From Sales to Leadership
Tim Walbert, CEO, Horizon Pharma, explains how doing right by the patient can still lead to significant profits.
Tim Walbert helped to launch two of the world’s biggest-selling drugs, Humira and Celebrex, and is now in charge of a $3 billion company with big ambitions – plus he knows what it is like to be a patient at the sharp end.
That is quite a track record. Walbert started his pharmaceutical career in sales and believes that has given him the best possible grounding for leadership: the Chairman, President and Chief Executive Officer of Horizon Pharma recalls his early days on the road with some affection.
“When you come through pharma sales, you deal with rejection,” he laughs. “You spend most of your time in your car, by yourself. When people say: ‘Hey! I’m a people person – I want to be in sales,’ they don’t realize you’re not spending that much time with people. It’s a very brief period of time you get with the customer.”
If you start with the patient and then the physician who is treating them, you can understand each of their motivations and needs and pressures, then you’ve got a pathway to success.
It follows that this experience – assuming you have a tough enough skin to thrive in the sales environment – crystallizes such vital abilities as relationship building. “The skills you hone are learning to deal with rejection, overcoming that, understanding what patients want and how the health system works,” Walbert continues. “If you haven’t got that, how can you be in a leadership role where you create solutions and drive them through? That’s the foundation for success for any good leader.”
That’s not all. While empathy with the doctor is important in pharma sales, it is crucial to be able to put yourself in the patient’s shoes – and this is something that Walbert has no problem with. “I’m a patient myself,” he reveals. “I’ve got an autoimmune disease and I’ve been taking a biologic medicine for about the last 16 years – so I come from a patient’s view. If you start with the patient and then the physician who is treating them, you can understand each of their motivations and needs and pressures, then you’ve got a pathway to success.”
An effective commercial model
Horizon is in good hands. Walbert took over in 2008 and the company has progressed from one medicine to nine (including arthritis brands DUEXIS and VIMOVO) – four of them for orphan diseases, which are rare illnesses that affect fewer than 200,000 people in the United States. Horizon now has more than 900 employees and is on track to generate over $1 billion in net sales this year. “We’ve made great progress in the last eight years,” he says. “We’ve really grown our business.”
We sell a lot of the medicine that isn’t covered so we can give away a lot of the medicine that is covered. It’s that simple: we have effective sales representatives and an effective commercial model that does the right thing for the patient. We sell a lot; we give away a lot.
Even more notably, this success has been possible with what many would see as a curious commercial model: the company in effect gives away many of its medicines. “In 2015, we had $757 million in net sales and provided more than $1 billion in patient assistance,” he explains. Comprehensive assistance programs provide eligible patients with a range of support services, co-pay assistance and access to medicines for free or at a saving. “So our support for the patient greatly exceeded our sales – and that’s unlike any company that I’ve seen in this sector.”
Two factors align here: the first is the idea of supporting patients – many of whom have to take several products for chronic conditions (i.e. long-lasting illnesses like asthma, diabetes or arthritis) – with financial help; the second is the ability to generate a lot of volume. Health insurance in the US is a major political and social issue, with the so-called “Obamacare” legislation passed in a bid to ensure patients receive appropriate financial cover from their insurers for the drugs they need. “We sell a lot of the medicine that isn’t covered so we can give away a lot of the medicine that is covered,” he says. “It’s that simple: we have effective sales representatives and an effective commercial model that does the right thing for the patient. We sell a lot; we give away a lot.”
Lessons learned
Walbert has learned many valuable lessons along the way in his pharma journey and distils the key leadership skills into three simple tenets: 1. drive for results; 2. deal with ambiguity and change; and 3. be prepared to stand alone.
He talks about the importance of having the “composure” to adapt to a changing commercial environment. “The way things were done before is not going to be the way they are done in the future.”
The idea of standing up for what you think is right and then driving a strategy through is also vital. “There are a lot of people in big companies who really are afraid to represent their views and we believe that, if you have a seat at the table, then you have a responsibility to speak up and be part of the team,” he says. “Hierarchy and roles and titles don’t matter; you’re expected to stand up and represent your business.”
