» Matt Giegerich
President and CEO, CommonHealth
The next 12 months will bring a continued high-pressure front in pipelines, patents, politics, and profits. As the industry
continues its grudging evolution toward a nimbler, more efficient business model, there will be accelerating volatility and
challenge to the status quo. On the radar screen will be overall cost-cutting—including sales force right-sizing and supplier
consolidation—and deft navigation of the new landscapes of public scrutiny, Medicare and managed care, regulatory guidelines,
and OIG lawsuits. Intensity, creativity, collaboration, speed, and efficiency will be required on every front. As always,
rewards will go to those who consistently innovate and add value. Existing brands will need even more clutter-busting insight
and creativity, and a more complex and rapidly coordinated menu of approaches; sales forces will require more innovative methods
to secure physician access and attention; managed markets will need a more decisive argument for pricing and formulary inclusion;
and consumers and patients will need ongoing courtship and cajoling toward diagnosis, treatment, compliance and persistency.
Given the complexity and specificity of the emerging world of medicine, new pipeline brands will require all this and much
more, including a more-refined scientific platform and a new communications model to support more and more targeted therapies.
It’s a year to cut costs, consolidate, move toward a nimbler business model, and dodge a lot of bullets.
» David Blumberg
Partner, health and life sciences practice, Accenture
The need to do more with less has become reality within sales organizations across the industry. Almost every pharmaceutical
company now recognizes that the strategies that propelled sales force success in the past may not measure up in the future.
Pharmaceutical sales and marketing activities are under a microscope as never before. The industry has become a political
lightning rod, as new medications are increasingly perceived as drivers of national healthcare costs. Additionally, the physician/sales
rep relationship is strained, as demonstrated by decreasing amounts of time to discuss the advantages of medications, access
restrictions, and a growing negative perception of reps among physicians.
Doing more with less: pharma’s future sales model
Moreover, price pressures continue unabated, driven by generic competition, an awareness of lower-price pharmaceuticals abroad,
and the abundance of similar branded products in blockbuster categories. Payers, too, play a role, as they push for more consumer
decision power and reduced price protection for all drugs. In addition, the pharmaceutical companies' traditional customer
base continues to evolve: Providers, armed with electronic medical records, integrated health networks, and more stringent
formularies, are challenging sales reps as never before. Finally, with the introduction of Medicare Part D, the government
is becoming an even more significant customer.
Pharma executives understand that they will need to search aggressively for sales force cost efficiencies and enhanced effectiveness.
The quest for cost efficiencies will drive a range of approaches, the simplest of which may be an overall reduction in the
number of sales reps. In fact, anecdotal evidence indicates that companies are already starting to reconfigure their sales
forces. Another approach—lowering the cost of the primary-care sales force—will require executives to think differently about
sales force structure, including territory coverage, customer responsibilities, compensation, and new sourcing strategies.
Companies will also look carefully at their operating efficiency and will adopt new approaches to their commercial support
infrastructure, including cutting layers of management and outsourcing noncritical functions.
Enhancing sales force effectiveness will push companies to pursue new operational models and leading capabilities. Many will
work to ensure that the physician/sales rep interaction becomes more valuable and longer lasting. Indeed, some are already
using tools such as the TabletPC to segment and deliver their physician presentations more effectively. Others will turn to
specialty categories where the ground isn't oversaturated and where they are targeting new drugs. Still others will take an
organizational view of the customer, redefining both the way they sell to individual physicians at a facility and their approach
to the facility as a whole. For most, such changes will require an upgrade in their account management capabilities and skills.