Mission Critical: Assessing Pharma's Drivers of Change - Pharmaceutical Executive


Mission Critical: Assessing Pharma's Drivers of Change

Pharmaceutical Executive

PE: Will you leverage any of these learnings in your current role as a developer of new treatments in the very competitive field in HCV? Many of the emerging therapies promise to increase the cure rate for hepatitis C from drug interventions to upwards of 90%, from less than 50% today. The patient benefit is clear.

Truitt: The level of innovation in this disease area is astounding—drugs now coming on the market promise to take patients from an HCV infection to cure in only 12 weeks. As a smaller company, we think there is an opportunity to carve out some "blue ocean" space in this field by focusing on what the patients with this disease really want.

PE: Any other examples of addressing a disruptive change or transition in your career?

Furey: Prior to joining Baxter, I served as general manager for an MNC's vaccines business in China. I arrived there and promptly discovered that the conventional model for selling medicines in China—lots of "boots on the ground"— was not working as well for vaccines. Government played a dominant role as the lead purchaser of vaccines and controls on traditional marketing practices in this segment were growing, leading me to pose the question why we on the vaccines side needed to rely purely on the mass mobilization approach. Government influence was so strong it could determine if you even had a sales channel to work in at all. In that case, market access would be irrelevant.

Recognizing these distinctions, we reconstructed the sales force around a new "customer solutions team" concept to work with government procurement agencies on transparent targets supporting China's five-year health sector development plan. For example, we emphasized the ability of pneumococcal vaccines to reduce pneumonia among young children and the elderly. It was a closely coordinated, patient-centric approach that acknowledged the role centralized health planning plays in penetrating the Chinese market.

This is a model—non-traditional, built around a new generation of stakeholders—that is relevant not only to China but to most of the industrialized countries as well. Public-private partnerships centered on high-value, innovative vaccines and biologics is certainly the avenue we are taking at Baxter. Last year, we began a 20-year partnership with a Brazilian state-owned company, Hemobras, to produce our recombinant factor VIII therapy for hemophilia so the country can move away from reliance on older, blood-based treatments. This relationship will allow the Brazilian government to upgrade the standard of care for the country's 10,000 hemophiliacs while also supporting the Brazilian biotech industry to leverage its capabilities from this technical transfer to spawn newer technologies.

Bourret: The disruption that matters most to me—and which I might hesitate to describe as innovative—is the massive downsizing of the industry sales force over the past decade. The challenge to those of us in the sales function has been to minimize the damage from the loss of so much accumulated expertise, especially as the implementation of these reductions in force has often been delegated to third-party consultants. Important issues like customer impact, retention of long-standing client relationships, legal and regulatory compliance, internal organization alignment, and staff morale, don't get the proper attention from senior management. The disruption has led to the loss of many high quality contributors. Company reputation is damaged: to fill the gap, you have to go to a physician who had the same rep, often for a decade or more, and try to start over again. In a larger sense, the question is whether any of this advances the claim of so many companies that the patient is at the center of their business? As a manager, my response is to do all that I can to establish continuity and restore trust. I work consistently with my team to get everyone on the same page.

PE: Looking ahead, what can you identify as the most "mission critical" function that executives will need to successfully navigate this transition in the biopharma business model?

Truitt: The key mission critical function is the ability to digest and synthesize multiple streams of information. An important example would be the ability to manage the increasingly complex process of completing clinical trials, on a global basis; and finding the best way to position a new product for maximum market access, in multiple countries worldwide. In the old era, structuring the trial, filing for registration, and securing market uptake could all be approached separately, in sequence. Looking ahead, we have to anticipate during the proof-of-concept stage what our trial design will look like, what comparators we will select, and what evidence is needed to position the product for reimbursement. The other step is to establish our launch order in a way that reinforces— not dilutes—our market access priorities as we roll the product out.

Di Piano: There is a great deal of innovation locked up in smaller companies. The problem is the lack of resources to fund it. There will be a premium on people who have the financial, operational, and communication skills to either create partnerships or take a company public. Making a case for the start-up is not easy, so the ability to do that is going to be a prized attribute for anyone in this business. Confidence and assurance is also needed to confront the negative headwinds from the VC community, whose engagement once gave small companies a runway to the future. Now the VC players want all their risks guaranteed—not only does a company like my own have to show it can generate revenue on a consistent basis, it has to shine on key profitability performance metrics like EBITDA. The ripple effect here is that big Pharma wants highly structured transactions, with milestones that shift more of the risk to the smaller partner. In summary, people with the smarts to overcome these institutional deficits and secure the capital to grow an asset internally are going to be in high demand.

Furey: No one skill or attribute is going to dominate as "mission critical." That said, process capabilities—getting all the functions in an enterprise to work together—will be very important to achieving business targets. It used to be that a good clinical profile coupled with commercial and promotional muscle was sufficient to move the markets. Today, many additional factors must apply to a seamless launch; there are more moving parts. But getting large organizations aligned behind the strategy and to identify and then execute around the right tactical measures is not as easy as it sounds. It may seem trite to state it, but we need to ensure the entire organization is working toward the right end point. It is surprising how often companies miss the mark by presuming that if you tick a box, results will follow.

Another factor that underscores the importance of process is the externalization of big Pharma R&D pipelines. This requires a high level of "street smarts" and sensitivity among managers in building successful partnerships. Big Pharma must strive for balance: expectations based on internal markers must not be so rigid as to starve a small and medium-sized partner of the oxygen—from know-how to capital—it needs to thrive and realize the potential of the partnership. Finding mutual benefit from the connection between big Pharma and the smaller biotechs is critical to the future of innovation, particularly in generating the resources to ensure the best new science is funded.

Bourret: Selling will remain the principal way this industry competes for profits. The sales rep is not going away; there will still be boots on the ground. What is changing is the role of the rep, who is going to be positioned as a knowledge asset and a service provider beyond the pill itself. The value of the relationship between the rep and the customer is going to be quantified. A few pharma companies are trying to make loyalty a metric of performance. Educating sales professionals to conform to this new model is not going to happen overnight; for some the transition will be painful. And there is a question whether this criteria is sufficiently objective to serve as the basis for compensation involving large numbers of professionals. Asking a physician to assess what amounts to a sales rep's personal and emotive skills is subjective. It might help determine what value the rep brought to the relationship, but it's worth emphasizing here that a sales professional is ultimately hired to sell. Going that extra mile, doing the right thing beyond the transaction itself, may—or may not—make a difference in generating prescriptions.


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