Mason Tenaglia

Pharmaceutical companies are huge relative to companies in most other industries, but many of their business issues are fragmented by function and market segment. I don't think about 10 big companies, but rather about 100 independent brands that are at different stages of their life cycle, with different competitive environments, different access issues. Many times there is a lot more similarity in terms of needs between brand organizations across companies than within a single pharma company.

For example, understanding the impact of copays on consumers who have a therapeutic alternative that is generic may be important to only one brand in each pharmaceutical firm.

Pharmaceutical companies have more matrices than just about any industry, except maybe software and packaged goods. So it often seems that an awful lot of time is spent aligning the marketing, managed markets, sales, regulatory, legal, and financial decision-makers. And it is easy for managers to get trapped in internal issues. No one has more meetings than PhRMA. That said, most senior managers come from sales and marketing disciplines, so they know their customers better than other industries, which might draw their managers from technical disciplines and finance.

ALIGN INVESTMENTS

From my view, the biggest change required in the industry is how to align the investments in field force with the reduction in market access. Very few companies have the degrees of freedom to make this adjustment in a revolutionary way. The industry will evolve as it gradually cuts sales-force size (making smart cuts, not across-the-board cuts) and develops evolutionary sales and marketing models that keep the best of the old and grow new appendages to adjust to the current climate.

IS THE GUN LOADED?

I believe that understanding how consumers respond to copay differentials and increased cost-sharing will be essential for understanding whether or not to invest in access. If you want to be Clint Eastwood and say "Go ahead. Make my day!" to managed care companies that want to put you on third tier, you have to know whether their gun is loaded. The use of longitudinal patient data to understand whether a small or a large copay difference from your competitors matters is critical to not getting squeezed in the annual negotiating process.

PART D'S OPPORTUNITIES

Just about 100 percent of industry volume growth in the past 18 months has come from the adoption of Part D. Yet few companies have done anything to adjust their business models around this change. It is just another channel to most companies, and many could gain a great deal by understanding some of its unique opportunities.

LOOK TO INFANT FORMULA

In 2004, I wrote an article in Pharmaceutical Executive about how the industry had the potential to develop like the infant-formula business—with a highly subsidized segment that has almost no profit in it, and a consumer-driven segment that is challenging for management but very lucrative ( http://www.pharmexec.com/ search 'Tenaglia 2004'). It is a more likely today with the emergence and importance of the low-income subsidy segment of Part D.

INSIDER INFORMATION

The Amundson Group assists managed markets, brand, and market-research organizations to plan, analyze, and assess their US product and payer strategies. The firm is known for understanding the impact of Medicare Part D on the US pharmaceutical business and recently completed an overall assessment of Part D for PhRMA ( http://www.phrma.org/news_room/).