Pf’s Iain Bate examines how contract sales organisations are taking their place among the industry heavyweights.

There can be little doubt that pharmaceutical employees – in particular sales and marketing executives – have taken some metaphorical hefty blows in recent times. All of pharma’s biggest heavyweights have announced ‘austerity’ measures as part of widespread job cuts across the majority of divisions in recent times.

Whilst pharmaceutical CEOs have enjoyed champion pay rises, the humble employee at ground level has been unable to duck and weave away from the dreaded knockout blow. As a result, the job market has been on the ropes. However, candidates searching for a career in the medical sales industry do not have to throw the towel in just yet.

The employment market has suffered many bumps and bruises in recent years – but Contract Sales Organisations (CSOs) are leading the fightback. Now regarded as a leading contender for those looking for a prolonged career in the medical sales industry, CSOs continue to punch above their
weight in a challenging environment.

Pf spoke to four leading CSO companies to provide a blow-by-blow account of how contract organisations have boxed clever in recent years. Why have they gained in popularity despite the employment market suffering a bloody nose? And what does the future hold for the contract sales movement?

The gloves are off

In the modern working environment, when uncertainty accompanies everyday challenges, the flexibility CSOs offer clients is a major attraction. “The fundamental driver is the requirement for an increase in flexibility from our biopharma customers,” says Helen Molloy, HR Director at Quintiles Commercial. “This is nothing new – but what has changed is the nature of that flexibility. It’s not just about numbers of people, it’s about expert teams with specific skill sets and evidence tailored address local priorities.

“Customers are increasingly looking to partner with us to help navigate challenges around proving cost effectiveness and long term value of a drug to a wider range of stakeholders. We are moving away from what has historically been seen to be the fundamental core of our services, and into much more specialised areas.”

Flexibility is certainly an attractive proposition for clients who have slimmed down sales teams yet still require the prowess to impress customers. However, flexibility isn’t the only factor driving CSO growth. Specialist skills are now required by clients to outwit the opposition. “Contract sales organisations are moving away from large-scale build, high noise proposition and are becoming much more specialist,”
says Emma Busby, Project Director at CHASE. “Organisations are demanding to have specialist skills and capabilities either to be equitable to their teams, or, in most cases, to offer more opportunity and more value within their teams. Their key objective is to heighten the level of capability that they have got on their headcount team.”

Pharma’s increased reliance on contract methodology is now reflected in the number of candidates turning to CSOs to develop a career in UK medical sales. “CSOs are becoming the only way into the industry,” says Emma. “We work with many blue-chip companies to provide an influx of trainees every year. Again those people go through organisations and develop. The trend went away from that for a few years, but it’s definitely coming back now. Companies recognise they need high-quality sales engagement. We can regurgitate skills but fresh attitudes and capabilities coming in will actually challenge the status quo.”

At a time when, as far as job security is concerned, pharmaceutical representatives fear the next barrage of punches, CSOs are doing more than ever to provide a shot at the big time in the industry. David Alexander, Contract Business Unit Team Leader at Star, says there are a number of reasons why CSOs have gained
in popularity recently. “Security, variety and skill development are key,” he said. “Working for a CSO
means people can move from one assignment to another and gather experience with different companies,
in different therapeutic areas and with different customers over time. Transferable skills and flexibility
are important qualities in today’s environment and working with a CSO will help people profile both.”

Swapping gloves

That value is also being recognised by clients seeking to boost sales at various stages of a brand’s life cycle. With the industry well on the way to manoeuvring itself away from the traditional sales model to a sophisticated fighting-fit key account approach, contract sales organisations are perfectly placed to augment teams or, in some cases, replace them. “A CSO can help do both,” says David. “It can either enhance a team or, if necessary, it can replace it. You can either have a bolt-on campaign, where contract reps target specific areas in fixed time periods, or, you can replace an entire team with a CSO key account team, enabling flexibility and resource in particular areas of the UK. This allows clients to be much more outcomes-focused.”

The next round

But what next for contract sales organisations? Will pharmaceutical companies decide to completely
shed their entire headcount and outsource functions to specialist organisations? Andy Holgate, Business
Unit Director from Ashfield In2Focus, believes this may be the case. “Contract sales organisations are expanding into new areas,” he says. “The model for CSOs in the next 20 years could be where pharmaceutical companies simply concentrate on research and development and strategic marketing and finance. Contract sales organisations will, potentially, then do all of the rest. I think that is the trend that CSOs are driving towards.

