Navigating change: Building a new commercial sales model for pharma

Converging forces – including better informed and empowered patients and the growing influence of managed care organizations – are creating new breeds of customers for the industry.

By Editor on Jan 24, 2007

Converging forces including better informed and empowered patients and the growing influence of managed care organizations are creating new breeds of customers for the industry. This growing customer base coupled with the increased complexity and expense of discovering and developing innovative new medicines have brought pharma to a crossroads says Bernardo Girala, head of customer management at Novartis.

For nearly any disease, patients can go to the Internet and get information similar to what a physician can provide, in many markets managed care organizations are gaining more and more power every day and discovering and launching new products is more expensive and difficult than ever before, he says. Meeting these kinds of challenges is changing the way we do business within pharma.

The traditional commercial model, which has relied almost solely on reps visiting doctors to convince them to prescribe a company's products, is beginning to be adapted in several ways, Girala says. In today's dynamic marketplace, he points out that companies must address the needs of managed care organizations and governments through strategies, such as key account management, pioneered by other industries like consumer goods.

And Girala says in some markets, like the US and Latin America, companies also must adapt the commercial model to consider the complexities and opportunities that come from dealing directly with patients. For example, he says Novartis is developing patient programs aimed at providing improved education and motivation to increase patient adherence to prescribed treatments.

Channel management also is increasingly important, Girala stresses, as wholesalers and pharmacy programs become more influential players in the healthcare environment. In many markets, pharmacies are recommending substitution products, and this changes the way pharma should interact with them, he says.

There are marketing actions we should follow to include them as customers, he says. We have to change the pharmaceutical model from one focused only on sales reps and physicians to one that integrates physicians, sales representatives, managed care organizations, patients and pharmacies. We are working to transform the commercial model from product-centered to customer-centered.

Simon Roberts, who focuses on strategic partnerships and market access for Roche, agrees that the industry has been horribly inefficient at taking care of its customers's needs. Like Novartis, Roberts says Roche is transitioning from a product-focused company to a portfolio approach that targets key physicians and institutional players.

We'sre still going to have people having those traditional therapeutic discussions, talking about products specific to a particular area of medicine, but we'sre going to focus more in the future on talking about our entire portfolio, he says. "We'sre looking at how we can better leverage our portfolio with our customers and how we can better link our investments to the strategic plans of our healthcare institutions."

Roberts says pharmas must sit down with their customers and really try to understand what they are trying to achieve over the next 1-5 years and how best to link their own companies to those plans. To achieve such a link, he says companies will have to better evaluate customer satisfaction and drive value in those relationships.

It's about taking the institutional relationship to a new level and becoming very active partners with them, ensuring the focus moves from what we as pharmas want to do toward linking what we have to offer to what their strategic plan holds, Roberts says.

Successfully making that transition will rely on really folding the sales force in, he says.

It's important to consider how to engage the sales force to get on-board with this kind of philosophy, he stresses. It's very different from what they are used to. They'sll need to still sell individual products to be successful, but we'sll certainly need their buy-in so they also are committed to looking at the institutional customer as a whole.

The challenge, Roberts says, is determining how to incentivize the sales force on the institutional profitability side, as opposed to looking at just their slice. He says Roche has put different mechanisms and meetings in place to attempt to tie sales teams into such an overarching institutional philosophy.

As companies change and expand their sales approaches, finding and retaining reps that fit their own corporate philosophies will become increasingly important, says Tracy Mellor, head of training and development Europe North at Novo Nordisk. Success, she says, will rely more than ever on finding the right people and effectively communicating with them.

At Novo Nordisk, Mellor says they use a variety of approaches to encourage individual awareness and responsibility for performance and behavior.

We use Cialdini's Principles of Persuasion to make sure that when we try to influence people to do something the way we want them to that we do it in the most appropriate and persuasive way, she says. We also work within a coaching culture to be sure that people ask and don'st tell.'s It's all about trying to get people to take more ownership and responsibility for their own behavior.

At the most basic level, Mellor says, it comes down to ensuring that people all speak the same language's at the organizational level.

And that's something that you have to keep working at, she says. It's not just about launching a new model and then moving on. It takes a lot of diligence and a strong working relationship between human resources and training and development to ensure individuals function well and actually are happy at what they do.

Mellor says Novo Nordisk closely evaluates how it treats people and how likely they are to stay with the organization. While training and development programs must tie in closely with the business plans and needs of the organization, she says, it also is important to ensure that the company retains the right people and that they are motivated to fulfill those strategies successfully.

We have to be certain we have the right people with the appropriate motivation, attitude, aptitude and ability to do the job, Mellor says.

Companies must evaluate their communicative principles and tie them closely to improving the bottom line, she says. Measurement, Mellor stresses, is critical.

Novo Nordisk, she says, has a new coaching development tool that allows it to evaluate key markers in sales force effectiveness to evaluate how it is communicating and how then to coach reps to look at linear improvement

If we can measure what good's looks like and benchmark our sales force, then we'sll know if a new person is really a good fit or not, she says. It would be really great to get some metrics into the recruitment process to be able to predict whether someone will do well with us.

But to begin with, she says, companies must first understand what they are trying to achieve. And that will be more important than ever as the commercial model transitions to meet new marketplace demands.

To gain more keen insight into sales force effectiveness strategies for today's dynamic pharmaceutical marketplace, make plans to attend eyeforpharma's 5th annual Sales Force Effectiveness Summit Europe being held 7-9 March in Monaco. For more information, please visit www.eyeforpharma.com/sales2007 or phone the eyeforpharma team at +44 (0) 20 7375 7203.