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Healthy Skepticism Library item: 14820

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.


Publication type: news

Roner L.
SFE in Australia – a conversation with Paul Hobbs 2008 Dec 16

Full text:

We recently had a chance to talk with Paul Hobbs, Director of Sales, Pfizer Australia about the sales challenges the industry faces and how it can turn those challenges into opportunities. Hobbs’ uniquely Australian perspective offers some great insight for sales organizations around the globe.

eyeforpharma: What are biggest challenges for big pharma in Australia?

PH: First and foremost, we’re not immune to the issues confronting pharma worldwide and the pending loss of exclusivity on key brands. The shallow pipeline that’s backing it up means that we have very significant sales, marketing and other investments in place without anything coming through in the near future to continue to leverage that huge investment. So the big concern is if we don’t get the next big blockbuster, what do we do with these massive investments we have in place?

Obviously the industry worldwide, and here in Australia, is going through processes of restructuring and in some cases realignment – so those are big challenges facing the industry, here and throughout the rest of the world. The other big challenge is that we recognize that there are practices that in the past may have served the industry well, but are no longer acceptable. There are sales strategies that have served the industry very well but are starting to become outdated. The challenge is what do we change to, how do we change to it, and when do we change to it? The need for change is obvious, but what exactly to do isn’t.

eyeforpharma: What effects might current economic conditions have?

PH: I’m not an economist, but traditionally in Australia when there’s been economic downturn the pharma industry has not suffered anywhere near as much as other industries because our medications are largely subsidized through the Pharmaceutical Benefits Scheme (PBS). Historically, patients still went and purchased their medicines because the majority of the cost of that was being subsidized by the government.

In recent years, the government has increased the patient contribution and decreased the PBS portion, trying to introduce some degree of price sensitivity and hoping patients might employ some economic rationale to their drug selection – and that might make economics a bigger factor now than it has been in the past. I suspect we will be impacted a little by the economic downturn, but not to a gross extent. It seems Australia’s got stronger fundamentals working for the economy than places like the US. We’re hearing all the gloom from overseas, but they’re saying it’s not going to be as bad for us in Australia.

eyeforpharma: What impact will the tightening the code of conduct by Medicines Australia have on pharma?

PH: Medicines Australia is the industry body. They provide a whole range of functions; one is that they develop and police the Medicines Australia code of conduct which applies to the way the industry conducts itself.

Medicines Australia is becoming much more active and assertive in the professionalism that they expect from the industry and are much more prescriptive now.

In the past, there were a lot of areas of grayness and they’ve come in now and told us this is the appropriate way to conduct yourselves with healthcare professionals and anything else is not appropriate. It’s a much more stringent code than it was five or 10 years ago.

The Code of Conduct make you stop and think: Is this consistent with the code of conduct? Is this consistent with our own internal policies? Now, with this code, I can stand up in front of doctors, and if I was given an opportunity in front of the general public, and say “we are, as an industry, very, very professional – very, very aware of how we conduct ourselves with very high ethical standards showing through at all times.” My degree of certainty in making a statement like that is so much higher today than it would have been five years ago.

I think this is the most important thing that the sales part of all pharma organizations needs to understand: if we get this right, we can protect and possibly even enhance the reputation of the pharma industry. And we need to understand how that translates to conduct that every representative demonstrates in front of the doctor, in the surgery waiting room and in every aspect of how they organize their daily lives, because they are on show.

I’m tired of going to restaurants as “Joe Public” and discovering a pharmaceutical company logo pen sitting in the restaurant. Obviously, a pharma rep must have given it to the restaurant. This code really – it’s strict; it’s difficult for people who’ve had complete free rein, but it’s heading the industry in the right direction. It’s challenged behaviors and attitudes that we thought were very appropriate, and now we understand they’re not.

