The Difficult Transition to APLD
Pharma companies do not always understand APLD. Some of the blame lies with vendor personnel, who are perceived as "data people"
rather than functional experts who can explain applications cogently to brand managers or sales operations managers. But
part of the problem rests with pharma management. Even when companies understand the value of APLD, they may not be able to
mobilize the personnel to translate data into actionable business decisions. And when they do—when companies see familiar
processes in light of more sophisticated data—the consequences bleed into neighboring fiefdoms within the company. Senior
management might see itself breaking a data logjam with a vendor, only to find itself refereeing unanticipated turf wars.
Any large-scale adoption of APLD would affect the way sales operations, brand management, and market research operate on a
day-to-day basis. For example, if sales goals and methods were shaped by APLD, sales-force compensation might be linked best
to several parameters besides total prescriptions written, such as number of switches effected, number of patients moved from
untreated to treated, or number of new prescriptions written. Market research would have to adapt some of its metrics to the
new data, while IT, HR, compliance, and a host of other departments would need to buy into the evolving system.
Managers also face the usual change-management issues if they back a move to APLD. In addition to persuading key constituents
of the value of the change, executives must deal with the perceived pain and anguish of a new implementation. The most resistance
likely will stem from parties that benefit from the existing system and therefore are threatened by a new one.
The Cost of Switching
Companies choosing APLD face high barriers to switching from current data sources, most commonly from industry leader IMS.
While new and existing data vendors have been building APLD capabilities faster than IMS, IMS remains the overall leader in
the pharma information market due to its strong position in physician-level data. IMS is a formidable competitor because of
its sheer size and market share. But the greater challenge for APLD vendors is the level at which IMS data have become entrenched
in the business practices of pharma companies.
The most critical entrenched business process is sales-force compensation. While switching to APLD does not necessarily mean
that administering sales- force compensation must change (although the new data would allow improvement on the current method),
it could require using a different data source (Verispan or NDC physician-level data, for example), which in itself makes
sales operations leaders uneasy.
IMS data also is considered standard for reporting to Wall Street. CEOs and CFOs want to remain consistent with that practice.
All this contributes to even higher inertial barriers to APLD. As one pharma executive bluntly put it: "No one ever got fired
for using IMS data." Unfortunately, continuing to use IMS for compensation, while paying other vendors for APLD, creates another
barrier: Two data types are substantially more expensive than one.
Taking on the Vendors
Before attempting a large-scale adoption of APLD, pharma companies must work with APLD vendors to ensure better communication.
Procurement managers must require vendors to clearly demonstrate the value of APLD. Collectively, vendors have a duty to simplify
APLD for their pharma customers. They must put greater emphasis on selling APLD in general, compared with differentiating
their individual services. A consolidation in the APLD market also could help clarify the options for customers.
The pharma companies must help vendors crunch the numbers and develop viable return models or business cases for large-scale
adoptions in pharma. This involves not only a detailed assessment of the timing, costs, and one-time investments, but also
a tangible potential benefit based on improved ROI. Pharma must work with vendors to assess the benefits of better decision-making,
more targeted marketing, and improved sales-compensation programs. In addition, it is critical that vendors be required to
thoroughly demonstrate in business-case scenarios the statistical validity of the data being used. Vendors must be able to
help potential pharma customers assemble the internal business case needed to convince senior management to approve a large
Assemble the Capabilities
APLD raises personnel issues for both vendors and customers. Vendors need a talent pool that can use the patient-level database,
but also understands the different business issues confronting pharma companies. Vendor personnel must not merely know how
to manage and mine the database, but also be able to analyze business issues and turn good analyses into actionable insights.