US and European pharmaceutical sales and marketing executives believe that the current business model is ‘broken’, according to a new survey.

More than two thirds (68%) believe that pharma’s current sales model needs to be rejuvenated to face current industry challenges.

Danielle Rollmann, a partner in Booz & Company’s global health practice, says industry is in the “eye of a hurricane of change” and companies need to “identify and focus” new capabilities needed to succeed.

The survey, conducted jointly by Booz & Company and National Analysts Worldwide, asked 156 sales and marketing leaders, most with global responsibilities, how the industry can adapt to face a changing healthcare environment.

If found that respondents noted that growing healthcare prices along with the need to highlight value and outcomes were the greatest challenge faced by sales representatives.

More than half of respondents now expect to invest heavily in marketing to key accounts and payers to counter these challenges. New pricing approaches, new service models and new partnerships with clients were also highlighted as being important.

“Those of us who work with pharma companies to develop and implement commercialisation strategies know very well the challenges of maximising asset value in this new environment, where both key customers and customer expectations are being redefined,” said Susan McDonald, CEO of National Analysts Worldwide. “We’re not surprised to hear people acknowledge that they can’t count on doing ‘business as usual’ and that they’re looking for new ways to gain traction.”

Respondents said the strategies which they believe will be the most important moving forward include:

• Organising sales and marketing activities around diverse stakeholders
• Taking a more creative approach to customer relations and partnerships
• Effectively demonstrating value through outcomes to clients
• Innovatively using digital media channels.

“Virtually everything is changing in the model and the market,” commented Rolf Fricker, a Munich-based partner at Booz & Company. “In response, most respondents say they plan to spend more on all their target marketing activities. Yet this is not aligned with what pharma is doing and needs to do at a company level. The companies that focus, prioritize, and follow a coherent strategy will be the winners.”

In desperate times, the pharma industry needs to deal with medical realities rather than corporate myths. Maxine Vaccine looks at the role of Key Account Management and consultative selling in helping the industry to change its role.

As the world economy continues to implode, public health is rapidly deteriorating while healthcare systems face severe austerity measures... and pharmaceutical companies are announcing a fall in profits. At which news, of course, shareholders demand that heads must roll, jobs must be cut and facilities must be closed down. Here’s a thought: if we’re all in it together, expect less profit. Less money in society plus less money in healthcare equals less money for pharmaceutical companies. Deal with it.

We’re now living in a climate where ‘brands’ and Armani suits count for very little. That Porsche you told your bank manager was vital for your professional image actually looks a bit stupid next to the beat-up used cars in the hospital car park, where doctors and nurses are facing pay freezes and reduced hours. Your customers will be scraping their keys across it. That ‘brand’ your company spent millions on promoting is about to be ditched by your local PCT in favour of a cheap and nasty generic from the bargain basement. And so, ironically, is your local PCT.

What can sales representatives do to hold onto their jobs and keep their products in circulation? Basically, the answer is: make it relevant. Never mind the brand image, the corporate image or any of that 1980s crap. Can you help your customers meet their clinical and financial challenges in a way that has staying power, reducing costs and improving outcomes not just today but next month and next year? Can you do so better than your rivals? Can you advise your customers – many of whom have even worse job security than you – how best to square the circle of growing need and declining resources?

Yes, it’s back to the KAM formula you’ve been hearing for years – but this time your job depends on it. The consultative selling model relies on you working with your customers to give patients more effective service and thereby, in the medium term, save your customers money. The customer can’t do that alone, and you certainly can’t. If you think it’s more important to mimic your customer’s body language, you’ll be alone – and that Porsche will be repossessed faster than you can say “share of voice”.

So if KAM is the real thing and not just a new (or old) acronym of the month, what does it take? The answer is:

• a serious knowledge of, and interest in, your customer’s therapy area and NHS geography, as well as the challenges facing patients

• an in-depth understanding of how your products fit into specific healthcare services and provide value in that context

• the backing of marketing and drug development functions guided by the same principles, with a shared focus on providing value.

There’s a pretty good article on this theme by Tony Swift of Apodi on the Pharmaceutical Field website here.

Don’t just make the noise, feel the noise.

Maxine’s views are not necessarily those of Pharmaceutical Field.

UK pharma companies are not doing enough to help medical sales professionals succeed in the modern environment, new qualitative research has shown.

The study, designed to understand the real world challenges of field-based executives, indicates that the working practices of UK pharma sales executives have changed dramatically in the past three years.

The combination of a maturing KAM model, the emergence of joint working and an increasing reliance on iPad technology, is driving a radical shift in the NHS/pharma relationship – and is forcing medical representatives to develop new skills to thrive in the new environment.

But many sales professionals claim that they have been given inadequate support to help them prosper in an evolving marketplace, and that some employers remain reliant upon traditional training methodologies to see them through, despite rhetoric to the contrary.

