Barcelona 2015

Mar 24, 2015 - Mar 26, 2015, CCIB, Barcelona

Your Customer is in Charge.

The growing influence of KAM

MSD’s Hossam El Faramawi talks to Nick de Cent about how effective key account management is driving growth in the Middle East.



KAM is evolving at a rapid pace and will play an even more significant role in pharma over the coming years, predicts Hossam El Faramawi, the KAM Lead responsible for identifying, creating and capturing growth opportunities for MSD in Egypt. The one time brand manager and sales manager expects to see KAMs and reps working in tandem on most accounts in future.

At the same time, market access will become an increasing priority. El Faramawi points out that, while medicines only account for about 20% of the healthcare market, they are still the primary target for price reductions. “One of the primary functions of market access is key account management,” he suggests, alongside working with policy makers to shape the market, pricing and tender management.

Today, pharma companies are truly starting to understand the principles of excellent key account management. However, despite being one of KAM’s most successful exponents, he acknowledges that companies are “still at the learning stage” in the Middle East. “Companies are trying different approaches at the moment; it’s a confused picture.”

El Faramawi has previous experience at Novartis, a pioneer in bringing KAM to the Middle East pharma landscape, and has been instrumental in driving revenue growth for his new company since he joined.

Super reps?

All too frequently in the past, sales reps were simply been rebadged as KAMs but he stresses that there is a fundamental difference.

The primary focus is not on healthcare providers (HCPs) but on large providers, policy makers or “maybe even the Ministry of Health”. KAMs have a great impact on the business but not necessarily on prescribers. In the context of the current dynamics of a pharma market rapidly reaching saturation point, with more competition everyday, the role of KAM is to deal with the decision makers and to come up with specific solutions: purchasing departments in major hospitals are “very important customers”.

“Selling Brand X is the reps’ responsibility. The main responsibility of KAMs is to drive growth at accounts", he emphasizes. The role of key account manager is far more complex and involves a wider range of skills at a different level both within the client organization and internally.

What are key accounts?

Although the definition of a key account can differ from one company to another, many organizations tend to follow the Pareto principle of designating the 20% of customers responsible for 80% of sales as key accounts. However, an account has to be more than just big; it also has to be a complex account offering several services, El Faramawi suggests.

Within such accounts, the role of the KAM is to explore new opportunities, to create promotions and provide solutions, and also to build relationships and establish partnerships. Key account managers work alongside whichever organizational channels are appropriate to satisfy decision makers, including the sales force, medical, finance and marketing departments.

Skills

The skills needed go beyond basic sales knowledge. El Faramawi explains that these include consummate communication ability in conjunction with the necessary leadership and influencing skills that enable KAMs to get the job done internally. “You need to be able to design a solution for key accounts,” he says, and this depends on the ability to engage and influence marketing, medical and other internal customers – for instance, sales and marketing are the key to what is available, the medical team can help explain how to implement a solution, while finance plays a key role in authorising the necessary budget.

El Faramawi lists the key competencies as:

  • Communication skills
  • Analytical skills
  • The ability to understand and work with cross-functional teams
  • Leadership – internally
  • Strategic thinking
  • The ability to translate ideas into winning solutions and
  • Business acumen

Externally, the role may also involve engaging with a wide range of customers, including patients. Co-creating solutions with customers is a rare but increasing phenomenon but the ability to create solutions beyond simply negotiating is vital.

“The KAM needs to match the needs of the customer with the capability of the company.”

El Faramawi indicates that effective KAMs spend 80% of their time in the field, working to facilitate the account through their own organization. “KAMs should be able to get into deep relationships with customers,” he says.

The fact that KAMs promote several brands – or sometimes the whole brand portfolio gives them the opportunity to manoeuvre in price negotiations. He acknowledges that reducing the price is always the easiest solution but obviously such actions hit profits. The skill of the KAM is in understanding which brands have room for growth.

Account planning

The KAM needs a complete analysis of how the different functions of the account relate, the key decision makers and their responsibilities, as well as information about the competition".

Effective account planning is absolutely fundamental to the role. “It can’t happen without proper account planning". This involves understanding opportunities within the account and coming up with solutions for them. “The KAM needs a complete analysis of how the different functions of the account relate, the key decision makers and their responsibilities, as well as information about the competition". In effect, the KAM needs a complete picture and will then be able to come up with the best solution.

Growth case-study

Effective use of KAM strategy enabled the team in Egypt to increase revenue dramatically over the past year.

Brand X is a diabetes drug that looked to have the best potential in Egypt. However, healthcare organizations in the country are mandated not to spend more that E£100 a month per patient on diabetes treatments. The drug is listed at E£220, so the organization was not able to sell a single pack.

The account team started to look at options: should they reduce the price or endeavor to get the level of reimbursement per diabetes patient raised? The account team decided to attempt to get the drug listed. Using a multidisciplinary approach, the team engaged the market on a number of different fronts: sales reps talked to HCPs to convince them that this was the best drug to prescribe under specific circumstances; the medical team approached key decision makers and also made an economic case, while the key account team approached the payers.

Working together, the team was successful in gaining approval for increasing the reimbursement level in this instance, based on the outlook for how the overall cost for diabetes care would develop. Not only would the overall cost actually reduce as a result of adopting this brand, but the very specific patient profile for which it would be used meant that the predicted economic impact of the more expensive new brand was actually 30% less than expected.

Following this initiative, MSD’s KAM team in Egypt has generated revenue growth of 74% in 2014, 35-40% from this project. An effective KAM approach was essential to achieving such impressive growth, in this case. This example also illustrates how KAM strategy often requires a multidisciplinary effort that mobilizes resources from across the company.


MSD’s Hossam El Faramawi will be speaking at Barcelona 2015 on the best KAM strategy. For more information on his presentation, click here.



Barcelona 2015

Mar 24, 2015 - Mar 26, 2015, CCIB, Barcelona

Your Customer is in Charge.