Mind the gap

pharmafile | October 20, 2003 | Feature | Sales and Marketing |  NHS, healthcare, industry relations 

There is a disconnection between what primary care organisation influencers want from a relationship with the pharma industry, and what they actually get. New research by VIA International highlights the mismatch between the needs of PCOs and the way pharma companies handle them.

PCOs want to build strategic relationships with industry

The survey found that the vast majority of PCOs want to develop deep, long-term relationships with pharma companies but that the majority of current relationships are perceived as tactical and tailored only to fulfilling the pharma company's marketing objectives. VIA has defined four levels of pharma company/PCO relationship based on different levels of alignment, which can be summarised as follows:

  • Traditional information provision (TIP): pharma is focused on giving the PCO information about its products.
  • Off-the-shelf investment (OSI): pharma provides access to additional information and services defined by the company to meet its own objectives.
  • Bespoke investment (BI): pharma tailors additional information and services to the PCO's objectives and priorities and to address local health needs.
  • Long-term alignment (LTA): pharma works with the PCO to plan investments over more than a year to help the PCO meet its local objectives and priorities.

PCO decision-makers were asked to assess the level of relationship held with each of the account managers they see. The results revealed that the majority of relationships (58%) are tactical and confrontational (TIP or OSI) where information and services are defined by the pharma company in terms of their own objectives as opposed to the PCO's needs.

Advertisement

Despite this situation, 87% of respondents want to build more strategic, collaborative partnerships (BI and LTA levels) with account managers. These relationships are valued by PCOs as investments and requirements can be planned over an extended period of time to help meet targets and local objectives.

Through work within other industries, VIA has seen increasing customer demands for strategic relationships with manufacturers. This is true even in the cut-throat world of retail, where buyers have traditionally been aggressive in their demands for product and price. Although some retailers retain a tactical buy/sell focus, many are migrating their relationships with suppliers towards the collaborative end of the spectrum, and fast. It appears likely that this trend will be replicated in the healthcare sector.

Questions to ask yourself: How are your account managers perceived? How do PCOs rate the information and services you provide? Do your account managers have the capability, skill set and support to deliver a strategic relationship?

PCOs will develop a limited number of strategic partnerships

In retail, relationships are emerging with an increasing emphasis on joint working and planning rather than negotiation of product price and supply. Joint working is perceived to give significant benefits, but also takes more time and effort. Consequently, retailers are developing such strategic relationships with a limited number of suppliers only, possibly five to six across all categories.

Likewise, as strategic partnerships develop between PCOs and pharma companies, it is likely that PCOs will focus on a limited number of key partners across all therapy areas. PCOs will want to work in partnership with companies who can add value and partner with them to improve the health of the local population.

Although the survey indicates a desire for stronger partnerships, individual PCOs and pharma companies must decide what is most appropriate for the healthcare market and their vision for joint working. For example, some PCOs will wish to keep the industry as a whole at arms length, using pharma advisors as gatekeepers limiting their interactions and discussions to the level of product, cost and fit with disease management guidelines. Others will look to develop true win-win-win relationships with real benefits to the pharma company, PCO and the patient.

Questions to ask yourself: Are you seen as offering a strategic solution? Do PCOs value your product and service offerings? Whether you know it or not each pharma company has a reputation: what is yours?

Pharma companies need to prioritise their investments

It is not possible, appropriate or even beneficial to work with all PCOs at the more collaborative levels. However, pharma companies need to be strongly positioned to be on a PCO's shortlist of key partners or risk being classed as 'also-rans' and given minimal partnership and access opportunities.

Again, there are lessons to be learned from other industries. Most suppliers concur with the 80/20 rule (that is, 80% of their profits come from their top 20% of customers). A smart manufacturer not only targets their efforts and offers on this top segment, but also disinvests in the bottom customer quartile (who may focus on item and price, tend to buy only when products are discounted and often cost the manufacturer money to sell to).

In primary care, by recognising the type of account you are dealing with, you can target resources and offers appropriately. A tactical partner will require less investment to meet its needs than a strategic partner. Similarly, PCO segments with low sales or low potential for sales should be given less focus and attention.

Questions to ask yourself: Do you know how much it costs for you to sell to PCOs? Can you classify PCOs on criteria beyond sales volume and market share? And do you have a clear process by which to prioritise your investments?

PCO priorities are not fully supported by the industry

PCOs have many important challenges and very clear priorities. However, the survey shows that the level of support they receive from the industry for their top priorities falls short of meeting their needs.

VIA asked respondents to rate eight areas of concern in terms of their importance to the PCO and the level of support they receive for each from the industry. This information is confidential, but included areas of concern such as the implementation of NICE guidelines. A clear disparity emerged between the four areas rated as being most important to the PCO (which are significantly under-supported compared with the level of priority) and the four lesser priorities (which, in contrast, are over-supported).

This highlights a common issue. Company effort and resource is often focused on areas of traditional strength and perceived need (and possibly low cost), such as the development of training and educational programmes, and not necessarily on an offering that meets the customer's key priorities.

Questions to ask yourself: Are you offering the PCO services that address their priorities? Have you considered how you can develop a product and service proposition that is truly valued? And that can bring a return from the customer?

Conclusion

As PCOs become more established and gain experience of working with the industry, levels of trust will increase and they will move to work in strategic partnership with select companies. However, PCOs hate the hard sell that they get from many suppliers. They want pharma companies to listen to their specific needs, understand their issues and to give them good, long-term information on new drug launches so that they can budget effectively.

PCOs are also under huge and increasing pressure to meet targets. There is a realisation that they need the industry to help them hit these targets. With this realisation comes the recognition that they need to develop relationships that offer benefits not only to themselves, but also to their pharma partners. To make the most of these opportunities, pharma companies need to:

  • prioritise the PCOs on which to focus time and resource for the greatest influence and return
  • identify the level at which individual PCOs would like to work
  • develop a compelling offer and value proposition for PCOs
  • develop a flexible account management process that enables account managers to work effectively across the spectrum of accounts.

Related Content

A community-first future: which pathways will get us there?

In the final Gateway to Local Adoption article of 2025, Visions4Health caught up with Julian …

The Pharma Files: with Dr Ewen Cameron, Chief Executive of West Suffolk NHS Foundation Trust

Pharmafile chats with Dr Ewen Cameron, Chief Executive of West Suffolk NHS Foundation Trust, about …

Is this an Oppenheimer moment for the life sciences industry?

By Sabina Syed, Managing Director at Visions4Health In the history of science, few initiatives demonstrate …

The Gateway to Local Adoption Series

Latest content