We need to look at our practices from the outside and government, obviously in Australia, pays a lot for pharmaceutical products, so they’d like to think that every dollar the industry earns isn’t being frittered away on excessive marketing and promotion. They’d like to think that they’re getting genuine value for the dollars they’re spending. They’d also like to think that the products they’re subsidizing are being used appropriately, for the right therapeutic conditions, for the right reasons – and not being used for unapproved uses. The level of accountability goes well beyond the doctor and the pharma company – now it’s much broader than that. Finally, companies recognize that and the Medicines Australia code is the important conduit helping us all stay on the appropriate straight and narrow path to be sure that we are accountable.

eyeforpharma: What specifically can sales departments do to help improve the industry’s perception with customers, patients and consumers?

PH: First, we need to be very clear about what the role of the sales rep is in the pharma industry. It is not our role to conduct industry affairs with the general public and with patients and consumers. That’s very important. If I was ever pushed on this I would like to make a firewall between what a sales representative does and any member of the general public. There have been occasions over the years when companies have said they’ll support a particular consumer group and, low and behold, their rep will turn up at a function with a trade display full of materials related to the product. And we suddenly leave ourselves exposed to being accused of promoting to the public.

So I really believe there should be a firewall between the sales rep and the public. Their primary role is to provide appropriate and current and accurate information that supports the quality use of medicines around their products – and communicate that strictly to healthcare professionals. Anything beyond that puts them at risk of being in breach of the Medicines Australia code. But the way they conduct themselves in going about that business means that they can, in fact, be exposed to the scrutiny of the general public.

For instance, you’re sitting in the waiting room of the doctor’s surgery with your manager and you decide to pull out your market share report and you’re talking about your product, saying you’re going to run more evening meetings. Then you say you’re going to be inviting the doctor you’re seeing in the surgery today and as a result you’re going to be seeing better market share. That’s a discussion that’s not appropriate to have in the surgery waiting room because you could be in earshot of a member of the public who might come to the wrong conclusion – that we’re trying to manipulate things simply to promote the sales of our product.

How would that person feel if they go in to see the doctor, after the sales rep has come out, and suddenly find themselves being prescribed the product that the rep spoke about. He might just be wondering, “Am I taking this product for the right reasons, or am I taking it because it’s going to help that sales rep achieve their sales target or get an incentive.”

So it’s just the little things that sales reps do in front of the general public. It’s not targeted to the general public, but we’re on show every time we walk into a surgery. Every time we walk in with an armful of giveaways for doctors – that just makes things look absolutely ridiculous. Here we’re talking about giving quality information to support the quality use of medicines, and yet they’re running around with gimmicks and toys and gadgets; it really does belittle the supposed professional relationship between the doctor and the pharma rep. Some reps take great delight in all the gimmicks and they’re happy for it to be on public show, which is a real shame.

The practice that’s crept in, which I think really needs to be shut down: the doctor’s busy, he comes out – he hasn’t been able to see you – and you take the opportunity to start talking about some features and benefits of your product to the doctor over the front counter at the surgery in earshot of a dozen patients waiting. That’s not good, because they’re only hearing these 20 second sound-bites being thrown at the doctor and it just doesn’t look very professional. The behaviors are less than professional- there are millions of little things like that that sales management needs to start scrutinizing and saying: “Hold on, if I was a member of the general public sitting close by, is this an appropriate thing to be doing?”

Some people have even questioned, and I think quite rightly, you take a doc to a coffee shop next door to his medical practice and you buy a coffee and sit down to talk about your product – again it’s in front of the general public. Is that right? These are questions we need to keep asking ourselves. In the past, we never asked ourselves those questions. But today we are; and that’s good.

We have this opportunity to protect the image of the industry. It’s very easy in that 30 second grab for a member of the general public to form a negative view of the industry – they’re only in it for sales, not in it for the good of patients. And that’s the conclusion that people can come to if we’re not conscientious about how we conduct ourselves anytime we’re in the eye of the general public.

eyeforpharma: What can we do as ambassadors of the industry?

PH: The pharma industry in Australia was felt to be very instrumental in the free trade agreement that was signed between Australia and the US a couple of years ago and that has all sorts of positive and negative connotations depending upon what industry you’re in. Some people are quite happy to be critical of the pharma industry’s role, but we just couldn’t expect sales reps to address all of the regulatory and economic issues at play and respond to that and protect the industry’s reputation.