The findings are the result of the first phase of an ongoing research exercise by Pharmaceutical Field, and follow a series of one-to-one interviews and roundtable discussions with existing sales professionals in the first two months of 2012. “Early indications, from what will be a sustained research programme throughout 2012, are that, across the board, the role of the medical sales professional has evolved considerably,” says Chris Ross, Editor of Pharmaceutical Field. “In 2008, when we conducted a similar exercise, whilst the term Key Account Management was beginning to gain traction, the concept of joint working with the NHS barely merited a mention. But it would seem that both aspects are now playing a central role in the day-to-day work of the medical representative. The problem is, too many argue that the training they are given to manage relationships with their local health economies – and indeed the metrics upon which they are judged – mirrors that of the traditional drugs rep. And when it comes to joint working, the majority of respondents are describing confusion on both sides of the NHS/pharma equation. The industry clearly has work to do in this regard.”

The 2010 launch of the iPad, along with the subsequent introduction of similar mobile devices, has revolutionised customer communications for many industries – and it would appear that pharma is also beginning to enjoy the benefits of digital technologies, albeit slowly. It is estimated that around 25% of UK medical sales professionals are now using iPad or equivalent to detail their products to customers – and this is very much in line with Pf’s research. A fifth of those canvassed have been issued with mobile devices and are using them with customers. Feedback suggests that HCPs find multimedia presentations more engaging and memorable. One regional account manager, from a medium-sized UK pharma company, said: “Gaining time with customers remains one of our biggest challenges, and it’s not unusual to be given just a few minutes in a corridor or a hospital canteen. Making the most of that time is imperative. We’re finding that detailing our products via the iPad has a much greater impact than printed leave-pieces, and the customer experience is significantly improved.”

Despite this, representatives from some of the smaller pharmaceutical companies that have taken part in the study still appear to be using traditional detail aids – and believe that it will take some time before the use of tablet devices in the field reaches a critical mass.

The Pf study also indicated an increasing number of medical sales professionals are choosing to work on contract, rather than on headcount at mainstream pharmaceutical companies – with job security cited as one of the key factors.

At a time when both the Government and the NHS are calling for value for money, how can pharma introduce and promote innovation and value propositions? Tony Swift discusses ways and means of promoting eye-catching solutions through the key account approach.

In my two previous articles, Making it work and It’s all in the execution, I discussed the transition to Key Account Management (KAM) structures that many pharmaceutical companies are currently addressing. They focused on the difficulties of execution and considered various related issues such as:

• The move towards decentralisation
• The role of leadership
• The importance of support from the people in power
• The need to change the culture, beliefs and behaviours of individuals within the business
• The requirement for supporting the new strategy with a process including short-term objectives, incentives and controls that drives the whole execution initiative.

My final article on this topic covers the issue of building innovation and value propositions into a company. This topic is, of course, fundamental to any pharmaceutical company. For example, the rationale for many pharma companies is to build a drug portfolio that differentiates itself from the competition – either through a cost advantage or by improving patient outcomes. This article concentrates on building innovation and value propositions into the KAM process and is based on the premise that to justify moving to Key Account Management, account managers have to be armed with value propositions that are attractive to the customer.

KAM and Jobs
Over Christmas I was lucky enough to receive the recent biography of the late Steve Jobs, the former CEO of Apple. It was a fascinating read and highlighted the pros and cons of working for the guy mainly responsible for building one of the most successful companies in the world. The key message that came out of the book for me was the total focus Jobs had on delivering the very best products for the company’s customers. Apple was able to do this repeatedly with products we are all familiar with, such as the iPhone, iPad and iPod. Jobs also managed to achieve success in the world of animated cinema through his company Pixar, which produced films such as Toy Story, A Bug’s Life and Finding Nemo, before being sold to Disney. Disney bought Pixar primarily because, for the first time in its existence, a company was out performing it in its core area of animated film production.

So why was Jobs continually able to innovate more successfully than his competitors and what lessons can pharma learn from his approach when moving towards a KAM structure? I will address this later, but would note that Jobs’ success had little, if anything, to do with market research and asking the customer what they needed – as Jobs stated, customers don’t know what they want until we’ve shown them.

The demand from pharma
It is clear that pharma’s primary customer, the NHS, is now a series of complex and multi-layered accounts with an increasing number of stakeholders and influencers. Prescribers, payers, patients and policy makers are looking increasingly for pharma companies to offer true value added solutions rather than just products. Key Account Management represents a real opportunity for pharma to develop an effective value proposition and nurture closer and more effective relationships with key customers.

I attended a conference recently and a member of the audience asked a leading member of the NHS how pharmaceutical companies could more actively engage with the health service. The response was: “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.”                                       

This is an increasingly typical response. Sir Ian Carruthers, Head of the Government Innovation Review Team for the NHS, stated: “The pharma 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 reform, but too few companies are coming forward.”      

The Government and NHS leaders are crying out for more innovative input, although potential trust problems between the NHS and pharma can impede the implementation of some value added solutions. In any event, there is no doubt that demand for more input from pharma is growing and, given the Government and NHS agenda, it appears this can only continue.

