Pharma Reform

Ever notice that when professionals (it doesn’t matter if it is a corporate executive, lawyer, actress, or athlete) are interviewed in their offices or homes they almost always have a library full of books in the background.  There is a reason for this.  It’s not just for looks, although it is impressive.

Professionals have an inherent need to know as much as they possibly can about their profession and the work they are doing.  This includes learning about differing points of view and why people might hold them.  This includes different ways of doing things,  even though they may not agree with the method.  Professionals strive to keep themselves up to date and ahead of their colleagues and anybody else for that matter.  They go well beyond what the average person will do to stay current or to do their jobs better.   And, while they know they can command higher compensation than non-professionals doing similar work in the same field, compensation is not a motivator for true professionals.

Professionals maintain their expertise and keep it current because it is a big part of who they are and they know that being a true professional with genuine expertise is rare.  They  continuously look  for ways to improve and enhance their expertise, often evaluating and employing new technology quickly if they think it might help them.  And while the internet makes it easier for them, books, including electronic versions, still provide information, insights, and unique author perspectives that can not be found on the internet.

Are you a professional or are you just doing a job?  It really is a personal choice and being a professional may not be for you.  It is also not a right or wrong choice, good or bad choice type thing.   It is also not about doing your best but more about being the best.  It takes commitment, dedication, skill, expertise, and an internal, self motivating drive to be the best at what you do.

So, if you consider yourself a professional, what’s on your bookshelf?  What have you read lately?

mike@pharmareform.com

For professional representatives to flourish in the evolving new healthcare market executives must create a corporate environment that understands the importance of and is committed to changing the commercial model.  An environment where executives and commercial managers are committed to do whatever it takes to help professional representatives be successful in this evolving new healthcare market.  With the professional representative focused on the customer (again, not just physicians), corporate and commercial management should be focused on developing the products, label claims, data, information, and programs that help professional representatives meet the needs and expectations of the evolving healthcare market customer.

This organizational transformation will require that commercial management step up their game and the level of their own professionalism.  Expertise in traditional marketing and sales tactics is not going to help much in this evolving new healthcare market. There are no slick technology quick fixes or gimmicky tactics that will substitute for meeting product and data needs of the market.  It is critical that marketing and sales management understand and accept that tactics that worked in the past and the bad behaviors that drove revenues in the past, are no longer going to be tolerated and will not work in the evolving new healthcare market.  It means marketing and sales management must reformulate their strategies and acquire new skills and expertise that are better aligned with the needs and expectations of the evolving new healthcare market.  This includes being able to effectively deploy a  sophisticated team of professional representatives and arm them with products and support resources that address the evolving healthcare market needs and expectations.

Unfortunately, most executives and the people running commercial teams today are grounded in a traditional mentality about pharmaceutical marketing and sales.  This is where I predict most organizational transformations will fall short and stall out.  Those who can make the changes and should be championing the changes will feel threatened by a move away from their own expertise, experience base, and comfort zone.

Here is something to think about.  Let’s assume the company decides to embrace the organizational changes we have discussed and it is ready to embrace the new professional representative profile. Where do you find marketing and sales management with the new skills, expertise, and mindset needed to formulate and implement the new commercial strategy?  For example, will sales managers understand and appreciate the differences between sales reps and professional representatives?  Will marketing managers understand that they need to spend more time comprehending the complexities of the evolving decision-maker processes and nuances of customer expectations (not just market research) rather than worrying about the copy and graphics for their next TV commercial?

Again, don’t underestimate the need for executives and commercial management to really understanding the market at the customer level and having the right mindset about how to approach this new commercial model.  Some sales representatives and some commercial management may be close to the desired profile and mindset needed for these changes but they also need corporate executives who can create an environment in which these individuals can champion these changes and flourish.   Unfortunately, there are probably more who don’t get it, won’t get it, and will probably fight it, if not actively, passively by doing nothing.

mike@pharmareform.com

In our series about pharmaceutical representatives we have covered factors impacting their job function, market expectations, what needs to be done to launch and market a pharmaceutical product, and what it means to be a professional pharmaceutical representative.  Today we are going to discuss the organizational implications and what has to happen throughout the corporation to make this transformation for professional representatives a successful reality.

