Product liability litigation against pharmaceutical companies often feature how the pharmaceutical company insufficiently or inaccurately informed physicians  (often highlighting what the sales representative said or didn’t say and the brochure used) about the appropriate use of products (right patients, right dose) or communicated misleading understatements or outright omissions of the risks associated with prescribing those drugs.  Companies who can demonstrate they did everything they could to accurately and comprehensively inform the prescribing physician, especially about the risks involved in the plaintiff claims, are generally afforded some degree of legal protection under what is called the “learned intermediary” doctrine.

An increasing number of healthcare systems, hospitals, and academic medical centers are banning pharmaceutical sales representatives from their institutions.  Some group practices and even individual physicians are also placing restrictions on pharmaceutical representatives.  The intent is often to control the influence of sales representatives on physician prescribing but also to preclude representatives from distracting physicians and consuming practice time with interactions that are perceived to have little or no value.

Whatever the reason for limiting sales rep access to physicians, I am wondering how pharmaceutical companies could possibly be expected to fulfill and demonstrate their “duty to warn” responsibilities when institutions and physicians have decided to ignore and outright refuse one of the historically most effective means of communicating product information.  Will the package insert information now be the basis for appropriately “informing” the medical community and satisfy the “learned intermediary” doctrine?

Again, I am not a lawyer but I wonder what the courts and patients are going to say when a pharmaceutical company facing a “failure to warn” product liability charge demonstrates that their package insert clearly delineates the appropriate use and potential risks and they did everything they could to get the information to the physician but they were banned or denied access.  What are physicians going to tell their suing patients when the pharmaceutical company representatives testify that they tried repeatedly to get time with the treating physicians  to discuss the risks and benefits of the drug but were prohibited by policy and rejected at the office or hospital.

If healthcare systems and physicians make the decision not to include pharmaceutical company representatives in their drug education process are they also assuming more liability when pharmaceutical companies defend themselves by demonstrating that healthcare systems and physicians “chose” not to be informed or educated by the company?   They may in fact feel this is no big deal, they’ll just do their own educating.  But if physicians and healthcare systems assume this responsibility and take the deep pockets of the pharmaceutical company  “off the table” , are they really ready to assume the financial consequences or will patients seeking compensation and their lawyers be less quick to file these product liability suits?

mike@pharmareform.com

I wonder if we will ever get to a point of exploiting the clinical information hidden in these electronic data files.   Could EHRs ever lead to better real world data to support evidence based medicine?  With millions of patients in the “real world” data sets over an extended period of time you would think that figuring out “best practice treatment guidelines” would be better served than by a couple of clinical trials with a few hundred or even a couple thousand carefully selected patients studied over a relatively short period of time.  Want comparative effectiveness?  You would think this could be determined with the electronic data on thousands if not millions of patients rather than a small statistically designed trial in a single institution or small number of sites.  EHRs could also be useful for identifying treatment trends or determining where companion diagnostics might be most helpful.

The challenges of HIPAA compliance, research regulations, and bioethical considerations are beyond my area of expertise but I feel it would be a unfortunate if they stood in the way of being able to use this valuable information.  There must be ways to design and execute this type of research without compromising patient confidentiality and ensuring patient safety.  I also appreciate the pitfalls, limitations, and scientific critiques of retrospectively data mining to assess and evaluate clinical data.

The value of EHRs goes well beyond the financial implications and benefits.  To realize their clinical potential the data must be accessible; it must be analyzed and accurately interpreted.  This will require a new breed of clinicians with specialization in the design, execution, and reporting of EHR clinical study data.  Clinical interpretation of the data will require therapeutic area expertise, an appreciation for statistics, and a comprehensive understanding of the data set and the nuances of the data limitations.  These are not part-time jobs but rather new job functions (staffed with expertise) that add cost to healthcare initially with cost benefits coming in the form of more cost effective, better treatment outcomes in the future.

The danger will be in executing poorly designed,  “quick and dirty” reviews and clinical assessments without expertise which can lead to misleading or wrong conclusions and potentially adverse or costly recommendations … purportedly supported by data.   mike@pharmareform.com

The apparent implication from these results is that there is no difference between Crestor and Lipitor and therefore, when available, generic atorvastatin will work just as well as the brand Crestor.  Extrapolating this “no difference” conclusion for a single endpoint to the totality of efficacy for atorvastatin could result in significant cost savings for patients and providers of prescription drug benefits.  You would think this is great news for patients but I believe the ramifications of this study go well beyond cholesterol lowering agents and the impact on future sales of Crestor.

Because of the investor interest, high media visibility, the enormous healthcare cost savings potential, and the mass market served by cholesterol lowering agents I believe there will be significant fallout from this study that is not necessarily beneficial to patients.

First, there are undoubtedly going to be patients who could benefit from Crestor rather than atorvastatin but who will not be given that option.  Smaller patient populations may never be studied well enough to determine if there really are patients who might benefit from one product or another in the face of large comparative trials showing no statistically significant difference.

Second, company executives have always been, but will now be even more, reluctant to sponsor comparative effectiveness studies for established products even when they feel they have an opportunity to demonstrate a difference (as I believe was the case for AstraZeneca).  The requirement for “statistically significant” clinically meaningful differences may be too high a hurdle (and represent too much risk) when complex trial designs are expected to prospectively identify a specific primary endpoint for a patient population with considerable variability.  We may, in an ideal world, feel we know enough about biology, disease pathophysiology, pharmacology, and the nuances of patient populations to be able to precisely design these definitive trials, but we probably don’t for most diseases.

Third, pharmaceutical companies may prematurely stop developing drugs they feel might not be able to demonstrate statistically significant differences to available therapeutic agents.  This would have been a catastrophe for antivirals HIV/AIDS treatments which we now know work best as cocktails of several products rather than one being “statistically  significantly “ better than another.  To further complicate this, regulatory approval studies are designed to establish efficacy and safety, not superiority.  I believe the need for demonstrating a statistically significant difference to meet market expectations and regulatory requirements for making a superiority claim (or to potentially gain approval) will make drug development near impossible where products already exist and efficacy is well established.

And if you are thinking about developing an as effective but “safer” product, good luck.  Regulatory requirements for claiming “safer” are even more challenging and from what I have seen, near impossible.

Lastly, this market expectation for demonstrating “superiority to available treatments” and regulatory requirements for making those claims, I believe will result in fewer therapeutic options for treating specific diseases (think antibiotic drug development over the past decade).  We are getting to a point where if a product is already available to treat a disease,  clinicians and payers want to know if your new product is better.  You would think this is not an unreasonable expectation, but it is an expectation that increases the cost, complexity, and uncertainty of drug development.

