Customer Focus in Pharma: the new commercial model 2/2.

  • Pharma Costs of market approach in control
  • From pharma mass detailing to Key Customer Focus
  • Focus as key to pharma success
  • Intervention points to create a focused commercial cycle for pharma
  • What tools to use to detail the pharma commercial cycle

A chalkboard scheme to sketch the new pharma market approach

Following up the presentation of our project with a pharma company in the Netherlands on How Pharma can enhance its impact and reduce costs of marketing, we present our chalkboard sketch to construe a new commercial model for a pharmaceutical market approach.
In review of our success we began to reflect and study the basic issues of our approach: an approach that would guide the decision makers in the company to construe the right set of activities to focus on accounts with the best chances of success, engage with its decision makers on drug prescription effectively and provide added value to their medicines so as to help care providers to help their patients better.

Strategic departure

The model starts with the acknowledgement that there is not one right way for approaching all different markets to pharma with a standard approach. Preference schemes for drug selection, local protocols, reimbursement schemes, actual health care systems’ conditions, drug prices, different stakeholders and the very portfolio of the company, can only lead to the conclusion that differentiation should be the name of the game. (see here). The model needs to accommodate for these different conditions.

We will also depart from the acknowledgement that the company’s choice for its market position might be on either one of both ends of the strategic dimension for pharmaceutical companies: ¨towards the position of being a producer of (generic) drugs, not relating to its use and application in therapies (other than just the method of administering the medicine), or to the opposite side, as in being a partner to the provision of health care instead.
To a generic producer of drugs, more and more markets seem to give only temporarily opportunity to sell and deliver (generic) drugs at a relatively low price, until there is a new supplier that has to its advantage a still cheaper price and/or a USP in its supply chain. No wonder that classic generic companies turn to branded generics to avoid the commodity trap.
As a partner in health care instead, the company might choose to work together with care providers and patients to figure out and develop, or even co-create best practices for therapy, integrate all aspects of the care process, like informing patients, help to co-create care paths, give support to the practice of shared decision making, instruction and guidance in therapy, foster on and offline communication regarding questions by patients, facilitate communication between care providers, adjust therapy in care of daily monitoring data, etc. It is no doubt that because of its drug research and development activities, pharma has several sorts of expertise and data that will contribute to care of patients. In the frame of developing personal medicine, more of this can be expected, and pharma should get ready for that.
By the ongoing development in emerging, mature and advanced markets, pharma will be challenged to the sustainability of its role to health care. It might even need to choose between either creation of new drugs or marketing and supply of medication to care providers and patients. Is one company capable enough for both the creation and marketing of drugs and be able to lead these to effective results?

Yet, the new commercial model to pharma’s market approach needs to accommodate for both strategic intentions. A positive development of the pharma company to either role is related to characteristics of the disease and preconditions of specific markets: regulations, reimbursement schemes and buyer systems, but also drug therapies, local conditions of care provision and contexts of care to patients, etc. ¨In any case, the roadmap for pharma’s development of its role in care will be divers: inspired by actual strategy, diseases covered, its portfolio, general (country and/or area bounded) market conditions and local contexts.” ¹


It is the intention of the model to guide the pharma decision maker to an optimal market approach for specific market conditions, to bridge strategic global intentions to local performance activities and to define the actions to realize pharmaceutical intentions in specific market contexts and health care system developments. ¨By now, every pharmaceutical company has come to acknowledge the large differences between regional markets, between countries, and also, between regions within countries, like in Spain and France in Europe, and like differences in urban and rural regions in Russia. Moreover, different paces in healthcare system developments within a country will give rise to changing local characteristics of care, be it different patterns of cooperation between care providers, the ICT systems in use, medical protocols and diverse arrangements in actual care processes. It is right isn’t it, that despite all standards of medical protocols, the actual care given is different. And still, at this point, I don’t speak yet about differences in perception and personal experiences of patients.

The model needs to enable different implementation tactics and activities, effective and efficient in its proper contexts. As local care characteristics and Rx conditions differ, specific approaches need to be defined in line with these and must enable developments from that point onwards. Effectiveness of standard detailing in promotion will only (still) be optimal in certain niche markets and will turn out to be bluntly ineffective when adopted as the dominant market promotion tool everywhere.

