Most UK pharmaceutical companies will disclose the payments they make to healthcare professionals (HCPs) from 2015 onwards.

ABPI member companies have agreed to publish details of payments made to individuals in fees and sponsorship for training.

As a start, they will shortly publish aggregate totals of payments made to HCPs in 2012, estimated to amount to £40m for the UK pharma industry.

The ABPI said it hoped the greater transparency would not only improve trust but also raise awareness of the benefits to healthcare of industry sponsorship.

From 2016 (covering 2015 figures), ABPI member companies will disclose the payments made to sponsor and support HCPs – for example, paying for them to attend international conferences – as well as fees for advisory and speaker roles.

They will also reveal how many HCPs they have made payments to in each year from 2015 onwards.

The new transparency standards for industry have been developed by the Ethical Standards in Health and Life Sciences Group (ESHLSG), which is seeking to promote partnership between industry and the NHS.

Stephen Whitehead, ABPI Chief Executive, commented: “The industry is proud of its collaboration with healthcare professionals. By publishing these figures industry’s aim is to ensure these vital relationships are open and transparent.

“It is right that professionals are reimbursed fairly for the time and expertise they regularly provide the industry in developing the next generation of medicines. These figures also show another way in which the pharmaceutical industry adds value to the NHS by supporting training and development and medical education.

“It is right that companies are transparent about the support they provide and it is important that we also recognise the benefits this delivers the NHS.”

NHS job cuts have resulted in health care professionals (HCPs) working harder than they were a year ago, being more stressed and less productive, new research has found.

After questioning more than 2,000 doctors, nurses and other HCPs the survey found that more than 50% feel they are now performing the job of 1.5 people after streamlining measures reduced staff levels.

The survey by Randstad discovered that a third of HCPs feel their workload requires the assistance of a part-time colleague to adequately complete tasks.

Vicky Short, Operations Director of Randstad Care, said that healthcare workers are “facing greater workloads” leading to “burnout, mistakes and lower productivity in the long-run”.

Nearly one in three respondents said their current workload would need two full-time employees to manage tasks effectively.

The increase in responsibilities has also led to a rise in stress levels. Nearly a quarter of HCPs said they feel more stressed than they did just six months ago, 49% indicated issues in unwinding away from work and 11% said they had trouble sleeping due to worrying about work.

“It’s clear that public austerity measures are exerting more and more pressure on local authorities and the NHS to keep their workforces as lean as possible,” said Vicky Short.

“It’s vital that heavier work burdens for health care professionals do not lead to the erosion of the quality of service provision.”

New guidelines to promote positive collaboration between health organisations and the pharmaceutical industry have been backed by the ABPI.

The guidance comes as ABPI President Simon Jose predicts the relationship between NHS and UK pharma will evolve to make them partners within the next three to five years.

Engagement between pharma and the NHS would, he said, develop to become one that is “less transactional and much more based on partnership.”

Guidance on collaboration between healthcare professionals and the pharmaceutical industry outlines best practice through a series of ‘dos and don’ts’ and highlights that active collaboration can deliver improved outcomes of care.

Stephen Whitehead, Chief Executive of the ABPI, said the document will “help assure professionals of the good work they are doing and make all sides aware of their responsibilities”.

The guidelines have been backed by several healthcare organisations, including the Department of Health, the Scottish Government and the Welsh Government. A number of royal colleges have also given their support.

Developed by the Ethical Standards in Health and Life Sciences Group the guidelines provide a clear framework for HCPs and industry. HCPs are advised to treat pharma as a healthcare partner, to seek and develop joint working opportunities and to understand the ABPI Code of Practice. They are asked not to expect or request any items which breach the Code, accept any negative accusations or myths against the industry when cooperating, or tolerate any unacceptable practices from pharma.

Alternatively, pharma is encouraged to be clear on its objectives when collaborating with HCPs, to ensure all activities are in line with the Code, and to keep up to date with the requirements of the Bribery Act.
The industry is warned not to collaborate without demonstrating the value of the partnership, not to expect healthcare professionals to participate in actions that are outside their professional code of ethics, and not to engage in collaboration with HCPs without first ensuring that there is a written agreement or contract in place.

“The NHS and pharmaceutical industry share a common agenda to improve patient care and clinical outcomes through high quality and cost effective treatment and care management,” said Stephen Whitehead. “This collaborative way of working is becoming increasingly common and we already have many examples that show how effective it can be. The publication of this statement by a broad base of health organisations will help assure professionals of the good work they are doing and make all sides aware of their responsibilities. Ultimately, we hope this will encourage further collaborative working and in turn, greater strides will be made in improving the health of patients.”

Following the publication, Simon Jose said that greater collaboration across disease pathways was anticipated as the industry seeks to promote its products and services, and the NHS looks to meet quality and efficiency targets.

“For me, it all starts with the fact that we are pursuing the same mission – improving the health and care of patients,” he said. “I think you’ll see the industry think much more about patient pathways instead of thinking about products. And you’ll see more collaboration across the pathway.