“We may be in a bit of a perfect storm at the moment where pharmaceutical companies, many of whom are being squeezed from above and are tinkering around the edges, are considering outsourcing services in areas where they would never previously have allocated external resource. Contract sales organisations are extremely good at being able to help pharma companies, and other clients, differentially resource people when and where they want them and when and where they don’t, be that in sales or other value-adding roles.”

In an austere environment when pharmaceutical companies are fighting against a whole host of external
pressures, it’s difficult to see how contract sales organisation will fail to grow in the coming years. The powerful combination of being an inviting proposition for individuals seeking a career in medical sales industry, and strategic allies for companies in need of flexible and specialist commercial expertise, CSOs are rapidly establishing themselves among the industry heavyweights.

A local information strategy is key to successful account management. The data is out there. Rhiannon Thomason explains how turning information into insight is all about context.

Despite reforms that appear to encourage decision-making and accountability at a local level, the UK health service remains a national one. The Health & Social Care Act actually strengthens the centralised power-base and, via the NHS Commissioning Board, issues a series of top-down directives that will cascade to a local level for implementation. Rumours of the death of the ‘N’ in our NHS are grossly exaggerated. But for Key Account Managers across the UK pharma industry, what happens at a local level is perhaps the prime focus. There is much talk of the need for ‘local health intelligence’. It is indeed a vital commodity. But it is important to draw the distinction between information and insight. The former is readily available. The latter is hard won and impossible to achieve in isolation. In the battle for local health intelligence, context is King.

The NHS is awash with data. Nowadays there is much more information available and the health service itself is increasingly placing useful data into the public domain. Examples such as QOF data, Joint Strategic Needs Assessments, HES (Hospital Episode Statistics) data, the Atlas of Variation and Public Health observatories provide a rich seam of information from which sales and marketing professionals can develop appropriate local messages. They combine to form a complex matrix of information. The challenge for KAMs is interpreting it and understanding what it means in their disease area and in their locality. There is variation right across the system.

In primary care, QOF data has become increasingly important. NHS customers are being tasked to reduce unnecessary hospital admissions, and the financial incentives from a local practice perspective are significant. But as the transition towards Clinical Commissioning Groups continues, practices know that they cannot work in isolation and that they must prove to the wider organisation that they are achieving their targets.

For the industry, QOF indicators have become a catalyst for improved customer engagement. Proactive sales professionals are no longer targeting GPs with messages based only on the clinical benefits of their products. They are instead identifying key local decision-makers and attempting to demonstrate how their product can impact a service, reduce hospital admissions, save a locality money and improve patient care.

Clearly, QOF data has become a strong lever for account managers to understand how their product can help customers meet their targets. In isolation however, the data can only take you so far.

When used in combination with other available information, a much more powerful package of metrics can emerge.

Sales professionals need to build the bigger picture of what is going on at a local level, to understand how their products can make a difference. This depends upon drawing together all the various strands of information, and developing value propositions based on the local context as a whole.

• How is each local health economy constructed? Which organizations are operating within each locality? What are the roles/responsibilities of each and how do they engage with one another? Who are the key stakeholders?
• What is the community profile? How many patients are there? What are the deprivation and ethnicity breakdowns?
• What is the patient pathway? What services are provided, by whom and how are patients managed?
• What is the cost of hospital activity? How much does each group of patients cost each locality?
• What are the outcomes? How much is each locality spending and how well are they managing each group of patients? How can the outcomes be measured?

The trick for pharma is to be able to use all of this information intelligently, in combination. Much of it is publically available, but without the knowledge and understanding of how it translates into what you are trying to achieve, it could, in a worse case scenario, send the sales professional in the wrong direction.

Variation in care
In a complex environment where context is everything, it is important not to lose sight of the bigger picture on a national scale. Many of the challenges being faced by local commissioners on the ground are around the treatment of diseases identified as national priorities. The implementation of commissioning plans at a local level largely cascades down from the key domains laid out in the NHS Outcomes Framework. The challenges manifest themselves in the local variations in care that are widely highlighted as being in need of redress. Once again, these local variations – if intelligently assessed – provide pharmaceutical companies with a powerful market access opportunity. Companies that can demonstrate that their products, not just their messaging, are aligned with local need will significantly increase their chances of uptake.
A good example of how the national agenda is driven by addressing variation in care at local level, is the treatment of diabetes.