If we work back from how the market is evolving and what companies need to do to address the changing expectations of a broader and at times, more sophisticated customer (not just physicians), we can see that the implications for change at a pharmaceutical company are organizational and not just for “sales”.  This is truly transformational for executives and senior management, R & D, and commercial operations.  Companies will fail miserably if they are merely looking at how to change their sales organization (e.g., restructure, new compensation, and new titles).

Of all the issues we could discuss, getting all the functional areas aligned for this change is the one that precludes most pharmaceutical sales organizations from making the fundamental changes they know they should make in light of the evolving new healthcare market. What we are talking about is formulating an organizational strategy that creates a comprehensive culture and support system that embraces the role of the professional representative so they and the company products can succeed in the evolving new healthcare market.

The first change that needs to take place is the organizational mindset from the traditional “sales” position to that of the professional representative.  Your CEO and executive team play a huge role in this.  They must see professional representatives in the light we have described and not as “expendable field people” deployed tactically to drive sales.  This mindset change requires that executives and senior management understand the changing healthcare market at the customer level (not just physicians).  They must appreciate how the role of professional representative will be different from that of the sales job they have known for decades and probably did themselves.  If executives and senior management don’t understand the difference, it will make no sense to implement any of the other organizational changes needed.   In fact, the other changes are probably not going to get their support because they will seem like a waste of time and money to the “sales rep” oriented executive team.

If it is not somebody on the executive team proposing the changes it is incumbent on the person or team that is to make sure the executive team fully comprehends and supports the strategy, organizational implications, and the rationale for the changes being proposed.  As bureaucratic as large companies can be, but more importantly because of the multi-functional implications,  this is not just a discussion over coffee.  It will require well thought out planning with a series of discussions to work out details of the functional implications and to garner functional support.

Each company and executive team will be different.  Company strategy, financial position, product pipelines, and even the expertise and competency within the organization will factor into how receptive an executive team might be to the magnitude of change being proposed.  Whether or not you can get the executive team to buy in and how to do that may be interesting fodder for another series but in our next post, let’s just assume the executive team is on board. They not only understand and are ready for change but  embrace it, expects it, and they are ready to support it.  I know this is a big assumption but we can’t get to where we need to be without it so let’s play this out in the next few posts.  What else has to change?  Stay tuned. mike@pharmareform.com

From our last post it should be apparent that successful pharmaceutical companies will move to a considerably more complex product sale than a simple discussion about indications for use and potential side effects or adverse reactions.   The technical depth of the science, the volume of data, and breadth of expertise required (basic sciences, therapeutics, diagnostics, pharmacoeconomics, and new quality metrics and outcomes) will require a level of scientific and technical expertise beyond that required or expected for most traditional sales presentations.  Success for pharmaceutical representatives will also require a much broader understanding of market dynamics (government, insurance, payers, and managed markets) and enhanced territory management skills beyond physician call scheduling.

I’m sure some readers are saying they already do these things and this is not new.  I am going to make a point here that might irritate some readers but it needs to be made.  There is a difference between being a sales representative and being a professional representative.  I believe sales representatives have little opportunity in the future of the pharmaceutical industry while professional representatives will be in high demand.

Being a true professional is more than just getting paid to do something.   So what’s the difference between being a professional and not being a professional?  One way to distinguish a professional from others is that they works so hard at being good at something that they can  even make difficult things in their profession look easy to do.

I know you have seen it.  There are those who always have perfect scores on package insert tests and always win the product presentation contests.  They even know stuff you don’t need to know.  They are also the ones who know every office staff person in their territory and have more access in their territories than most of their competitors.  They are always in their territories until late, sometimes even after most sales representatives would consider beyond a reasonable time to call on an office.

Professional representatives are frequently the ones who volunteer to help or mentor new representatives.  Probably most interesting is they are also the ones that seem to complain the least and accept regulatory or market challenges as something they just have to deal with.  And, while they may be critical of marketing materials, they offer constructive feedback and find ways to work with what they have.  They also welcome skillful manager coaching and performance reviews as ways to get critical feedback on how to get better rather than looking at them as their manager checking up on them and a scorecard for incentive compensation.

For every job there are different levels of performance and expertise.   If you are a sales representative you do what needs to get done, make the calls you can, learn enough about your products to deliver the marketing message and answer the important, high probability questions, and in the end,  hopefully you’ll deliver the sales expected.  You give the company a full day of “work stuff” and maybe even do some “work stuff” at home to make you feel better about being committed to your job.  Again, there are varying degrees of performance and expertise in being a sales representative.