“Our role is about partnering with the NHS to ensure they and their patients can get the best out of our medicines, rather than seeing this as a transactional supplier/procurer relationship – which I think is one we’ve come from in the past.”

A lot of noise has been made about the needed switch from a traditional pharmaceutical sales model. Apodi’s Tony Swift questions whether the complex sales models now in place are delivering and suggests a simplified alternative based on delivering value to customers.

For a number of years now it has been acknowledged that the traditional sales model needs to change. Access to GPs through the long-established sales route is increasingly difficult with more doctors closing their doors to the conventional representative detail.

Pharmaceutical companies have embraced this and reduced the number of traditional sales representatives that they employ. Furthermore, the environment in which companies are promoting products has, in recent years, become increasingly complex with the emergence of new stakeholders requiring additional market access, specialist expertise and key account management skills.

Pharma’s response
Clearly, pharma companies have responded to these dynamics in different ways depending on their individual circumstances. It is, however, possible to draw some general conclusions. The response has tended to be the establishment of complex sales structures involving a myriad of roles aimed at mirroring the complex structures of the customer: the NHS.  Most companies will have structures including some, if not all, of the following roles: business managers, regional managers, traditional representatives, key account managers, strategic account managers, market access specialists, medical liaison specialists and so on.

On paper, these structures are difficult to criticise given that they are aimed at addressing the apparent needs of ALL stakeholders within the customer environment. The real problem is that due to their complexity they are almost impossible to manage effectively. Cohesion, coordination and communication in structures of this nature are extremely difficult and companies that go down this route often find that improvement in performance – namely in the sales of product – is difficult to achieve.

Such structures can be expensive and companies find that savings made by reductions in the number of sales representatives are merely diverted into the new structure. Indeed, these are often more expensive than the old traditional structures. Although companies are also looking at less costly ways of detailing, such as e-detailing, and tele-detailing, most commentators believe there is no real substitute to face to face interactions.

Simplify, simplify, simplify
Whilst every company is different, they should all follow the principle that the simpler the sales structure, the easier it is to manage and the higher the probability of driving high performance into it. It is hoped that the much heralded simplification of the NHS, which puts money and power into the hands of the GP and Clinical Commissioning Groups (CCGs), may encourage pharmaceutical companies to simplify structures, making them more effective and less costly. So, for those companies looking to simplify ineffective and inefficient structures, what general principles should be followed?

Don’t turn the noise off
Many commentators suggest that the ‘noise’ model is dead and that companies need to look elsewhere to drive sales performance. In my view this is misleading. Creating noise is hugely important in any sales environment – the key is the content and whether or not it is effective.

The traditional representative is finding access increasingly difficult as GPs face growing patient demands and administrative burdens. GPs often see many interactions with representatives as providing little, if any, value and are simply not willing to spare the time to listen to a detail. Where GPs do perceive there to be value, they are more likely to open their doors and consequently there is more likelihood of changes in prescribing behaviour and resultant market share.

Simply put, many pharmaceutical companies should be looking at a sales structure model that encompasses the following characteristics:

NOISE + VALUE = EFFECTIVENESS.

We envisage this structure being driven by an ‘engine room’ consisting of Key Account Managers (KAMs), focused on strategic key accounts, and Customer Account Managers, driving key messages and value to the larger targeted population of healthcare professionals (HCPs). A KAM structure without Customer Account Managers in the new world of CCGs would need to rely on an effective platform of communication within the CCG from the strategic levels through to individual HCPs – this often does not exist in an effective form and much decision making will still be made at the individual HCP level.

Building the structure
In my last article, Moving on up, I noted that, ‘some observers believe that the pharmaceutical sales representative is one of the world’s most underutilised resources’. For most companies, their representatives are still the people who interact with customers far more than anybody else. These customers – the GP and CCG – appear now to be even more important in the buying process and therefore, common sense would seem to indicate that the role of the representative is more important than ever – not less so.

The only way that this can be the case though is if the role of the representative changes from delivering a detail to delivering value to customers – otherwise customers will continue to refuse access and react negatively to any interaction. Therefore, I believe that in many cases the sales representatives will, in the future, be better termed as ‘Customer Account Managers.’ This is not just changing the title of the person but involves a real change in the role which will include:

• Intelligent conversations with customers about the care pathway with, of course, the role of product within that pathway.
• Consulting to, and with, the customer about therapies and disease areas.
• Advocating improved patient outcomes and assisting GPs in delivering them.
• Providing additional value, based on the individual preference of the customer.

In existing structures this will require a transition phase as representatives increase knowledge, particularly around care pathways, therapies, diseases and improve interaction skills.

The engine room

Customer Account Managers should form the foundation for many promotional sales structures. Above them is the Key Account Manager role, and together, these represent the ‘engine room’ of the promotional sales structure. The role of the KAM is now well known to pharma, involving as it does, segmentation of the customer base, allocation of responsibilities – particularly between the KAMs and the Customer Account Managers – and promoting to key and more complex stakeholders. KAMs should also be able to assess if there is a need for more specialist help on particular accounts.

