Who exactly is pharma’s customer these days? Jessica Henderson takes a look in the NHS customer showroom and urges sales and marketing executives to examine all the features and benefits when choosing the right vehicle for their brand.
The UK Government’s floundering Health and Social Care Bill has been widely decried as “a car crash that has already happened”. But critics predict further pile-ups around the corner as the beleaguered Health Secretary finds himself increasingly stuck in bad traffic on the road to reform. It’s fair to say that the Bill is enduring a difficult journey towards Royal Assent – but irrespective of when, or indeed if, it reaches its final destination, it’s clear that work on the ground to transform the NHS into its new shape and structure has been ongoing since the White Paper in July 2010. There have been delays and roadblocks along the way, but across the country, local NHS organisations have been moving towards the promised land of Clinical Commissioning Groups for well over a year. And as a consequence, the pharmaceutical industry’s customer-base has incrementally shifted – with the prospect of more twists and turns to come. We may not yet be motoring towards reform – but the wheels are well and truly in motion. And it’s driving pharma companies down a familiar road where they are being forced to revisit the age-old question: “just exactly who is my customer?”
The NHS customer showroom
For UK pharma, NHS customers have always been a moving target – but the rate, scale and definition of impending change has meant that the latest movements are proving more difficult to track. In the car (or should that be ‘care’?) showroom that is the NHS, the staff, partners and customers all know that there’s a new model on the way, but they don’t entirely know what it will look like when it arrives, and whether it will work when it gets here. And it may not even leave the factory. But many also believe that the second-hand model that’s been driven around since 1948 is old, creaking and costing a fortune to keep on the road. It was certainly built for a different era where there was far less traffic. And as demand has increased, the size of the problem, as well as the size of the NHS itself, has increased with it. For pharma, the NHS customer showroom has expanded rapidly.
The Toyota Prius: CCGs
The proposed new model is, of course, an NHS that, in England, is led by Clinical Commissioning Groups (CCGs). There are already a few early models in the showroom – in fact, more and more are being test driven right across the country as we speak. CCGs can perhaps be considered as the health service equivalent of the Toyota Prius – a hybrid model comprising of clinicians and commissioners, with similarly green objectives to save their environment and become sustainable vehicles that use their resources effectively.
From BMW to white van? The depreciation of PCTs
For the past decade, the NHS has been run by PCTs, who issued instruction to clinicians in primary care and commissioned and managed local health services. As we know, under the new proposals, the old PCT model is to be discontinued. The inference is that PCTs have, like a saloon BMW with added extras, become expensive to run and, in austere times, are an unnecessary luxury. Instead, commissioning responsibilities will be passed to clinicians – chiefly GPs – who will be handed the car keys and given the authority and autonomy to drive local services as they see fit.
GPs have become accustomed to playing the role of a reliable Ford Focus, simply and efficiently getting the job done and concentrating on the core competency of delivering patient care. But now they are at the crossroads, deciding whether or not to upgrade and move into the fast lane of a more adventurous commissioning role within a CCG, or to stay within their comfort zone of standard general practice. At the same time, many within PCTs face the prospect of the BMW being downgraded to a simple White Van; delivering support to CCGs from the edges as part of Commissioning Support Services (CSSs), a marketplace that is apparently – and perhaps contentiously – open to huge competition.
One customer group that appears to have emerged unscathed from the reforms is Medicines Management, perhaps the Porsche within the NHS customer showroom. These will remain important, high-powered and influential customers that preside over high budgets.
The question for pharmaceutical sales and marketing executives, then, is which customer vehicle is the most appropriate for their individual brands? With the immediate direction of travel for the Health and Social Care Bill still unclear, an already complicated customer matrix becomes ever more difficult. Will the NHS landscape really be governed by a generation of hybrids? Will there be a power struggle between CCGs and CSSs, or will the previously powerful PCTs allow themselves to be reduced to ‘white van delivery vehicles’ without putting up a fight? Or will they simply be rebadged as CSSs and surreptitiously given the same powers as before?
The answers will, of course, vary from region to region – with a clear message emerging from the reforms that a one-size-fits-all solution to health service delivery is simply not feasible in the modern day. Local health economies are being given the autonomy to develop health services to meet the needs of their patient populations, and as such, regional approaches will evolve at varying speeds. But, despite the alleged congestion at ground level, there are already parts of the country where proactive local health organisations are making real progress along the road to reform. Whilst each local health economy will be unique in its approach, lessons can be learned and best practice can be shared – both from an NHS and an industry perspective – by examining progress within the more proactive health organisations, and how they are approaching the change process.
Learner plates for pharma
Working within the Transformation Team has demonstrated how important it will be for pharmaceutical sales and marketing executives to understand their local health economies – not only as CCGs become embedded, but equally as importantly, as they move through the transitional phase. The opportunities for pharma to help local NHS customers to equip themselves for the new model are great – but to maximise them, and in the process give their brands the best chance for success, companies must ensure they are engaging with the right customers. So which ‘vehicles’ should pharma invest in? The answer will vary from region to region and from disease area to disease area. But some general lessons can already be learned:
The CCG Prius
This will undoubtedly seem the most obvious vehicle choice for pharma, given current trends – but at this stage, it may not always prove the most successful approach. In some parts of the country, real GP leadership is already evident, typified by the movement of QIPP programmes to CCGs. But some readily-formed CCGs may in fact be BMWs disguised as a Prius – and less susceptible to working differently. The GP Commissioner in these organisations may not yet be your best customer – and you may need to change gear to accommodate this.