At the same time, pharmaceutical companies that demonstrate statistically significant differences for their branded products in comparative effectiveness trials will be able to command “super premium pricing” with an almost monopolistic “treatment of choice” position for the duration of their patent.  When a product demonstrates a clear benefit (statistically significant) over other treatments the bar is  raised for subsequent new products to demonstrate statistically significant superiority.  For products with trial supported superiority, regulators will have no choice but to allow superiority claims,  physicians will have little choice but to prescribe the product, and payers will have little choice but to provide reimbursement.  Unfortunately,  this also dampens drug development interest in therapeutic categories that already have well established “treatments of choice.”

And while we may have more effective and potentially safer products in the future,  if you think prescription drug prices are high now, just wait for these products that establish “treatment of choice” with clinically meaningful statistical differences.    mike@pharmareform.com

For example, pharmacists for years have claimed that they can help patients avoid medication errors and improve patient care through patient counseling and follow up.  They are often the only healthcare provider with that opportunity once a prescription is written, especially for chronic conditions.  Seems logical that pharmacists obviously play an important role here.  But then you read the recent study that suggests that mail order pharmacies may do a better job of lowering costs while improving clinical outcomes than local pharmacies.  Whether or not this study can be replicated or validated remains to be seen but it represents how it is going to be better to have data to support your position than to rely on implication.  Think about pharmacists who now are trying to make their case for improved clinical outcomes with counseling at the local pharmacy.  What data do they present to refute this mail order study?

Similarly, Express Scripts® recently reported on several research studies that demonstrate the ability of Pharmacy Benefits Managers to lower costs and improve clinical outcomes.  Again, even as part of the “managed market,” Express Scripts® felt compelled to support their benefits claims with data.

Why is this important?  Because pharmaceutical companies who still feel they can use traditional marketing and sales advertising and promotion to imply being able to lower costs while improving clinical outcomes  without actually having the data are going to have a much more difficult time convincing decision makers and selling their products.  More importantly, pharmaceutical companies that develop the real world data to support their claims for improving clinical outcomes and lowering overall healthcare costs (and not just shifting costs to another part of the healthcare system), will find a more receptive audience and create a significant competitive advantage.

We are entering a time where the healthcare market will expect you to prove (“show me the data”) that you (as a healthcare provider) or your products or services are delivering demonstrated (data driven) real world clinical outcomes that reduce overall healthcare costs.   mike@pharmareform.com

A recent featured article in Health Benefit News highlights the success WellPoint has experienced in a pilot program to enlist and pay pharmacists for more attentive “medication therapy management.”  They were able to demonstrate increases in adherence which not surprisingly translated to better control of disease symptoms for hypertension,  hyperlipidemia, and diabetes mellitus.   While pharmacy costs went up they also “saw a great reduction in hospitalizations.”  Overall, in the one year study, they saw cost neutral results, but concluded “it’s going to take more than a one-year time frame to see dramatic changes in cost.”

The healthcare market (with pressure from government, payers and insurers) is getting more aggressive about delivering better clinical outcomes as one way to help increase quality and lower the cost of care.  So whether it is through Accountable Care Organizations, Integrated Healthcare Systems, or just enhancing outcomes from solo or group practice settings, I believe pharmacists will play an increasingly important role in medication therapy management, especially adherence-enhancing programs.   Pharmaceutical marketers who view the retail or hospital pharmacist as merely a dispenser of medications and cursory counseling will be putting their products at risk of competitive erosion and never meeting their full commercial potential in the evolving new healthcare market.

So what’s a pharmaceutical marketer to do?

Well, how many pharmaceutical marketers have assessed (not just mentally speculated) how their product might perform in this type of a trial or study?  How many have commissioned similar types of studies?  How many marketers have partnered with healthcare provider systems to determine the adherence value (clinical outcome differences) between adherent and non-adherent patients and what the value proposition could be?  How many marketers have actually met with pharmacists about their evolving role? How many have started to work with pharmacists on developing educational programs and materials for their products?  How many have pharmacist training programs for their patient education programs?  More importantly, how many pharmacists are considered high priority calls for your sales representatives?

I think I just heard somebody say…”of course we are doing all this.”

Great.  Now, are you doing it as  just another marketing tactic?

I might suggest that if you are doing it to genuinely help patients, pharmacists, and healthcare provider systems achieve their goals, you will find a much more receptive audience, ready to embrace your efforts and make meaningful contributions to your product success without feeling compromised.      mike@pharmareform.com

Healthcare failure statistics (e.g., hospital related infections, treated but uncontrolled diseases, lack of responsiveness to treatment, complications of multi-drug treatment, and patient non-adherence to treatment) while disconcerting, have often been ignored or just taken for granted.  But, these types of numbers can give clues as to where prescription drug treatment could help healthcare providers in ACOs (or other healthcare provider systems) improve the quality of care and clinical outcomes in cost effective ways.

Across healthcare, the list of failure statistics seems never ending from clinically inappropriate drugs or dosing being prescribed to adherence related issues, outright medication errors, and patient disappointment with the explanation about discharge medications.  Even a cursory internet search of product relevant disease states will yield a wealth of failure statistics that could potentially be improved, many simply with the appropriate use of  prescription drugs.

Don’t be discouraged by the variability of the statistics for any given problem.  The precision of specific numbers is not important because at this stage you are looking for clues for where you might be able to make an improvement.  You’ll get real world hard numbers from the healthcare provider sites you work with to develop your baseline data.

You should be able to put together a disease and treatment statistical profile for each of your products.  What I am suggesting is going beyond the global numbers of patients and market shares traditionally used for determining opportunities and driving forecasts.  You need to dig deeper to find the performance improvement opportunities, the types of patients or situations that represent less than satisfactory healthcare performance.   Here are a couple of examples:

Hypertension:

There are plenty of safe and effective prescription drug treatments available, including generic drugs.  When you take a quick look at the overall average numbers there might not seem to be much of an opportunity for significant performance improvement.  After all, 68% of adult hypertensive patients are being treated with anti-hypertensives and 64% are achieving blood pressures less than 140/90mm Hg (controlled).   But a closer look reveals that the percentage of treated patients is much low in younger patients (age 18-59), especially men (47%) and Mexican Americans (50%).  The percentage of controlled hypertension is also lower in older patients (58%) than in younger patients (72%), in general.  Insurance coverage has also been identified as a factor with 71% of uninsured hypertensive non-elderly adults uncontrolled.  More striking is that 52% of those with private and 45% with public insurance remain uncontrolled.

Pneumonia:

Again, at first glance one might find it hard to suggest there is an opportunity for performance improvement when you read that over 60% of elderly patients receive pneumococcal vaccine.  But a closer look reveals that the percentage of adults aged 65 years and over who had ever received a pneumococcal vaccination was 39.8% for Hispanic persons, 64.9% for non-Hispanic white persons, and 44.5% for non-Hispanic black persons.  More importantly, despite vaccinations and effective antibiotics there are still 52,000 deaths related to pneumonia in the US every year.

