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Healthy Skepticism Library item: 19612

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: Electronic Source

Mansell P
Pharma sales: KAM as a market access tool 2011 Aug 9


Peter Mansell reports on why key account management (KAM) is coming into its own as a market access strategy

Full text:

There are compelling reasons for adopting key account management (KAM) strategies in pharmaceuticals.

Increasingly, these reasons apply globally, but they are especially pertinent to a UK market in which companies face not only tough budgetary constraints but a radical shift in NHS commissioning powers and an overhaul of the drug pricing system.

One-to-one transactional exchanges with prescribers—the default setting when blockbusters, sales force muscle and share of voice shaped the marketplace—are ill-equipped to a world of ageing populations, chronic disease, complex therapies, networked care and, above all, close attention to costs.

These trends have brought with them new layers of decision-makers, payers, influencers and advisory bodies more inclined to focus on cost-benefit, long-term value and outcomes than on top-line claims of superior product efficacy or safety.

Different stakeholders will have varying agendas and priorities, further differentiated by country, region or locality.

The new landscape demands not just flexibility and more acute local awareness but the capacity to empathize both with individual customer needs and how these needs relate to wider issues of resource allocation within hard-pressed health systems.

The re-alignment, moreover, has to be much more than skin-deep.

It must be acknowledged and driven from the top down, permeating every aspect of a company’s operations that contributes to putting the final product—be that a drug, a biologic or a broader value proposition, solutions package or suite of services—in front of the customer.

As Mark Woodcock, head of operational and market excellence in Bayer’s pharmaceutical business, commented at eyeforpharma’s Key Account Management Europe Summit in London last November, KAM “is a way of working, and it has to engage with everybody in the organization.”

Full KAM commitment

There is little doubt, though, that a full commitment to KAM can be a slow, difficult and painful process, with some traditional sales reps falling by the wayside.

Companies going through this upheaval will want to be sure there is a substantial pay-off in terms of better market access.

One consequence of a shift to KAM could be to even out market-access stakes between large companies that in the past have relied on sheer volume of sales reps to drive through brands at high prices and the smaller players with more specialist products and expertise but fewer resources on the ground.

With the blockbuster era now seen by many as over, the emphasis will be on more sophisticated, personalized medicines, supported by biomarkers or other patient segmentation tools, and offering more precisely calibrated safety, efficacy and cost-effectiveness benefits in better defined patient populations. (For more on personalized medicine, see Personalized medicine: A kick-start for innovation?; for more on biomarkers, see Biomarkers and oncology forecasting: How to hit a moving target.)

That should also help key account managers argue the case for their products as an investment in health rather than just one more strain on the medicines bill.

In the UK, it should further chime with the requirements of the value-based pricing system that will apply after the current Pharmaceutical Price Regulation Scheme runs its course at the end of 2013.

But price and value will also need to be aligned with local or regional demographics, health trends, budget priorities and cost-efficiency targets.

This is why KAM approaches should be looking at long-term relationships, in which products and branding may be a corollary to a broader offering drawing on industry expertise in areas such as data or project management, treatment adherence tools, screening clinics, nurse support or preventive health campaigns.

It would be naïve to think customers in this environment will not be taking a long, hard look at costs.

At the same time, though, a large proportion of those costs will be incurred in areas other than medicines; in the UK, for example, the drug budget accounts for only around 11% of overall NHS spending.

One of the market-access objectives of a KAM approach should be to position brands as part of a mutually agreed and mutually beneficial offering that can save health systems money where costs hit hardest.

KAM as a market-access proposition

As often as not, that will be in hospitals. Speaking at eyeforpharma’s Key Account Management Europe Summit, David Thorne from GP consortium Newcastle Bridges gave the example of a 46-year-old man who in 2007 had a non-elective hospital admission following a hypoglycemic event, stayed for three days and received a balloon angioplasty, at a total cost of £4,877.

Funding for the local Primary Care Trust to cover all healthcare services, on a weighted capitation basis, was £1,880 per year.

So in three days, one man used up his entire allocation of NHS resources for a whole year, plus that of nearly two other people, Thorne pointed out.

The transition from Primary Care Trusts to GP consortia (now ‘clinical commissioning groups’) was “absolutely good for pharma,” as GPs “see the world of medicines differently,” he argued.

While medicines managers in PCTs might lean towards evidence-based medicine, the GP’s perspective was more “narrative and experiential,” based on prescribing medicines, knowing their value in day-to-day care, and knowing how they fitted particular patient needs, Thorne explained.

These are the kind of subtleties companies will need to pick up on if they are to make KAM a genuine market-access proposition, rather than just reheating strategies long past their sell-by date.

They must also be able to select the right accounts. Basing KAM on accounts with the highest sales “doesn’t actually reflect the industry we’re in,” Woodcock contended. “A key account could be the most profitable in the long term.”

If a brand strategy for an already market-leading product was about growing the market, a key account could be the one with the highest level of unmet need, Woodcock added.

If the strategy was to expand market share, the key account could be the one with the lowest share yet a high rate of growth.

Among the parameters used by Napp Oncology to identify key accounts are segmentation potential, local uptake of new cancer drugs, application of the company’s compassionate use program, data from hematologists on key opinion leaders, relationship/access factors, and knowledge of potential early wins.

