SFE USA 2011: The future of the sales force
*In the run up to Sales Force Effectiveness USA [1] in May, eyeforpharma asked some of our key speakers for their insights on the state of the* [1] http://www.eyeforpharma.com/sfeusa/
By on Feb 15, 2011In the run up to Sales Force Effectiveness USA in May, eyeforpharma asked some of our key speakers for their insights on the state of the industry and the future of the sales force. Heres what they had to say...
What are the biggest challenges facing the pharma industry?
Joe Malta, VP sales and marketing, Taro: The three biggest issues I see facing the pharma industry presently are reputation and perception of the industry, continued pricing pressures and access, and impending volume of brand patents that will go generic.
Todd Lambert, VP sales, Shire: The end of the blockbuster era has come. The scale and approach of commercialization of products/portfolio by big pharma has to change. The days of huge mirrored sales forces will diminish. The regulatory pathways are more rigorous, costly, and time consuming. The me-too era is over. Payer pressures are placing a strain on top lines. And the economic and political environments are placing greater restrictions on our ability to have meaningful interactions with the healthcare providers.
Charlotte Sibley, senior VP, Shire: The R&D pipelinedeciding what to develop and how to afford it; R&Dmaking it more efficient while adding health outcomes and comparative effectiveness data; and US healthcare reform. (For more on comparative effectiveness, see How to build value through comparative effectiveness research and Health data and comparative effectiveness.)
Barry Duke, VP sales, Genzyme: Increased regulation and scrutiny, blockbuster products going off patent, increased managed care and government involvement, more informed customers (patients, providers, and payers), and bloated infrastructures. These challenges also represent enormous opportunities for the organizations that take the sustainable, long-term view to address them. (For more on patent expiration, see Patent expiration: Innovate or die; for more on generics, see Forecasting for generic erosion rates.)
How do you see the future of pharma changing within the next decade?
Joe Malta: Pricing pressures will continue, especially within me too categories. Volumetric and share growth objectives will be replaced with profitability objectives within the sales force. With regulation increasing, there will be more diligence regarding promotional efforts. There will be more specialty focus, with an emphasis on differentiating, novel products. Pharmacoeconomic value is also becoming more of a necessity rather than a luxury. There will also be an emphasis on R&D and commercialization efficiencies and maximal achievable margins. With little brand replacements for the patent losses of the major primary care-driven brands, I believe 2015 will begin to see consolidation in the generic industry and a rise in generic pricing in select, large categories. Pharma needs to explore educating consumers and physicians with facts regarding the positive health and economic impact of pharmaceuticals. (For more on R&D, see Pharma R&D: Where will the new drugs come from? and Will big pharma become a collection of marketing and distribution firms?.)
Todd Lambert: How products are brought to market will change. There needs to be more stringent commercial considerations given to products earlier in their development. A more strategic approach to the resources you put behind products before and after approval needs to be adopted. Sales forces will need to be more agile and flexible to support the life cycles of product portfolios.
Charlotte Sibley: More acquisitions (perhaps fewer mergers), especially of smaller companies; incorporating health outcomes and comparative effectiveness data routinely into clinical trials.
Barry Duke: More outcome-focused research; strategic use of partners and collaboration; more sales channels, but likely less direct sales people; less me-too products and more products that meet unmet clinical needs.
How do you see impending healthcare reform affecting the industry, and how is your company preparing for this?
Joe Malta: The number of insured lives could expand market availability, but there will be continued price pressures and erosion of margins in Medicaid and Medicare. Were likely to see more access restrictions or obstacles in government-funded programs to reduce costs. I believe the pharmaceutical industry needs to explore and analyze ways prescription medications can be extracted from insurance reimbursement. There are many complexities and issues to assess, but I would explore the ability and value to implement global pricing legislature and/or analyze how current industry patient programs may be adapted and expanded to include patients in a separate prescription plan. Maybe the pharma industry rather than the insurance industry can own Rx reimbursement. In the current model, which is progressing to more restrictions, access and margins will continue to decline and, with the multiple insurers in the market, the cost of necessary commercialization may remain relatively high.
Todd Lambert: This is a tough one to answer given how politicized this topic has become in Washington. Fundamentally, pharma is trying to position itself as part of the solution. However, with an ever-increasing focus on pricing and rationalizing healthcare, there is significant risk that we are moving towards a commoditization of ethical pharmaceuticals.
