patients and their appropriate use of the prescribed medicine. If a patient is misdiagnosed, does not comply,or takes the medication incorrectly,this is a waste of valuable resources. Clinical educators can play a vital role in addressing this challenge.They can teach clinicians about underdiagnosed or undertreated disease states,demonstrate proper procedures for administering newor complex drugs,help patients understand how and why to take their medicines exactly as prescribed,and motivate patients in ways that will increase compliance in full compliance with all of the regulations and industry guidelines. ” MattWallach, Verticals onDemand We are two years away from Lipitor coming off patent, which means we are one year closer to Armageddon,and things are going to get really ugly. PV0608 Layout FINAL2 5/20/08 12:45 AM Page 32 2007 Innovex. All rights reserved. The industry needs a new business model, and that’s the line we’re taking. The pharmaceutical industry is undergoing a sea change. Familiar sales and marketing models are no longer enough. Innovex believes that commercial success requires a rigorous new approach. One that demands insightful new strategies and the innovative commercial solutions to fulfill them. Because today business takes more than just acumen. It takes science. And you’ll find it at innovex.com/science 25178_Innovex_LOB_PharmaVoice_11.5×9.5in_f:25178_Innovex_LOB_PharmaVoice_11.5×9.5in 25/3/08 15:32 Page 1 34 J un e 2 008 PharmaVOICE for some organizations to adjust their thinking from the “spray and pray” method of provid ing the same message to all the physicians in their universe, but prioritizing those most likely to respond is just good sense. “We consistently find that 10% to 30% of local action leaders who we identify as the most prominent leaders in a disease state or condition are either not targeted at all or are considered low priority targets,” he says. “Some local action leaders can impact any where from five to 20 times as many patients as they treat themselves through physicians they have relationships with.” Mr. Myers says a company can realize bet ter results from its efforts in as little as two months after predictive modeling has been implemented. “If done successfully, the impact is immediate in terms of getting lift beyond a company’s customer base,” he adds. “This helps stretch sales and marketing dollars and the actions can be quantified at both the individual physician level and physician network level.” The lack of new pharmaceutical products as well as the increase in government pro grams and compliance initiatives are forcing pharma companies to look at existing portfo lios today in ways they haven’t had to in the past. This means they need to be more strate gic than ever before, Mr. Keefer says. “Outsourcing programs such as preference based marketing efforts can help fill the gaps created by reduced salesforces and other pres sures facing the industry,” he says. “There are many more touch points to cover in reaching physicians in today’s marketplace. “Physicians’ demographics are changing in terms of age and gender,” Mr. Keefer adds. “Younger physicians are growing up in a tech nology environment, which should inspire ini tiatives that allow physicians to state their preferences in getting information. Outsourc ing provides an organization with the ability to adjust quickly to market dynamics and market changes. For small to emerging com panies in particular, outsourcing can put addi tional live representatives in the field, staff huge call centers with nurses or pharmacists, or provide the tools for virtual representatives. Outsourcing solutions can bring flexibility and synergy to the table while allowing the pharmaceutical company to focus on what its expertise is: developing drugs.” Experts agree that as the industry continues to change, the strategic use of flexible out sourced solutions will be an integral part of how companies market their products in the future. Taking advantage of these winds of change will require a company to carefully identify a brand that is important to the company’s future, as well as the need to get the undivided support of the IT department and the business department, Mr. Wallach says. “Until those two entities have bought into the new business model, a company can’t suc ceed,” he says. “Goals need to be shared, and IT and business functions need to work together. This collaboration will allow pilot programs to go forward without the fear of failure; teamwork is necessary to success.” Mr. Wallach advises companies to identify a brand that is small but important and then overspend on training and document the best practices so they can be replicated. # PharmaVOICE welcomes comments about this article.Email us at email@example.com. RICK KEEFER. Chief Operating Officer, Publicis Selling Solutions Group, Lawrenceville, N.J.; Publicis Selling Solutions Group is a provider of outsourced sales teams and support services. For more information, visit psellingsolutions.com. JIM MERCANTE.Partner,TGaS Advisors, East Norriton, Pa.;TGaS Advisors provides Experts on this topic pharmaceutical companies with customized information that enables them to evaluate their commercial operations against industry benchmarks.For more information, visit tgas.com. KELLY MYERS.Cofounder and CEO,Qforma, Santa Fe, N.M.; Qforma is an advanced analytics and predictive modeling company specializing in sales and marketing solutions for the healthcare industry. For more information, visit qforma.com. MATTWALLACH.VP,Sales and Marketing, Verticals onDemand Inc., Pleasanton,Calif.; Verticals onDemand delivers ondemand customer relationship management (CRM) solutions for specific industry segments. For more information, visit verticalsondemand.com. As the industry continues to change, the strategic use of flexible outsourced solutions will continue to be an integral part of how companies market their products in the future. Rick Keefer, Publicis Selling Solutions Group PV0608 Layout FINAL2 5/20/08 12:45 AM Page 34