For many readers, this structure may appear as a dramatic over simplification of what is required to meet the demands of a complex customer – and perhaps it is. But it has been presented as such to be in stark contrast to the over complex and costly structures that many companies deploy. In fact, in some such structures, the role of KAMs sometimes gets lost and in some, the role of Customer Account Managers actually does not exist.

Mass customisation
A key role of the engine room is to provide value to customers, that is, value over and above that provided by competitors and so enabling the company to grow market share. Historically, much promotional activity to GPs has been based on a key fact – that all the customers are the same. This is obviously not the case.
However, marketing departments wishing to provide customised value are often unable to do so for a number of reasons:

• Representatives and others are not skilled in, or indeed tasked with, identifying individual value requirements of customers.
• Technological solutions have so far been found to be ineffective or companies have failed when attempting to execute them.
• The role of creating value propositions that can be tailored to individual needs often gets lost in the complex structures existing within pharma.

And yet the concept of mass customisation is very common in other industries. There are many examples of collaborative companies who conduct a dialogue with individual customers to help them articulate their needs and then customise the offering to them.

It could be argued that pharmaceutical companies sell a standardised product – the drug is the drug. However, it is important to realise that where companies cannot customise a product per se they can still customise what they offer and thus build learning relationships where their knowledge of the individual customer increases exponentially.

For a pharmaceutical company to do this effectively, it needs to visualise its offering in the broadest sense not simply as a product but as an object that provides a service, solves a problem or meets a need. Therefore, the total value offering includes:

• The core product: clearly this is a hugely important part of the overall value proposition, including the drug’s capabilities, safety record, treatment characteristics etc.
• To the GP there will be other enhanced value solutions which can be of enormous value – these can include: additional services, promotional and marketing communication, patient and clinical help lines, product support, access to Key Opinion Leaders, staff training, services that improve the patient experience and so on.

To provide this value in a customised way, companies needs to find out from the customer what value means to him/her, collate the information effectively and deliver the value. Many readers will be sceptical that this is deliverable – how delivery is achieved will be discussed in the next article in this series.

Conclusion
Simplified sales structures including the reinvention of the traditional sales representative role could be of real value to all stakeholders, including the representative, the GP, the patient and the pharmaceutical company. By placing the provision of value to each and every customer at the very heart of the company’s promotional activities, companies can be truly aligned to the NHS agenda and perfectly positioned to meet the needs of the turbulent market conditions that exist today.

Tony Swift is the Managing Director of Apodi. He may be reached on tony.swift@apodi.co.uk.

New guidelines to promote positive collaboration between health organisations and the pharmaceutical industry have been backed by the ABPI.

Guidance on collaboration between healthcare professionals and the pharmaceutical industry outlines best practice through a series of ‘dos and don’ts’ and highlights that active collaboration can deliver improved outcomes of care.

Stephen Whitehead, Chief Executive of the ABPI, says the document will “help assure professionals of the good work they are doing and make all sides aware of their responsibilities”.

The guidelines have been backed by several healthcare organisations, including the Department of Health, the Scottish Government and the Welsh Government. A number of royal colleges have also included their support.

Formulated by the Ethical Standards in Health and Life Sciences Group the guidelines clearly state the existing working environment in which pharmaceutical companies and healthcare professionals operate and the regulations they must abide to.

The ‘dos and don’ts’ in the document aimed at healthcare professionals towards the pharmaceutical industry include treating pharma as a healthcare partner, searching for and developing joint working opportunities and understanding the ABPI Code of Practice.

HCPs were advised not to expect or request any items which breach the Code or to accept any negative accusations or myths against the industry when cooperating, and not to tolerate any unacceptable practices from pharma.

Alternatively, pharma was encouraged to be clear on the objectives when collaborating with HCPs, to ensure all activities are in line with the letter and spirit of the Code, and to keep up to date with the requirements of the Bribery Act.

But the industry was warned against collaborating without demonstrating the value of the partnership to those who may know less about it, expecting healthcare professionals to participate in actions that are outside their professional code of ethics, and engaging in collaboration with HCPs without ensuring that there is a written agreement or contract in place.

“The NHS and pharmaceutical industry share a common agenda to improve patient care and clinical outcomes through high quality and cost effective treatment and care management,” said Stephen Whitehead.

“This collaborative way of working is becoming increasingly common and we already have many examples that show how effective it can be. The publication of this statement by a broad base of health organisations will help assure professionals of the good work they are doing and make all sides aware of their responsibilities. Ultimately, we hope this will encourage further collaborative working and in turn, greater strides will be made in improving the health of patients.”

Improving regulatory compliance in the wake of global legislation around anti-corruption has emerged as one of pharma’s key challenges for 2012.

A 2011 Cap Gemini report on impending change within life sciences showed that only addressing ‘fragmented business processes’ and a ‘lack of access to business critical data’ rank higher as the most critical issues for the sector.

