18
Marketing and Healthcare Policy: Germany
March 2008 Pharmaceutical Executive Europe
Share of Voice to Share of Care Peter Albiez and Thomas Hennlich look at how changes to German healthcare regulation have created a need for effective go-to-market sales models.
lobal pharmaceutical market trends and country-specific changes to healthcare policies are forcing the pharmaceutical industry to reconsider their go-to-market models across Europe. In Germany, a number of specific changes to healthcare related laws on the subject of “cost effectiveness of medicines provision” (AVWG and GKV–WSG) are influencing pricing and prescription decisions by supporting: • the possibility for more flexible pricing contracts and a strengthened position of health insurers for contract negotiations • the implementation of cost-benefit assessments, second opinion requirements and limited reimbursement amounts for medicines • a stronger development and implementation focus for integrated care solutions/structures. The practical implications of these changes range from the general practitioner’s (GP) constrained freedom to prescribe and the increased control of the health insurer on the one side, to new forms of partnerships, such as risk-sharing contracts between insurers and pharmaceutical companies, on the other side.1 These policy changes have a direct impact on the pharmaceutical market environment and the way we, the pharma companies, engage with our customers. In this respect, three key developments concerning our traditional prescriber customer base need to be recognised. 1. We are experiencing continuously rising expectations on the part of the doctors to receive additional value-add from the interaction with our sales representatives, going beyond the pure productbased information and transfer of medical knowledge. 2. We are facing a generally more complicated and restricted level of access, driven by the increased competitiveness amongst pharmaceutical representatives for customer-facing time. Once in front of the customer, we must differentiate ourselves from the competition. 3. There is a growing relevance of other influencing stakeholders for the practice-based doctor’s therapeutic decision process, which requires an increased amount of interaction, collaboration and coordination between all stakeholders for varying professional purposes.
G
Adding value in the future The management of pharmaceutical sales forces in Germany has to some extent responded to the above challenges. A number of companies are searching for better go-to-market models while developing new product related services. However, the necessary transformation effort is significant, with the key limiting factor lying within the classical sales and marketing approach. We still have very large sales forces focusing on the pure distribution of product related messages and specific product or indication know-how. This approach is governed by our industry’s widely accepted interpretation of the ‘Share of Voice’ key performance indicator (KPI). This indicator ultimately drives the main part of our sales activities to be product details. This only addresses a
Pharmaceutical Executive Europe March 2008
part of the needs of a GP or practice-based specialist. Their professional success rests on consultation work, which is based on a spectrum of indications, the ability to coordinate a patient’s treatment regime, the efficiency of the practice and finally also the loyalty of their patients. The needs of doctors have also started to evolve as a result of the interaction and collaboration between the stakeholders. In Germany, on a regional level, doctors work together across practices, with hospitals, pharmacies and payers to manage a patient’s disease. The German public health insurer, AOK, has recognised this and signed managed care-type contracts with two representative associations of German GPs to develop ‘GP-centred provider models.’ A goal of these models is for the doctor to again become the central point of contact for patients and families, acting as the guide throughout a patient’s therapeutic process.2 Our problem today is that the pharmaceutical sales organisation still has a limited understanding of these regional healthcare markets, with their referral practices, prescriptioninfluencing decision patterns and the development of managed care networks. However, if we want to be seen as a trusted and integrated player of the healthcare environment, we will need to increase the scope of our involvement. By not focusing purely on the product, we can expand our engagement to the entire therapeutic process, from the support of prevention and generation of disease awareness to compliance and post-therapy care. Secondly, we must begin to develop an understanding of regional healthcare markets. By understanding the existing and emerging networks and addressing the needs and concerns of all relevant and connected stakeholder groups within these networks, we will identify entirely new opportunities for developing value-adding services. As pharmaceutical companies, we have a tremendous amount of knowledge and competence in these areas. Additionally, we can tap into the knowledge of our customers and collaborate with them to support the development of managed care structures or entirely new “networks of care.” With the knowledge of the regional healthcare market and the referral networks for example, we can act as knowledge brokers, mediators as well as facilitators to bring
Marketing and Healthcare Policy: Germany
all parties of the healthcare environment around the table. Engaging with the different stakeholders of the regional healthcare networks and developing new value contracts and services for them requires a change to the traditional ‘Share of Voice’ control mechanism. To create sustainable value, we need to employ a more customer-centric and patient outcome-oriented ‘Share of Care’3 model. The paradigm shift for us lies in the better balancing of our products’ financial performance with the delivery of improved healthcare effectiveness (patient treatment outcomes) and healthcare efficiency (contribution to cost-containment in the healthcare system).
