Procurement: Clever Leverage

Don't be afraid of sourcing consolidation—the benefits outweigh the challenges.
Mar 01, 2005
By Pharmaceutical Executive Editors

Lisa Becker, Pfizer
Consolidation, leveraged spend, preferred suppliers—pharma meeting planners and their agencies have been hearing these terms and others like them more and more during the past few years. For the most part, they have reacted to them with something between distaste and dread. Pharma has never taken kindly to the idea of a consolidated, procurement-based approach to leveraging meeting spend.

It's never seemed quick or flexible enough for the vast range of meetings pharma companies need to produce, from physician events, such as advisory boards and investigator meetings, to international and domestic conventions to large sales meetings. And it has always been seen as interfering with— rather than aiding—individual or departmental efforts.

But pharma in 2005 is a very different industry than it was even a few years ago, and for many companies, consolidated meeting planning looks increasingly attractive, not just for its potential cost savings, but as a way to cope with heightened regulatory requirements.

Common Ground
In the following Q&A, Lisa Becker, a sourcing manager at Pfizer, explains how consolidation and cross-functional team buy-in of the meetings and events procurement process can enable companies to respond appropriately to compliance requirements, and ultimately, reduce costs. Her ideas were originally presented at the Second Annual Pharmaceutical Meetings Invitational, co-hosted in October 2004 by Pharmaceutical Executive and Meetings & Conventions magazines, and represent her six years of experience in meetings and events procurement strategy development.

Pharm Exec: What has been driving the trend toward consolidated meeting planning?

Becker: Much of the answer can be traced to three internal and external pressures that the industry is facing:

Rules and regulations The industry is under scrutiny from FDA, OIG, and even individual state legislatures, and sales and marketing spending—including spending on meetings—is on everyone's radar. To stay in compliance, companies need to set business rules for all types of physician meetings, including overnight events, such as advisory boards, speaker training, and investigator meetings, and speaker programs, such as dinner meetings sponsored by marketing or sales. The rules must cover logistics: How much is an appropriate expenditure, and what are acceptable events? They need to be enforced company-wide, and the company will need to be able to document its meetings activities in detail.

Collecting company-wide data
The ability to quickly and easily provide company-wide data on meetings is especially important today, when state governments are beginning to seek information from companies. Without a central repository for data, these regulatory requirements become increasingly overwhelming and prohibitively expensive.

Cost control A few years ago, it was easier to overlook the cost savings promised by consolidated meeting sourcing. In today's highly challenging environment, costs are of much greater concern.

Communications needs On the other hand, meeting planners must develop new ways to ensure that information is effectively transferred among geographically disparate groups. Because as pharma companies strive to develop and market new medicines or new therapeutic applications for existing medicines to offset pipeline and patent concerns, increased global clinical and partnering activity is demanding face-to-face meeting alternatives, such as webcasting, or tele- and video-conferencing.

How can a company best transform its meeting procurement process?

Successful procurement strategies deliver...
Regardless of the particular spend area, the most effective approach when developing new supply strategies is to get the right people around the table. Cross-functional teams will typically include marketing and sales professionals, operations support, finance, legal/compliance, and purchasing. The greatest successes emerge when the team starts from the beginning and goes through a robust and objective process. But there's not always the time to do so and that introduces the need to fast-track the process without losing the advantage of a cross-functional team approach.

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