But despite widespread recognition of the importance of business transparency in all interactions with customers, a recent study shows that 44% of pharma companies are still using manual paper-based systems to record promotional spend with HCPs.

The survey, European Trends in Aggregate Spend, Transparency and Disclosure, conducted in December 2011 by Cegedim Relationship Management, shows that life science companies are making real progress in their attempts to become more compliant. 94% of respondents report that their company enforces corporate standards for spending on HCPs, and over half (54%) indicate that their company already has a project team in place to address compliance issues.

But, despite 64% believing that the implementation of a unique spend data reporting and disclosure solution is an ‘absolute requirement’, a high number of European companies are using traditional methodology to record activity.

“Europe is at a pivotal moment as it approaches an enforcement model increasingly similar to the US,” explained Bill Buzzeo (pictured), Vice President of Global Compliance Solutions at Cegedim Relationship Management. “Companies are making essential strides at self-enforcement, but according to the 2011 survey, most respondents are reliant on inefficient manual and Excel spreadsheet reporting mechanisms.”

Faced with managing relationships within an already complicated customer jigsaw, medical sales professionals can ill afford the administrative burden of paper-based systems in the modern era.

The increased focus on transparency and disclosure follows the global development and enforcement of regulation and guidance to counter bribery and corruption across business sectors. The US Foreign Corrupt Practices Act and the UK Bribery Act impose criminal charges on companies that breach the law, and have already led to some high-profile casualties in the life science sector. In 2011, Johnson & Johnson were fined $70 million after admitting that the company bribed doctors in Europe and paid kickbacks to win contracts and sell drugs and artificial joints. Integrated technology company Siemens paid $1.3 billion following a bribery case that scarred its medical division, following violations in its healthcare unit.

With further, hard-hitting legislation expected in other parts of Europe this year, companies are being forced to assess their ability to achieve better transparency of aggregate HCP payment data – which in turn is having major implications for the industry’s sales and marketing strategies. Companies in Europe must not only track a complex matrix of marketing and promotional spending, but also keep track of, and uphold, each country’s unique reporting standards.

The Cegedim Relationship Management survey concludes that the US model of operational compliance serves as “the handwriting on the wall”, but warns that European organisations, uncertain as to how to approach transparency in the future, must act quickly to ensure they avoid paying a much higher price.

The UK industry has worked hard in recent years to improve its reputation with customers, and the issue of building trust with HCPs remains a high priority for companies. Medical sales professionals will continue to play a prominent role in achieving this.

With so many pharmaceutical companies undergoing some sort of restructuring plans as a result of mergers, acquisitions or simply cost-cutting measures, field force worries immediately turn to job security. Apodi’s Tony Swift discusses valuable ways to ensure your job isn’t one under scrutiny the next time the axe is wielded, and how to progress in the new pharmaceutical world.

In the past a competent sales representative could look forward to a long and secure career in the same or similar role, often with the same company. For the more ambitious representative it was also possible to climb a well-defined ladder towards seniority – as field trainer, sales manager, sales director and beyond.

However, much has changed. Sales representative positions have reduced dramatically and the ladder to seniority appears far more difficult to climb. Job security and traditional long-term career planning is disappearing into oblivion. The situation is just as precarious for those half way up the ladder, in first or second-line management roles, and restructuring is affecting job security and career planning throughout companies in the industry.

These seismic changes are not temporary. We are seeing a transition to a new world order in the pharmaceutical industry where:

• Traditional career paths are disappearing
• Management roles are fewer and are just as susceptible to restructuring
• Employees can no longer rely on the organisation to develop their careers – career and personal development is an individual’s responsibility
• The company needs to provide support and experiences to individuals to learn new ways of adding value to the customer and the company itself
• Creative expertise to address the new NHS is in huge demand by pharmaceutical companies. This presents an enormous opportunity for representatives and managers who may currently be worried about their long-term future in the industry.
  

Personal development
I recently interviewed a number of successful pharmaceutical industry executives to assess how they addressed the issue of personal development. Almost all of them stated that they could not have solely relied on the organisations they had worked for to either fully develop their skills or, indeed, their career.

In the majority of cases these successful individuals had made a decision to take personal charge of their careers. By keeping abreast of changes in the industry, anticipating new developments and consistently reviewing and updating their skills and relationships, when changes did occur in the industry or company, they were often well placed to take advantage of the new opportunities these presented.

At Apodi, our resourcing division sees first-hand the changing dynamics of the marketplace. Quality market access and key account managers are much in demand and are, at times, very difficult to recruit. There are also lots of sales representatives looking for jobs, with many believing they now have to look outside the industry to secure their future. However, representatives who are aware of the changing dynamics and have adapted their skills are now often successfully obtaining those market access and KAM roles.