The Ford Focus GPs
The enormity of the challenges ahead has slowly dawned upon even the most proactive GPs. It is now clear to them that the scale of their prospective responsibilities are vast and potentially intimidating. The responsibilities associated with the ownership of costs associated with high referrals and inappropriate prescribing are quickly being realised – but helping jobbing GPs to minimise these costs could present a real opportunity for pharma. Primary care does not need to be a swanky Ford Focus ST, but it can’t afford to be a 10-year old rust bucket either. The more proactive pharma companies may be able to help them learn to drive.
The Porsche Medicines Management
Medicines management is not only here to stay, but it will remain a key customer for the pharmaceutical industry. GPs have recognised that medicines management has assumed huge importance in a cost-driven climate and, as embryonic CCG arrangements develop, many proactive clinicians are considering employing medicines management directly on headcount rather than parking them in the car lot of CSSs.
The white delivery van CSSs
The power of these organisations is likely to be variable across the country. Less engaged CCGs may well devolve a lot of decision-making to CSSs, which could really put them in the driving seat – to the extent that they become rebadged BMWs. At present there has been real conflict of interest between PCT clusters trying to get their CSS models in place without a definitive financial envelope as CCGs consider how to carve up the £25 a head budget alongside trying to negotiate the authorisation process and design the organisation they want. An outcomes-based approach by CCGs to the development of CSSs may make CSSs a real opportunity for industry to tap into. In addition, there are a number of other vehicles that pharma should not rule out:
- The Rolls-Royce – the National Commissioning Board (NCB). Although the NCB’s role is not supposed to be prescriptive, the concept of sharing best practice and buy-in to initiatives with demonstrable outcomes may present pharma with opportunities for partnership.
- The people carriers – Clinical Senates. These will play an advisory role, with disease area specialists providing a clinical check on commissioning plans for CCGs. At present, the geography of clinical senates appears to be largely mirroring PCT clusters, but their final form may depend on how the NCB develops a regional presence.
- The cross-border ferry – Health and Wellbeing Boards. As integrated care becomes a major priority, in disease areas where health and social care overlap, this alternative means of travel may well be worth boarding
- The 4-by-4s – the hospitals. The integrated care agenda has seen the hospital model of care come in for much criticism for being expensive and unsustainable – but the big providers will remain important and will be working towards improved outcomes. They will need all the help they can get.
Moving through the gears
The NHS landscape continues to change and with it, the industry’s key influencers – and the influences they have – are moving too. In a variable and dynamic marketplace, pharmaceutical sales and marketing executives must be agile and flexible enough to adapt to change. Only by taking the time to understand the environment – not only at national level but, more importantly, at local level – will the industry reap the rewards. There is a new roadmap for the NHS and, for individual marketers, the challenge is to ensure your products reach the final destination: being used by your target patient. Success will depend upon making sure you go to the right customers via the quickest route, and this should be achieved through doing what you do best; networking and tracking where your key customers are going.
Selling into the NHS has always been a challenge – it is a complicated customer matrix. The industry’s influencers are different everywhere, dependent upon region, disease area and economics. The most successful marketers will be those that understand local needs and tailor their services that help meet them, delivering relevant outcomes in the process. Whatever the fate of the Health and Social Care Bill, the terms of engagement between pharma and NHS are unlikely to change and the key ingredient for success will continue to be the ability to be customer-centric.
The Government’s NHS reforms may yet prove to be the car crash that has already happened, but don’t allow your sales and marketing approach to become exposed to the same accusation. The industry can help all of its NHS customers drive improvements to patient care – it’s all about finding the right vehicle. Now belt up!
Snapshot review of an emerging CCG
In October 2010, I was seconded into the NHS to provide additional resource to a Transformation Team charged with managing the transition of a PCT into the new CCG model. The project covered a large geography and involved three established PBC teams, each with different responsibilities, structures and cultures. The Transformation Team was multi-disciplinary, but included clinicians who were strong advocates of clinical commissioning. The group would eventually emerge as one of the first wave Pathfinders.
The transition project required the team to evaluate every function of the existing PCT, and to establish which of these should form part of the CCG function and which could be outsourced. The scale of functionality of a standard PCT is broad and vast. It includes aspects such as medicines management, information/data management technology, decision support systems, HR support, contracts/procurement, legal finance and communications.
The challenges and considerations were huge; which services are critical to running a commissioning organisation with a budget of around £700 million, and therefore should remain in-house? Which could be outsourced to CSSs, who may be able to provide them more cost-effectively? Should the CSS be brought in-house, to ensure control over key aspects such as IT and other back-office functions? Should medicines management be included on headcount?
The CCGs established a Clinical Commissioning Board, comprising a multidisciplinary panel of CCG and PCT representatives, to drive decision-making and ensure it was clinically-led. The CCGs were divided into seven localities, each with a Locality Lead that had previously sat within the PBC groups. As part of the transformation process, the GPs who have declared an interested in assuming commissioning responsibilities are being taken through a training programme to upskill them for the future model. This process is ongoing. The scale of the challenge for GPs is recognised to be huge.
The Board created a blueprint for Commissioning Support Services and agreed the outcomes that they wanted to achieve from it, its functions and objectives. This was done in collaboration with over 100 GPs, who worked through a long clinical commissioning transformation process to jointly agree how existing PCT functions would be transformed and where they should sit within the CCG.
The NHS is currently firefighting with uncertainty, but alongside all this transformation work there is still the undercurrent of ‘business as usual’ to ensure the wheels are kept on the organisation. Commissioners are continuing to carry out their day jobs amongst all this uncertainty, and need support to make their mark in what will be a competitive jobs market as commissioning roles reduce to accommodate the £25 a head budget which has been granted to CCGs.
Jessica Henderson is a Research Associate at WG Consulting Healthcare Ltd.