For flexibility and efficiency, pharma has traditionally called on contract sales organizations—for temporary help, a particular
region, or even an entire brand—but companies are now looking to take outsourcing to the next step. One of the most interesting
developments in outsourcing is the emergence of "embedded" contract sales forces—hired and trained by the outsource company,
but actually working within the client pharma company. "Two years ago, nobody was talking about [embedded] outsourcing, and
now we're having weekly conversations with clients," says Sandy Jennings, executive vice president for Innovative Selling
Solutions, an inVentiv Health Company. "Most companies utilizing the embedded model are working within a more regionalized
approach. For example, if a vacancy occurs, a decision may be made at the regional level to add a flexible resource due to
changing local market conditions. This provides continual flexibility in the field force."
Through its database of approximately 400,000 candidates, inVentiv screens and profiles candidates. When working with a pharma
partner, the company can develop a profile catered to the client's needs. For example, in an embedded model, a company can
request 50 percent B2B people who have never sold a pharma product, 30 percent who have less than two years' experience selling
pharmaceuticals, and 20 percent nontraditional sales individuals such as recent graduates. (Jennings notes that whatever the
team, typically there is a percentage population involved for each profile.)
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A study in the journal Health Affairs found that in 2007, US healthcare spending grew the least it had in a decade. The reason for the slowdown, reported lead
author Micah Hartman, was traced back to drug spend, which slowed because of several factors: more generic use, less overall
use due to safety concerns over some products, and less-harsh price increases—just 1.4 percent in 2007, compared with 3.5
percent growth the preceding year.
Indeed, the industry understands just how important payers are in this environment, with decreasing margins and tight battles
for formulary placement, given the formidable competition generics pose. Bob Merold, general manager of Symphony Metreo's
pharma division, says, when it comes to the rising tide of generics, "Right now it's at a trickle, but in mid-2009 that trickle
will turn into a steady gush."
To survive, each pharma needs to figure out how to broker an equation with managed care companies and the government to present
the meaningful advantages of its medicines and solidify placement on key formularies.
Certainly, there's a lot of work being done. Novartis' pharma CEO, Joe Jimenez, stated late last year that the company had
been conducting what turned out to be very successful pilots in already highly restrictive markets. In places like Massachusetts,
Novartis significantly reduced the number of sales reps but built up cross-functional teams—with a managing director and finance,
sales, health economics, marketing, some medical—to call on payers and healthcare providers. "We're interacting now with those
customers at a different level than before," said Jimenez.
Particularly for manufacturers with high-priced therapeutics, companies must work "incredibly close" with payers, says Andrew
Komjathy, vice president and general manager, North American and Asia Pacific commercial operations for Shire Human Genetic
Therapies, a division that specializes in very rare genetic diseases. He cites three reasons why: to point out that there's
a patient in the system that needs treatment, to justify why patients with an unmet need deserve access to their products,
and to include a third stakeholder—the patients and their families. "These diseases are devastating," says Komjathy. "So it's
incredibly important that we not only have a good working relationship with the physicians, but that we make sure we can get
access from a payer perspective and maintain a very close relationship with the families."
But it takes different skills and ways of working to approach payers. Shire's Adsett believes companies, in turn, are going
to place a heavier emphasis on training reps to understand the payer landscape. "As we think about the expertise we need for
our sales people in understanding the role of the payer, the role of either the government as an insurer or some of the private
insurers or cash-paying patients," he says, "it requires a deeper understanding of ultimately who is reaching into their pocket
and reimbursing for this product."