Can pharma deliver?
Our experience at Apodi shows that companies currently differ significantly in their ability to deliver innovation and value added solutions through their Key Account Managers. However, a number of companies are extremely well set up to drive this agenda with specific divisions established to identify new ways of working in partnership with the NHS. Some have managed to integrate the operations of these ‘centres of excellence’ with other parts of the company – particularly brand management, sales and KAM management, and marketing.  In other words, innovation and execution are inextricably linked.
Other companies are not so well positioned or structured to deliver such value added solutions. In this situation, the validity of establishing a KAM structure needs to be addressed. I was recently party to a discussion between a senior executive of a pharma company and a service supplier that went along the following lines:

Service supplier: “Do your KAMs have real value propositions/solutions to take to the customer?”
Senior executive: “No.”
Service supplier: “Why not?”
Senior executive: “There is no real process to identify propositions and any that are identified are blocked because of budgetary constraints, restructuring issues and so on.”
Service supplier: “So why invest in KAMs?”
Senior Executive: (Silence).

Success ultimately depends on the KAM delivering real value to the customer. If that is not possible, companies need to critically analyse whether they should invest in Key Account Management rather than, or as well as, a ‘share of voice’ solution.

An innovative culture
For those companies still at the starting blocks in terms of building and delivering innovative value added solutions to its customer(s), the key question is what steps are needed to drive these processes into the company?

a) Establish a ‘Centre of Excellence’
Firstly, it is clear that it takes investment to truly understand customer issues and develop a deep knowledge of the marketplace to identify how experiences and value can be improved. Such insight is a powerful foundation for strategic, product and service innovations that create value for all parties.
In the early stages, we believe a company needs to establish a function to identify value added solutions. This should be centrally driven and staffed full time by people with the appropriate skills. Whatever these centres of value added excellence are called, their role is to generate propositions that can be shared with other parts of the company to assess whether the propositions should become part of the ‘tool kit’ of Key Account Managers.

b) Develop links with other parts of the organisation
As mentioned earlier, it is critical to link innovation and execution. This may be best done by the company encouraging – even demanding – that the Centre of Excellence coordinates its activities with other parts of the organisation, particularly those involved in executing the value added solutions.
How well a company coordinates these activities and actually makes things happen depends on a number of factors. For example, we have seen companies identifying value added solutions and introduce them to the Key Account Management structure, but then nothing happens. In this situation, the company needs to implement a rigorous process of establishing short-term objectives, incentives and controls to ensure that behaviours change.

c) Focus
Steve Jobs stated that his real passion was to build a company where people were motivated to make great products and that everything else was secondary. The focus he was able to engender in his company was extraordinary. Leaders need to assess whether they are instilling a culture that supports innovation and building value added solutions for their customers.

The impact of value
With the NHS now being a complex, multi-layered organisation with an increasing number of stakeholders and influencers, most value added solutions will differ depending on the company’s particular circumstances, product portfolios, services and so on. They will, however, be focused in one or more of the following areas:

a) Prescribers: solutions may address best patient outcomes, other clinical benefits and cost effectiveness of treatment

b) Policy makers: solutions may address care pathways, disease management targets and integrated care clinics

c) Patients: solutions may address adherence, access, provision of information, support groups and integrated care clinics

d) Payers: solutions that address funding issues, monitoring usage issues, etc.

Back to Steve Jobs     
Ultimately, Apple was so successful in building the most innovative products in its industry because the company, through Steve Jobs, ensured that innovation and value added solutions became part of the DNA of the company.

If a company is establishing a Key Account Management structure, we at Apodi believe that pharma companies need to follow these same principles. After all, what is more important when establishing a KAM structure than making sure account managers are in a position to deliver real value to their customers?  

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

Tracking and responding to NHS change in a highly competitive Olympic year will be a test of endurance for medical sales professionals. In a light-hearted article, David Round examines why winning a place amongst the medals will depend upon getting your preparation right.

It’s a well-worn cliché that a little knowledge is a dangerous thing. But as the UK pharmaceutical industry heads into an Olympic year when the pace of change amongst its NHS customer-base will undoubtedly increase, medical sales professionals will need to demonstrate more than a little knowledge to achieve a podium position for their products. The Health and Social Care Bill may still be some way from the finishing line, but as the health service continues its transition towards the seemingly inevitable, changes on the ground are already taking place. And the implications for pharma are huge. The industry cannot afford to sit and wait – it needs to act now to ensure its sales and marketing communications are reaching the right customers, with the right message at the right time. For pharmaceutical sales executives, it’s about developing more than knowledge: it’s a question of intelligence. And the answers may be right at their fingertips.

It has been widely documented that the NHS is working its way through a period of unprecedented change – both in its working practices and, of course, in its organisational structure. As a result, pharmaceutical companies – often criticised for being ‘data rich but information poor’ – will, more than ever before, need to maximise their data assets to deliver a more customer-centric approach to selling. And sales professionals will need to draw on all the information at their disposal to develop and deliver relevant and robust value propositions that satisfy customer need.

