Market effectiveness: The key competency for pharmaceutical growth

Optimizing information and collaboration will be the new key to winning or losing in Pharma.

As the Pharma industry matures, it faces a host of new challenges: the growth of generics, a slowdown in new blockbuster drugs, increased oversight from regulatory bodies worldwide. At the same time, the Pharmaceutical marketplace has become more complex. According to IMS Health, as the impact of established Pharmaceuticals losing patent protection accelerates, the industry will see an decline in its growth rate for the first time from a range of 6-7% in 2007 to 4.5-5.5% in 2009.

Broad changes like these force Pharma firms to identify more accurately their true target clients and the buying criteria these clients use. It also means figuring out the best ways to get messages out to more of these prospects. Traditional methods may not produce the needed results and executives require new tools to read the market correctly and develop the right responses to it. For many Pharma firms this may well constitute a "burning platform" issue for future success.

As a result, Marketing and Sales - and the technologies to improve effectiveness - have moved to the top of executive agendas as Pharma competitors race to capture market share and grow revenues.

The Changing Landscape of Pharma Competition

Today Pharma firms not only compete with each other, they do so on a playing field that is constantly changing. Competitive products, sweeping shifts in buying influence, and the multitude of legislated constraints all affect go-to-market strategies. These issues are more complex than they ever were before and they are simpler now than they will be in the future.

1. Price and market share pressure from generics

Generic drugs are expected to capture a great portion of the market share as several major drugs lose patent protection and market exclusivity. The availability of lower priced generic equivalents is attractive to all buyers, especially the big buyers: health plans and governments. Generic drug manufacturers will furthermore continue to pressure the market exclusivity for proprietary drugs, narrowing the window of higher margin sales.

2. New stakeholders taking a stronger role.

Today health care payers, a group which includes health plan providers and governments, wield much more power. Their decisions on how to classify drugs, which they will pay for, and how much they will reimburse have an enormous affect on consumption. By playing a dual role as a healthcare provider as well as a payer, governments in many parts of Europe have attained an overall authority and influence on the functioning of the healthcare system. The impact is not small: in some countries the government has emerged as the largest buyer of drugs. Governments can take additional measures as well, including product price controls, reference pricing, and even profit control.

3. Demographic trends

There is a significant shift in market growth dynamics. Although overall growth will decline to a 4.5-5.5% % range in 2009 from 5-6% the year before, the market is still enormous. These high level statistics, however, mask some of the primary marketing challenges Pharma companies face.

In the United States and the five largest European markets, 2008 sales grew only 4-5%. Pharma sales in seven emerging markets, China, Brazil, Mexico, South Korea, India, Turkey, and Russia, grew approximately at 12-13% rate. Taken together, these seven countries represent an impressive 25% of worldwide growth. In comparison, the largest seven markets will produce 50%. Clearly, Pharma companies must maintain market share in large markets, but if they don't get a foothold in emerging markets, they risk being shut out.

Shifting Market Dynamics Put Marketing Executives on the Front Lines

Marketing and sales executives are squarely in the headlights now. Getting better at the same tricks just isn't good enough as Pharma CEOs demand better accountability and ROI from their marketing investments.

Capturing and growing market share in the fast evolving $643B global business calls for re-inventing marketing and sales approaches. Unfortunately existing information systems often aren't up to the task and don't provide the necessary visibility and insight. Until just very recently, IT support for Pharma sales and marketing efforts has been a patch work of point solutions and ad hoc analysis. To face the challenge of the shifting market dynamics, Pharma executives will need to demand systems that:

– Develop marketing channels and touch points:

The dramatic shift of market targets and increasingly knowledgeable consumer base increases the importance of high-quality segmentation and targeting. Executing these tasks well, presents two of the most important opportunities for increasing revenue and profitability. This demands that Pharma marketing execs rationalize disparate factors such as:

• Finding the right level of promotional investment across all channels
• Targeting physicians better and increasing message effectiveness
• Identifying the high-yielding physicians
• Identifying stakeholders and their roles in each market

Having daily interaction with physicians and other key healthcare stakeholders, the pharma field sales force is the key source of up-to-date knowledge that is needed for segmentation and targeting. For example: identifying number of patients within a therapeutical area for the individual doctor and their perception of the specific brands, etc. Thus marketing executives should demand IT tools that enable the sales reps to provide market knowledge feedback in a structured manner, and integrated in their daily work routines. The CDM Advanced Segmentation module does just that.

– Recognize power players and influencers and send the right messages in the right ways

Governmental actions, acquisitions and mergers, cultural changes, and new health care paradigms all influence the Pharma market. Their combined interactions create a new operating environment. Recognizing the degree of influence each exerts and developing strategies to respond is a key skill successful companies will hone.