Diabetes – a mini case study
The national picture
An estimated 3.8 million people in England have diabetes, with 2.45 million QOF registered patients. This is forecast to rise to 4.6 million by 2030. Diabetes and its complications costs the NHS around 10% of its annual spend. £725 million a year is spent on diabetes medication (8.4% of NHS drugs spend), and an additional £600 million is spent on diabetes-related hospital activity. An estimated 80% of the NHS’s £9.8 billion UK diabetes bill is spent on treating diabetes complications. It is predicted that diabetes will cost the NHS £16.8 billion by 2035.

National and local initiatives
As part of QOF, practices are to be encouraged to provide lifestyle advice and annual glucose checks to everyone judged as high risk from the age of 25 – even those with normal HbA1c levels. NICE is piloting new QOF indicators that promote tight cholesterol control in diabetes.
The introduction of insulin pumps instead of injections, as well as educational programmes such as the DAFNE (Dose Adjustment For Normal Eating) course are good examples of local initiatives to combat diabetes.

Local variation
NHS Hampshire has the highest number of diabetes patients on the QOF register (54, 761). Hospital admissions (inpatient, outpatient and emergency attendances) are costing NHS Hampshire £3.7 million each year – one of the highest of all PCTs. However, its cost per thousand patients is low – ranking 113 of all PCTs. It also has the lowest death rates from diabetes. Therefore, although it has the highest number of diabetes patients, NHS Hampshire appears to be managing its patients well.

NHS Kingston has one of the highest diabetes spend per thousand patients in England. Compared to other PCTs in its SHA, it also has a higher number of Finished Consultant Episodes, longer lengths of stay, higher emergency admissions and the lowest elective admissions. Compared to NHS Hampshire, this suggests  that NHS Kingston could be managing its diabetes patients more optimally.

Lessons for pharma
The diabetes example outlined above provides a clear indication that a one-size-fits-all approach to pharmaceutical sales and marketing will no longer work. The apparent variation in care between two diverse PCTs highlights that every local health economy has different needs. A diabetes KAM working in Hampshire could not relocate to Kingston and challenge stakeholders there in the same way, with the same proposition. The situation, and the opportunity, in each PCT/CCG is totally different. The ensuing approach must be similarly distinct.

A local information strategy is critical for Key Account Managers engaging with today’s NHS. Understanding local dynamics is critical, and the information to facilitate this is increasingly within reach. The key is joining it all together and placing everything in context. It’s a mixture of local and national. Top-down directives issued at national level are providing important indicators by which local commissioners are measured, and are in turn are becoming powerful levers to help pharma develop value propositions that align with local need.

The data is out there. But success is in understanding the difference between information and insight. After all, context is King.

Rhiannon Thomason is Business Development Manager, Cegedim Relationship Management.

An increase in pharmaceutical jobs in Europe helped the total number of life sciences roles increase by 3.7% in the first three months of 2012, according to a report.

ZRG Partners’ Life Science Hiring Index found pharmaceutical jobs increased by 25% in the first quarter in the EMEA region, despite a reduction in sales and marketing and R&D positions.

Job growth in the global medical device industry also increased by 6.8% as roles in the Asia Pacific region jumped by 102% – mainly due to recruitment by Philips and Siemens.

But the report found that outsourcing and CRO positions fell by 5.7% after roles in North America were substantially cut and jobs remained flat in Asia Pacific.

Hiring activity in the Americas decreased by a tenth, however it still recorded its highest level in the past two years, research found.

The EMEA region reversed a trend in the past six months as overall positions increased by 18% with a rise in pharmaceutical and outsourcing roles; medical device positions remained flat.

Regulatory, clinical and quality positions made up more than a third (36%) of jobs in EMEA, followed by IT, finance and general administrative positions (31%). Research and development roles made up nearly a fifth (18%) of overall positions with sales and marketing jobs making up 11% and manufacturing accounting for just 4% of all roles.

Emerging markets in the Asia Pacific region again helped boost the global outlook as the amount of jobs also increased by 18%, despite outsourcing/CRO remaining flat and pharmaceutical jobs falling.

Despite the US already cutting 4,800 jobs this year, according to outplacement consulting firm Challenger Gray & Christmas, the Index found that the Americas still account for 51% of global life science roles, followed by EMEA (28%) and Asia Pacific (21%).

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. 

The Porsches
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.

What car?
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.