Selling medicines in today’s marketplace should be built on partnership principles. ABPI CEO Stephen Whitehead talks exclusively to Pharmaceutical Field about the importance of NHS/industry partnerships.

Back in 2009, Chris Brinsmead – then President of the ABPI – told Pharmaceutical Field that the future role of the pharma field force would be to facilitate partnerships between the NHS and industry. Three years later and the partnership agenda is slowly inching forward. Progress has been made, but adoption of a more collaborative approach across the country has been variable. As ever, there are early adopters, and those that wait. Last month, Pf led with an ABPI announcement that predicted the NHS and industry would ‘become partners within 3-5 years’. Why not now, came the familiar cry? Why not, indeed. The ABPI seems determined to address this.

This month, Pf spoke exclusively to Stephen Whitehead as he approached the first anniversary of his tenure as CEO at the ABPI. It is clear that, in challenging times for the UK industry as it battles to ensure that patients gain access to life-changing medical innovations, partnership sits at the heart of the ABPI agenda.

“There is a currently a big commitment to move the joint working agenda forward,” says Stephen. “Strategically, over the past 15 years there has been the emergence of many different influences on prescribing – NICE, local commissioning and local formularies are obvious examples. The industry now has to work with a wide variety of stakeholders to demonstrate the value of its medicines. And traditional sales representatives have to work with many different and more complex audiences than they used to when they were purely detailing. Increasingly, I think joint working is the vehicle best suited to satisfy these varying demands.”

Innovation Health and Wealth
The environment for a more collaborative approach is certainly improving. The Innovation Health and Wealth review last December reiterated the need for greater partnership working to help accelerate the adoption and diffusion of innovation in the UK. Crucially, it said that the NHS needed to be ‘open for business’ on partnership. As such, advocates from both parties are working hard to raise the profile (and the benefits) of the approach. But resistance and misunderstandings around joint working remain.

“One of the problems is that there are variable definitions and understandings of what joint working is,” says Stephen. “In simple terms, joint working is a partnership approach focused on solving a patient-driven issue. The industry has disease expertise, it knows how to manage conditions and has developed medicines in those areas. Joint working is about bringing that expertise together with the providers and focusing on patient outcomes. And often we can find cost savings in delivering those outcomes as well.”

Importantly, says Stephen, joint working is not sponsorship. “This is not about industry paying for something. Historically we have funded a lot of things and sometimes there is a real benefit to us bringing money to the table. But this is about changing that perception. Partnership is where two parties, with different strengths and weaknesses, come together to focus on a shared goal. In this case, that has to be patient care.

“The fundamental issue is about recognising the value of innovation and its implications for a pathway of care. By working together to find out how these medicines can be used appropriately, we can save money in the system, we can prevent unnecessary and costly hospitalisation and we can improve patient care.”

Medicines in the middle
In recent years, discussion has focused on whether UK pharma companies should reconsider their product-centric approach to customer engagement, and concentrate instead on developing services with the NHS. The caveat being that a specific medicine would form the core part of any service. But joint working is not an exact science. There is no one-size-fits-all solution – it’s simply about working together to establish the most appropriate approach in a given disease area. “It’s about products and services,” says Stephen. “Some of our members do offer services. But the way I look at joint working is that there is always a medicine in the middle of it – because that’s what we discover, develop and sell. In today’s environment, the only way that the value of that medicine can be truly realised is through joint working that reengineers the pathway of care.”

At present, most joint working initiatives are being built around new innovations – and are being used to redesign services and improve the care pathway. A good example of this is in the field of anticoagulants, where a number of new brands are coming to market. “The new class of drugs have gone through NICE have been recommended and should therefore be utilised,” says Stephen. “Old warfarin clinics should now be closing as patients move onto the new drugs. But to achieve that, and to free up the funds to be able to use the new innovations, we need to take other measures. And you can only do that, in my view, through joint working.

“It is my passionate belief that in most cases, innovative medicines will save money in the system – in the short, medium and long term. We simply need to work together to deliver it.”