Depression:

While there may be considerable opportunities realized by encouraging more patients with signs and symptoms of depression to seek treatment, here are some statistics that would suggest there are even opportunities within the treated patient population.  Only 24% of depression patients recover following 16 weeks of drug or psychotherapy and remained well during 18 months of follow-up and  50% of depressed patients treated by medication relapse within two-years.

My intent here was not to provide an exhaustive statistical profile for these diseases but rather to demonstrate that previously ignored or taken for granted healthcare failure statistics, especially those related to treatment  failure may represent new ways to help healthcare providers achieve their quality and clinical outcome performance metrics.  It may take some investigation into the reasons behind some of these numbers but if they are patient selection, dosing, or adherence related, you could be onto something.

Developing a useful value proposition and supportive data will require identifying the specific failure-based  statistic opportunities and then determining with provider systems which improvements will make a difference for them and what data could be developed to demonstrate meaningful improvements.  Keep in mind, healthcare provider systems will now have electronic medical records to help track and follow interventions (e.g., education and adherence programs) and patient responses to treatment.

Again, this goes beyond marketing your regulatory claims for safety and efficacy.  It also takes some research beyond traditional market profiling in a marketing plan.  It will require creativity to interpret the ACO performance metrics in the context of how your products will be assessed and how your product might be able to improve some of the relevant healthcare failure statistics.  These healthcare system improvements in quality or clinical outcome performance metrics not only benefit patients but could have significant financial implications for healthcare providers.  mike@pharmareform.com

Some pharmaceutical industry executives, healthcare providers, and even patients may view these performance metrics as a biased, bureaucratic process for defining medical practice and imposing the “cheapest, least expensive” treatment options.

Whether or not the ACO concept survives in its current form is not important, but rather, I believe it represents the next level of managing healthcare delivery that can not be ignored.   I believe the draft ACO concept also represents an important new context for how pharmaceutical companies need to be looking at developing, marketing, and selling their prescription drugs.  Here’s why…

For decades the pharmaceutical industry has boasted about cost savings, cost-effectiveness, and the pharmacoeconomic value of prescription drug treatment.  Professing that prescription drugs can reduce overall healthcare costs by avoiding the ancillary costs associated with chronic diseases, reducing office visits, keeping people out of the hospital, and most importantly, preventing and curing diseases.  And despite the industry’s best efforts, these claims and propositions have seemed to nebulous, lacking in credible data, and therefore mostly fell on deaf ears within traditional healthcare provider systems.

In an ACO-type healthcare delivery system, these value propositions have real meaning, especially as they relate to the defined performance metrics.  With electronic medical records, insurers, payors, and providers will now have more robust information systems to track and report performance of prescription drugs and validate the value propositions in their own healthcare system.  That means marketing and research must be aware of how their products will now be assessed against these performance metrics and design clinical trials that go well beyond establishing regulatory claims for efficacy and safety.

Getting your product identified as a “treatment of choice” in a performance metric would be the ideal and almost assure commercial success for a prescription drug in that healthcare system.  In fact, pharmaceutical companies who align their products and deliver data driven proof for improving healthcare delivery performance metrics as defined by ACOs will find healthcare provider systems more than willing to encourage the use of their products over other, less performance impacting therapeutic options.  Rather than trying to find ways to limit the use of seemingly expensive new products, this new perspective provides rationale for healthcare provider systems to proactively promote the use of prescription drugs that can help them meet or exceed their performance goals in a cost-effective way.

In the next post we’ll explore how healthcare statistics can provide an interesting platform for driving prescription drugs in this new performance metric, ACO-type healthcare provider market.   mike@pharmareform.com

Included in this proposal are 65 performance metrics (Table 1, pages 174-194); specific quality and clinical outcome measures of care delivery.  Healthcare providers in an ACO will be required to track, record, and report their performance against these metrics to qualify for what’s called “Shared Savings” …  financial rewards … or essentially bonuses for meeting or exceeding these performance metrics, but they’ll also be subject to financial penalties for delivering expensive care or under-performance against these metrics.

What kinds of metrics are we talking about?

Well … some are more general … like the use of survey results to capture for example;

• The  level of satisfaction with physician – patient communications
• patient feedback about their provider experiences
• And whether or not the healthcare system has best practice processes in place like patient education, the extent of electronic medical records, and the use of e-prescibing

Other performance metrics are clinically oriented and much more quantitative, for example;

• The number of readmissions following hospitalization
• Healthcare acquired conditions (e.g., surgical or catheter related infections, pressure ulcers)
• The percentage of patients vaccinated or being treated with specifically identified treatments of choice ( e.g., beta-blockers, ACE- inhibitors, or ARB therapy for heart failure patients with Left Ventricular Systolic Dysfunction, warfarin for patients with atrial fibrillation)
• or the percentage of patients controlling their hypertension, blood glucose if they’re diabetics, or controlling their cholesterol levels

The ACO performance metrics go well beyond the tracking and reporting requirements hospitals now capture in their quality systems.   More importantly, these performance metrics are more likely to get the attention of healthcare system administrators and individual healthcare providers because they will be held financially accountable for delivering against these metrics.

While there is considerable debate about, and even resistance to,  the details of the draft proposal and uncertainty as to whether or not CMS can actually implement the ACO concept, this should not create a “wait and see” mentality for pharmaceutical marketing and sales.  The ACO draft proposal should be viewed as a feasible strawman proposal which will foster pilot programs at a few healthcare provider systems and will certainly elicit commentary and alternative proposals as to how to hold healthcare providers accountable for delivering higher quality care at lower cost.

In an earlier post we discussed the pharmaceutical sales and marketing challenges created by the complexity of ACO organizational structures and decision making processes. In our next post we’ll explore how this ACO concept and the 65 performance metrics could actually provide a platform to help drive revenues for pharmaceutical companies in this evolving new healthcare market.   mike@pharmareform.com

Pharmaceutical marketers who lack sophistication and try to merely enroll clinical pharmacists as their sales advocates will be woefully disappointed.  Clinical pharmacists are well educated, well informed, and very analytical when it comes to evaluating therapeutic treatment options.  They have an insatiable need for clinical data to support not only efficacy and safety but also the value proposition for a product.

Pharmaceutical marketers should spend some time understanding the different roles clinical pharmacists might play in the evolving healthcare system and better determine the information needs and evaluation criteria used for assessing products in therapeutic categories that pertain to their marketed products.  More importantly, pharmaceutical marketers should understand the best ways for packaging and presenting their product information so as to assist clinical pharmacists with their product evaluations, presentations, and fulfilling their clinical responsibilities.