If, on the other hand, you are a professional representative, you commit to a much higher level of job performance and expertise than merely going through the motions and doing “work stuff.”  You research more, study harder, practice often, and try to reach a level of job performance and expertise beyond the expectations of others.  You are doing it not just to increase sales in your territory.  You are doing it not just to be the smartest person in your district or to garner favor with your District Manager.  You are not even doing it just to please your customers.  You are doing it because it is your profession and you are committed to being a professional representative.

Today both types exist (pharmaceutical sales representatives and professional representatives) but I believe you have no choice in the evolving new healthcare market.  If you want to be employed as a pharmaceutical sales representative, your days are numbered.

If, on the other hand, you are committed to being a professional pharmaceutical representative you have a much higher probability for being employed and having a positive impact on patient care.  And while you may find the market more complex and products more technically difficult, you will find that overcoming those challenges will be even more professionally satisfying.  You will also find that patients in your territory who should be on your products will have a higher probability of that than if you are a pharmaceutical sales representative in that same environment.   Professional representatives will be in demand because, while there are plenty of people who can be pharmaceutical sales people, there are far fewer people who are ready, willing, and able to commit to the hard work and effort required to be a professional pharmaceutical representative.

In our next post we will discuss how the corporate mindset and expectations must be aligned to support professional pharmaceutical representatives in the evolving new healthcare market.

mike@pharmareform.com

If we are trying to figure out how sales representatives can add value, we must start with those who will determine whether or not there is value being added… the customer.  This may be obvious to some, especially sales representatives, but over the past several decades pharmaceutical industry management has characterized the “value added” in the context of what sales representatives can do for the company or the product and not what sales representatives can do for the customer.  So let’s start with the customer (which is not just physicians in the evolving new healthcare market) and what their needs are and how we can add value by meeting or exceeding those expectations.

I don’t want to get off on a tangent but the needs and expectations I’m talking about here are not for things like lunches being delivered or a return of the tchotchkes.  Unfortunately, the industry trained physician offices into developing these expectations in lieu of meaningful clinical discussions about products.

So let’s review some of the evolving market expectations for pharmaceuticals that the industry must be ready to meet, especially in light of healthcare reform:

• Safe and effective products that can be differentiated (clinically proven and with label claims where possible) from currently available treatment options (including preventive medicines)
• A clear understanding with supportive data for the basic science behind the product, its mechanism of action, and rationale for efficacy and potential side effects and adverse reactions.
• Clinical data to support “comparative efficacy” and other claims of differentiation or even superiority (justify the premium pricing)
• Personalized medicine supported by biomarkers and companion diagnostics that can predict response, determine extent of response, and anticipate side effects and adverse reactions with specificity and accuracy
• Real world pharmacoeconomics data to support the economic value of the product and pricing that reflects the value being delivered. Again, justify the premium pricing.
• Hospitals will want data and methodologies to demonstrate the impact of products on newly established quality metrics and outcomes data that will be used to force rank their institution performance against national standards.

One of the first implications of meeting these more demanding market expectations is that pharmaceutical companies must readjust their thinking to be more selective in their pipeline evaluations and  a lot more comprehensive in their approach to research and development.  In the past, you could just find a compound, identify the potential indications for use, do the clinical studies, get approval, and go to market.  This traditional “get it to market” approach to R & D will deliver products and data that fall short of market expectations and hamper commercial viability of products in the evolving new healthcare market.

It also becomes apparent that regardless of the representative’s scientific or technical expertise, even the best of sales representatives will struggle to address these market expectations if the research foundation and data are lacking.  I believe this is one of the reasons sales representatives are struggling today.  Pharmaceutical research has not kept pace with the demands of the market and sales representatives are being asked to compensate for limited regulatory product labeling, a lack of product differentiation, and minimal real world clinical data that can be used in product discussions.