But in terms of the good that our products do – the collective industry’s products, not just my company’s – we need to instill in sales reps that just because we are so competitive – and we encourage that – we’ve got to make sure that reps understand that what other companies make is good and if they can talk about the benefits of the good work of the industry, not just their own company, all the boats are raised. That’s probably a challenge for us, though, because of the spirit of competitiveness.

Getting the rhetoric right, getting the attitude right is a challenge for us all – for sales especially, because people depart after only three or four years – they’re not in it for the long haul, whereby they really do develop their deep understanding of how the industry operates and a love and passion for the industry. It’s often just a period of transaction where they simply get paid for doing their job. And that’s a real shame.

eyeforpharma: What can pharma in Australia learn from its counterparts in Europe or vice versa?

PH: There is no doubt that some of the European markets are more similar to the Australian market than those that Australia is geographically aligned to. Australia is seen as part of Asia – so we’re compared to Indonesia, the Philippines, Thailand, China, even Japan – and people assume that the needs and market dynamics are similar, and they’re not. Australia is more advanced in the area of Health technology assessment or Health economic outcome assessment – very advanced. The local authorities use it to determine whether to subsidize our drugs or not, and more and more the reimbursed markets of Europe are using health technology assessments as part of a similar approach.

So the reimbursed and single-payer type markets are moderately predominant across Europe and they’ve driven a lot of changes in the way they reimburse within individual countries and the pharma industry’s had to engage with those changes. There have been changes in sales models, very new roles – targeted at not just prescribers but those inward – at the primary care trust type organizations – the people who make formulary decisions at a local level. It’s very unique.

Fortunately for Australia, we’re not likely to go down a path where we have local fund holding and local formularies – but there’s still going to be a national formulary. But we are seeing other influencers emerge in the healthcare network, which we believe will need contact within the pharma industry above and beyond the usual prescriber.

So there is some opportunity to learn from European markets without a doubt and I believe Australia has some great opportunities to continue to learn from the US market because the sales model that US-based companies have applied around the world, including Australia, is influenced heavily by what’s done in the US – and everyone’s questioning it. Is this share of voice approach the right way? It’s easy to put 1000s of reps out there on the road, it all looks good on paper, but when it comes to actually executing it, and looking at it from the doctor’s perspective, where he may be getting barraged by five or six reps all talking about the same product, he’s saying enough is enough – I don’t have time for this. Until you guys can do something valuable for me I’m not going to see you, or see you less.

I know the US is seriously questioning the approach and whatever is decided will be pushed down. This can give us some forewarning – and if we can experiment with some alternatives and it helps create some learnings for the rest of the world in the meantime, well that’s great. Sometimes the corporate needs overtake local decisions, but it’s immensely important for us to reach out to other parts of the world, because ultimately what’s happening there is going to affect Australia. It will be a bit different, but ultimately it’s going to change the ways the industry is adopting here in Australia.

I’ve seen a lot of change in the Australian industry. There’s been a lot of change in how doctors choose to interact with us and looking at it with Australian-centric eyes only, I’d say things are not good. But having visited Europe and seen what’s going on in the US, I’d say we’re still in a much better place in Australia. The frequency of interaction between us and doctors in Australia is at a much higher level than in the US and parts of Europe. But if we don’t start changing our sales practices soon, it might be that we find ourselves in the same position. We want a doctor to be happy to greet us and we might be able to preserve some elements of that that are still working for us if we reorganize ourselves and find the right sales strategies. I don’t have the answers, but I do have some ideas.

There’s an effort across Australia trying to get some sort of forum happening among senior sales management across the industry – and I’ve been involved in that – but so far it really hasn’t delivered anything that’s high impact and high value for our senior sales colleagues across the companies. But we’re intent on cultivating this, because if you don’t get people talking on industry matters and developing forums to discuss professionalism and ethics, etc. and what the industry should be doing, because if we’re all left to our own devices – if we’re all shut away like mushrooms in the dark – we’re not going to make progress as an industry, we’re just going to continue to have all the in-fighting that’s worked against us.


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