The noise-driven, share of voice model of pharmaceutical sales and marketing has become like Monty Python’s parrot: it has ceased to be. Today’s approach, which relies on a reduction in call volumes, is less linear, more selective and much more sophisticated. Key Account Management is leading the industry pack. But whilst the approach is, in theory, more measured, making it work requires quality customer data as a platform to identify ‘key accounts’ and, crucially, the ability to translate that data into meaningful market intelligence. Companies are becoming much smarter in segmenting their key customers – but faced with moving targets across a changing NHS, maintaining the accuracy, and in the process the efficiency, of the approach is not easy. It is, however, imperative.

The race to reform
The transition towards the new environment is already well under way. Last year in England 152 Primary Care Trusts (PCTs) were reorganised into 51 PCT Clusters of variable size, while the ten Strategic Health Authorities (SHAs) were restructured to form four large regional clusters. By April 2013, PCTs and SHAs will be extinct and Clinical Commissioning Groups (CCGs) and the National Commissioning Board will spearhead the commissioning of NHS services under a new-look structure. If you throw into the mix the onset of Clinical Senates, Health and Wellbeing Boards and new Commissioning Support units (which may well emerge as private organisations and therefore new customers), it is easy to see that an already complex customer matrix is set to become even more complicated. And that’s simply the start line.

Critics of the reforms claim that the situation on the ground is fast approaching chaos within the NHS, as the wider organisation struggles to implement changes even before the Health and Social Care Bill has achieved Royal Assent. But in the interim period while the health service readies itself for the inevitable, UK pharmaceutical companies cannot afford to let their sales and marketing operations become similarly chaotic. Tracking and more importantly responding to change throughout the transition period will be vital for medical sales professionals if they are to support their customers through the metamorphosis and, in the process, meet their own commercial objectives.

Access to quality data that can not only enable Account Managers to make the right targeting decisions, but can also help them engage in the most appropriate customer dialogue, will be critical to success. It is not simply a case of knowing who to target – understanding why and how they should be approached is equally important. It is this understanding that separates knowledge from intelligence. And separates winners from also-rans.

Keeping on track
Sales professionals not only need to identify their ‘key accounts’, they also need to understand the varied environments in which these individuals operate. What challenges do they face? What are their key priorities? Do they carry out more than one role – or sit on a variety of boards and committees in addition to their main job? If so, how does this impact their spheres of influence? How pivotal are they in driving service redesign, influencing formulary decisions, or facilitating joint working within their local organisation? Where do their roles and their needs overlap with your product or service?

This is standard market access. And it’s vital. Pharmaceutical sales professionals need to define how they engage with the NHS and why their customers should want to engage with them. They need to establish how they are going to deliver value and improve outcomes for the health service and its patients. And to achieve this, they must understand their local health economy, its priorities and objectives, and identify the key stakeholders whom they can help support to meet those needs. What is the structure of the local organisation? What is its indicative budget and its strategic plan? Who is responsible for commissioning in your disease area? What areas are emerging Commissioning Support Units going to be supporting commissioning in – and what are they not? As PCT clusters evolve and CCGs take shape, which customers are most relevant today, and how relevant will they be tomorrow or indeed in two years’ time? Only by tracking customers in real time as they make their transitional journey towards the new NHS can sales professionals be sure that their interactions are aligned with that change, and be prepared to respond accordingly when required.

Technology in a team sport
The Key Account Manager in the modern market must, therefore, have the mental preparation of an Olympic athlete – but work on the basis that the race is never won. The NHS is a dynamic marketplace where change is continual. The Key Account teams that are best able to track, capture and share intelligence will be best placed to emerge victorious. The role of the Key Account Manager is, after all, an individual pursuit in a team sport.

The tools to support ‘informed’ Account Management are already here. Customer Relationship Management (CRM) systems that help capture and share vital customer intelligence have been in common currency across the UK drug sector for many years. But never before has their value to the medical sales professional been so important. Industry surveys suggest that CRM usage amongst front-line sales professionals could still be improved – and this is essential. CRM systems are only as good as the data that is put into them. But when collected and shared properly, that data is there to help medical sales professionals. In a fast-evolving customer environment that will almost certainly intensify as the NHS continues its inexorable march towards a new structure, key account management can only be enhanced by the knowledge and intelligence a good CRM system can help deliver.

In fact, the sheer volume of likely NHS change in the next 12 months could provide a catalyst for 2012 to become the year when CRM finally comes of age. And those sales professionals who recognise its potential to significantly support customer interactions – and make for a more intelligent and appropriate engagement – will undoubtedly reap the rewards.

But the time to act is now. In an Olympic year, the fast track is the only option. After all, a little knowledge is a dangerous thing.

David Round is UK General Manager, Cegedim Relationship Management.

There has been a lot written about the industry’s apparent move to Key Account Management and its impact on call rates and targeting. David Round provides a welcome break from the rhetoric and concentrates instead on the facts.

Mark Twain famously said that people often use statistics as a drunk uses a lamppost: for support rather than illumination. But when used properly, data can be incredibly illuminating – not least for the UK pharmaceutical industry. And analysis of pharma’s ongoing modification of its sales and marketing model is well worth putting under the spotlight.