Barry Duke: Its hard to say since no one really knows what the potential legislation is or if we will have material changes at this point. (For more on reform, see How US healthcare reform could change pharma.)
How do you evaluate market potential in order to allocate resources?
Joe Malta: We look at several factors and rank our portfolio accordingly. First, within our core specialties and competencies, then the disease states we are targeting, then the competition for the market and what segments they target. We identify large enough niche segments with attractive potential ROI with minimal competition, then asses the RX, unit, and pricing potential. The market is identified in multiple segments: personal and non-personal promotion geographies and by payer segmentcash, Medicaid, third party. Model costs and commercialization capabilities are developed to deliver the desired ROI.
What commercial models look most attractive and why?
Joe Malta: Within our organization, we utilize our field sales districts as integrated healthcare regional account teams who have responsibility for targeted state/commercial plans. Their objective is the provider and, most importantly, P&T education, support, and relationships. This allows us to minimize infrastructure costs and maximize productivity.
Are there three key learnings from your experience at Taro on how to successfully transform the sales force?
Joe Malta: Focus on doing fewer things very well. Accurately assess your commercialization capabilities. An A plan with a C execution still equals a C plan. Prioritize initiatives/tactics using two criteria: ROI potential and can you quantitatively metric results to accurately assess next steps and ROI.
How is the role of the sales rep evolving? Is this moving toward a more service-orientated approach?
Todd Lambert: A customer-centric approach has always been a strong value driver in my mind. We simply moved away from this during the blockbuster era and focused more resources and attention on reach and frequency. Reps will need to be more knowledgeable on not only the products/portfolios they represent, but also the entire landscape (managed care, procedures, reimbursement, patient education) of the diseases and treatments that their customer deal with on a daily basis. (For podcasts on customer-centricity, see Creating a customer-centric sales strategy and Creating a customer-centric sales force.)
What approach is Shire currently using for training sales reps?
Todd Lambert: We are developing curriculum that encourage and mandate our reps to be more conversational, consultative, and credible. We are working to get away from product-centric approaches and focus more of our efforts on the customers needs.
How do you assess the suitability of venturing into an emerging market?
Charlotte Sibley: Similar to any other market: unmet, or not well met, (medical) need, opportunity, barriers to entry (regulatory, financial), match of need with your products, infrastructure and investment needed (marketing, sales, R&D), human resources issues.
What are the critical success factors for gaining BRIC business?
Charlotte Sibley: Identifying and understanding fully the critical success factors: the regulatory, legal, medical, social, environmental factors and culture; having a realistic assessment of objectives, costs, and revenues/profits and the time and investment needed to achieve these objectives; hiring the right people and having good leadership. (For more on emerging markets, see Getting into the Indian pharma market, The Middle East: A pharma market in the making, Reassessing Russia's pharma market; Breaking into the Brazilian pharma market; Cracking the Chinese pharma market; and How to get ahead in 'pharmerging' markets.)
What does achieving more with less mean to you?
Barry Duke: More top line revenue while decreasing sales expense, or at least the rate of revenue growth exceeds the growth rate of sales expense. The model of saturating the market with sales people to drive top line growth has found its ceiling.
Which commercial model is the way forward?
Barry Duke: Lets ask the customer (or customers) how they want to buy; not a novel idea, but it requires actually listening. I cant believe any provider would have asked for a company to send three representatives to his office per week to discuss the same product(s)!
Which key components are integral to an effective implementation strategy?
Barry Duke: Customer feedback, assessing options, understanding barriers and channel conflicts, and the ability of an organization to engage its employees to create change. In essence, strong leadership capabilities and organization trust (transparency, employee involvement in the process, and the reasons why) must be high.
What are the dynamics that make up a winning sales force?
Todd Lambert: Winning sales forces in the pharmaceutical industry have to possess near peer product and disease state knowledge. That requires a new hiring profile for most large-scale sales organizations. It requires a stronger reliance on training to prepare their sales forces to be more credible and conversant on their products and marketplaces. Winning sales forces are also going to need to be better versed in health care economics, be it managed care impact, reimbursement for services and procedures, diagnostic codes, etc. Reps are going to need to be knowledgeable on many of the business facets of the healthcare providers they call on in order to be effective and valued. (For more on the changing role of reps, see New sales force models: Get ready for the hybrid reps and The pharma sales rep repair kit.)
For the latest SFE insights, join the industrys key players at Sales Force Effectiveness USA from May 1719 in New Brunswick, NJ.