Assuming you have a high demand product that fills a significant unmet medical need, clinical pharmacists can play a critical role in making sure your product is available in their healthcare system, is a part of treatment guidelines and highlighted in any e-prescribing support systems they use to encourage appropriate use.  They can facilitate educational programs for physicians and patients to ensure that the right patients are considered for your product, are aware of any potential safety issues, and reinforce the value of your product relative to other therapeutic options.  Clinical pharmacists are also well qualified to be clinical care coordinators in Accountable Care Organizations, and are organizationally well positioned to ensure patient compliance and adherence while monitoring and tracking the financial benefits derived from appropriate use of the product.

So tactically, what does this mean for pharmaceutical marketers?  Here are some things to consider.  Who will be making your product presentations to ensure product inclusion on formularies and securing reimbursement?  Do they have the credibility and training necessary to discuss the clinical data and value proposition (e.g., outcomes and quality metric implications) without having to refer questions to the company Medical Affairs department?  Do you have a user-friendly, comprehensive product dossiers with any efficacy, safety, or value claims (including outcomes and quality metric implications) supported by published clinical data?  Can you provide clinical trial designs and templates for doing comparative efficacy trials for your product?   Can you customized your healthcare provider and patient education materials  for specific healthcare systems?  Are you ready with electronic medical records integration technology and patient care support apps for mobile devices (think e-prescribing and adherence support)?  Can you help with customized electronic models for tracking and analyzing improvement in outcomes and quality metrics consistent with the healthcare provider system goals and objectives?

Reception of these tactics will depend on the healthcare provider system and the clinical pharmacists but also the quality and value of the products and tactics being made available.  The key is for pharmaceutical marketing to align with and embrace the needs of clinical pharmacists and find ways to help healthcare provider systems accomplish their goals and objectives in this evolving new healthcare market.  Pharmaceutical marketers who figure this out can create a significant competitive advantage and enhance revenue growth, assuming they have the innovative products, the data to support their claims, and tactics that are supportive and embraced by healthcare provider systems.

mike@pharmareform.com

I’m talking about the clinical pharmacists who evaluate and make formulary recommendations for treatment options within large healthcare systems, managed care, Pharmacy Benefits Managers, government agencies (think CMS), and at healthcare insurance companies.  I’m talking about clinical pharmacists who are rounding in the hospital with attending physicians; monitoring, evaluating, and consulting on drug treatment. And, I’m talking about clinical pharmacists who are delivering and managing chemotherapy and other intravenous drug treatments in the outpatient or home health settings.

Clinical Pharmacy’s power comes from the ability to influence formularies and reimbursement decisions, draft treatment guidelines, and recommend treatment choices.  They are frequently involved in clinical trials and may find themselves increasingly involved in designing, executing, and evaluating “comparative effectiveness” studies.

More importantly, clinical pharmacists could be in the best position of healthcare providers to monitor and manage patient compliance and adherence to treatment, ensuring that treatment outcomes and quality metrics improve, and patients realize the full benefit of drug treatment after the prescription has been written.

The intensifying cost consciousness of the managed healthcare market being driven by healthcare reform and the opportunity for financial incentives from Accountable Care Organizations will further elevate the relevance, importance, and value of the drug treatment expertise of the clinical pharmacist.

It is important for pharmaceutical marketers to understand and appreciate the increasingly influential role of the clinical pharmacist in the evolving new healthcare market.  See why in the next post.  mike@pharmareform.com

So why was I even paying $130 in the first place, when generic alternatives were available?  Well, when I had prescription drug coverage through my employer provided insurance,  my co-pay for the branded products was about $20.   I not only didn’t think about the actual price of the drug but I didn’t even care to know what it would have cost without insurance.   Generic drug alternatives didn’t enter the thought process.  Besides, how much lower priced could the generic drug be? More recently, until the price increase,  I just kept getting the prescription filled even though it seemed expensive at $130 per month.

Fortunately my physician agreed to try me on the generic alternative.  For once I also felt fortunate that I was not covered by a government program (e.g., Medicare, Medicaid, and TRICARE) which would have made me ineligible for this savings club and these generic drug prices.  There is a wide range of therapeutic categories with over 400 generic medications available from this pharmacy prescription savings club priced at $12 for a 90-day supply (or $9.99 for 30 days).  Again, hard to suggest these prices are unreasonable and they certainly are not expensive in the context of most prescription drug price discussions.  Even without the savings club membership the price would have been less than $30 per month.

Despite the fact that over 70% of prescriptions in the US are now filled with generics drugs, I can’t help but to think from my own experience that there are still a lot of people who could financially benefit from a switch to generics.   I also believe healthcare reform will bring significant cost pressures to get more patients converted to generic drugs.  The Congressional Budget Office reported that in 2007, if all of the 45 million Medicare Part D prescriptions filled with multiple-source brand-name drugs (brand name drugs with generic alternatives) had instead been filled with their generic counterparts, an additional $900 million would have been saved.  And that is without considering therapeutic substitutions (as my case would be considered) or the potential savings from the blockbusters now coming off patent over the next few years.

The biggest downside for patients resulting from this healthcare market evolution to encouraging the use of more generic drugs is that if you need one of the innovative branded products for which there is no good generic alternative, you are going to pay much higher prices than you might have in the past.  If my generic cholesterol lowering agent isn’t as effective (or has more side effects) as the branded product I was taking, I’ll be back to paying the $140 per month.

I believe two factors will drive branded product prices higher with healthcare reform.   First, truly innovative treatments that deliver real clinical value and unique therapeutic benefits will command a premium price because they will be deemed worth paying for and taking.   Second, more generic drugs and more patients taking generic drugs will shrink the market for branded products to people who absolutely need the branded products.   Drug companies will have to exact their profits from fewer products that can deliver these unique therapeutic benefits to much smaller patient populations.   Companion diagnostics will further reduce these already small populations of patients, by identifying responders and eliminating those who might experience side effects.

So the good news for patients is there will be more generic drugs available at low prices resulting in lower costs to government programs (tax payer benefit), private insurance (keeps co-pays lower), and patients.   Pharma companies on the other hand will be able to, and will have to, charge even higher prices when patients need their innovative branded products.

Disclosure:  I am not compensated  by the prescription savings club.  The link is included here only as a reference.

mike@pharmareform.com

If the symptoms are silent and merely precursors for what might happen, people tend to be indifferent and less interested in paying any associated expenses.  If they are sick with symptoms that are uncomfortable, make daily activities impossible, or they are told they are dying from the disease, they will do just about anything and pay just about anything to eliminate the symptoms or disease.

I believe this reflects both a healthcare systems failure and tremendous patient apathy that suggests they don’t feel responsible for expenses (thinking either insurance or the government should pay) related to the consequences of their own poor health.

The report concludes:

“Although treatment of high blood pressure and high cholesterol is very effective and relatively low-cost, most people with these conditions remain at elevated risk for heart attacks, strokes, and other problems.”