In the past few years, experienced pharma commentators have looked in vain for evidence to support an inexorable, yet often anecdotal, march towards Key Account Management (KAM). The rhetoric said that pharma was taking a more sophisticated approach to sales and marketing activity and, in the process, delivering a more efficient and effective commercial model using a targeted KAM methodology. But the reality, and indeed the numbers, seemed to suggest otherwise.

The UK pharmaceutical industry may have taken the surgeon’s knife to its collective sales force and cut back on the volume of field-based staff. It may also have rebranded its sales representatives as ‘Account Managers’ and encouraged them to take a more measured approach to targeting key customers. But, until very recently, the number of GPs being seen by medical sales professionals across the year remained as high as ever – belying the claim that companies were moving away from the apparently inefficient ‘share of voice’ model that had served them so well in the past. Critics claimed that the traditional sales rep had simply been issued an Account Manager’s business card and given the accountability and autonomy to be more selective in targeting key customers – as well as a call rate target that was directly at odds with the KAM philosophy. And the statistics did little to quell the debate.

Data from Synmetrics, Cegedim Relationship Management’s activity benchmarking tool, shows that between December 2009 and December 2010 – and in the thick of widespread opinion preaching the gospel according to KAM – 92.7% of UK GPs had a face-to-face call or meeting with a representative from a pharmaceutical company. This indicates that, far from adopting a more considered approach to targeting its customers, the industry was still carrying out almost blanket coverage of GPs. What’s more, the 2010 data merely continued a similar trend from the years that preceded it – with annual industry coverage in the past decade consistently reaching over 90% of the total prescriber population.

But the past 18 months seem to represent a watershed for pharma sales operations in the UK. Something, it would appear, is happening. In the 12 months from July 2010 to June 2011, Synmetrics data show that the number of GPs who have had a face-to-face call or meeting with an industry representative has dropped to 85% – a fall of some 7%. Alongside this, in the first six months of 2011 the total number of GPs who have had a similar contact has slumped to 73%.

Whilst the half-year figure may not be wholly indicative, the July 2010 to June 2011 full-year data appear to represent a trend. And upon closer scrutiny, it’s a trend that’s been developing incrementally over the course of the past decade. Figure 1 shows that the total number of contacts on GPs has, apart from an uncharacteristic spike in 2008, been gradually declining since 2001.

Contact is classified as either a traditional face-to-face call or a meeting, and analysis of the contact rates for each of these methodologies is equally revealing. The number of face-to-face calls (per rep, per day) has been steadily falling year-on-year. Conversely, the number of meetings (per rep, per day) has gradually risen – and in fact grew disproportionately between 2007 and 2008. The Synmetrics data show that there are more meetings taking place today than at any point in the past ten years; and that, crucially, in 2010 the number of meetings per day overtook the number of face-to-face calls for the first time.

Significantly, the number of face-to-face calls being made each day has halved over the course of a decade. That’s a pretty spectacular statement. So spectacular that it’s worth repeating just to reflect on it: the number of face-to-face GP calls, per rep, per day, has halved since 2001. This has nothing to do with field force size and the fall in the number of representatives – it’s literally the number of calls per rep.

Moreover, data shows that 17,000 GPs – around 35% of the total population – have not received a face-to-face call in the past twelve months. In truth, this is another staggering revelation: the bread-and-butter, conventional pharma approach of face-to-face engagement between GP and representative has reached a point where more than a third of GPs have not received a call in the last year.

And so the ‘real world’ data are piling up. There are now fewer representatives, who are collectively making fewer calls. There’s an increase in the number of meetings, but a significant drop in activity, with daily call rates halved and over a third of pharma’s traditional customer population not receiving a single face-to-face call. It is a breathtaking decline, but it has not just happened overnight.

The implications
So what does all this mean? Does the 7% drop in GP coverage over the last 12 months provide the first conclusive evidence that Key Account Management is beginning to take hold in the UK? Or does the incremental decline in contact activity over the course of the past decade merely confirm that customer access, for reasons that are well documented, has shrunk considerably? Have GPs increasingly decided to close their doors to industry representatives, or have pharmaceutical companies taken a more measured approach and chosen not to target them? Drawing a distinction between the two is difficult. It’s most likely to be a combination of both factors.

What we do know, of course, is that the industry’s customer-base has broadened extensively in the past few years with the emergence of a new breed of decision-makers – loosely classified as payers. As a
result, pharmaceutical companies have been forced to balance activity between traditional customers and more influential stakeholders in medicines management and commissioning functions. With GP call rates
falling by half it would be easy to assume that sales professionals are spending up to half of their time refocusing on payer engagement. But this may be too simplistic a conclusion. The payer population has rapidly earned a reputation for being difficult to access, and building relationships with the new stakeholders is widely accepted to be a long-term process that will take time and effort.

However, it would be disingenuous to conclude that half a sales professional’s day is being spent calling upon payers, and to use this presumption as the ultimate proof that Key Account Management has finally
established itself is probably a leap too far – it would perhaps be more realistic to assume that the effort and preparation required to see these payers is what is taking up a greater part of the sales professional’s day.