Taking charge
One conversation with a successful executive led to a more in-depth discussion about what sales representatives can do if they want a long-term career in the pharmaceutical industry. The executive detailed the steps he had taken, and I believe this serves as an interesting case study for those unsure about their prospects in the industry. He said: ”It quickly became apparent to me that to take charge of my career I had to focus on a number of key areas.” To summarise, these were:

• To develop a clear view of the future of the industry and the likely impact of this on an existing position and potential future roles
• Be successful in a current role –  believe that new opportunities will only arise following success
• Find a systematic way of increasing knowledge, skills and relationships – do this to differentiate yourself from colleagues.

The future
In a previous article, Leading the way – Pharmaceutical Field, September 2011, I mentioned a couple of quotes. One was from a leading member of the NHS responding to how pharmaceutical companies could more actively engage with the health service. They said: “Don’t just bring pills and gadgets in the future, bring us value added solutions that drive the QIPP agenda with a documented and robust cost/benefit analysis.”                                   

The other, by Sir Ian Carruthers, NHS Chief Executive Innovation Review Team, stated: “The pharmaceutical industry needs to think more in terms of working in partnership with the NHS rather than just sending in the sales force… the NHS needs your disruptive contribution to help NHS reform, but too few companies are coming forward.”  

Despite such prominent views from the NHS, many companies are still sending out sales representatives with a very limited agenda – primarily delivering some key messages about a particular product. Indeed, some observers believe that the pharmaceutical sales representative is one of the world’s most underutilised resources! And, given the limited ambitions of each visit, it is perhaps not surprising that HCPs are continuing to reduce access.

To counter this, companies are deploying key account managers whose role is to provide value over and above the ‘noise’ associated with a traditional rep visit. We believe there will be a gradual merging of the functions of sales representative and KAM in the future. This means that everyone representing a company in the field will need to operate to KAM principles and provide significantly more value than before. Indeed, our research shows that historically excellent representatives have effectively operated to KAM principles, irrespective of the training and direction received from head office.

Current success
Whilst each sales representative has key performance indicators (KPIs) to meet – often merely call rates, we believe that individuals need to focus on providing added value to their customers and their companies irrespective of their targets. By taking a more strategic view, identifying the key stakeholders, delivering and developing solutions with the help of their company’s marketing, medical and promotional functions, representatives will become a more valued partner to both parties.

Representatives can only do this if they are experts in their products, the therapy area concerned, the care pathway and the local healthcare economy. Additionally, they will need knowledge of best practice and potential solutions.

Unfortunately, to some this may be perceived as going ‘beyond brief’ and will sometimes result in knockbacks. However, we believe the risks attached to this are far less than continuing with the limited role noted above. The risks of a representative failing to distinguish themselves and failing to provide real value will leave them susceptible at times of restructuring, and with fewer skills needed to attract jobs in the new healthcare economy.

Using initiative 
Fundamental to taking charge of your career is to take responsibility for personal development. A colleague told me about how he had done this successfully with a process that included the following:

A) Yearly audit – produce an annual plan that addresses the following:

• I am currently known for…
• Next year I want to be known for…
• My personal development last year included…
• I currently differentiate myself from my colleagues by…

B) Quarterly plan – each quarter produce an action plan:

• I aim to develop a more in-depth knowledge of the product, therapy area, care pathway and local healthcare economy by…
• I will develop closer relationships with key stakeholders in my company by…
• I will develop closer relationships with key customers by…
• I will develop a better understanding of best practice and consider the most appropriate solutions for my customers’ problems by…

C) Quarterly assessment – assess the potential to drive value into internal/external customers against the following parameters:

• Do I demonstrate more than financial value to key accounts?
• Have I increased the number of internal/external relationships where I add real value?
• Do I possess specialist knowledge that I can share with colleagues/customers to add value?
• Have I influenced any changes to the benefit of the company or customers?

This learning and knowledge was primarily delivered through personal research using books, magazines and the internet. My colleague also constantly suggested projects that he could work on, even in his own time, that he felt could transform the value being provided to customers. Many of these were rejected, particularly initially, but eventually he developed close enough relationships with people in the company who recognised the value these projects might create. These projects were a very valuable learning tool and a superb way of displaying his talents.

In summary
Pharmaceutical companies are looking for new and innovative ways of providing value to customers. As decision making within the NHS increasingly shifts to those regularly interacting with the end user (patients), the opportunity for primary care representatives to adopt a more customer-centric approach based on KAM principles grows exponentially.

The advantages of this may lead to less complicated field force structures, reduced costs and additional value added for customers. With such developments, companies will be in a better position to assist each individual in developing their careers to meet the demands of the new healthcare economy.

Tony Swift is the Managing Director of Apodi. He may be reached on tony.swift@apodi.co.uk.

What level of medical device failure is acceptable? Brad Abbey argues that the industry needs to arm itself against the threat of litigation – not with lawyers, but with the right kind of evidence.

I was somewhat taken aback by a letter in the British Medical Journal last December, where under the unlikely-sounding title ‘FDA is gold standard of review’, Mark B. Leahy, president and CEO of the US Medical Device Manufacturers Association, while singing the praises of the industry, said that a recent study of FDA-approved medical devices from the past 5 years showed that fewer than 1% had been recalled.

