October 2015
Transforming the Biopharma Go-To-Market Model
Courtesy of:
An Introduction by Executive Insight Mind the gap! Why the disparity between the go-to-market strategies companies should be implementing and are implementing represents a great opportunity for biopharma With increasing pressures on healthcare systems and the rise in power of different stakeholders, such as payers and patients, the traditional go-to-market models for pharmaceutical products are no longer fit for purpose. The survey results contained within this report support the fact that most within the industry are aware of this. Yet they also show that the uptake of new strategies has, to-date, been modest at best. So why is this? In a volatile environment, most biopharma companies – perhaps understandably – prefer to play it safe. They gravitate towards those strategies with which they are historically more experienced, such as employing key account managers with large institutional customers. However, to sustain superior competitiveness and improve the bottom-line, new strategies are needed, for example: •
Offering unique business / healthcare services, e.g. integrated chronic disease management
•
Leveraging product portfolio synergies, e.g. holistic therapeutic area leadership
•
Realigning responsibilities to a supranational level, e.g. dedicated pan-European business units
Our rich insights on offering unique business / healthcare services, leveraging product portfolio synergies and realigning responsibilities to a supranational level, have been published in the past and can be viewed on / downloaded from our website http://www.executiveinsight.ch/publications: • “Five Steps to Find your ‘Beyond the Pill’ Strategy”, Pharmaceutical Physician, May 2014, Volume 24 No6, Aleksandar Ruzicic et al. • “Dive in, Gaining long-term leadership in a therapy area can be commercially invaluable”, Pharmaceutical Market Europe, September 2014, Andrea Sobrio et al. • “Pan-European Specialty Pharma Businesses, Perfecting Your Game for Success in Europe”, Executive Insight, 2014, Dr. Jürgen Raths et al.
For those companies who embrace these types of strategies, there are many potential advantages, such as long‑term and stable relationships with stakeholders and increased probability of reimbursement. It is time for the biopharmaceutical industry to close the gap.
Executive Insight is a specialty healthcare company that helps biopharmaceutical companies to successfully prepare, launch, and commercialise their products
Transforming the Biopharma Go-To-Market Model A new FirstWord survey of 36 industry executives lifts the cover on biopharma’s go-to-market playbook. When asked to identify which go-to-market objective is currently of most importance to their company, a third of respondents cited an ability to sustain superior competitiveness versus rival players while a fifth highlighted optimised stakeholder engagement. Less than 10 percent of respondents said that improving profitability was the most important go-to-market objective but 36 percent of all those polled said that each of these three objectives are equally important to them.
Other high profile, and high frequency, strategies, cited by 47 percent, 44 percent and 41 percent of all respondents, respectively, were leveraged product portfolio synergies, use of novel commercial models and a shift of resource across existing roles within the company, such as a reduction in the number of traditional sales representatives and an increase in market access specialists. Figure 2: Which go-to-market options has your company implemented in the last 2 years? 5.6%
Figure 1: Which go-to-market objective is most important for your company currently? 30.6%
36.1%
2.8% 41.7%
47.2%
19.4%
36.1%
30.6%
61.1% 44.4% 33.3% 8.3%
Offering unique business/ healthcare services – e.g. integrated supply chain solutions, revenue generating healthcare services Leveraging product portfolio synergies – e.g. one-company approach towards key accounts, TA leadership approach
Optimise stakeholder engagement Sustain superior competitiveness
Realigning responsibilities to a supranational level – e.g. centralised functions across countries, European / global Business Units
Improve the bottom-line All above objectives equally relevant Other (please specify) Source: FirstWord
Switching focus to those go-to-market strategies, which have been implemented by pharmaceutical manufacturers over the past two years, the creation of additional roles – such as field-based market access and key account management positions – was cited most frequently by 61 percent of respondents.
Designing novel commercial models – e.g. cross-functional customer-facing teams with P&L responsibility, multichannel platform for selected physicians Creating additional roles – e.g. field-based Market Access, field-based Medical, Key Account Management Shifting resources across roles – e.g. reduction of sales reps, increase in field-based Medical, increase in Market Access Improving with current roles – e.g. systematic capability assessment, Corporate Training Academies Other (please specify)
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www.firstwordpharma.com
Source: FirstWord
While only 36 percent of respondents said that their company had implemented a strategy designed to offer a unique business and / or healthcare service within the previous two years, this was cited most frequently – by 53 percent of poll respondents – as the go-to-market option that remains underutilised by the pharmaceutical industry. Furthermore, although drug manufacturers appear to have invested heavily in the design of novel commercial models, this too was cited frequently as an area where the industry could do more, according to 47 percent of respondents. As was further leveraging of product portfolio synergies, cited by 36 percent of respondents as an area where the industry continues to punch below its weight. Figure 3: Which go-to-market options does the biopharma sector not yet use adequately at the moment?