As head of oncology sales Sally Ransome noted, the category lends itself particularly well to a KAM approach, with its complicated networks of customers, decision-makers and influencers, as well as high barriers—at least in the UK market—to NHS funding before health technology assessment bodies have their say.

The KAM model at Napp came into effect at the beginning of 2010, involving seven oncology account managers with 10 accounts each.

According to Ransome, it had already started to bear fruit, with better understanding of the processes for commissioning and prioritization of oncology products across all cancer networks, as well as adoption of Napp drugs in guidelines and protocols even before they had been assessed by the National Institute for Health and Clinical Excellence.

Globalizing KAM

There is also the challenge of globalizing KAM efforts and selling them to corporate management.

In Woodcock’s view, KAM in the UK is quite distinct from other markets: “The principles can be the same but actually the implementation is often very different.”

At Bayer, the opportunity to take a fresh look at the commercial model came with the acquisition of Schering in July 2006.

But the UK was a few steps ahead of its regional and global colleagues in embracing KAM, Woodcock acknowledged.

Now, though, the philosophy is “very much feeding into global projects.”

For Adam Knights, managing director of 15 Healthcare, a UK-based company that brokers relationships between the pharmaceutical industry and the NHS, KAM will not be effective as a market access tool unless companies first define clearly what the term means to them.

“I work with a lot of companies, and the first question I ask is their definition of KAM,” Knights comments. “I’ll get 12 different versions back.”

Moreover, KAM may mean different things to different parts of the company, because the corporate strategy has not been properly laid out.

“So if you say, ‘Our definition of KAM is to treat more patients at lower cost while delivering top-line profit and performance’, and everybody knows that within the organization, that’s what everybody will do,” Knight adds.

“If it’s to target more doctors in my area and be more successful, that doesn’t mean anything.”

15 Healthcare’s take on KAM is “a bespoke method of engaging with the customer while actually improving your P&L.”

In the new NHS, Knight stresses, that has to be about engaging on the service’s own agenda and data.

The NHS is “still really stuck in the 1980s” in terms using outcomes data, he explains.

“They have streams and streams of data that they effectively don’t have time to go through.”

From a market access perspective, companies need to be “remorphing and rehashing” those data into an effective model that can be used by NHS organizations.

“You can then have a conversation around the patient and the NHS problem based on those data.”

While some companies have the tools to construct an NHS data model, too often they come to the NHS with data illustrating a particular health challenge but without any suggestions on how to deal with it, Knight observes.

“If you’re going to go to the NHS and show them a problem, then have a solution,” he says.

“And then don’t try to jump in with your product as the only solution. That’s when people get a bit cynical.”

Open-door strategies

Industry sales reps have tended to be very good at understanding the product and how to sell it, but not very good at dealing with difficult objections or closing the business, Knight says.

Moreover, they have struggled with conversations about disease areas and their wider implications.

But aggressive cost management has completely changed the equation, he points out.

As achieving product take-up in primary care became “really difficult,” companies responded by putting all of their resources behind key opinion leaders in the hope that their influence would carry enough weight with medicines managers.

With £20 billion worth of NHS efficiency savings hanging over their heads, though, medicines managers are now saying, ‘We don’t really care what you think in the hospital. This is what we’re doing.’

Companies can no longer “go into the market and say, ‘We’re spending £10 million launching this blockbuster product and it’s going to be the best thing ever’, because the medicines management in the NHS are going to think, ‘Where are we going to get the money for that?’” Knight comments.

Better to engage by identifying the local patient base and offering “some kind of commercial deal” around the product that supports NHS objectives, he suggests.

“It’s an open-door strategy as opposed to shut it in your face.”

While Knights believes the UK is still 5-10 years ahead of the rest of Europe in terms of adopting KAM, he is convinced the trend will spread.

At the moment, Germany “doesn’t really do KAM” and the US is still wedded to a traditional share-of-voice strategy.

But France is cracking down on one-to-one visits by sales reps and companies there are showing an interest in what is happening in the UK.

In the north of Italy, too, companies have begun to pursue KAM in line with a shift to regional control of healthcare budgets.

The globalization of guidance from health technology assessment agencies such as the NICE will help to drive this trend, Knight suggests.

And the fundamental issue underpinning KAM is a universal one: ballooning healthcare costs.

“If you look at any other industry, telecoms or IT, then prices always drop,” he comments.

“We’re spending billions of pounds on therapy areas that the NHS was never designed to support.”


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Far too large a section of the treatment of disease is to-day controlled by the big manufacturing pharmacists, who have enslaved us in a plausible pseudo-science...
The blind faith which some men have in medicines illustrates too often the greatest of all human capacities - the capacity for self deception...
Some one will say, Is this all your science has to tell us? Is this the outcome of decades of good clinical work, of patient study of the disease, of anxious trial in such good faith of so many drugs? Give us back the childlike trust of the fathers in antimony and in the lancet rather than this cold nihilism. Not at all! Let us accept the truth, however unpleasant it may be, and with the death rate staring us in the face, let us not be deceived with vain fancies...
we need a stern, iconoclastic spirit which leads, not to nihilism, but to an active skepticism - not the passive skepticism, born of despair, but the active skepticism born of a knowledge that recognizes its limitations and knows full well that only in this attitude of mind can true progress be made.
- William Osler 1909