Yes we KAM?
It’s still too early to make definitive claims that the KAM model is firmly embedded in UK pharma. The indications are that the approach is beginning to take shape, but there is perhaps still some way to go before companies finally feel confident enough to entirely let go of the traditional share of voice model. But while that transition continues, the need for a more sophisticated approach to targeting customers remains as strong as ever. Pharma companies need to use all of the available data to drive their promotional plans, and use every available channel to reach their customers.

The industry needs to be as targeted as it can be, and sales professionals must be as smart as possible in their approach. Quantity is being replaced by quality. As the number of daily contacts being made continues to decrease, it’s vital to make sure that every face-to-face call or meeting actually counts. As
Account Managers are encouraged to develop their own call plans and become more accountable for their
own business, the need for robust and effective data to help make informed targeting decisions in the process is paramount.

Statistics can, of course, be used to provide reassurance and justification for a decision; but when considered more carefully, robust data can stimulate much greater illumination. For UK medical sales professionals, gaining access to information that enables you to shine a light on all of your customers and establish which ones provide the greatest potential, could make the difference between staggering around in the dark and giving your sales figures that extra spark. Don’t allow yourself to become the drunk at the lamppost – it only ever leads to a headache the following day.

David Round is UK General Manager, Cegedim Relationship Management.

The hardest part of effecting meaningful change is not in the strategy, but in the execution. Tony Swift examines critical success factors in change management and how they can drive performance in pharma’s transformation towards a Key Account Management structure.

Last month’s article, ‘Making it work’, explored how pharmaceutical companies are managing the transformation to Key Account Management structures. Rather than a comprehensive review of all factors involved, the article primarily focused on the role of organisational structure and the deployment of appropriate personnel when going through the change process.

Since it was published, I have received some valuable and insightful feedback from readers about their own experiences and why, in their view, the transformation process has not worked, or has taken longer than anticipated. As a consequence, this month, I examine in greater detail other key factors in the change process.

The feedback I received made it clear that failures in implementation had little to do with strategy or with a lack of understanding of the marketplace. This is not surprising – pharmaceutical executives usually understand their market extremely well and, in the majority of cases, are able to produce robust strategic plans that address the challenges facing their companies. The problems readers encountered in their organisations were often executional in nature and involved difficulties of driving through change. Again, this is not entirely surprising as change management is very tough and is problematic for executives in all industry sectors. However, these difficulties are often grossly underestimated when embarking on major change.

This article explores three key areas that can help ensure the transformation process works. These are:

• The role of power in any organisation or team to drive through change
• How to affect the change in culture required to adapt to the new world of working
• Ensuring there are appropriate short-term objectives, incentives and controls to drive change through.

Power

Primarily, the KAM transformation process needs the support of the people in power in order for it to be successful. This may appear somewhat obvious, but, it is often the absence of such support that is quoted as a major reason for failure. Those in power must be convinced that the transformation to a KAM structure is a fundamental foundation stone in achieving the company’s strategic goals.

Yet, even defining where the power resides can be complex. For example, a leader of a KAM team may define power as existing in the following areas:

• The heads of sales and marketing in the organisation
• The CEO of the UK company – and other board members
• Abroad – if the organisation is multinational
• Aligned departments or units if they exert influence on one or more of the above.

It is often relatively easy to assess whether the appropriate power is in place or not. Organisations where it is in place are rarely blown off course by short-term hiccups – and they are acknowledged as just that. Where it does not exist, the conversations start relatively early about the need to change course or go back to the old ways of working.

Of course to ensure continuing support, it is important that the change to a KAM structure produces clear, measurable and positive value-added results. If these results cannot be seen, the support for the change will start to disappear. This is often the crux of the problem with KAM teams – processes for appropriate measurement and communication are often absent. This then leads for calls to revert back to type and use measures such as those based on share of voice.

A KAM team leader cannot always influence where power lies in the organisation, but the leader can heavily influence how the team is measured, works towards meeting objectives, and how the measurement of the team’s success is communicated to other parts of the organisation.

Culture

Last month I referred to the fundamental changes involved in becoming a KAM-based business: “…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, P&L accountability are now among the order of the day.”

Some of these changes can only be driven by changing the culture, beliefs and behaviours of individuals within the business. For me, one of the most interesting studies in culture change can be found in Lou Gerstner’s book, ‘Who Says Elephants Can’t Dance – Inside IBM’s Historic Turnaround’. In the book,
Gerstner explains that he came to believe that an organisation is nothing more than the collective ability of its people to create value. However, to change the attitude and behaviour of many people is “very, very hard to accomplish. Business schools don’t tell you how to do it….you can’t simply give a couple of speeches or write a new credo for the company and declare a new culture has taken hold”.

For Gerstner, the key to changing culture is that a leader should create the conditions for transformation. Creating the conditions involves a focus on changing behaviours which can then lead to culture change. He went to great lengths to explain the behaviour changes required in the company at all levels. Some examples of these bear resemblance to the changes required when moving to a KAM-based business.

Required behavioural change

Defining the behavioural changes required during a transformation process and a plan for driving behavioural change is a valuable tool in a change process and one not often seen in the commercial world. A successful implementation of a KAM-based business can only occur when behavioural change occurs, and this can be encouraged by:

• Bringing new people into the organisation
• Changing organisational structure
• Short-term objectives, incentives and controls.