But let’s assume your company is committed to a much more comprehensive research approach to deliver truly innovative new products with robust data packages.  This has significant implications for how pharmaceutical sales representatives can add value for customers.   You might be surprised by some of the implications we’ll discuss in our next post.  mike@pharmareform.com

I and others have speculated about the demise of the pharmaceutical sales representative position.  Diminishing physician access, regulatory constraints on promotion, outdated activity – oriented management expectations, and misguided and sometimes misleading marketing materials that seem to have been developed by clueless corporate – based MBAs have all challenged even the best of sales representatives trying to do their job.  Rather than dwell on what has gone wrong, and why the traditional sales representative role isn’t working any longer, let’s take a look at where to go from here.

To survive, most would agree that pharmaceutical sales representatives must add more value for customers and be able to justify the substantial expense of continuing to have them in the field.  One of the more popular solutions often proposed is to enhance the scientific and technical expertise of those who want to pursue this profession, modeling the position closer to that of a Medical Science Liaison.  But, after having spent considerable time reflecting on this I have come to the conclusion that the challenges facing the sales representative position are not necessarily just related to the lack of skill, competence, or expertise.  Rather, I believe the pharmaceutical sales representative dilemma is a symptom of the current state of industry dysfunction with broad based, deep seated root causes within most pharmaceutical companies.

If this is true, then companies and especially senior commercial management are making a huge mistake and wasting time and money by taking a narrow minded approach to resolving this problem by thinking that this is a sales issue best left to sales management to figure out and fix.  It is equally naive to think marketing can figure this out and strategically determine the clever new tactic to resolve this “sales” issue.  Territory realignments, new territory management analytics, flashy new electronic detailing aids, and even enhancing hiring standards are desperate attempts at a magic bullet, quick fix for what I believe is a much broader, inherent organizational misalignment with the evolving healthcare market.  Companies that appreciate the pervasiveness of the organizational dynamics that impact the sales representative will be able to more efficiently identify the changes needed (less trial and error) and will be able to deploy more impactful commercial organizations for the evolving new healthcare market.

Over the next several posts, we’ll discuss the basis for this conclusion (Hint: it starts with the customer), what organizational changes companies need to make (Hint: it has less to do with sales than other parts of the organization) before company representatives can once again add value and justify their deployment, and finally how the job description for field deployed company representatives will change.

mike@pharmareform.com

People with a job in the pharmaceutical industry are fortunate just to have a job given the current state of unemployment in the US.  At the same time, slow revenue growth, patent expirations, depleted pipelines, and layoffs from downsizings can create anxiety and well founded despair, discontent, and insecurity.

If you’re wondering about your company’s viability in the evolving new healthcare market or considering a move to another company, here are a few things you might want to assess and check out:

• Does the executive team describe their vision in terms of patients and value to healthcare or do they talk about how big the company will be and what industry ranking by revenues they are shooting for and how they are going to get there?
• Is your C-level and management team committed to an uncompromised culture of integrity and what have they done to prove it? DOJ Corporate Integrity Agreements don’t count as proof of their commitment.
• Does your company make decisions based on doing what is right or are decisions driven more by what is legal or what is regulatory compliant?
• Is your executive team more concerned about just having something to sell and the ability of sales and marketing to drive sales than they are about having innovative products that can deliver meaningful clinical benefits to patients?
• Is R & D focused on a few therapeutic areas they intend to conquer with a broad basic science approach and a continuous search for expertise to help them or is your company merely searching for any compound or technology that might have a commercial opportunity?
• Are you proud of your management team, their skill and expertise or are you wondering how in the world they got to be managers?
• Is your marketing team dominated by MBAs who have never spent a “real day”, much less a year or more, in the field? Market research focus groups don’t count as “real days.”
• Are the entry requirements for your sales organization based on high standards for professionalism and technical competence or are people hired because they can talk a good story (read BS meter overload) and have exceptional social personality traits (look nice and are very cordial)?
• Are sales managers focused on the value reps are delivering to their customers or are they still concerned about trying to quantify your activities and deliver the marketing message?

No company is perfect, but if your assessment from these questions are not as reassuring as you might like them to be, you might have good reason to be concerned.   We haven’t even gotten into assessing business considerations like financial stability, pipeline strength, acquisition vulnerability, or litigation exposure.