Implications for pharma sales
The implications for pharmaceutical sales professionals are significant. While joint working is not always appropriate – aspects such as disease area or where a particular product is along its lifecycle are key factors in whether the approach is applicable – adopting a partnership approach most certainly is. “Joint working is a natural evolution of partnership principles,” says Stephen. “Industry engagement has changed from being a simple seller/buyer transaction, into seeking to work in partnership with customers to ensure the NHS properly maximises the value of medicines. The UK has a low price and a slow uptake of medicine – and as a consequence, the UK system is not as efficient as it could be. It would be more efficient if it adopted innovation more quickly. And if it did, we would certainly have better patient outcomes.

“Joint working is best used when you want to coax the system into innovation. It is not always the most appropriate approach. But whatever you have in your medicine chest, partnership is always applicable. In today’s marketplace, how you approach selling that medicine should always be built upon partnership principles.”

The US Supreme Court heard that drug representatives are not sales professionals in a new twist of the ongoing GlaxoSmithKline overtime pay dispute.

Two sales representatives are suing GSK for overtime pay they claim was illegally denied to them by the company’s definition of their role.

Attempting to overturn a lower court ruling against them, the plaintiffs argued that ‘detailing’ is a promotional role and not a sales role.

While rooted in the terms of the US Fair Labor Standards Act (FLSA), the case could have implications for similar disputes worldwide.

The FLSA stipulates a mandatory ‘time and a half’ payment rate for time worked over 40 hours per week, but excludes ‘outside sales representatives’.

Lawyers representing Michael Christopher and Frank Buchanan claimed that their role was not ‘sales’ since no transaction was involved.

GSK’s lawyers argued that the difference merely reflects the purchasing mechanisms prevalent within healthcare, whereby health professionals must purchase drugs through a pharmacy.

According to GSK, the company’s representatives are “evaluated and compensated as sales people” just as if they exchanged goods for money.

The US federal government supports the plaintiffs. Lawyer Malcolm L. Stewart said on behalf of the Labor Department that pharmaceutical reps do not sell: they “set in motion a chain of events” that make sales “more likely to occur”.

The pharma industry is facing overtime claims from an estimated 90,000 sales representatives in the US, with lawsuits currently filed against Novo Nordisk, Johnson & Johnson, Bristol-Myers Squibb, Merck & Co and Novartis.

If the ‘not sales’ interpretation becomes standard across the US, the industry could lose billions of dollars in back overtime payments.

So far, a New York court has supported the ‘not sales’ view, while a San Francisco court has supported the ‘sales’ view.

One Supreme Court justice Stephen G. Breyer, argued that a balanced strategy might be appropriate: industry sales representatives could be entitled to overtime payments in the future, but not retrospectively.

The nine Supreme Court justices did not reach immediate agreement. Their verdict on the GSK case is expected in June.

A former US sales representative for Roche has won more than $1.8 million in damages after a Las Vegas jury ruled he had been subject to age discrimination.

Randy Dossat was awarded $168,000 in lost pay and a further $1.7m in damages for pain and suffering after he alleged he was repeatedly targeted due to his age after the appointment of a new sales manager.

Roche said it was disappointed with the verdict and plans to “appeal and vigorously defend ourselves”.

The lawsuit claims that Mr Dossat was aged 55 when a new manager began to repeatedly call him “old school”, commented on his “tenure” at Roche and claimed he didn’t fit in with the “new environment” under their leadership.

When Mr Dossat complained at his treatment, senior managers at Roche did not conduct a thorough investigation, the lawsuit claims. He was then punished for his complaint, the suit adds.

Mr Dossat’s representative commented: “This verdict sends a clear message to employers that they should not retaliate against employees for complaining about discrimination in the workplace.”

The Swiss-based company, which says on its official website it employees around 80,000 globally, insists the discrimination case has “no merit”. “Roche is committed to ethical and lawful personnel practices... [and] to providing an environment where each individual is respected and supported, and is rewarded on the basis of personal achievement and contribution,” said a statement.