Most recalls, he said, were due to manufacturing and design problems in a post-marketing setting. This was in response to an article that had been highly critical of the safety surveillance of medical devices in the US and the low hurdles that have to be jumped to get a device approved (seemingly true on both sides of the Atlantic).

I am a generalist in the healthcare industry, mainly involved with medicines, but to say I was surprised by that figure is an understatement. I realise that the number of car recalls may be higher – but with a surgically implanted device, the owner cannot check it in at the service centre and pick it up at the end of the day.

I know that MHRA gives daily warnings about medical devices, from wheelchairs to drug-eluting stents; but given that the level of adverse event risk that is acceptable to the public for a medicine is somewhere between 1 in 10,000 and 1 in 100,000, the 1% risk seems difficult to accept.

A lead article in the May 2011 BMJ, by Peter Wilmshurst of STARFlex fame, opened with the comment that the regulation of medical devices is (in his opinion) unsatisfactory, unscientific and in need of a major overhaul. Pretty damning stuff.

 

Duty of care

The registration of medicines requires data on the safety, efficacy and quality of products, and the numbers of patients needed to demonstrate an acceptable risk/benefit profile can be dauntingly high. The same level of scrutiny does not happen in Europe for medical devices, where a single approval can trigger cross-community acceptance.

With the increasing complexity of devices and the high levels of patient expectation, it is hardly surprising that when seemingly good devices go wrong the patients want compensation – and, where there is a suitable arena, for punishment to be meted out.

In the US, where many complex medical devices are developed and initially marketed, the ‘learned intermediary’ doctrine has been used by healthcare product manufacturers in recent times to protect themselves in the event of something going wrong. This doctrine, used in the US legal system, states that the manufacturer of a product has fulfilled their duty of care when they provide all the necessary information to a ‘learned intermediary’, who then interacts with the consumer.

This doctrine has been used primarily by pharmaceutical and medical device manufacturers in defence against tort suits. In a majority of American states, the courts have accepted this as a liability shield for pharmaceutical companies.

However, drug and medical device manufacturers sustained an unexpected blow in August 2008 in Rimbert v Eli Lilly and Company: in a federal court decision, for the first time, there was a rejection of the learned intermediary doctrine in its entirety. The decision rejected the notion that the manufacturers of drugs and medical devices do not have to make the patient fully aware of the risks associated with them and that this can be delegated to the prescriber.

The idea underlying the ‘learned intermediary’ doctrine is that the prescriber, who has expert knowledge and skill, should make the decision about risk. But changes in the consumer environment whereby prescription products can be advertised directly to potential patients have rendered this justification obsolete, and so it was predictable that for medical devices – some of them traditionally never coming ‘into the hands’ of the patient – the risk scenario would be influenced by the lesser amount of risk/benefit information needed before approval for marketing. While the doctrine has not been used in Europe, the risk information relating to devices is lagging behind that for medicines.

In order to be vigilant about the risks of medical devices, companies will be best served by surveillance systems that monitor the risk/benefit profile of products from the moment they are first evaluated (even if that takes place in animal models). This is not always easy.

A letter in the BMJ (in the same issue as Leahy’s letter) from a Welsh group of doctors highlights the problems of post-marketing surveillance for medical instruments, and in particular the use of single-use devices for tonsillectomy from 2001 in the wake of the variant Creuzfeldt-Jakob disease that followed the ‘mad cow’ scare of the 1990s.

Widespread adverse events were associated with these non-reusable instruments despite their CE marking, and they were deemed not fit for purpose. The case for reform of medical device regulation therefore seems a given.

 

Hip or lame?

In the meantime it seems that the visible portion of the iceberg of device regulation-related problems is giving rise to a stream of litigation that could possibly become a tide. Recent Medtech Business news reports have followed the fate of orthopaedic company DePuy and its ASR hip replacement.

Hip replacement is one of the clinical successes of the marriage between orthopaedic surgeons and the medical device industry, and it was estimated (before this year’s NHS rationing) that about 70,000 patients were undergoing total hip replacement each year in the UK.

I remember metal-on-metal hip replacements from the 1970s (I have one in a drawer at home that came to me as a result of its breaking), and they became popular again in the 1990s. However, the most recent generation have not fared so well, with higher than expected rates of failure and concerns about excessive levels of metal ions (cobalt and chromium) in the blood of patients.

According to 2010 data from the National Joint Registry of England and Wales, the DePuy ASR Hip Resurfacing System has a revision rate of 12% at 5 years after surgery and the DePuy ASR XL Acetabular System has a revision rate of 13%.

That means that during the first 5 years after a hip replacement with the DePuy ASR hip, at least 1 in 8 patients will experience hip failure requiring painful and expensive revision surgery. With more than 90,000 DePuy ASR hips in patients worldwide, over 11,000 people could require additional surgery due to the defective design of this implant and DePuy’s failure to remove it from the market earlier.