The challenge for the field force The deployment of account management approaches is currently receiving a lot of attention. While the concept has historically been applied mostly in secondary care, it is also valid for the primary care environment, although defining accounts here is more of a challenge. To begin with, it is essential to develop a regionally integrated customer approach, with full business responsibility for the portfolio of products on the management level. An account manager is installed to engage with the key customers and the healthcare networks in which they operate. In co-operation with the account manager, multi-capability teams, made up sales employees with different profiles and priorities are formed, address the requirements of our customers in a more targeted and quality oriented fashion. An account manager working within a designated area with such a multi-capability team, focused on a set of customers and with a responsibility for a broad portfolio of products, can provide a holistic engagement approach for the single GP, while at the same time developing an understanding of the integrated and complex customer structures that exist within the area. This allows him or her to be at the forefront of creating value where it is needed, for one customer or across a network of customers. In this manner, the account manager acts as a knowledge broker and facilitator. For example, by understanding the indication specific referral patterns within an area or region, care pathways and a more efficient patient flow can be facilitated. To address the needs of such integrated care structures, more and more ‘package solutions’ of products and value-adding services will be needed.4 All of this means deep and significant change, a great challenge and much to achieve in terms of strengthening the competencies of our employees in the field. A regionalised organisation, which allows the account manager, as well as the members of the multi-capability-team to be closer to a network of customers within designated areas, will demand more autonomy as well as greater responsibility at a much lower organisational level.
19
20
Marketing and Healthcare Policy: Germany
March 2008 Pharmaceutical Executive Europe
Conclusion
About the Authors
The ongoing transformation in the German healthcare arena challenges the pharmaceutical industry to adopt its go-to-market models. A ‘Share of Care’ sales model will allow organisations to generate sustainable value across the full spectrum of care, and allow them to create deeper, longer term partnerships with our customers. If we can successfully manage the necessary transition process and develop our competencies consistently in this direction, there is high potential to achieve sustainable growth within a challenging healthcare environment. It is up to the pharmaceutical industry to take up this challenge. ■
References 1. Sebastian Jost, “Das Aldi Prinzip,” Brand Eins, January 2008. 2. Christoph Eisenring, “Ein Vertrag erregt die Gemüter deutscher Ärzte,” Neue Zürcher Zeitung, July 2008. 3. Share of Care trademarked by Executive Insight AG 4. Jörn, Ballhaus, “Zeitwende im Vertrieb,” Pharma Marketing Journal, May 2007.
Peter Albiez is vice president of sales, Pfizer Pharma GmbH in Germany. Prior to his current role, he was director of brand marketing at Pfizer GmbH. He graduated from the University of Regensburg with a degree in Biology and received a scholarship from the CarlDuisberg-Gesellschaft. Thomas Hennlich is a partner at Executive Insight AG, Switzerland, where he focuses on developing customer-centric sales and marketing strategies to deal specifically with healthcare networks. He graduated from Northeastern University in Boston and holds a BSc in Industrial Engineering and a Masters degree in Business Administration (MBA). t.hennlich@executiveinsight.ch
e-newsletter
Pharm Exec Europe Direct Get more Industry News and Analysis for FREE Stay ahead of the competition with the new, twice-monthly Pharm Exec Europe e-newsletter. Pharm Exec Europe Direct is packed with news, features, commentaries, opinion polls, surveys and event information.
Subscribe now by visiting www.pharmexeceurope.com and click on ‘e-newsletter’