If you like the answers you got from this assessment you are very fortunate indeed.

mike@pharmareform.com

The role of the pharmaceutical sales representative (Chapter 9 in Pharmaplasia™) has been waning for some time.  The internet is full of discussions about the sales representative (“detail person”, “detail man”, “detailing”) position being dead, dying, or even obsolete. Some discussions are defensive while others are unrealistically optimistic about a return to the traditional role.  At the same time,  Pharmaceutical companies are trying to balance the challenges of physician access with the fact that pharmaceutical sales has been one of the most impactful marketing tools available.  More importantly, the pharmaceutical sales representative was probably the best way to inform, and yes, “educate” physicians about prescription drugs, especially new products.

There is a lot of blame to go around for why pharmaceutical sales is struggling for survival.  There is a rarely talked about and hidden reason but first here are a few of the more obvious and frequently complained about reasons for why pharmaceutical sales representatives find themselves either unemployed or wondering if they will still have a job at the end of the year:

Some have also postulated that the advent of electronic communications and internet availability of medical and drug information have made sales representative obsolete.  I believe electronic communications should not be seen as a threat or replacement for pharmaceutical sales but rather could be a future necessity for handling the large volume of data available and to explain the complexities of new treatment options.

Some have suggested sales and sales management brought it upon themselves with questionable sales tactics and the hiring of less than professionally or scientifically qualified sales personnel.  While these may have ultimately contributed to the continuing demise of this important position, I believe you have to dig deeper to uncover the genesis of this unfortunate evolution.

Some have blamed management for just about everything and in this case, you don’t have to be very specific, from C-level to front line managers.  Unreasonable expectations and “stretch” sales forecasts drove a lot of sales organizations and individuals to do “whatever it took” to meet those sales goals.  Sales management complied with these expectations and was bound and determined to make their incentive bonuses and ensure their place at the annual sales incentive trip.  Again, “whatever it takes” to make or exceed your numbers.

Marketing often built those sales forecasts out of hubris and pushed the sales organization to deliver while also provided the marketing message and resources to do “whatever it took” to  deliver the sales.  Think of the virtually uncontrolled, unlimited (by standards for most other industries) funding for tchotches, lunch and learns, speaker programs, and of course, samples and literature (marketing materials).  Of course reps were encouraged to fully deploy and leverage all their resources.

Some people like to blame the regulatory environment (constraints on what reps can say and do) while others point to a less tolerant healthcare market (increasingly difficult physician access and institutional limitations on promotion).  These, however, while real, were more a response to increasingly aggressive and sometimes questionable (unethical or illegal?) activities rather than being inherent in the market.

No doubt, pressure on sales representatives to make their numbers was and is intense and often requires incredible selling skills and creativity to compensate for the realities of marginal product profiles given the market expectations and sometimes even harmful side effects of the products they were selling.

This leads us to one of the less obvious sources for why I believe the sales representative position has become threatened with extinction.  And that is,  the lack of credible clinical data and appropriate regulatory labeling to support the commercial claims needed to deliver the forecast sales numbers.  Sometimes the clinical data and marketing messages provided to the sales organizations have even been inaccurate, intentionally misleading, or even concocted.

Solid credible clinical data and regulatory approved labeling to support commercial claims mitigates the need for overly aggressive and questionable sales activities and reduces the regulatory constraints that bar sales representatives from having meaningful clinical discussions with physicians.  It is hard to imagine the level of sales that might have been achieved had the talented, skilled sales representatives been armed with better clinical data and stronger, more definitive regulatory label claims.

Research teams pushed (and senior management was pushing even harder) for approval rather than building comprehensive product profiles to support the commercial expectations.  The get-it-to-market drive for approval to attain indication- based label claims without differentiation or consideration for what sales representatives will be able to say or use in promotion unfairly puts sales representatives in an awkward, boring, professionally compromised, and near impossible selling situation.

So before you blame or criticize sales and sales management for jeopardizing the pharmaceutical sales position, look at the clinical data they had to work with.  You might find that they did a better job than might have been expected and you might find the reasons they felt compelled to go to such extremes in some cases to make their sales numbers.

mike@pharmareform.com

“… Pharmaplasia is important reading for anyone with a vested interest in the pharmaceutical industry (especially those who work in it).”

(Four of Five Stars)

ForeWord CLARION Reviews

Unlike other books written about the pharmaceutical industry, Mike Wokasch, a 30 year industry veteran, delves into the causes of the industry’s current state of dysfunction.  He provides practical solutions for a prosperous future, even in light of the increasing regulatory constraints, restrictions on marketing and sales, and the demands of an increasingly cost conscious market with its own challenges imposed by healthcare reform.

