What’s wrong with the traditional go-to-market strategy?

KAM-pharma

In the past – pharmaceutical companies used to rely on a well-established and successful go-to-market strategy: Visit doctors, detail new medicines, and ensure product adoption. Hand in hand with increased access, the influence on doctors increased steadily, with the anticipated impact on revenues.

Lately, however, the face time that doctors allocate to sales reps has declined sharply. In early 1990s, for example, sales reps talked with physicians regularly and for an average of 12 – 15 minutes per visit. Today more than 30% of doctors meet sales reps less than 7 times per year and these visits last on average just 2 – 3 minutes.

The decline in face time is only one of the recent challenges faced by the pharma industry. Doctors are increasingly overwhelmed by the amount of information they receive. On an average; Primary care physicians, deal with up to 30 medical sales reps per week. One-third of those interactions are simple sample-sign-offs, with no product detailing involved.

Moreover, new regulations have put serious restrictions on sales activities and sample distribution. As a result it has become increasingly difficult for pharma companies to establish brand awareness, keep sales force morale up and have the impact required to maintain or even increase sales.

Pharmaceutical companies must find new ways to stimulate sales.

Recognizing the emergence of new influencing groups, pharmaceutical companies have set up dedicated sales teams or roles, alongside the traditional primary and secondary care teams. Many have taken the approach of simply cutting back resources and re-labeling some sales reps roles as account managers, only making the most superficial of adjustments to their operating  models. And yet, to a large extent, pharmaceutical companies have failed to develop go-to-market models that simultaneously address multiple stakeholder types and bring customer needs back into focus.

With KAM; Pharmaceutical companies can revitalize their sales model & regain their consultative status and influential role in physician’s choice of medicines

In UK; many Pharma companies have issued an Account Manager’s business card to traditional sales reps and given the accountability and autonomy to be more selective in targeting his key customers – as well as a call rate target that is directly at odds with the KAM philosophy.

KAM: The road less traveled…

pharma-kam

Currently, most pharma companies are still functionally operating in the early stages of the KAM progression. The more successful ones progress one stage at a time. They carefully take the time to build capabilities before moving to the next stage.

To move Pharma organizations forward in challenging times; there are several key stages that pharma companies employing KAM go through as they mature and embark on a journey that moves them through successive levels of sophistication.

Sales force restructuring & innovation – State of the industry

As per Deloitte, several mid-sized pharma companies and Big players have already started to find new ways to optimize it’s sales force for better performance.

A. Wait and watch players: Big Pharma companies with expanding portfolios, like Novartis and Roche, are mostly taking a watch-and-wait approach and collecting information on rep‘s value and productivity in doctor’s offices.

B. Slow movers: Companies with stable portfolios, Glaxo Smith Kline and Abbott Labs, are going a step further, tweaking their field forces to increase productivity

C. Change setters: Companies with declining portfolios, like Pfizer and Merck are seeking change and have the greatest willingness to pilot and experiment new approaches. And it is this group  where the action is, in terms of sales model variation.

Several mid-size companies are also making critical sales force change using their small size to target specific physician groups, assigning more responsibility per rep through account management and also making changes in their first line management system.

KAM-implication-on-pharma-sales

The typical Pharmaceutical KAM evolution stages are:

1. Pre-KAM: Contact already exists between multiple roles at the pharmaceutical company and in the account. However the pharmaceutical company has little success at connecting effectively with the central decision making unit. The emphasis of promotion is the product’s features and benefits, although the customer’s decision may ultimately be determined by price.

This stage has two potential sub-stages:

  • One-on-one selling: The sales force “details products” to individual customers (physicians). The focus is on short-term prescription generation. The sales force has coverage and frequency targets.
  • Low-traction account management: The sales force has been trained on KAM concepts. However, only the best reps are implementing effectively, while others struggle and the initiative loses momentum. Variation of results between the best and worst reps is large.

2. Early KAM: Outcomes with individual physicians are successfully connected to the needs and outcome of the central decision-making unit. The activities of the different roles in the sales force are now aligned towards a common purpose;

3. Structural KAM: The pharmaceutical company decides to actively bring the value of its full portfolio to the account, coordinating the different roles in the selling company. Product and therapy area specialists operate as part of the KAM team to bring detailed product knowledge to individual physicians;

4. Value-based KAM: The pharma company seeks to sell on the basis of the full value that it brings to helping the account achieve its objectives. The “product” is expanded to be more than a box of pills. Instead it is defined as the full value to the account’s business of the complete range of services, programs, physical products and financial offerings delivered by the pharmaceutical company;

5. Synergistic KAM: The pharma company and the account work in partnership to deliver value to the account. Solutions are developed in tandem, to the mutual benefit of both parties.

Value Measurements – Pharma KAM

POTENTIAL (Volume of OPPORTUNITY to prescribe or refer brand specific disease treatments)

PROPENSITY (The Degree of LIKELIHOOD of increase in future prescribing, influence or referral for the brand)

 

  • Market sales
  • Volume of patients by disease profile – e.g age, ethnicity, socio economic etc
  • Practice size – number of GPs, nurses, list size
  • Disease prevalence
  • Disease management clinics/mechanisms for generating patients
  • Number of beds/treatment capability by disease*
  • Patient treatments/admissions by disease*
  • Hospital spend on disease area*
  • PCT funding/financial data
  • Size of catchment / referral areas*

 

  • Own product sales – growth/volume/market share
  • Specific competitor usage profile
  • Attitudinal data – adoption, attitude to treatment of disease
  • PCT influence – formularies, protocols, guideline
  • PBC status and influence
  • Customer typology (qualification, special interest etc)
  • Disease management structure
  • Hospital formularies and protocols
  • Funding
  • KOL
  • Sophistication of structure to treat

 

Addressing a range of new customers

The prescribing physician has always been at the centre of attention of pharma companies’ marketing and sales activities. Other stakeholders, e.g. patients, health insurers, government institutions, pharmacists and nurses, while not completely ignored, have not been the focus of the pharma industry’s strategy and interventions. Meanwhile, these stakeholders who did not seem to be involved in prescribing decisions in the past, have gained substantial influence in the healthcare market.

The increasing number of stakeholders with direct influence on prescribing decisions also demands for a review of sales force strategy. The term “customer” now includes a range of stakeholders other than direct prescribers. Key account management is therefore evolving and growing in importance as pharmaceutical companies recognize the relative influence of these stakeholders.

Final thoughts

As the number of daily face-to-face visits made continues to decrease, Quantity is being replaced by quality. Account Managers are encouraged to develop their own call plans; hence every face-to-face call or meeting actually counts.

Personal selling with a well-trained sales rep will not be replaced, at least not within the next decade, but sales representatives will be required to bring value to the table, functioning not only to move their brand’s share, but also as partners in the healthcare cooperative. Dialogue is essential. This will require having the reps understand the big picture: the market, the competition, their product’s share of voice. In this scenario, the purpose of the sales call takes on increased enormity. The rep is there to help the physician make the best decisions and provide the best treatment for their patients. This is the rep as a problem solver, a valuable resource.

The need for robust and effective data on the go to help make informed targeting decisions is key to the success of Key Account Management.

 

Dipesh Majumder

Dipesh Majumder

Chief Evangelist at Medismo PharmaSoft
I am a Marketing Technologist, a strategist & a visionary with over 8 years of experience in traditional & digital marketing. I have been responsible for the development & execution of sales force effectiveness strategies, tools, processes for global Pharma sales organizations. Lead key initiatives, critical projects & continuous improvement activities.

Chennai, India · http://www.medismotech.com
Dipesh Majumder