Healthy Skepticism Library item: 12345

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Publication type: news

Key account management mission critical for pharma in 2008
eyeforpharma.com 2008 Jan 9
http://social.eyeforpharma.com/node/1827

Full text:

eyeforpharma editor Lisa Roner recently caught up with David Wright, director and senior partner at Imonic, to ask him about Key Account Management trends for pharma in 2008. Wright will be leading a one-day workshop on April 1, 2008 on how to develop and implement successful Key Account Management strategies for enhanced customer access, higher-quality customer engagements and an increase in sales success just prior to eyeforpharma’s 6th annual Sales Force Effectiveness Europe 2008 congress in Barcelona, April 2-4.

eyeforpharma: Why is key account management (KAM) so important for pharma now?

Wright: The common situation affecting all of Europe is the growing significance of healthcare costs – with people living longer, etc. This is driving a heightened political sensitivity, so healthcare is becoming much more important to voters and much more a part of any Western economy. At a top level, that’s bringing an increased desire for both performance and value for money improvement. We’re seeing this whole aspect of more private/public partnerships and a greater drive for value for money a lot in governments in the UK and now with many European governments, too.

So then at a national level, services are reorganizing for these healthcare treatments based primarily on outcomes – shifting much more to buying on best results and also buying for prevention, as well as cure. Another big thing is trying to permeate down ownership for results – right down the line, across the healthcare organizations, through community practices and right down to patients – so everyone has responsibility for healthcare.

eyeforpharma: What do these changes mean for KAM?

Wright: Largely, if you are a public health organization, if you want results and value, your complexity of buying increases – and we’ve seen that with the breakup of the health authority organization and with things like formulary committees with greater business impact, clinical committees, buying clusters and practice-based commissioning. The end result has meant that buying complexity has increased and, therefore so must selling sophistication to align with that.

Currently, there is a “misalignment” in most of pharma with the simple coverage model that’s been applied and that needs to change to accommodate the more organized buyers and the barriers they’ve now put up in the buying process. Misalignment means the buyer isn’t getting value from sellers’ continued “detailing” attempts that do not take into consideration a health professional’s local and individual needs. Reps are falling victim to this misalignment and are being shut out as access becomes increasingly more difficult. It’s like trying to sell lawnmowers to people in apartments. They simply don’t know their customer’s organization and processes well enough to appreciate their priorities and needs.

eyeforpharma: Is KAM being successfully applied in pharma?

Wright: There are some excellent early examples of real KAM success. One example is called the Happy Hearts project, in which six drug companies and the Nottingham Primary Care Trust (PCT) partnered to improve patient care in heart disease, meeting the PCT’s objectives around prevention and health equalities. From a drug company perspective, the project effectively expands market size, because they will find more cases of early heart issues and be prescribing for them. Treatment earlier for prevention also gains valuable data about success impacts for those drug companies.

In another example, Novartis is working with NICE to jointly do a study of cost effectiveness for a new drug. NICE gets new ideas, approaches and a process to assess the cost effectiveness of a new drug. Novartis gets data, plus insight and influence into NICE’s decision making process (they help them design it!!), which they can apply to other drugs so that they can start to forge a lead in health economic attractiveness of their drugs and likely cost effectiveness.

eyeforpharma: What should pharma be doing to prepare for key account management?

Wright: Currently, as margins are coming under increasing pressure, pharma companies are shedding sales staff. Yet there appears to be a reluctance to move away from the siloed departments pharma has been organized in. There is a big need in pharma to address their structures more aggressively and to understand what prevents them (internally) from taking a customer-centric approach and what stands in the way of a coordinated and tailored message to suit the local health economy.

Identifying where the pharmacos have these organizational barriers and knocking them down will result in greater convergence of sales, marketing and business intelligence. Another good tip for large pharmas is to learn from small pharmas who’ve been able to start with KAM from scratch and therefore have simpler and more amalgamated structures. Many are achieving good success.

eyeforpharma: What can pharma learn from other industries using KAM strategies?

Wright: There are a myriad of other sectors that could be beneficial to look at, including utilities and facilities management.

The key points are the closer you intelligently get to customers, the greater the value you can deliver and the more you move toward locking in the client. So a big thing pharma can learn from other sectors where KAM is much more mature, is that they can get more budgetable long-term business if they package the sort of deals which make it difficult for the customer to go elsewhere.

For pharma, that means providing bundled drugs and services – some of it through partnerships with other specialists. Particularly if you haven’t got the latest blockbuster drug, you may have to get into this space. A good way to do that is once you understand the customers’ needs well, take your product and start a ripple effect outward to look at peripheral services around your drug. For some treatments, it might be a matter of reducing or removing waste, or recycling or helping measure or test results, for others it might mean collaborating with a ‘sister drug’ company to provide a more complete treatment solution.

eyeforpharma: How can pharma leverage key account management to its advantage?

Wright: The bottom line is that pharma must think about solutions –it’s much more of an up-front effort for longer-term consistent rewards. You have to understand your customer well to achieve alignment – how they make buying decisions, who’s involved, who influences those involved, the objectives likely to influence decisions and how and when those objectives are measured.

KAM’s not really rocket science, but if you add the plethora of different decision makers in terms of clinical areas and influencers involved – business decision makers, therapeutic area decision makers, decision makers by health discipline. – you cannot achieve this coverage through one person, no matter how super-human an Account Manager – it will always be a team approach. Pharma’s generally are well equipped with these specialist skills but they don’t pull them together holistically very well. I appreciate when you add the mix of health professionals you need to touch and then overlay geographic complexities, it all becomes quite difficult to get this total view of the customer and one that will enable you to get the best sales outcome.

Pharma needs to structure internally to coordinate these resources well to pull feedback and gain customer knowledge. This is where the account planning process comes in to link pharma strategy and objectives with the customer and unfold the myriad of opportunity the new public healthcare organizations are presenting.