One of the questions that remains unanswered was whether there were potential conflicts of interest between the supplier and the healthcare professionals who developed and were involved in promoting these devices. The key issue in litigants’ minds is that the device did not perform as well as such a device might be expected to, and it seems that the device’s registration in the US was obtained without clinical trials to prove its long-term safety and efficacy. In a litigious society such as the US, where someone must pay for any mistake, the supplier appears to have suffered with the rolling of heads and the decision to remove the offending brand from the market.

Don’t get the idea that this case is a one-off: the recent history of medical devices suggests that arrivals on the market may sometimes be premature, as real risks may not have become apparent. Whether this is related to inappropriate endorsements from the medical profession is difficult to judge, but there are known examples of high-level payments to medical inventors who ‘sell’ their developments to industry and subsequently endorse them.

On the other hand, everyone is aware of what happened to Peter Wilmshurst when he took the opposite stance against a device manufacturer: there was a serious attempt to punish his critical views (which seemed to be well founded) and personally break him through the English court system.

 

Evidence is strength

Litigation against medical device companies is nothing new. However, in an age when people with problems can readily find lawyers willing to take on their problems, and some lawyers (particularly in the US) go looking for people who did not even know they had problems, access to litigation seems to be easier – and it is oiled by the possibility of compensation (which may be deserved when devices turn out to be inadequate or unsafe).

A Google search for the term ‘medical device litigation’ returned 640,000 hits; most of the leading ones were to do with lawyers offering their services in the pursuit of such litigation, or training sessions for lawyers who want to become involved in such cases, or training for companies who want to avoid them. I don’t believe a wake-up call about the risks of being sued is necessary, but what is well worth thinking about is the possible root causes of the current danger, which can ruin a company that believed it had a good product.

The message I am offering is consistent. The products of the healthcare industry must be subject to close and continuous scrutiny for their risk/benefit profile, and this should be done prior to marketing and continue in a structured manner post-marketing. NICE advisory policy on the best devices to use is still in its early stages.

There seems to be a raft of opinion supporting the idea that the regulation of medical devices (in Europe, and probably also in the US) needs to be overhauled to eliminate the placing of devices on the market with inadequate safety and efficacy monitoring.

Rather than finding ways of avoiding expenditure during a product’s development and launch by minimising the collection of such data, companies need to embrace the need for resilient data sets and continual risk/benefit signal monitoring. The competent authorities will wake up to this need, and those with effective systems in place will withstand the culture change best.

Brad Abbey is an industry observer, or the pen-name of an industry observer. The views expressed in this article are those of Brad Abbey, and do not necessarily reflect the views of Medtech Business.

With financial experts warning of another global recession it’s a worrying time for both healthcare professionals and those currently without a job.

The Government in its ultimate wisdom last week revealed plans to eliminate certain discrimination laws in an attempt to make it easier for employers to do away with unproductive workers and replace those with a willingness to work.

But while the principle may sound simplistic, one boss’ judge of a productive medical representative doing their upmost to sell a dated product may be different to the person struggling to succeed in a crowded and competitive marketplace.

Instead of casting aside one unproductive worker for another, the Chartered Institute of Personnel and Development (CIPD) has called for the Government to scrap its intention to remove certain discrimination laws and instead focus on those with healthcare jobs, for example, to increase their skill set to improve productivity.

The CIPD’s calls aren’t exactly rocket science – yet they do make sense. Questions have to be raised why so many employees are unhappy with the level of productivity of their workforce. The reason may be closer to home.

More than a third of the workforce in the UK has managerial responsibilities. But how many of those dedicate time to improving the skill sets of their staff? Whilst training days or programmes may not provide immediate results the long term skills gain can yield rewards for years to come.

The key to unlocking productivity levels may not be with those set for the axe, but those wielding it in the first place.

The switch to Key Account Management is one more companies are introducing to tackle current challenges. Apodi’s Tony Swift highlights the principles of effective execution and making a strategy work for a smooth transition.

More and more companies are now addressing the changing healthcare market by transitioning the sales process from one which primarily involves representatives engaging with healthcare practitioners on a ‘one-to-one’ basis, to the establishment of Key Account Management (KAM) teams.

The rationale for this change is irrefutable. Access to GPs is increasingly difficult and the ‘customer’ now represents a series of more complex accounts with numerous stakeholders and influencers. Furthermore, decision making is both at a national and regional level and there is now a greater need than ever to focus on local healthcare economy needs and requirements.

As a result, pharmaceutical companies have established, or are in the process of doing so, KAM teams in which individuals have increasing responsibility and autonomy in addressing the needs of their customers at a local level. Some pharmaceutical companies have even taken the model further and given team members, or a small collection of them in a specific locality, P&L responsibility – essentially establishing micro business units within the team itself.

 

A different approach

Some years ago it could have been argued that any company transitioning to the KAM model was differentiating itself from the competition. This argument is much more difficult today because most pharmaceutical companies have moved, or are moving this way – in short, almost everybody’s doing it.

However, there is still a key source of competitive advantage in this environment – and that is to actually make the new model succeed.

