More than 75 percent of the executives in a 2006 survey told us that they were actively reviewing alternative incentive-compensation
strategies based on the declining availability of information in certain geographic territories. More recently, 60 percent
of respondents in a related survey said they have actually changed their 2007 programs in the affected areas, further reinforcing
the gravity of this issue.
Raising the Marketing Bar
There is a consensus about the urgency for change in the marketing model, with top-tiers averaging 73 and mid-tiers 69—an
industry average of 70. In fact, changes are ongoing.
Mid-tier companies expressed the desire to build greater competencies in CRM and multicultural marketing but said they lack
the resources to implement (see "Marketing Skill Sets"). And all companies want to increase competencies in patient segmentation
and Internet marketing. While some progress has been made industrywide, nearly a third of the pharma brands we recently queried
had not established success metrics for their online ad campaigns.
The strongest needs were for functions in support of managed markets from a primary market-research standpoint, business development,
and licensing support. Secondary data management and standard reporting, functions of declining value and good candidates
for off-shoring, were deemed adequate. Our benchmark data tell us that the average spend in marketing sciences is currently
$55 million for top-tier companies and $15 million for mid-tier.
As the industry undergoes increasing scrutiny by regulatory bodies, watchdog groups, and litigators, medical/regulatory/legal
review assumes much greater importance. Adding to this, sales force technology innovations are turning a fairly static paper
review every six months into a dynamic process that may require more frequent updating. So it is no surprise that operations
execs see medical/regulatory/legal review as the most significant area for increased support. In fact, 75 percent felt that
this area would undergo the greatest change.
Other high scorers included promotional materials management, which is directly related to the review process, and managed
markets support. Additional needs were for innovation and speaker management, while internal and external agency management
were at acceptable resource levels.
Investing in Integration
Executives were asked about the degree of integration among sales, marketing, and managed markets. Recognizing that this is
an area for significant improvement, they awarded integration only a 53.5.
One of the key aspects promoting integration is coordination of cross-functional departments, particularly with regard to
product launches. Benchmark data show that top-tier companies tend to have a distinct group to manage these complex programs.
Our data also show that companies are investing in their headquarters' decision-support systems to streamline data processing
turnaround times, improve data quality, reduce headcount, enable future flexibility, and improve service levels to sales and
marketing. Companies are devoting about 22 people and $7.5 million annually to this effort.
The forces operating in pharma today, including industry-perception issues, cost pressures, regulatory restrictions, increasing
government say in pricing, and outdated sales models, strongly impact commercial operations. Executives, who are continually
asked to do more with less, understand the need for radical change, yet our benchmark showed no sense of trade-offs. Given
a wish list, operations executives identified 24 areas in need of increased resources, 10 for maintaining at present levels
and zero (!) for decrease.
This comprehensive benchmark, a wake-up call for the tough choices that must be made, provides a blueprint of the most dynamic
areas for future change. This "outside-in" perspective on operations clearly shows that managed markets and sales force models
are the top candidates. Armed with this information, executives who support operations have a unique opportunity to make their
voices heard and exercise strategic leadership on the road to the future.
Stephen E. Gerard is a managing partner of TGaS Advisors, in East Norriton, PA. He can be reached at 215.646.3884 or firstname.lastname@example.org