The author provides an insider’s perspective with unique insights into the unintended consequences of the industry’s rapid growth and explores why some Big Pharma companies may be too big for the complexities of the science, the business, and the market.  Much like his blog PharmaReform.com, this 180 page book is not an exposé but rather a hard hitting discussion of how the industry’s mistakes and poor decisions have led to serious questions about its outdated business model, its long-term commercial viability, and the imbalance between corporate priorities for “profits and patients” that have driven product sales but often put patient health and safety at risk.

Pharmaplasia™, which is available in hard and soft cover at  www.Pharmaplasia.com,  addresses important management, organizational, functional, and philosophical questions such as:

• How will Healthcare Reform affect the pharmaceutical industry?
• What do pharmaceutical companies need to do to better align with the expectations of the market and to adapt to Healthcare Reform?
• What factors, actions, and decisions led to the current state of industry dysfunction?
• Why can’t $65 billion in annual R & D spending produce more innovative products?
• What did organizational growth do to pharmaceutical companies and the industry?
• Is the role of the pharmaceutical sales representative obsolete?
• What do pharmaceutical companies need to do to reestablish trust and credibility in the market?
• What should pharmaceutical executives focus on as they reconfigure their business models?

Industry executives and employees will relate to the historical insider perspective but more importantly, take away practical recommendations for increasing R & D productivity, preserving profitability in the face of healthcare reform, and reestablishing public trust and credibility.

Pharmaceutical industry service providers and vendors will better understand their customers and comprehend the transformative challenges the industry faces; ultimately they will be in a better position to align their products and services to the address the changing needs of the industry.

Healthcare providers will relate to how the industry needs to evolve, appreciate the need for and value of “conflict of interest-free” relationships with the industry, and gain further understanding of the important role they play in ensuring that their patients receive the best available treatment options.

Patients and the general public will enjoy the insider perspective about Big Pharma while learning what they should be able to expect from an industry we all depend upon for innovative new drug treatments that can relieve pain and suffering and save lives.

Preview Table of Contents

Preview Chapter 1

Go to www.Pharmaplasia.com

Those who have read this blog know that I am not into making excuses for pharmaceutical industry misbehavior.  At the same time, it is important to understand the impact of how outsiders (those not involved in the pharmaceutical industry) are going to interpret actions and behaviors.   What might appear to be clearly unethical or illegal to an outsider may require an informed interpretation of circumstances or intent.

Think about it.  At what point are consulting assignments and advisory payments to physicians a bribe or kickback?  Could providing lunch for the office staff really be a bribe or kickback?  Is any comment about product efficacy or safety that is not verbatim out of the package insert possibly “off-label” promotion?  When are graphic interpretations or implications from an advertisement “off-label” promotion?  At what point do random side effects and adverse reactions become “hidden” if not publicly broadcast to the media?  Are systematic miscalculations of pricing always an indication of fraud?  When is competitive pricing considered price fixing?  At what point does editorial assistance become “ghostwriting?”

I am not an attorney and this is not a legal discussion.  Rather, this is about past history of proven and alleged pharmaceutical industry misbehavior including illegal activities.  Perhaps most disappointing has been the fact that as prosecutors pieced together their better informed perspective of alleged illegal activities they often found both willful intent and additional even more egregious activities to support the initial allegations.   The seemingly endless offenses have tainted the perception of prosecutors, legislators, healthcare professionals, regulators, industry critics, and of course, patients.  Virtually everything the industry does is now suspect and often transformed into allegations of unethical if not illegal activities.  Even normal course of doing business activities (e.g., presenting a favorable product profile, trying to influence prescribing, and providing samples) are now being viewed as inappropriate and possibly illegal.

It all boils down to a lack of trust and credibility.  The industry can’t even credibly defend itself to maintain normal business practices because there are just too many cases that demonstrate companies are willing to betray this trust and take advantage of the market for financial gain.  Unfortunately, the pharmaceutical industry doesn’t seem to be too concerned or you would have seen a dramatic change in behavior.

Before trust and credibility can be reestablished the industry and company executives must be on their best behavior.  Once again, actions and consistent behavior will speak louder than words or intermittent gratuitous gestures.  Trust and credibility are much harder to reestablish than to maintain.

mike@pharmareform.com