The role of the rep is changing faster than ever. Encouraging your reps to think of your business as their business is a good strategy
By Rich Bavasso, Marketing Leader, Closed Loop Marketing
Pull, don’t push: Info delivery on an as-needed basis
Changes in the way the pharma industry goes to market and sells its products have been discussed for a decade, but there is now an extreme sense of urgency compounded by global stress. The demise of the sales rep that was once a prophesy is now a reality. Pharma is being forced to move to a new value proposition for a new leading stakeholder, the payor, and away from the traditional customer with whom they have over-invested to the point of deterrence.
Here’s the landscape:
• Many pharma companies clasp to the traditional model with a death grip, utilizing electronic sales and marketing tools to populate old channels. Perfuming the pig has lost its luster
• True innovation has been slow and patchy, often superficial, sometimes poorly implemented
• ROI is suddenly an important focus, but positive ROI measures are hard to find. Today’s customers are driven by value, outcomes, and systems that are designed to block branded Rx
• The focus will shift from a tactical, product-centric sales approach towards a more strategic risk share on patient outcomes mindset
• The range of products and services intended for the target audience will need to be segmented, immediately responsive, and ever-changing. Pharma will need to invest in systems to support this dynamic relationship with its key accounts
• Technology will play a part both in reaching stakeholders on their terms and frequency and on navigating the legislative landscape
• Successful organizations will implement a multi-channel approach to the marketplace, enabling different customers and stakeholders to interact with them via whichever channels are most convenient – whether these be social media and mHealth (mobile health), teleDetailing, eDetailing, combined with a streamlined sales organization. However, key to effective MCM strategies is relevant content targeted to stakeholder concerns
• Organizations that do not have appropriate sales management capability or that need additional tactical sales support will be able to draw on the strengths of independent and freelance contractors, with their emphasis on flexibility, agility, and core sales management aptitude
• There will be a continued scaling back of employed field forces and a re-imagination of the role of salespeople into more of a peer level key account manager or concierge
• The regulatory framework is a large drag on innovation in this area; for instance, the time taken to establish regulations pertaining to mHealth and mobile medical apps (MMAs) are reportedly delaying investment in this promising new channel to market. Fear of litigation trumps optimization of new technology
Some commentators are calling for the traditionally cautious pharma sector to adopt a more entrepreneurial ethos, particularly within its sales and marketing models, while continuing to fulfill its ever-burgeoning and complex global compliance obligations. This requires wide changes in culture, particularly among sales leadership, or even a complete rethink of the way that stakeholders – health care professionals (HCPs), patients, providers, payors and the industry – interact. What is needed is a trusted and transparent marketplace for all life sciences stakeholders.
A radically new approach
An idea that holds a lot of promise is an electronic marketplace which transforms reps into entrepreneurs in charge of their own micro-businesses, with success determined both by their expertise in key specialty areas and their proven ability to interact with HCPs. This new model sees the reps of today, whether directly employed, as part of CSO teams, or as independent micro businesses, joined by other appropriate individuals, such as nurses and pharmacists, in interacting as part of a modern online marketplace that also includes patients, HCPs and payors. Such a system would, of course, be tightly regulated to ensure compliance and adherence to relevant legislation. The lexicon will change. The “Sales Rep” of yesteryear will be replaced by an “Agent of Engagement.”
In an industry where resistance to change is encoded in its DNA, exactly when this revolution will happen, nobody is sure. Certainly, the industry landscape will be transformed by the end of the decade.
It’s an electronic marketplace which transforms reps into entrepreneurs in charge of their own micro-businesses, with success determined both by their expertise in key specialty areas and their proven ability to interact with HCPs
The tipping point will occur when a critical mass of organizations and stakeholders respond to the realities of the new landscape by taking a more strategic approach to healthcare collaboration. In part, this will be a response to a more complex marketplace, dominated less by “big pharma” and “blockbuster” products, and with more players operating in a wider range of niches. It will be accelerated by the penetration of technology throughout the system, the advent of radical new solutions, which may or may not gain traction, and successful incorporation within the regulatory framework.
Social media, mHealth and Virtual Private Social Networks
Social media is showing promise in B2C (business to consumer) and some B2B (business to business) sectors as a cost-efficient and highly segment targeted marketing sales channel. However, life sciences companies are cautious, constrained by a regulation and highly attuned to the threat of litigation. For instance, many healthcare companies spend millions of dollars monitoring social media only to be told by their lawyers that they cannot act on the insights gained.
Nonetheless, healthcare organizations need social media platforms as a way of interacting with stakeholders: patients, doctors, providers (hospitals and clinics) and payors. Our mHealth initiatives can span many different channels and levels of patient and physician accessibility and potentially offer the opportunity to provide users with faster, easier access to treatment and medical information. Because of this scope, they are subject to scrutiny and oversight by the regulatory authorities which can act as a drag on innovation. Pharma companies in particular are hesitant to invest in medical app development because of pending FDA regulations. The question remains as to whether these apps need to be approved by the FDA as medical devices. The FDA issued draft guidance in July 2011 but has been slow to finalize protocols. Meanwhile, app creators have been hesitant to spend too many resources on development in the face of unclear regulations.