• By the Numbers – High Blood Pressure
  • 1 in 3 Adults has high blood pressure
  • 1 in 3 Adults with high blood pressure does not get treatment
  • 1 in 2 Adults with high blood pressure does not have it under control
• By the Numbers – High Cholesterol
  • 1 in 3 Adults has high cholesterol
  • 1 in 2 Adults with high cholesterol does not get treatment
  • 2 in 3 Adults with high cholesterol do not have it under control

The insurance coverage focus of healthcare reform will probably make little difference in these numbers.  In this same CDC report, it is noted that more than 80% of patients who lack control of theses cardiovascular disease symptoms already have insurance.  Additionally, the cost to treat these conditions is relatively low with many highly effective treatments now available as inexpensive generic drugs.

Unfortunately, over the past several decades while healthcare provider systems battled Pharma companies over drug prices and Pharma companies focused on driving the market for “new prescriptions,” a huge market of untreated and ineffectively treated patients was building.

Why should we care?

Well, Pharma should care because there are tens of millions of potential patients yet to be treated.  Perhaps not all these potential patients will be willing or able to pay high prices for branded products but some may and will.

More importantly, beside the thousands of people suffering debilitating consequences or even dying prematurely, this same CDC report notes that cardiovascular disease costs the nation $300 billion each year.

So how do we improve and expand the treatment of patients with high blood pressure and high cholesterol?

The CDC report includes several suggestions and recommendations for programs, systems, and incentives for prevention and improving the treatment of cardiovascular diseases.  Unfortunately, many are similar to tactics being deployed today, previously suggested, or that have been tried before.

I believe the solution to this dilemma is to make the patient take responsibility for their health.  Pharma companies can make effective treatments available, physicians can prescribe the life style changes and medications, insurance companies and the government can pay for the treatments.  But, if patients don’t seek out and comply with the life style changes and treatment regimens, there is little the rest of the healthcare provider system can do to help patients prevent cardiovascular disease.

So how do we get patients to take responsibility?  This may be a little radical but what about making patients personally,  financially responsible for the consequences of not seeking diagnosis and treatment or complying with their treatment regimens.  If you have high blood pressure or high cholesterol and you choose not to find out (get checked) or be treated or not to be compliant with your prescribed treatment (including life style changes), that’s fine,  but you become personally responsible to pay for any medical expenses related to your heart attack or stroke.

While people have a hard time appreciating the health consequences of a heart attack or stroke until it happens, they seem to understand the financial consequences without experiencing the event.  That is why people buy insurance and why health insurance is so important to them when seeking employment.  They can relate to the financial implications more than the health consequences.

Want more patients to have their high blood pressure or high cholesterol controlled?  Make them financially responsible for the consequences of not seeking treatment and not staying in control of their disease.

mike@pharmareform.com

Without getting into all the nuances (e.g., implications of electronic health records or accountable care organizations) of the legislation, the major healthcare reform implications for the pharmaceutical industry include:

• Commitment for fees, rebates, and discounts totaling over $100 billion over 10 years
• Additional 30 million potential patients with insurance and drug coverage

Agreements and other negotiated benefits for the pharmaceutical industry:

• 12 years of data exclusivity for biologics
• No direct government negotiations on pricing
• No reimportation of less expensive drugs from foreign countries

So, for pharmaceutical companies, does it really matter if the healthcare reform bill is repealed?

To answer this you have to look beyond the next couple of years and any politically driven tweaks to the legislation that might take effect as a result of trying to pacify special interest groups, including insurance companies, advocacy groups, and state governments.  Any near-term implications don’t and won’t change the fundamental realities of where the US and global healthcare markets are trending.  These realities include:

• plenty of inexpensive generic drugs to treat many mass market diseases
• an increasingly cost conscious managed market with direct or indirect (mandatory discounts and rebates) price control tactics
• increasing market expectations for premium priced new products to deliver clinically meaningful benefits over other available therapeutic options (with sophisticated expert reviews of new treatment options)
• increasing demands for definitive pharmacoeconomic data to support the relative value of premium priced new products

Any near-term changes, repeals, or tweaks to the US healthcare reform legislation will not impact these fundamental market expectations.  Interestingly, the more the US market moves to a single payer model with increasing government involvement, the more these expectations will drive the prescription drug market.

Regardless, I believe the implications of any repeal of healthcare reform will be inconsequential in the context of the long-term business model implications for the pharmaceutical industry.  Yet, it’s scary to think about the amount of lobbying money being spent right now by big drug companies and the industry to influence this legislation.

I’m sure there are also teams of people at pharmaceutical companies right now working diligently trying to forecast and model all the permutations of legislative repeal.  While a necessary exercise (don’t want to miss an opportunity or provide Wall Street with flawed financial guidance), a laborious review could be a huge distraction and probably a waste of time in the context of what needs to be done for the long-term.

The real focus for pharmaceutical companies should be on enhancing and bolstering their discovery research.  In the end, the pharmaceutical industry and drug company success will be determined by finding better more efficient ways to deliver products that satisfy a much more demanding market that has higher expectations for therapeutic benefits and value.  mike@pharmareform.com

If the healthcare market, industry critics, regulatory agencies, and patients are looking for a way to control and reduce the influence of pharmaceutical company advertising and promotion on prescription drug choice, they should step up and take responsibility for the decisions they are making.  Don’t blame the drug companies for prescribing and reimbursement choices being made by the healthcare market.

Nobody is forcing physicians to prescribe these drugs.  Nobody is forcing insurance companies or the government to reimburse prescriptions written for “off-label” uses.  Nobody is forcing patients to take drugs for unapproved uses or to take drugs that might result in side effects or adverse reactions.  These are all conscious choices.

Information about the appropriate use of prescription drugs and the known potential risks associated with taking these drugs is readily available in the prescribing information (FDA approved label claims or package insert) for each drug.

One would think that prescribing decisions would be based on careful evaluation and assessment by the healthcare market, physicians, and patients and not driven by the influences of pharmaceutical company marketing and sales activities.  How irresponsible is it for physicians, government agencies, or insurance companies to accuse drug company advertising and promotion for determining their prescribing practices or reimbursement policy rationale?  It is also not credible to suggest the government (including state agencies) and insurance companies are being duped by drug companies and are blindly reimbursing for drugs prescribed for “off-label” uses.