Our research, and the feedback we have received from companies trying to adopt the new model, is that the execution process is much more difficult than originally anticipated. The type of feedback we receive often includes the following observations:

• Account managers do not appear to be acting in any materially different way than the sales representatives of the past
• They are adopting the new model at vastly different rates with a small number leading the way and the rest struggling to come to terms with the new strategy
• The move to more local autonomy is creating confusion about the role of the centre and its interaction with the decentralised function.

 

Difficulty of execution

So why is it that so many companies are finding the execution process more difficult than anticipated? The primary reason is that there is often an underestimation of the scale of the organisational change required.

For instance, many sales functions in pharmaceutical companies have historically been based on a traditional command and control structure. Here, the sales management instructed sales representatives on which HCPs to target, how many times they should be called on and exactly what to say during any meeting with them.

Within the new model however, many of these individuals are now faced with adapting to a new environment where decentralisation, decision making, autonomy and P&L accountability are now among the order of the day. Given the above, managements’ task of transitioning the organisation from the old to the new model requires considerable skill, focus and expertise.

 

A decentralised approach

Many management commentators argue that decentralisation is a panacea for all ills. If executed effectively, in an appropriate environment, this structure can deliver enormous benefits to an organisation. However, the move towards decentralisation often creates a number of serious problems which, if not addressed directly and quickly, will significantly impact on performance.

These problems are as follows:

A lack of expertise: a decentralised structure almost always requires an increase in expertise in the key roles within the structure. For example, increased knowledge will be required by employees AND management to solve problems, address more complex customers and, in effect, run businesses – particularly if P&L account responsibility is part of the role.

Inertia: many employees enjoy going to work in an environment where they understand exactly what the day will bring; the common challenges they always face and, in exceptional circumstances, being able to refer any unusual problems to their line manager. In a new environment where their decision making authority is increased, many employees will be reluctant to do things differently and may continue behaving much as before.

Lack of responsibility: the new environment is a scary prospect for some people. The last thing they want is more responsibility and a fear of failure and an inability to work in the new way paralyses them – again leading to ineffective execution.

At Apodi we have looked at specific pharmaceutical companies that are struggling with the implementation of KAM teams and researched the reasons for their difficulties. In every single example, one or more of the problems outlined above was prevalent – and in most cases all three problems coexisted together.

In fact, some of our own executives have reported their own first-hand experiences of working with companies in which the almost evangelical zeal and enthusiasm of top management continued unabated whilst chaos reigned and they failed to achieve an effective transition.

 

The way forward

As we have seen, the execution process can be difficult. And because of this, it is critical that a clear procedure for managing an effective transition is implemented. This process needs to address the following:

1. Identify clearly the strategic intent of the company, including the projected benefits of changing the model and how these are to be measured

2. Given the strategy noted above, clearly identify the role of the centre and the role of the decentralised units and how these might evolve over time. In our view, companies are often too ambitious in managing the transfer of responsibilities from the centre to the divisions or KAMs. Clear standard operating procedures need to be driven from the centre in the early stages and KAMs need to understand the rules that they are expected to work to. Think carefully about giving newly formed KAM teams P&L account responsibility. It may be better to transition to this over time, and in some cases, not even to go this far

3. Identify very clearly the roles and responsibilities of management and KAMs at all stages in the change process

4. Given the roles identified in the new structure, carefully recruit the appropriate personnel. Implement a training and development programme focussed on areas such as the role of Key Account Management, the implementation of a complex sale, general business disciplines and other skills

5. Management need to quickly identify any KAM team member who cannot make the leap to the new world of working and deal with this appropriately

6. Instil best practices across the whole KAM team by establishing effective coordination and information sharing processes

7. Establish effective incentives to drive the performance required

8. Put in place appropriate controls, feedback, learning and corrective action processes to improve performance. Key to this is the management team that drives KAM performance. This team needs to be highly experienced and knowledgeable about the requirements of KAM teams and how to manage a change process.

 

Leading the way

As ever, the role of the leader is absolutely critical in driving through the changes to address the needs of the new healthcare economy. Whilst the development of a sound strategy is critical, it is also the relatively easy part of the process. In every pharma magazine, nearly all consultants and most competitors will support the notion of moving towards a KAM driven business.

However, it is the effective execution of this transition that the leader should focus on. They will also invariably experience many of the challenges that are common to such change programmes, such as internal politics, resistance to the new way of operating, lack of appropriate skills within the team and so forth.

It is because of this that a leader needs to draw on commonsense business disciplines to be successful. It is also crucial that the immediate management team are able to do the same. Therefore, before embarking on the process, it is important to make sure that the management team is capable and ready to execute change.

As I noted at the beginning of this article, many companies are implementing similar strategies. It is therefore logical to assume that, everything else being equal, it is the company that has the management capabilities to execute these changes most effectively that will gain a competitive advantage over its competitors.

 

Tony Swift is the Managing Director of Apodi. He may be reached on tony.swift@apodi.co.uk.