The model will also suggest use of new market approaches, like on-line information, education activities, social media, mobile applications, multichannel management, and data registering routines through ICT support systems. It will also suggest directions for its features, data and outcomes. Current programs like CRM, CLM, market access, KAM, Customer excellence, multichannel management and other ideas packed in modern pharmaceutical industry’s sales and marketing procedures, might so be aligned to build meaningful information to their users, instead of presenting a vast but fragmented overload of data.
The model will guide the decision maker to effective use when deemed feasible and appropriate in contexts of specific and different markets.

What are the criteria for the new commercial model of pharma?

In short:

The draft of the pharma commercial model

With these criteria in mind, we started the transformation of our experiences into a preliminary sketch of the pharma commercial model with a general draft of the commercial cycle. See board #1.
The core elements that define the market need to lead the market approach: starting from profiling the market conditions at the one side, on to selection and engagement with customers/accounts at the other. In this draft it is easy to depict how standard detailing, even to potential customers, would turn out raising costs with doubtful return, whereas increased focus on defined and selected customers would decline costs and raise benefits.

Focus priority

As you can see in the blackboard sketch, standard detailing to doctors moves away from specific engagement with Rx decision makers in networks around them, whereas focused approaches can pick up on specific information coming from account profiles.² We have good experiences with profiling activities done by the company’s proper sales forces. The actual profiling variables we need to know do depend on the company’s strategy and portfolio. A standard set of general information will fall short of specific data needed. This profiling will be prioritized to the Decision Making Units on Rx, related to the country’s policy on development of decision making on prescription of drugs, possibly by preference schemes and/or reimbursement ruling. If so, what use would it have to just detail to individual doctors while they are being influenced by networks around them. See board #2b.

Focus: the main stream business approach?

One can define focus in terms of several dimensions and intentions. Focus is the instrument to tune in to the conditions the market presents to the business. Actual focus is made up by a cycle of analysis, evaluating, selecting, planning, management and fulfillment, turning into evaluation again. See board #3.
This is not only necessary to establish the results of actions, but also to keep track of changes in market conditions that occur along the way. In the Netherlands, we have had to perform two cycles of these per year due to the dynamic nature of the transformation phase of the Dutch health care system. Also, because of this, we rather created quick feedback to see how our marketing efforts showed results in the desired direction. But, to enable one to “see” the sometimes really subtle effects, one needs to know where to look at.

What are the points of intervention to create focus?

Segmentation and targeting of accounts for the market approach is usually done exclusively on individual physicians’ potential, ever since the publication of McKinsey’s “Making more of pharma’s sales forces” (2002); for certain an important variable to know one’s customer, but surely not the only one. See board #4.
When a pharma company wants to play an active role to support medication in care, to add real value to its therapy, these are the variables to adapt to: general market conditions, Rx, reimbursement and account conditions, but surely too conditions related with patients, their care and therapy.
Systems’ differences between several types of care, like emergency care, hospital, chronic, family, longterm and elderly care, create contexts of medication that will impact the use and effects of therapy. These will for instance influence the relatively early discontinuation of taking medicines by patients. Mind the actual interest for therapy compliance, where one looks to remind patients of their medication, whereas the experiences of issues intervening individual compliance will be more than just that. The evolving use of national, regional and local protocols is a convincing example too. It means that for decisions regarding the market approach, one would like at least to check these conditions that might seriously influence the selection, prescription and use of medication. Furthermore, one needs to know these varying conditions not only as for their influence on medication decisions, but also to analyze them on opportunities to create support for care that might also improve the use of one’s proper medications. In our experiences, just going through them, to inspect opportunities for service, often results in surprised reactions like: “..that we did not see this before!”

What tools to use?

One needs to know how to convert these starting points into hands on activities. In Board #5 we specify the commonly known programs to market approach that are currently used by pharma companies. However, as any program has some promise of a better reach out to customers, the question is whether a sum of al these do bring about more effect. As a decision maker, you want to prohibit ineffective (current) routines to continue. In fact, one wants to free internal resources for change into a desired direction.
Here, we take every program in fact as a dimension on which a decision to focus can either be defined towards desired activities, or better be left aside. Going through a process of developing and building the configuration of market activities cycle by cycle, we were able to decide every year about the growth of account focused activities, in line with the company’s strategy. We did so on grounds of commercial effectiveness, for the definition and development of support activities and to limit detailing activities to an optimum of impact to leave out those that would have nearly no chance whatsoever of success. Every time the demand to increase focus and intensify the engagement with customer accounts, did bring about new activities in the market approach. Because of the recurrent cycles of review and planning we were able to design the configuration activities in an integrative sense, so as to build on effectiveness.