So how should this be working?  (I am not trying to be a lawyer here, just proposing how it should be working)

• When a physician and a patient decide to use a product, it should be implicitly acknowledged that they are aware of and understand the information in the product prescribing information (FDA approved label claims and safety information).  If the patient does not understand the information in the product label or the implications of the wording in the product label, it is the physician’s responsibility to help them understand the potential risks and benefits.
• The patient has a choice to take the drug or not based on the information they receive from the physician (and they can read the product prescribing information themselves, if they want to).  By deciding to take the drug, patients acknowledge they are aware of the potential for side effects and adverse reactions and accept these risks (shouldn’t be able to come back and sue the pharmaceutical company for something that is in the package insert).  They have made an informed choice to accept the risks.
• Pharmacists, before dispensing a prescription, should make sure patients understand how to take their medications and the potential side effects, adverse reactions, and food or drug interactions.  Dispensing pharmacists should be accountable for making sure patients understand the risks.
• Physicians should prescribe products only for the FDA approved label claim indications.  Physicians who prescribe and patients who decide to take a drug for an “off-label” indication or use should assume the product liability for how the patient responds to the drug (lack of efficacy or any resulting side effects and adverse reactions). They have made a conscious informed decision and choice to prescribe the product for a use for which the manufacturer has not obtained sufficient evidence of safety or efficacy (FDA approval).
• Government programs (e.g., CMS), private insurance companies, healthcare provider plans (including state government programs), and pharmacy benefits managers should reimburse only for FDA approved label claim indications.  By providing reimbursement for “off-label” uses, I believe they are complicit in the promotion of “off-label” use of prescription drugs.  The lack of reimbursement makes the promotion of products for “off-label” uses much less attractive for drug companies.
• Insurers (private or public) who provide reimbursement for off-label uses of a product should assume all product liability for its “off-label” use, including lack of efficacy or any resulting side effects or adverse reactions. (can’t come back and sue the pharmaceutical company)
• Insurers (private or public) who agree to reimburse for “off-label” use of a product should not be able to sue for false claims or fraud related to that “off-label” use.  The insurer knows the physician has made a conscious decision to prescribe the product for an “off-label” use, the patient has been informed of this decision and how it was reached (discussion with the physician), and the reimbursing insurer has the prescribing information against which to evaluate their decision.  By providing reimbursement, the insurer acknowledges agreement with these decisions and should accept the potential liabilities.

If the healthcare market, insurers, physicians, and patients don’t want to be influenced by drug company advertising and promotion, they can simply take responsibility for the drug treatment choices and reimbursement decisions they make.  The ready availability of FDA approved prescribing information leaves little excuse to be unduly or inappropriately influenced by drug company marketing and sales activities.  In fact, isn’t it embarrassing to admit that prescribing and reimbursement decisions are based more on pharmaceutical company marketing and sales than medical information and clinical judgment.

So quit blaming drug companies for prescribing choices and reimbursement decisions.  mike@pharmareform.com

Here are some things for Big Pharma executives to consider as they restructure for the future:

• No single blockbuster product can fix a dysfunctional pharmaceutical company.  It can only buy time to make the inevitable difficult but necessary changes.
• The pharmaceutical market will become increasingly global with less regional variation in treatment practices, regulation, and pricing.
• Unsubstantiated value of seemingly unjustifiably high prices will be met with market rejection, outright price controls, government price negotiations, and higher rebate expectations.
• Relative to Big Pharma pipeline needs, Biotech will have a finite supply of clinically meaningful differentiated innovative products available for acquisition
• Traditional marketing and sales activities will have little impact on prescribing behavior which will be more influenced by scientific rationale, demonstrated meaningful clinical benefit, and the impact on overall healthcare costs of treating the patient
• Prescribing will be increasingly managed with “best practice treatment guidelines” prompted and monitored for compliance through e-prescribing technology
• Electronic medical records with medical information systems driven algorithms will allow for real world assessments for determining relative therapeutic benefits and healthcare cost implications of treatment options
• Financial incentives, cost management benefits, and more effective products and programs will drive a revitalized interest in making preventive medicine and medically prescribed life style changes a priority
• Product and treatment assessments will be more rigorous, more sophisticated, and less easily influenced by Pharma companies unless they have  compelling real world clinical data to support their claims
• Comparative efficacy will become a regulatory and healthcare market expectation
• Therapeutic options will include stem cell, gene therapy, and synthetic biology- derived treatments.  Some may ultimately eliminate the need for chronic treatment in small molecule mass markets.
• Drug-device and delivery systems will target treatments to specific disease targets, increasing efficacy at lower doses while reducing the potential for side effects and adverse reactions
• Companion diagnostics and personalized medicine will be a regulatory, market, and healthcare provider expectation
• Reliable, high quality manufacturing that ensures consistency and safety will be a differentiating feature for pharmaceuticals, especially for generic drugs
• Affordability will eventually mean denying insurance coverage (private or government) for high priced drugs with marginal therapeutic benefit, especially those with minimal end of life benefits
• To maintain profitability under intense pricing pressure Pharma companies will be forced to dramatically reduce their operating expenses (well beyond their current thinking)
• Big Pharma companies that maintain their large organizational size will have less pricing flexibility and will be hampered in their ability to deliver innovation, ensure customer satisfaction, and avoid regulatory and legal missteps

So what to do now:

• Pharma recruiting, training, and talent management must improve with a focus on expertise, competence, and integrity.  Hire and develop “the best” (e.g., world class scientific expertise, visionary leadership with integrity, highly skilled operations personnel) rather than just finding somebody who has done or can do the job.
• Focus research on comprehensive understanding of diseases rather than just exploiting chemistry and disease targets.  Strive for preventions and cures rather than just developing another compound or molecule to get to the market.
• The number of pipeline projects is only meaningful in the context of new market expectations.  Products that can not deliver clinically meaningful differentiation should be objectively reevaluated for commercial viability in a more demanding healthcare market. Fewer development programs will make it past this assessment if companies are truly objective and critical in their evaluations.
• Pipeline target product profiles should define the potential “comparative efficacy“ and the meaningful clinical benefits relative to other therapeutic options
• Identify and develop plans for securing the specific data needed to substantiate the claims of efficacy, safety, and “value”.  This is not just to meet regulatory requirements but to withstand rigorous, more sophisticated managed market expert assessments.
• Make companion diagnostics a requirement for pipeline projects
• Develop managed market expertise throughout the organization not just as commercial function.
• Develop healthcare system collaborations that allow for understanding, designing, and executing comparative product and treatment assessments in different electronic medical records systems
• Assume none of the traditional marketing and sales tactics will work (including social media) and then prepare plans for promoting your products in this new healthcare market. For example, think about how electronic medical records and best practice treatment guidelines will influence e-prescribing.  How will you educate a physician population without traditional tactics?
• Assume that even your most aggressive cost cutting programs in operations will not be enough.  Root out legacy, non-essential expenses as if you were facing bankruptcy.
• All non-core competencies should be critically evaluated as outsourcing opportunities
• Invest in expertise, competence, integrity, and high performance systems and equipment to ensure consistent high quality manufacturing (if the company plans to continue manufacturing as a core competency). Invest and retool your processes now for the future.

