Creating Customer Value: New Horizons on the Managed Markets Journey - Pharmaceutical Executive

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Creating Customer Value: New Horizons on the Managed Markets Journey


Pharmaceutical Executive


False Confidence About Performance


Gaps in Organizational Invesments
More than 90 percent of managed market organizations report they have established working relationships with managed care organizations. Asked to describe the effectiveness of account management efforts, most exude confidence. According to most respondents, their organizations follow a clear strategy, focus on performance, and create results for customers. However, a small cloud of uncertainty peeks over this otherwise blue horizon when these same respondents consider their organization's underlying account management "culture."

Effectiveness cannot be judged without context, however; when considering account management, it is important to understand the type of relationship created with customers along a continuum of B2B partnerships, from preferred vendor to trusted advisor. Research findings at this level of investigation are striking.

For the most part, after many years of effort, managed markets have created customer-serving relationships with payers. Lower prices are offered for formulary status, and managed market organizations are responsive to customer requests and demands. In this context, success is measured by achieving a "preferred vendor" relationship.

Customer-serving "preferred vendor" relationships, however, are far from B2B partnerships; these relationships are limited to a cut-and-dry exchange of product for price. Our survey did find that organizations—though significantly fewer—have established a higher "value-add" position on the relationship continuum with payers. Tellingly, these higher-level B2B partnerships are more common among less powerful regional payers than with large, national payers. Still, evidence of value-added relationships confirms that some managed market organizations may be able to solve problems and create value. As a test, managed care organizations should determine if their value offerings—including access to scientists, marketing support, and health economic data—are offered as solutions with links to improved business results.

Still, the Holy Grail of B2B partnerships—a trusted-advisor relationship—remains an elusive goal for most managed market organizations. Our customer interviews reveal that payers question the credibility and intentions of life sciences companies, pointing to conflicting actions among their various agents: managed markets, the sales force, marketing, and other functions. Also, payers feel reluctance on the part of life sciences companies to increase their value by dedicating resources to them or helping to measure performance.

These findings may link back to the "cloud of uncertainty" concerning culture and effectiveness. For many managed market organizations, performance strategies dominated by cost containment are at odds with a commitment to creative problem solving.


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