Examples of variety in use of market approach programs

Specific market conditions will indicate varied response opportunities on which to decide about extension or focus of market approach programs. The following examples give some insight into how one may reflect on market conditions and evaluate the programs that are used to create the business. It would demand too much space here to go through them extensively. Further on we turn to the new tools that we had to develop to accommodate our demands for information and action to create customer focus for better care and return of business in specific market contexts.

What new tools?

In line with the development of the new approach, we needed to develop several tools, that were not available before. These were developed successfully:


We became quickly aware that implementation of a new market approach is not a process of installment but a process of continuous change and development. That makes it more difficult to sustain and lead the desired changes. But beware, the process is not a matter of checklists of activities that need to be ticked subsequently. The desired changes may demand change of attitude, new skills, change of internal procedures, installment of new functions, and the like. The more the chosen strategy is further away from classic, standardized detailing, the more structural the changes will be. So it is wise to assure step by step development to create a cascade of subsequent steps over cycles of implementation.
In a commercial perspective it would mean to “pick the lowest hanging fruits” first. Next further development needs to create focus to effective actions and addded value to selected accounts. If so, more information about new variables will be needed. The better the profiling of conditions is done, the more effective early development steps can be defined, also in terms of costs and energy.

Change and development of the market approach cannot be done without the right understanding and abilities of people to perform it. Certainly not when understanding of new areas of concern are at stake, like physician patient interaction and communication.
Demanded new competencies are not to be expected overnight, nor to be communicated and acquired by technology only. It might even imply selection of people with the right attitudes and capabilities. A developmental approach, that allows for genuine learning and development of the part of pharma’s personnel, and management too, will allow for growth or selection of personnel.

Hence, applying this commercial model to pharma’s market approach is about change and decision making, about focus and added value. Added value to care upon the medication to use in therapy. As the trends in health care point to development of personal care and of concordance between providers and patients, we will see more parties to care cooperatively in the process. Pharma has to decide on whether and how to develop its position to this development. So in essence, the application is about change and innovation to the organization, not just of implementing yet another new program. It will be a roadmap with a moving end. One must decide in the context of system developments of care and regulations. So it will be best to learn as an organization how change can be made permanent to it. There are several ways to do so. Every market and affiliate will have its own best and optimal way for effectiveness and efficiency. Implementing global strategies are about differentiation.

To conclude, a reflection to share

You might have already detected that the model has been used by us to guide a pharma company to close cooperation with accounts to help them improve their patient care. So, that is more to the strategic end of adding value to escape the commodity trap. As indicated, it proved to be the right strategic choice.
Preferences or even necessity for the opposite might also be realistic: it will lead however to more focus for decision makers to buying of drugs in hospitals, health insurance, governmental, HMO-like or wholesale organizations. These will decide on criteria of costs, not so much on care. It might need care providers and patients organizations to speak out for their interests.
As indicated too, cost effectiveness and USP’s in supply chain perspective might help. Even then, examples of direct supply to patients demonstrate pharma’s relationship with patient care: in tailor made patient packaging and reminders of medication. It will take time for decision makers to acknowledge that the ‘cheapest’ options will turn out to be expensive in the long run.
The more substantial roadmap for development will be grounded in health and pharma related economic considerations about medication, regarding prescription and therapy routines with it. There’s no alternative I think, to integrative perspectives to care. This model will help pharma to grow as a respected partner to care.


¹Regarding literature on Pharma’s new business model, commercial model, sales model, etc. a grand list of publications is too long to present here. Drop me a line to have it sent to you, if you so wish;
²See for an example of the discussion about the effectiveness of standard detailing here;
³ Bryan Lawson, How designers think, the design process demystified, Oxford 2005.
Also: Donald, A, Schön, The reflective practitioner, how professionals think in action. Aldershot, England 1998.





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