Critical Success Factors

• Innovative new products with companion diagnostics
• Robust real world data to support clinically meaningful differentiation
• Organizational managed market expertise
• Talent management focused on expertise, competence, and integrity
• Low cost, efficient yet reliable operations
• Commercial programs designed to help healthcare providers and patients realize the full value of the company’s products
• Become a trusted and credible source of disease and treatment information
• Patient well-being must be a priority (e.g., patient safety more important than negative impact on sales or potential implications for litigation)
• Leadership and organizational integrity

The intent here was not to draft a business plan but rather to identify some of the predictable changes of the evolving new healthcare market that will impact Pharma companies.  This was merely to demonstrate that it is possible to anticipate the changes we see evolving in the market and prepare for them if we look forward and take action now.

Now, I’m sure some of you are thinking… ” do you think we are idiots? You made me read all this for nothing.  Obviously, the industry and its executives are doing this.  We have strategic planning groups of MBAs working full time on this stuff.”

Well, I’m pretty sure industry executives thought they were taking care of the future back in the mid-1990’s as well.

mike@pharmareform.com

I believe the current layoffs are in large part a result of Big Pharma mismanaging the cash they were generating over the past two decades.  Innovation in R & D was not critical for market success when you could “tweak molecules” and drive sales of even marginally differentiated products with aggressive, and wastefully expensive marketing and sales tactics.  Efficiencies in operations were not a priority when you had so much cash coming in that the modest  savings generated by pseudo cost reduction programs seemed inconsequential and not worth the effort.  And despite laboring through annual departmental political battles for headcount requests, cash rich Big Pharma continued to add staff while still delivering Wall Street acceptable operating profits.

You can’t blame the economy for historically bloated operating expenses, diminished R & D productivity, or the billions of dollars spent on litigation, fines and settlements for questionable marketing and sales activities.  The patent cliff and the increasingly managed evolving new healthcare market were not only predictable but their impact could have been mitigated had executives worried more about long term strategies rather than focusing on meeting quarterly numbers to appease Wall Street and ensure their own personal financial security.

But now Big Pharma has no choice. There is no way for the slowing revenue growth to support the expensive, inefficient operating infrastructures they have accumulated over the last several decades.  Unfortunately, and even unfair perhaps, this means their front line employees will bear the brunt of the mismanagement.  Even more unfortunate, is the loss of jobs at Big Pharma at a time when unemployment is at an all time high and the global economy is struggling to recover.

Even without 20/20 hindsight, I believe the current situation was avoidable.  Had Big Pharma pursued innovation in the mid-1990’s rather than relying on “tweaking chemistry” just to get products to the market, managed their expenses when cash was plentiful, and had the foresight to begin adjusting their strategies and workforce for the evolving new healthcare market rather than trying to be the biggest Big Pharma you would not be seeing the layoffs we have been experiencing.

So what does Big Pharma need to do to make sure they realize the benefits of this painful but necessary downsizing?  We’ll discuss that in the next post. mike@pharmareform.com

The comprehensive care expectations for Accountable Care Organizations are beyond the capabilities of most solo physician practices or even small groups.  Also, hospitals will need to expand their roles to include better coordinated post hospitalization care to ensure patients continue their recovery without relapse and re-hospitalization.   This integration of care approach is causing some private practice physicians to consider joining larger group practices and encouraging hospitals to reach out to employ and align with the best physicians in their geographic coverage areas.

So how will this affect pharmaceutical sales?

The first implication of Accountable Care Organizations is most likely going to be a further reduction in sales representative access to primary care physicians as they join larger, busier group practices or hospitals.  Representative access to these physicians is  likely to be governed by even more selective product recommendations and administrative policies developed by the Accountable Care Organization.  The impact on physician time with patients and the potential for sales reps to influence expensive branded product use will also affect access decisions.  If representatives can demonstrate value by favorably impacting quality of care or cost reductions, they will find physician access less challenging.

Adoption of best practices and formalizing treatment guidelines will mean physicians will  be less autonomous in their prescribing practices. They will also have a financial vested interest in prescribing cost effective treatments, complying with formularies, and following recommended treatment guidelines established by the Accountable Care Organization. This will make it more difficult for pharmaceutical representatives to directly influence prescribing of products not supported by ACOs.

Electronic health records (a prerequisite for Accountable Care Organizations) will make the real world impact of drugs on provider quality of care and costs more readily available for evaluation.  Electronic medical records and e-prescribing will also allow for managing and monitoring compliance with treatment guidelines. These assessments and compliance monitoring will leave less opportunity for random use of expensive branded products with marginal clinical benefit.  Deviations from treatment guidelines will require justification and could result in reprimand or potentially expose physicians to financial penalties if repeated non-compliance results in increased costs without clinical benefit.

Companies with products that can demonstrate improvements in clinical outcomes (better than alternative treatment options) or reductions in overall healthcare costs will find a much more receptive institutional audience than they might have in the past.  Companies armed with compelling data will be able to influence the inclusion of their products on formularies and in treatment guidelines.  This is especially true for value-priced preventive medicines, vaccines, and companion diagnostics.

Sales representatives with new products or products that are not favorably received by the ACOs in their territories will be faced with the challenge of gaining acceptance.  Unlike having to convince (selling) individual physicians to prescribe your product, formulary and treatment guideline recommendations will be determined by healthcare provider teams with therapeutic and cost benefit expertise.  More importantly, electronic health records will provide these teams with easy to analyze comparative clinical outcomes and cost data from their own organizations, making it even more difficult for companies (and representatives) without comparable data to make their case.  Collective expertise, real world data, and financial incentives for delivering good clinical outcomes at low cost will make for a hostile environment for companies and representatives who are not equally armed with expertise and real world therapeutic and cost benefit data.

On the other hand, if the Accountable Care Organizations feel a product can help them achieve their quality of care and cost savings goals, representatives may be enlisted to assist the ACO achieve its goals.  Representatives could be encouraged to help educate physicians and other healthcare providers about the appropriate use of their product (within treatment guidelines).  They might even be called on to assist with implementing adherence and compliance programs to make sure patients take their medications as directed.  It might even get to a point where products are placed in treatment guidelines contingent on delivering the expected clinical outcomes and cost benefits.  This would require representatives to understand the metrics for assessing their product performance and staying current with how their products are performing (clinical outcomes and cost savings) within that ACO.

Regardless of how the ACOs are structured or how they decide to operate, it will mean a completely different work environment for pharmaceutical sales representatives.

mike@pharmareform.com

About the same time, the widespread use of antibiotics rightfully started to raise concerns with the Infectious Disease community about the development of resistance.  Armed with microbiology data and clinical studies, formularies and treatment guidelines were developed to encourage appropriate antibiotic use.  Selectively targeted narrow spectrum treatments were preferred to the mindless routine use of broad spectrum agents.  To preserve their antimicrobial activity, the use of some uniquely effective agents was further restricted to prior approval by Infectious Disease specialists.

While these were responsible and commendable actions taken, they presented the pharmaceutical industry with a new set of expectations for developing antibiotics. The message was clear.  If you want your new antibiotic to be used and you want to be paid a premium price for it, you better have the data (comparative effectiveness) to support that it is better than what we already have (including generic alternatives) and be able to prove it is worth the money (comparative value) you want to charge.  And, even if it is that good and costs that much, we are going to make sure it is used selectively in only those patients who absolutely need it.