Former sales representative Alex Gorsky has been announced as the new Chief Executive Officer of Johnson and Johnson.

Mr Gorsky, who will start his new role on 26^th April, succeeds Bill Weldon, who has served as Chairman and CEO since 2002.

The outgoing CEO, who will remain as chair of the board, says the future of the company is now in “very capable hands”.

The new CEO began his career with J&J as a sales representative in 1988 with Janssen Pharmaceutica. He then progressed to positions of increased responsibility and was appointed President of Janssen in 2001 and then Company Group Chairman of J&J’s pharmaceuticals business in Europe, the Middle East and Asia two years later.

He briefly left the company to join Novartis in 2004, but returned four years later as Company Group Chairman and Worldwide Franchise Chairman for Ethicon in the medical devices business. In 2009, he was appointed Worldwide Chairman of the Surgical Care Group and to J&J’s Executive Committee. In January 2011, he was appointed Vice Chairman of the Executive Committee.

In his new role he will assume full management responsibilities for Johnson & Johnson and will also join the company’s Board of Directors.

Sheri McCoy, as Vice Chairman of the Executive Committee, will now report to Mr Gorsky when he assumes the role of CEO. She will continue to lead the Pharmaceuticals and Consumer Groups, and maintain responsibility for Information Technology.

“Our success at developing outstanding leaders from within is reflected in the selection of Alex to lead our great company forward,” said Bill Weldon. “Alex and Sheri are two extraordinary leaders.”

Novartis has agreed to pay $99 million to settle a US lawsuit involving more than 7,000 current and former employees over wage and hour claims dating back to 2006.

The lawsuit claims sales representatives did not qualify as ‘outside sales’ staff and, as a result, were not exempt from receiving overtime pay.

Andre Wyss, President of Novartis Pharmaceuticals Corporation, insists the company pays staff “fairly” in line with US Fair Labor Standards Act (FLSA) and state laws.

The case is similar to a number which have been brought against pharmaceutical companies in recent years. Pharma companies insist sales representatives’ compensation is typical of employees exempt as defined by US law.

However, a number of courts across the country have disagreed. The Supreme Court is preparing to review a GlaxoSmithKline case and its interpretation of FSLA which would affect pending overtime cases across the US.

David Sanford, the lead counsel for plaintiffs, said he was pleased to secure the settlement for sales reps after the Supreme Court refused to reconsider an appeals court ruling, which agreed reps shouldn't be classified as exempt.

“We are proud that over seven thousand current and former Novartis sales representatives will be able to participate in this settlement,” said Mr Sanford. “It is a fair and equitable result and can serve as an exemplar for companies around the United States that face wage and hour litigation.”

GlaxoSmithKline (GSK) has agreed to pay $3 billion to settle US criminal and civil investigations into whether the company illegally marketed drugs and other matters.

The investigations include a Department of Justice review of the UK company’s controversial diabetes drug Avandia, which has been linked to heart risks.

The settlement follows clampdowns since the late 1990s in the US on unfair pharmaceutical industry practices that may have prioritised sales targets over payer and patient interests, such as marketing drugs for unapproved uses.

Andrew Witty, CEO of GSK, said: “This is a significant step toward resolving difficult, longstanding matters which do not reflect the company that we are today.

“In recent years, we have fundamentally changed our procedures for compliance, marketing and selling in the US to ensure that we operate with high standards of integrity.”

Mr Witty said that the company has put in place a new bonus system for US sales, which no longer focuses on individual sales goals, but is now based on selling competency, customer evaluations and overall performance of the sale representative’s business unit.

Federal prosecutors began investigating GSK in 2004, into whether the company promoted drugs for unapproved indications, and into cases where the company may have potentially influenced doctors.

The inquiry involved nine of the company’s best-selling products from 1997 to 2004, including lung therapy Advair.

Gbola Amusa, an analyst at UBS AG in London, said: “This news essentially draws a line under a 10-year legal saga.”

Both civil and criminal settlements are expected to be finalised in 2012.