Short term goals

‘Making it all work’ examined the first two points above in some detail. Here, we look at how a successful strategy can be executed by translating it into short term, measurable operational objectives. A recent and comprehensive report into Key Account Management practices in the UK indicated that:

• Pharma has still not implemented metrics that accurately track the outcomes of KAM programmes
• There is general consensus on what to measure – account plan development, quality of engagement with customer, sales progress, tactics that work etc – but attitude (culture/behaviour) dictates whether measurement is effective
• Over 70% of companies still measure on-call rates.

Given the findings of this report and the importance of short-term, measurable objectives, it is little wonder that pharma is struggling with KAM implementation. Furthermore, it is possible in these situations that incentives and controls established to support the execution process are ineffective and possibly damaging.

Good incentives have to be tied to the right short-term objectives and must reward the right thing. Similarly effective controls provide feedback on performance, reinforce execution, and provide a corrective mechanism if things go wrong. If the company has inappropriate short-term objectives and/or they cannot be measured, it cannot have effective control mechanisms.

Implications for managers

Whilst management faces many challenges during the change process, what about Key Account Managers on the front-line? In recent years, many sales representatives have faced – and indeed some are still facing – the prospect of their jobs becoming redundant and having to apply for the new role of Key Account Manager. For many this is an exciting new opportunity. For others it may represent simply the opportunity to stay in employment.

To transition successfully to the new role, individuals need to understand:

• A KAM role requires changes in behaviour from the past
• KAMs need to fully understand what success looks like and how it is measured. In practice, management is often slow to clarify objectives and metrics and, in such cases, KAMs must push hard for clarification.

Conclusion

The move towards a Key Account Management structure demands that management teams concentrate on
the execution process required to drive change. Yet pharma is not unique when striving for change in an organisation, as these challenges are also being faced in other sectors.

The hardest part of any change process is not strategic, but executional. I believe that if companies systematically address the following areas then the chances of success will rise exponentially:

• What is the appropriate organisational structure to drive through the change?
• How does this change the roles and responsibilities within the organisation?
• What types of people are required in those roles and responsibilities?
• What cultural and behavioural changes are needed in the organisation?
• What short-term objectives, incentives and controls should be established to drive the changes required?
• How is the organisation going to measure success and how is that success going to be clearly communicated around the organisation?
• Where does the power in the organisation lie and is it fully supportive of the strategic objectives of the change process?

Pharma companies will succeed in transforming to a KAM model – there is simply too much at stake and too much expertise in the sector for it not to happen. It really is about how painful the transformation process is, and it is how the execution/change process is addressed that will dictate that.

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

In the UK joint working is being encouraged to develop innovative services and propagate best practice. But in France, new legislation is placing significant barriers between pharma and its clients. Jérôme Guermonprez explains the implications for market access strategies in the country.

Across Europe pharmaceutical companies have been looking to underpin market access strategies with strong links to healthcare professionals. And while most pharmaceutical companies admit there are significant national differences that demand specific market access strategies, there has been a push, where possible, to leverage expertise, messaging and strategy to drive economies of scale.

Many organisations are now actively embarking upon innovative, cooperative working with regional decision-making bodies – such as the Clinical Commissioning Groups (CCG) in the UK; whilst doctors and pharmacists are increasingly involved in research projects, from clinical research to patient care, patient outcomes and procedures. Indeed, the UK’s amended Health and Social Care Bill strongly encourages pharmaceutical research, innovation and the use of scientific evidence in decision-making.

In France, the forthcoming radical overhaul of the drug regulatory system will significantly change relations between pharmaceutical companies, healthcare professionals, patient associations and physician associations. The “Reforme du Medicament” legislation aims to crack down on health practitioner conflicts of interest, restructure the country’s drug regulator and tighten the process for licensing drugs and for monitoring their effects once in use.

The proposed bill creates compliance requirements that far outstrip the UK anti-bribery laws and includes a number of significant changes which will directly affect the way pharmaceutical companies interact with opinion leaders across the French health service.

To minimise the risk of conflict of interest, the new legislation mirrors the US Sunshine Act by requiring pharmaceutical companies to disclose all financial relationships with healthcare professionals, patient associations and scientific experts.

With an emphasis on patient safety, the bill also requires far more detailed information and discussions about indications – from the provision of a helpline number on every drug packet to enable patients to report problems, to the creation of a government watch list of drugs under review.

It also demands pharmaceutical companies no longer undertake direct physician training but instead provide the funding for training to the government, which will then oversee independent training programmes.

 

Restricted access

Critically, from a market access perspective, the bill will prohibit individual medical representative visits to physicians within a hospital; visits must be collective to avoid any one-to-one relationships and ensure discussions are open and transparent.

The impact of this legislation – which is currently being discussed and should be passed by the French government by the end of 2011 – will be significant for pharmaceutical market access policies and demand companies gain new insight into key opinion leaders (KOL).