Changing sales models
With this philosophy in mind, it is no wonder that Walbert has a very clear idea of what is required from the reps Horizon now hires. “Sales has changed substantially,” he points out. “The old way was really about the physician as the primary target – where reps were trained on their medicines and their market and tried to convince the physician that the medicine made most sense for the patient.”
That does not hold today, in a world where pharmacy benefit managers (PBMs) play a key role in deciding what drugs get prescribed. “We’re seeing a rapid change in the business,” he continues. “You’ve got PBMs who have taken a forceful position and are driving significant cash flow and profit themselves and they are stepping in and are increasingly dictating what a physician can and can’t do.” Successful sales reps still need to be focused on the physician – but as just one of the key elements in the chain, along with nurses, patients, payers, pharmacists and so on.
“We typically will hire a business-to-business representative,” he explains. “They’ve learned that the person they go to at the front desk is equally important to the sale as the person who is writing the cheque. We feel it’s very important to hire representatives who understand how to sell, who are trained on the medicine, the diseases, and the other therapies that are available. Then you have to give them the tools to work with.”
To this end, Horizon takes what Walbert calls “a very behavioral-based analytic approach”, giving reps data on a practice’s profitability and doctors’ prescribing habits, for instance. It will be clear from this information where they should be spending their time and effort, and when they should be moving on to try another practice. Incentives are far from one-size-fits-all – those working in primary care are rewarded on a prescription basis but for those in the orphan (or very rare) disease space, it is based on number of patients, for example – and there are no caps.
Those selling orphan medicines have a much higher level of scientific background and can hold more in-depth medical discussions. “There is also a need for the ability to interact with advocate groups, and patients and families,” he says. “They need to have the compassion and empathy and understand what they are going through – so it’s a completely different approach than we would take in the primary care side of the business.”
Focus on value
Above all, there is a need to communicate the value of a brand. While Walbert believes true value-based medicine is being achieved by individual payers and companies in oncology “and a few other areas” in Europe, this is not easy in a fragmented US market, he suggests. “Value-based medicine is a strategy that in some areas we see being done well, but in the US it is typically associated with a bigger rebate,” he insists.
“The PBM will want rebates that then translate into their cash flow but those rebates aren’t then passed on to employers and payers. So it’s a system that’s continually taking more cost – and medicines make up only 15% of total health spend – so we focus on value and medicines. Yet the 85% (such as services and hospital costs) is growing in an uncontrollable fashion. It is difficult to have a value discussion with a payer that doesn’t focus on total healthcare costs including prescription and medical costs.”
He thinks transparency laws will help everyone understand where the total healthcare dollar is being spent, where value can really be maximized and where managed-care rebates actually go; but it is a complex picture, which explains why pharma companies need to change.
More than selling medicines
Integrating marketing and sales and forming collaborative relationships with payers, PBMs and retail pharmacists – plus understanding that pharma is no longer just selling medicines – are all going to be part of the new commercial model. “What you need in marketing roles is leadership – people that understand the payer and reimbursement environment, who understand retail distribution, and understand all the other aspects of the healthcare business,” he suggests.
“Pure” sales and marketing tactics are no longer as effective; instead there is a need to find employees who have consulting and analytics backgrounds – “who don’t look at things like a typical pharma marketer would” – and who can work out how to come up with the right solution for their medicine. “They can go from sitting with the managed care organization to sitting with the opinion leader, the community physician to the patient advocacy group – and the skill sets required to do that are much higher than in the marketing and commercial leadership positions of the past,” he stresses.
All this complexity perhaps explains why Walbert’s interests outside his job are straightforward enough. “When I’m not working, I’m with my family, coaching my kids in sports – and that’s it!” he laughs. “Work, family, kids.”
It is telling that even this downtime contains a very active element – helping his children with their sports practice. That drive for activity is a thread which runs through Walbert’s whole life and certainly informs his approach to the corporate world.
“The old days of command and control and just sitting in your seat and telling people what to do is no longer efficient in my view,” he concludes. “People have to lead by example, work hard and be part of the solution as opposed to just judging other solutions. For me, that means I need to be involved in interacting with PBMs, payers, community physicians and opinion leaders, and taking a personal role. It’s active versus passive management. The days of sitting behind a desk and passively approving things are no longer what’s required to be successful.”
Published by permission of the International Journal of Sales Transformation ©2016 www.journalofsalestransformation.com