The challenge set by these new power players will only be met by systemizing strategies and anchoring them in a user friendly CRM system. Thus CRM should be flexible and adaptable to the shifting marketplace that sales and marketing executives operate in.

– Optimize sales execution

Converting strategy to profit will require flawless and automated execution worldwide. Solving execution problems requires more than monitoring time-tested KPI's. If market share is the goal, Pharma firms must win more consistently and manage sales costs per visit. This can be done by tracking sales activities and cross-analyze them with actual sales statistics to see which activities have the greatest impact on the target group.

Having the right systems in place to track and optimize the actual performance of your sales reps, requires more than just a reporting system. You need to identify your high performers and best sales practices using a CRM system that tracks sales activities in a manner that is effort- and painless for the individual sales rep. In order to capture that vital sales activity information, CRM should be user friendly and fully integrated in the daily tools used by sales reps - especially mail clients such as Microsoft Outlook and web/intranet applications such as SharePoint.

– Unite every customer facing part of the organization

Executives across the Pharma industry recognize the need for integration among sales, marketing, and managed markets. One of the key aspects promoting integration is coordination of cross-functional departments, particularly with regard to product launches, and opening up new markets. The information needs of a changing Pharma market must be thus accommodated with a sales and marketing system that goes beyond ordinary CRM.

Every customer facing department in the individual pharmaceutical company - from clinical over sales to marketing and academy - should each have IT tools that serves their particular needs and at the same time gives a common 360° overview of the overall interaction with healthcare stakeholders. Yet many of the systems currently used make it difficult to have just that.

Built in Microsoft Dynamics CRM, the CDM Optimize CRM suite for Life Science contains integrated tools for every customer facing part of the organization, from event management through clinical study management to segmentation and sales force automation. It will meet your needs with regards to search, business process management, and business intelligence and mobile support.

– Support sales and marketing compliance

Managing Marketing and Sales Force compliance becomes ever more important. With stiff civil and criminal penalties and the subsequent damage to company's reputation awaiting every misstep, companies simply can't afford to be on the wrong side of compliance regulations. Use automated real-time reporting to identify safety risk signals earlier and detailing is done correctly. Use common cross-national guidelines and standards for executing the educational events that form key part of pharma marketing.

Therefore pharma companies needs to automate business processes with systems that:

• Are seamlessly integrated in the daily working tools of sales reps, for example Microsoft Outlook. This gives the right conditions for real-time data capture
• Are geared for the automated handling and registration of sample handouts.
• Gives easy access to corporate event policy contains predefined templates managing academy-based events
• Enables users to quickly adapt the automation of business processes to local conditions. This can be done with the powerful workflow technology of Dynamics CRM

– Close the loop

Analytics inform major decisions, such as advertising spend and messaging, and sales initiatives. At the aggregate level, analytics provide insight into how the awareness, direct response, and relationship marketing programs are working. Analytics should not be complicated tools for a select sophisticated audience. Ensure that the analytics tools:

• Help understand the true source of demand - requested by the patient, recommended by the doctor or determined by the Insurance providers
• Support the correlation between consumer advertising and product positioning
• Clarify the relationship between efforts and results of campaigns and sales activities
• Are usable by all levels of the organization.

The award-winning, integrated ZAP^© Business Intelligence functionality in the CDM Optimize solution for Life Science enables higher campaign effectiveness and sales productivity. This powers the understanding the correlations between campaigns, sales tactics and effective detailing, and the characteristics of individual sales representatives.

Supported by End-to-End IT Solutions

Until just very recently, the IT support for Pharma marketing efforts has been a patch work of point solutions and ad hoc analysis. Most companies would point to challenges correlating data from multiple campaign touch points: advertising, channel and distribution sales, physician sales, and Managed Care Provider's feedback and regulations. No one program or campaign is a standalone - understanding the interactions is essential to effective design, impact assessment, and remedial efforts.

At the same time, Pharma firms don't have a long line of blockbusters to fuel an insatiable IT budget nor can they wait or attempt a wholesale replacement of legacy systems. They must find low cost evolutionary paths to integrating their marketing and sales efforts. No company should embark on building a custom CRM system for these needs, but all Pharma companies should invest in leveraging the standard CRM tools and data available to them as quickly and as pragmatically as possible.

CDM Optimize for Life Science is a suite of integrated, adaptable CRM solutions that enables you and your people to make business decisions with greater confidence. Built in Microsoft Dynamics CRM, CDM Optimize works like familiar Microsoft software such as Microsoft Office, which means less of a learning curve for your people, so they can get up and running quickly and focus on what's most important. Built to work with Microsoft technologies, it works easily with the systems your company already has implemented. By automating and streamlining customer relationship processes, CDM optimize brings together people, processes and technologies, helping increase the productivity and effectiveness of your business, and helping you drive business success.