Why is this relevant to pharma sales and marketing? For two reasons: it emphasizes how technological innovation in pharma can be a protracted process, and it highlights the importance of a clear regulatory environment for any sales and marketing initiative that seeks to influence patient choices. Nevertheless, it remains a fruitful avenue for pharma companies to explore for the future.
In this environment, HCPs are empowered to control who, when, and where an interaction is delivered.
I think that using electronic channels to push information to doctors is the wrong approach. The ROI is poor; the ROI was always poor. However, this didn’t matter so much when the scale of potential revenues were such that ROI was almost irrelevant.
I advocate a shift from “pushing” information out to stakeholders towards a “pull” approach which facilitates the supply of high-quality information at the time that the prescriber, patient or payor needs it. Pharma needs to be poised to respond rapidly and with relevant content, products, and services. The doctor wants to understand Which is the best medicine for my patient at this particular time? Pharma has always been good at educating. Harnessing this traditional strength in educating, and incorporating it in a new model of “radical collaboration,” switches the polarity of pharma sales and marketing from a push to a pull approach. One such model uses digital and social media utilities to advance the outsourced sales model one step further in a new “virtual marketplace.” Agents of engagement act on a self-employed basis under contract to one or more companies at a time. A so-called Virtual Private Social Network enables healthcare stakeholders in the value chain to collaborate on critical business transactions in a private and compliant social network.
The initiative can best be compared to the well known platforms of LinkedIn, Amazon and eBay, with the additional necessary component of providing a content-compliant management system, CRM, CLM, and social utilities to support its network for the life sciences sector. Participants will include a number of groups: HCPs, payors, patient advocates, pharma companies, medical device and supply firms, and “franchise agents.”
As the technology learns various stakeholder behaviors, the opportunity engine will not wait for a stakeholder to post a desired transaction but will post the opportunity to the party that has repeatedly made unanswered inquiries about a disease state or product.
In this new model, agents with demonstrable access to HCPs and existing good relationships with prescribers would be able to represent several brands and might specialize in various clinical areas. Even more radically, the agents might not necessarily even be drawn from the ranks of the traditional sales community, but could be pharmacists or recruited from the ranks of the professions allied to medicine.
The selection of representatives to execute calls is based upon proven access to the desired customer. In this environment, HCPs are also empowered to control who, when, and where an interaction is delivered.
One major benefit for pharma companies will be the ability to blend and continually adjust their mix of sales and marketing channels according to the wishes of the HCPs. This is a disruptive approach to evolving the pharma commercial model: further advantages for firms include taking the field force “off balance sheet” while organizations also only pay for successful transactions as defined by the sponsor of the desired transaction.
This is an opportunity for pharma to pay only for optimal execution of activities in the marketplace. A rep that tries to make a call on a physician per the posted opportunity but is unsuccessful would not be paid. Some pharma customers are offering graduated incentive payments to reflect the varying levels of activity. Not all reps will like this system. But those that are entrepreneurial stand to create franchises that will yield far more income than a typical annual salary.
Further research needs to be undertaken to confirm that professionals such as pharmacists would be allowed to undertake a dual role to include selling to doctors and other HCPs. The definition of “rep” will clearly be challenged in this model.
I see recruits undertaking several stages of training, which would largely be carried out remotely:
• Generic compliance training pertinent to the country of commerce
• Disease state training
• Manufacturer provided product/ messaging training
So what makes this approach difference from other models? It is entirely a “pull” model. HCPs request information and select it from the most appropriate and trusted sources (according to a ratings scheme). At the same time, the initiative transforms the commercial model, both from the perspective that all software for eLearning (LMS), CRM, CLM, eDetailing, eSampling, and reporting is provided at no cost to the pharma company or designated rep/agent and by converting traditional reps into entrepreneurs responsible for running their own businesses, thus removing the overhead to pharma for items like auto, expenses, benefits. The agent negotiates directly with pharma to determine the fee for the transaction. There are many different types of transactions ranging from the traditional, eg, live and remote detailing, to whatever legally compliant request is being made by the HCP, like desire to enroll patients in a clinical trial. Response from pharma has varied not so much in terms of “if ” this model can deliver on the value it proposes but “how.” Large pharma see it as a way to reduce costs and develop better relationships with customers based on HCP expressed preferences. Small to mid-sized pharma see it as a way to expand their footprint on the same scale of large pharma by being able to “rent” an optimal resource to meet a specific need for a limited time frame.
The need for a new model is now. Its time has come. •
Rich Bavasso is one of the pioneers in the use of digital media, devices and the web as tools to support pharmaceutical sales and marketing strategies and tactics. He served as CEO of Pharmedica Holdings, LLC, one of the world’s largest med ed companies, and then founded Exploria SPS, LLC, now the market leader for Closed Loop Marketing (CLM). In 2012 he founded RIMEDIO, Inc. in partnership with global consulting concern Capgemini. Pharma-Voice magazine has named him one of the top 100 most influential people in pharma.