This wasn’t and still isn’t a very attractive investment opportunity for the industry given the ease of tweaking molecules and the lack of market resistance in other therapeutic categories. Even for companies that decided to have a go at antibiotic drug development, it hasn’t been a very easy road to market.  The few products that have gotten approved and done well were able to demonstrate or at least imply a clinical advantage over other drugs.

Now the industry and the FDA are faced with trying to figure out how to design trials that would allow for fair comparisons of different antibiotics.  Not satisfied with clinical “non-inferiority” the FDA and the industry seem deadlocked in trial design limbo.  More importantly for the industry, the market expectation is for superiority anyway. The company will need near impossible – to – obtain “substantial evidence” in their clinical data to obtain an FDA approved superiority claim needed to promote the antibiotic as superior.

Could other therapeutic categories become similarly unattractive for drug development?  When market expectations and regulatory hurdles become impractical and seemingly financially infeasible pharmaceutical companies will make one of two choices.  They will take on the task in hopes of beating the challenging circumstances so they can charge a super premium price when they bring that superior product to market.   Or, more likely, they will gravitate to therapeutic categories with lower market expectations and fewer regulatory hurdles.

Many pharmaceutical companies will fail making the first choice and many diseases will never have optimal treatments given the second choice.

mike@pharmareform.com

Warning: This post is intended to be a genuine offer of help to people who work in or for the pharmaceutical industry through an invitation to purchase Pharmaplasia™.

Are you wondering about the future of the pharmaceutical industry and whether your company is making the right strategic choices to succeed in the evolving new healthcare market?  Do you have the insight and “know-how” to exploit the changing environment to your advantage? Or, are you wondering if the pharmaceutical industry is still the place for you to advance your career, fulfill your professional aspirations, make a living, and support your family?  Are you wondering how long this will last… for you?

As in any dramatically changing market environment (think typewriter manufacturers and sales people in light of the personal computer) you want to stay ahead of the changes so you don’t find yourself with outdated thinking, products with no market, or obsolete skills.

Pharmaplasia™ can help you understand and plan for the changes taking place.  It will help you broaden your perspective, challenge your biases, and give you a context to frame your own conclusions.  And even if you don’t agree with all the findings, Pharmaplasia™ will force you to think through your current situation and its viability in the evolving new healthcare market.

If you work in or for the pharmaceutical industry, understanding the impact of the changing healthcare market and the implications for you personally are critical to your career success and financial security.  Pharmaplasia™ describes the impact of healthcare reform at the functional level of a company with specific recommendations for change in leadership, sales and marketing, research, and operations.

Pharmaplasia™ will help you evaluate your personal situation so you can determine what you should be doing to prepare for the changes so you not only have a job but have a professionally satisfying career with financial security in the evolving new healthcare market. You’ll be able to assess your company initiatives against the strategic scenarios and specific recommendations for change to determine for yourself whether or not your company and its leadership understand what lies ahead and are taking the necessary steps to align with the new market expectations.   Using what you learn from Pharmaplasia™, you can also evaluate other companies to see who in the industry seems to be getting it right.  Who has the pipeline products you think will make it in the new marketplace?

No need to leave your career and personal financial security to chance.  Stay in the industry, stay with your current company, or change?  Stay in your current area of expertise and functional responsibility or prepare for a career change? Change to what?

I invite you to order your copy of Pharmaplasia™ so you have the information you need and a context to evaluate and help make informed, rational decisions about the changing healthcare market and the implications for the pharmaceutical industry and more importantly ….. the implications for you.

mike@pharmareform.com

So here goes.

When it comes to skills and expertise each of the following representative profiles has its strengths and these strengths may or may not be a good fit for a particular industry or job function.  Here is how I see the two profiles:

Traditional Pharmaceutical Sales Representative:

• Strong interpersonal and social skills help build rapport and establish relationships
• Exceptional selling skills and persuasive techniques
• Tactically oriented, relying on sales materials, promotional programs, and samples
• Customers are seen as prospects and a source of sales revenue
• Selling is seen as a competition (if I get more prescriptions I win, you lose…even if my product isn’t as good as yours)
• Sales numbers are a scorecard for incentive compensation
• Work Objective:  “get the doctor to prescribe your product as much as possible”

Future Professional Representative:

Has many of the skills of the sales representative including interpersonal, social, and selling skills but…

• They have a patient-oriented focus around meeting or exceeding customer and market expectations (want the best product for the patient)
• Rely heavily on technical and scientific expertise as their base of confidence  to establish rapport and build credibility and trust
• Sales numbers and incentive pay are not performance motivators
• Work Objective:   “make sure patients  get the right product and customers realize the maximum benefit from your products”

The biggest differences between these two profiles for selling pharmaceuticals are the level of expertise and the mindset about their jobs.  The professional representative goes well beyond the company training and resources to understand the science around their products and diseases.     They pride themselves in staying current and knowing more about their products, the diseases being treated, and competitive products than anybody in their territories, including the physicians.  They base their knowledge, presentations, and conclusions on data from the literature which they can quote objectively and accurately.  They do this because they see this not just as their job but their responsibility.

The professional representative has a different motivational mindset.  They are motivated more by personal performance excellence and expertise than sales numbers and incentive pay.   The reason they like and do their job goes well beyond making the sale.   In fact you might even think the sale is a collateral benefit of their work.   This is a very hard attribute and concept to describe because it is inherent in the thinking of a professional representative.  This is one of those “you know it when you see it” type things.  Their drive and motivation may not even make sense to the hard core traditional sales representative and certainly isn’t compatible with most traditional pharmaceutical sales management thinking or expectations.

There is nothing wrong with being a traditional sales person.  This profile drove sales in the pharmaceutical industry for decades.  And, there are industries , especially retail and consumer products, that require a sales mentality to succeed.  And, you can be a professional sales person, mastering the skills and acquiring the expertise related to sales of the products you are selling.  But if your mindset is still that you  are motivated by making the sale and the only reason for your interaction with a customer is to generate a sale, you are a sales person.

The healthcare market has changed however, and one of the changes that the pharmaceutical industry must accommodate is the declining effectiveness and diminishing tolerance for the traditional sales representative role and profile.  Declining physician access was perhaps the first indication of this market change.  State legislation to restrict sales representative activities followed and intensified regulatory scrutiny has now made for a much more challenging environment for pharmaceutical sales representatives.  As a result, I believe that a professional profile as described here and in  a previous post is the only hope for pharmaceutical companies to have a local “in the field” presence in the evolving new healthcare market.

I can hear it now….but the regulatory and legal constraints won’t allow for this profile.  I’ll address that in the next post.  Stay tuned.  mike@pharmareform.com