Market access and the new NHS in England
pharmafile | August 25, 2011 | Feature | Sales and Marketing | NHS, NHS reforms
The National Health Service in England is undergoing massive structural and financial upheaval, and pharma marketers will be rightly concerned by the changes.
Everyone in pharma wants to know how the reforms will affect the industry’s market access in the medium and long- term, but the scale and complexity of change means there are no easy answers.
The pharma industry nevertheless needs to keep looking ahead to plan and manage its market access strategies.
“We live our lives forwards and understand them backwards” – so said Søren Kierkegaard the Danish philosopher.
This applies very much to strategic planning – we can’t be sure what the future holds, but we can use some solid planning techniques to help us deal with change and to run our businesses successfully.
NHS reforms – the final changes
After a year of confusion, it looks like the shape of the new reformed NHS is coming into focus. Let’s briefly re-cap the story so far: In July 2010, the government published its NHS White Paper, Equity and Excellence: Liberating the NHS. It set out health secretary Andrew Lansley’s vision for a new improved NHS, proposing the passing of power to new GP consortia, which would oversee budgets and commission services.
Foundation trust watchdog Monitor would be re-purposed as a body overseeing and encouraging competition within the service, with a much greater role for private and social enterprise also proposed.
However, resistance to the reforms steadily grew, forcing Lansley to announce in April an eight-week listening exercise to address the most contentious elements of the reforms.
The Future Forum published its recommendations on 13 June, and the government accepted virtually all of the significant changes to the reforms.
These include the addition of a nurse or hospital doctor and two lay members to the consortia in order to provide a broader clinical perspective, and a watering down of the drive towards competition in favour of greater emphasis on collaboration and integrated care.
A new timetable
Another significant change is to the timetable for change – the plan had been for a ‘big bang’ on 1 April 2013, but now local consortia will only take control when they are judged to be ready.
Some consortia, to be re-dubbed Clinical Commissioning Groups – are already operating in shadow form, whilst some are still in the planning stages.
The government states that by April 2013, GP practices will be members of either an authorised clinical commissioning group, or a ‘shadow’ commissioning group, i.e. one that is legally established but operating only in shadow form, with the NHS Commissioning Board commissioning on its behalf.
It goes on to say: “Clinical commissioning groups that are ready and willing by April 2013 could be authorised to take on full budgetary responsibility. Some will only be authorised in part. Others will only be established in shadow form…where a clinical commissioning group is not able to take on some or all aspects of commissioning, the local arms of the NHS Commissioning Board will commission on its behalf.”
So how will this affect pharma?
This phased introduction of consortia will inevitably mean variability and diversity in approaches from region to region. The decision-making process is made more complex by introducing the local arms of the NHS Commissioning Board into the mix.
These will have a greater or lesser part to play in decision-making, depending on the readiness of each Commissioning Group to take on full budget responsibility.
For many years, with a single ‘traditional customer’, pharma didn’t have the challenges faced by other industries in overcoming the complex decision-making processes in their customer groups.
A shift in the balance of power and the creation of new structures and roles with significant influence has meant that pharma has had to confront the Decision- Making Unit (DMU) in its full glory.
As we know, just keeping track of the web of sophisticated decision-makers, influences, gatekeepers and guides is a challenge in itself that requires a very different skill base to that of the traditional sales representative. The industry is well on its way to developing a skill base capable of grappling with these challenges.
Most pharma organisations have now adopted a Key Account Management approach in one form or another, but there is of course still work to do.
In order to be effective, teams need local accountability and empowerment, which whilst increasing responsiveness to diversity makes maintaining appropriate levels of consistency more difficult.
The three challenges for pharma
1) Ensuring consistency in a variable environment
Marketers generally want to ensure consistency of approach, while the practical differences between one customer and the next means initiatives need to be highly tailored in order to manage the DMU at local level.
The devolution of decision-making can mean that consistency is hard to achieve, and also hard to measure. What is needed is clarity on what is flexible and what is not. Then local implementation can fit local need while being true to the core marketing tenet.
2) Using your resources appropriately
Each locality will have its own specific priorities, the nature and extent of resources required for pharma to engage in joint-working, service redesign or other initiatives will vary.
To define the level and nature of activity needed to operate successfully in a given locality, can only be estimated by applying a clear model that defines its characteristics, similarities and differences to others.
3) Identifying and sharing best practices
The traditional process of analysing the overall sales picture may identify areas with the best market share or growth progression, but does not uncover the underlying success factors.
To identify the best initiatives for a given locality, it is important to take account of the variances between localities and the specific circumstances that underpin success.
Having achieved this, best practices can be applied sensibly.
Achieving success
To achieve good alignment of strategy, effective execution and consistency, it is necessary first to apply a systematic process that enables localities to be characterised using meaningful attributes.
Only once this has been achieved, is it possible to segment accounts appropriately and direct activity accordingly.
Specific activity for each segment must then be applied with a clear understanding of the stakeholders within the local DMU and their specific needs.
Once the local environment has been modelled and we have developed a clear understanding of the drivers that apply in each locality, it is also possible to agree the root causes of high performance and to replicate them elsewhere.
This approach can then develop high impact programmes that are applicable across larger geographies.
We invariably overestimate the short-term impact of change and underestimate the long-term, and are now grappling with the long-term consequences of changes that first began in our markets over twenty years ago.
Whilst strategic planning is not unduly hampered even by the kind of change that we are encountering, it is planning for successful execution that remains the key difference between the companies that will do well, and the rest.
Jonathan Dancer is managing partner at The MSI Consultancy. He can be contacted at jdancer@msi.co.uk
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