New Commercial Realities – Part 2: Key stakeholders in the changing healthcare environment
pharmafile | September 23, 2010 | Feature | Sales and Marketing | Kinapse, White paper
Faced with a changing healthcare environment and the prospect of diminishing commercial returns, the pharmaceutical industry has recognised that traditional commercial models based on sales force arms races are no longer viable. In order to adapt to new commercial realities that require more complex decision-making processes and involve a greater number of stakeholders influencing at a range different levels, pharmaceutical companies must undertake a fundamental and systemic rethink of their commercial operations.
This article is part 2 of a 4-part series. Part 1 described the key drivers of the evolving pharmaceutical commercial landscape, and in this second part of the series we consider the key stakeholders in the changing healthcare environment.
The new commercial realities are driven by changing customer dynamics
The increasing importance of health economics in achieving market access is impacting customer dynamics in both Primary and Secondary care, shifting the emphasis from prescribers towards patients, payers and Health Technology Assessors (HTAs).
With access and reimbursement policies and protocols being formulated at national level, and managed and implemented by regional and local bodies, the role of prescribers will become more akin to that of gatekeeper, with activities constrained by prescription guidelines. In Germany for example, Sick Funds already publish positive lists, while in the UK the implementation of NICE guidance is soon expected to become mandatory. Meanwhile in Spain the definition of strict protocols according to disease type is shortly expected to be implemented at a regional level.
In principle this will enable a wider range of healthcare professionals such as nurses and pharmacists to adopt prescribing roles. For example, recent regulatory changes in the UK now allow independent prescribing nurses to prescribe medicines outside licensed indications.
Patients are also gaining greater influence in terms of access to and demand for medicines, through the growing power of patient groups and associations (see NICE decision reversal for Herceptin and other cancer drugs for terminally ill people; an online petition is currently been used to influence favourable NICE guidance for BMS’ and Novartis’ CML new drugs in the UK).The European Medicines Agency (EMEA) have recently released a reflection paper regarding the structured involvement of patients and consumers in the agency’s activities, following an initial report on the topic in March 2008.
These changing customer realities will have a significant impact on the future commercial capabilities required by the pharmaceutical industry. From our experience, these capabilities – some of which already exist, some which require reinforcing and others which need to be built from new – can be categorised into those that are customer-facing and those that are enabling:
Customer-facing
- Key account management for payers
- Key account management for providers
- Political lobbying
- Contracting and tendering
- Clinical education
- KOL management
- Patient engagement
Enabling
- Health economics
- Clinical trials and epidemiology studies
Table 2 summarises the relevance of each of these competencies for in the evolving stakeholder landscape.
For individual organisations, the specific mix and content of these capabilities will depend primarily on the nature of their business and the key stakeholders involved. Key considerations will include the emphasis on Primary vs. Secondary Care, therapy area and maturity of the product lifecycle.
In general, for brands with little potential for differentiation we view payers and national/regional and local authorities as the key decision makers in respect of cost management, alongside community healthcare providers (GPs, nurses and pharmacists) for service provision (including patient management and compliance). On the other hand, demonstration of value for specialist products will require engagement of a network of stakeholders by cross functional teams. Health economists will advise on pricing and reimbursement, provide input into the design of clinical trials for candidate molecules and support health authorities planning future expenditure by evaluating epidemiological data; Key Account Managers and Lobbyists will negotiate with payers and HTA agencies; and Therapy Areas/Disease specialists will support providers with a deep knowledge of how to manage patients throughout the disease lifecycle. Table 3 summarises the key differences in the capabilities involved in selling to Primary Care and Secondary Care.
The deployment and relative emphasis of these capabilities will also depend on the stage in the brand lifecycle. We have already highlighted the importance of early demonstration of value to provide payers with confidence of cost-effectiveness for new products. This might imply early involvement of payers and health authorities into development programmes. For example in December 2007, Novartis disclosed that it commissioned NICE to advise the design of a Phase III trial to measure the efficacy and cost-effectiveness of an experimental new drug; in 2008, GSK piloted the involvement of payers in selecting compounds to progress through its pipeline. Such initiatives are likely to be welcomed by HTAs such as NICE, which is calling on the industry to do more to work alongside them on cost-effectiveness. The European Innovative Medicines Initiatives (IMI) is also bringing together several pharmaceutical companies to collaborate on developing common approaches to diagnosis, treatment and ongoing management that delivers best efficiency and effectiveness for purchasers, with initial focus on areas of high need such as diabetes, neurodegenerative disease and cancer.
Risk sharing and patient access schemes are also likely to increase in popularity as a way to secure positive appraisals which might not be forthcoming on the basis of currently available evidence. The UK’s Medicines and Healthcare products Regulatory Agency (MHRA) is even beginning a public consultation on proposals to make certain new drugs available to patients before they are formally licensed, with a view to having such a scheme up and running by the end of 2010.
Once a brand reaches the market, the focus will shift from establishing confidence in value to establishing confidence in risk/benefit. Accumulated real world patient data can be used to generate evidence to support confidence in risk benefit whilst also providing insights that lead to expansion of initial product labels into new indications. Lifecycle management is therefore likely to involve a series of smaller launch waves as new approvals are staggered over time. Furthermore, as confidence in product value and benefits become established, sustained uptake will depend on adding further value through tools and services for patients and providers.
This article – part 2 of a 4-part series – has built upon the discussion of the key drivers of the evolving pharmaceutical commercial landscape in Part 1 and considered the key stakeholders in the changing healthcare environment. In the third article in the series we go on to discuss in detail the implications of this changing landscape for pharmaceutical commercial operations – with a particular emphasis on roles and organisational scale.
We have written this series of articles from a practical as well as a conceptual perspective, and would welcome comments, feedback and ongoing dialogue with all stakeholders to develop further thinking and pragmatic insights into the industry’s evolving commercial realities. The full series of articles is available as a complete White Paper or can be accessed via our website at www.kinapse.com.
About the Authors
Jean-Francois Delas is a Vice President at Kinapse Ltd. and leads the Marketing & Sales Consulting Practice.
E: jean-francois.delas@kinapse.com
Stephen Mayhew is a Manager in the Consulting Practice at Kinapse Ltd. He consults to the life sciences industry in valuation, deal-making and asset and portfolio management.
About Kinapse
Kinapse provides consulting and outsourcing services to the life sciences industries, globally.
Our mission statement is: ‘Collaborating with our clients to innovate for exceptional results’. Kinapse clients include many of the world’s leading pharmaceutical, biotechnology, medical device and specialty pharmaceutical companies, government organisations and life sciences service providers.
For more information please visit www.kinapse.com.
Related Content
Service Insight: Discovery metrics – creating the right balance
SERVICE INSIGHTMetrics can be powerful tools for driving performance in organisations and have proliferated in …
The Project Management Office – Accelerating Project Management Maturity
Success in the life sciences industry depends on allocation of scarce resource to the right …
Offshore outsourcing in Regulatory Affairs and Pharmacovigilance
Based on Kinapse’s direct experience, we explore the emerging environment for regulatory and pharmacovigilance offshore …