Under this new model, the industry will have to be incredibly careful about the type of relationships that are put in place with stakeholders; indeed, at least one pharmaceutical company has already announced it will no longer pay physicians directly in the future or invest directly in physician grants to avoid any regulatory compliance issues.

Furthermore, with many physicians likely to back away from any interaction with the pharmaceutical industry, at least in the short term, patient and physician associations will have a far greater role to play. Pharmaceutical companies will have to rapidly assess the way these associations and individual physicians respond to the new legislation and amend market access strategies accordingly.

 

Regional structure

This new challenge comes at a time when pharmaceutical companies are still adjusting to the major overhaul of the French healthcare system – which has seen the creation of 26 Regional Health Authorities (RHA).

While drug reimbursement is still set nationally as in the UK, since 2009, each region has found the responsibility to adapt national objectives to local or regional health and demographic problematic. Over the past year, each region has had to sign multiple year contracts between the  state and the region to deploy the health strategy.

As in the UK, over the past two years, pharmaceutical companies have realigned resources to create a regional approach based on a key account management (KAM) model. The regional structure has significantly broadened the number of stakeholders involved in decision-making, both financial and medical.

Furthermore, each RHA has a different demographic breakdown and health issues, creating very diverse goals for each region. This change has required a far greater insight into decision-makers and regional objectives; it has also demanded pharmaceutical companies use the KAM approach and strong CRM tools to drive synergies between teams at local, regional and national level.

Pharmaceutical companies in both France and the UK are now actively seeking in-depth insight into the KOLs within new regional structures. Information from the structure of the new organisations, including the multiple drug, technical and price commissions, to identifying specific members, roles and drivers is proving key to create the right regional messaging.

And with this regional, KAM-based model still in its infancy in France, pharmaceutical companies face a tough challenge to ensure the implications of the new medical reform legislation are incorporated.

Messaging, for example, must now be amended to include product safety, as well as quality and efficacy; while companies must ensure information is up to date to ensure changes in physician attitude to the pharmaceutical industry as a result of the new regulations are flagged to remove the chance of inappropriate or unwanted contact. CRM tools will also be essential to coordinate group visits to physicians to avoid any chance of the forbidden one-to-one interaction.

As in the US following the introduction of the Physician Payment Sunshine Act in 2009, pharmaceutical companies will also need help to meet their obligations to declare all activity with physicians.

 

What next?

It is tough to predict how the health service in France will respond to the new legislation over the next 12 months. For pharmaceutical companies there is no doubt that direct physician contact will decline and organisations will have to refocus efforts towards the increasingly influential patient associations and physician associations.

But for those organisations operating across Europe, the changes must demand very different approaches towards health service co-operation. As the UK market looks to drive service innovation and close ties with practitioners at every level, counterparts in France are being compelled to be transparent and improve patient safety. The concept of the global, or even pan–European, market access strategy looks ever less practical.

Jérôme Guermonprez is the Vice President and General Manager, France, Cegedim Relationship Management.

Sometimes, reporting on the UK pharmaceutical industry feels a bit like Bill Murray’s Groundhog Day. In the late 1990s, when I edited my first title for UK pharma, all the talk was of the move from GP Fundholding and the imminent introduction of Primary Care Groups.

By 2000, New Labour’s NHS Plan promised a revolution in healthcare built around delivering improvements in ‘partnership, performance, patient care and prevention’. The politicians were about to ‘modernise the health service’.

Fast forward almost 12 years and we’re still being read the same script; new politicians, the same old lines. Four Ps – partnership, prevention, productivity and patient care – continue to dominate airtime, only this time, of course, it will be different.

Different? Some hope. This is Groundhog Day. So how is the UK pharmaceutical industry responding to change? Its customer-base, meticulously redrawn through 10 years of implementing the NHS plan, is yet again being reshaped. PCTs are on the way out. CCGs and Clinical Senates are on the way in. Keeping track of decision-makers and influencers is critical. Getting in front of them in the right volume, at the right time and with the right message is life and death.

The industry is currently pinning its hopes on Key Account Management (KAM), supported by a Customer Relationship Management (CRM) philosophy that promises to enable the field force to have a more detailed understanding of individual customer needs across a diverse and complex landscape.

The tools to support the CRM approach are impressive, established and evolving in time with the modern technological advancement. They also provide huge value to medical sales professionals, and the ability to enhance customer interactions.

But, as ever, this is Groundhog Day. Twelve months ago, Pf’s annual survey into field force attitudes revealed an apathy amongst some sales professionals towards the use of CRM. A year later and it appears that, despite its many advantages, the value message for CRM is still not being heard by all of those who can undoubtedly benefit from it.

This year, 90% of Pf’s survey respondents have access to a CRM system – but only 43% of these find time to use it in the field, and more than a fifth admit that they fail to record post-call reports accurately.

In a fast-moving, dynamic marketplace, generating, sharing and maximising real customer insight is one of the best ways for sales professionals to achieve competitive advantage. CRM tools provide the perfect mechanism for this. Only the foolish would pass up the opportunity.

I feel like I am repeating myself. But then again, this is healthcare Groundhog Day. Next month: more NHS reform.

Chris Ross
Editor

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.