Unsurprisingly then, these areas were also highlighted as strategic options, which respondents felt their company should implement within the next two years if they are to best achieve their go-to-market objectives. Indeed, leveraging product portfolio synergies and the design of novel commercial models were both cited by 42 percent of respondents, as was a shift in resources across existing roles within the company. Attempting to offer unique business / healthcare models was cited most frequently for implementation over the next two years, by 44 percent of those polled. Of the options provided, notably fewer respondents – 19 percent and 28 percent, respectively – cited the realignment of business responsibilities at a supranational level and the creation of additional roles, as strategies that if implemented over the next two years will be critical to drug manufacturers achieving their go-to-market goals. Figure 4: Which go-to-market options should your company implement in the next 2 years to achieve its objectives best?
5.6%
25.0% 52.8%
0.0%
30.6%
33.3% 36.1%
27.8%
44.4%
41.7% 41.7%
47.2%
22.2%
27.8% 41.7%
Offering unique business/healthcare services – e.g. integrated supply chain solutions, revenue generating healthcare services
Offering unique business/ healthcare services – e.g. integrated supply chain solutions, revenue generating healthcare services
Leveraging product portfolio synergies – e.g. one-company approach towards key accounts, TA leadership approach
Leveraging product portfolio synergies – e.g. one-company approach towards key accounts, TA leadership approach
Realigning responsibilities to a supranational level – e.g. centralised functions across countries, European/ global Business Units
Realigning responsibilities to a supranational level – e.g. centralized functions across countries, European/ global Business Units
Designing novel commercial models – e.g. cross-functional customer-facing teams with P&L responsibility, multichannel platform for selected physicians
Designing novel commercial models – e.g. cross-functional customer-facing teams with P&L responsibility, multichannel platform for selected physicians
Creating additional roles – e.g. field-based Market Access, field-based Medical, Key Account Management
Creating additional roles – e.g. Key Account Management, field-based territory P&L managers
Shifting resources across roles – e.g. reduction of sales reps, increase in field-based Medical, increase in Market Access
Shifting resources across roles – e.g. reduction of sales reps, increase in field-based Medical, increase in Market Access
Improving with current roles – e.g. systematic capability assessment, Corporate Training Academies
Improving with current roles – e.g. systematic capability assessment, Corporate Training Academies
Other (please specify)
Other (please specify) Source: FirstWord
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19.4%
www.firstwordpharma.com
Source: FirstWord
While there is a relatively broad spectrum of opinion towards the go-to-market strategies that pharma has implemented in recent years, how effective these have been and how these should develop in the near term future, there was a much sharper focus from poll respondents when they were asked to identify the healthcare stakeholder, which will most increase in importance to their company over the next two years. Fifty percent of respondents cited payers as the most important stakeholder, while a fifth of all respondents cited patients. Healthcare professionals garnered just over 10 percent of the vote while policy shapers and healthcare providers, such as hospitals, were cited by only 8 percent and 3 percent of those polled, respectively. Figure 5: Which healthcare stakeholders / institutions will increase most in importance for your company in the next 2 years?
Of the FirstWord audience members surveyed for this Perspectives Report, 31 percent hold corporate responsibilities on a global basis, 28 percent on a regional basis and 14 percent in one of the five largest EU markets. On a profit and loss item basis, 53 percent of respondents are accountable for revenues, 42 percent for functional expenses (i.e. market access, government affairs), 39 percent for marketing expenses and 31 percent for sales-related expenses. Figure 6: Which geographic markets are you responsible for? 2.8%
Global Region – e.g. Western Europe, EU, EMEA
11.1% 30.6%
8.3%
Multiple European countries – e.g. Nordics, BeNeLux Top 5 EU country – i.e. France, Germany, Italy, Spain, UK
13.9% 27.8%
5.6%
Other European countries Other (please specify)
2.8%
Not applicable
11.1% 2.8%
Source: FirstWord
19.4%
Figure 7: Which profit & loss (P&L) items are you held accountable for? 5.6% 5.6%
Revenues – e.g. product revenues, customer discounts
11.1%
8.3% 50.0%
22.2%
52.8%
41.7% 38.9%
Professionals (at individual level) – e.g. key opinion leaders, prescribers
30.6%
Providers – e.g. hospitals, specialised (ambulatory) centers Payers – e.g. national and/or regional, private Policy shapers – e.g. government, media, NGOs Pharmacy-services providers – e.g. pharmacy chains, home care providers Patients – e.g. patient associations, family members / relatives Other (please specify) Source: FirstWord
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www.firstwordpharma.com
Marketing expenses – e.g. Product Management, Customer Service / Call Centre Selling expenses – e.g. sales reps, Key Account Managers Functional expenses – e.g. Medical, Market Access, Government Affairs General & administrative expenses – e.g. Human Resources, Finance, Legal Other (please specify) Not applicable Source: FirstWord