Many organisations have put in place or are considering ‘marketing excellence’ programs to help drive performance. The key challenge for companies is to prepare marketers for the future rather than just focusing on their current needs or god forbid the past. So what will ‘excellence’ demand going forward?

I am going to be a little controversial given our experience in recent years in developing, executing and seeing the end product of marketing excellence programmes.

Many organisations are still using a series of templates, generally PowerPoint as no one seems to have time to read written documents these days, as the way to ensure marketing is excellent across brands, business units and countries. However, as the smart marketing managers are recognising, their marketing teams are getting very adept at completing templates but they are not actually achieving the ‘excellence’ in marketing that is required. The necessary quality of thinking is just not there, and too often the end plan is no different from the way marketing within the organisation has always been done.

The more insightful companies that have recognised that templates are NOT the way forward, have assembled sets of tools and a logic structure to try to get true ‘insight’ by putting the customer at the centre of everything. From this base the hope is that excellent marketing strategies and plans can then be developed. However, this suffers from the inherent problem that if marketers and their bosses do not actually know what ‘excellent’ is, then the end product can still be lacking.

So what is going to drive success in the future healthcare environments and as a consequence what does ‘excellence’ look like?

Getting off to a strong start

There is now evidence to suggest that sales at the end of Q3 after product launch predict sales at Q20 (5 years post launch) and consequently peak sales Source: INSEAD.  Plus the quicker you get to market the greater period you have to maximise peak sales. Interestingly, what the analysis also shows is that the post launch trajectory is not about being first to market or being the best molecule.

An important element in achieving ‘excellence’ comes from the R&D and commercial divisions working together effectively, a key element of which is to manage thought leader segments to shape the future for the molecule, generating insight for market development, the evidence base for the product and its future positioning. This is a critical area in creating ‘value’ (see later) and developing competitive advantage.

Then there is effective management of market access and market entry, including ensuring timely and acceptable pricing along with formulary approval post-launch.

Above all product launch is about developing and sustaining a momentum for the product. This means ensuring the customer’s initial use of the product is positive and provides a foundation on which to build. How you do this is by helping the clinician identify the right patient for the product and by managing their and the patient’s expectations appropriately.

Developing true customer insight

‘Insight’ is a buzz word at the moment, but what does it mean. The Oxford English Dictionary defines insight as “the capacity to gain an accurate and deep understanding of something”; whilst the Collins English Dictionary definiton states “the ability to perceive clearly or deeply; a penetrating and often sudden understanding, as of a complex situation or problem”.

From a marketing ‘excellence’ perspective this is about discovering or recognising some previously unknown, overlooked or unappreciated reasons behind why customers behave in a particular way, their motivations; that we can then utilise to drive change.

This requires real tenacity in getting under the skin of what we see and hear. It is about assimilating and interrogating data, facts and observations to tease out and really understand the underlying drivers. It is an iterative process that looks for and then tests new patterns and explanations that have not been previously recognised.

You know when you have generated true ‘insight’ because it is so obvious, with the benefit of hindsight, once you have reached the end of the process! Getting there is all about perspiration with a little inspiration. It is about having the eyes to see and the ability to really listen.

Delivering ‘value’

The terms ‘value’ and ‘value proposition’ are being used more and more in healthcare marketing these days. The problem is that many people see the ‘value proposition’ as purely part of market access and specifically the pricing and reimbursement package pre-launch.

The challenge for marketers and what is excellence moving forward is to demonstrate value to a number of different and diverse stakeholders over the whole life cycle of the brand, not least as value means very different things to different people.

To payers it is all about the economic benefits of treating whole populations, and hence drug cost. In the UK the intent to move to Value-Based Pricing is all about improving NHS patients’ access to effective and innovative drugs.  Value for the UK Government includes impact on ‘burden of illness’ (the seriousness of the condition – including severity, and threat to life – after treatment with current best practice) and ‘therapeutic innovation and improvement’ (the scale of clinical benefit provided by the medicine, beyond current best practice). Also important are non-health benefits, such as impacts on time spent with carers. The value-based pricing assessment is intended to yield a price range that represents the value of a new medicine to the NHS.

To healthcare professionals it is more about treating the individual patient, but within the local operating environment. It is all about the medical or therapeutic benefits of the treatment. However, even then ‘value’ will differ across the healthcare professional spectrum. For specialists there will be a strong bias to evidence-based decision making with a dose of personal experience and practice, the extent depending on the specialty. So ‘value’ for the specialist is going to be driven by the strength and depth of the clinical evidence. For the generalist it is more about patient recognition and the ‘value’ comes from the medical benefits plus the practicalities of managing the patient over the course of treatment.

For the patient ‘value’ is different again. Here it is about outcomes, focused around the patient / caregiver benefits (pain, anxiety, social /emotional well-being, functioning, ability to work, etc).

The challenge for the marketer is that the relative or perceived ‘value’ of a product will change over the life cycle, given changes in the competitive set e.g. brand leaders going off patent and new entrants that offer greater benefit. Hence life cycle management takes on a different dimension. Rather then just managing label or indication extension, the marketer needs to continue to develop perceptions and the evidence of acceptable ‘value’.

Focus

In project meetings with senior managers we regularly hear the same thing: “we try to do too much”. With the necessary change in business models, away from pure sales force numbers and share of voice, there is a natural tendency to try to cover all the bases in case we miss something important. But then marketers end up with little focus and no clear direction; like headless chickens rushing round doing lots of things and achieving little.

Resource – time, people and money – is increasingly stretched as our businesses become more efficient and more effective in order to operate effectively and profitably in the new healthcare environment.

Consequently there is an increasing need to reduce the number of ‘things’ we do without compromising achievement of ever more challenging objectives. That means we have to be confident of what really drives success for our brands.

‘Excellence’ is about identifying what we ‘have to do’ and what we ‘want to do’. Anything else is a just a waste of resource.

The challenge is having the clarity to recognise what is important and what is not, and the courage to let go of what we might be comfortable and familiar with and not just repeatedly do the things we have always done.

Conclusion

If you want to define marketing ‘excellence’ in the immediate future according to different elements of bringing the product to market and maximising success, then it is all about:

1. Maximising speed of market entry
2. Effectively managing the thought leader base across the life cycle of the product
3. Ensuring timely and acceptable pricing along with formulary approval post-launch
4. Generating true customer ‘insight’ that allows you to understand underlying motivations and drive change
5. Helping the clinician identify the right patient for the product and managing their and the patient’s expectations appropriately
6. Delivering value, based on that insight to a wide range of stakeholders across the life cycle of the brand – customer ‘value’ management

But you know what, marketing ‘excellence’ is really all about identifying and then executing what we ‘have to do’ and what we ‘want to do’ and ignoring the rest.

About The Author

Dr Paul Stuart-Kregor is Director at The MSI Consultancy.

Originally published in PM Europe, June 2011

Although the words ‘market access’ have become much more commonplace in our working lives, the new clarity of its importance and the acceptance that market access is a necessary pre-requisite for success, seemed superfluous and therefore has not been totally embraced by everyone working in the brand team.  In fact, some marketers are happy to let the market access teams get on with their jobs, without getting involved in the detail and without considering the ongoing benefits to the brand.

It seems that although marketers know that if access to market has not been considered then their products stand little or no chance of any success, they might not seek to completely understand what it is, how their market access colleagues are going about doing it and more importantly how market access initiatives can help in driving the brand – how does everyone, in fact, sing from the same hymn sheet? How could a synergistic relationship between marketing teams and their market access colleagues potentially be exploited by the marketing team and provide them with an opportunity to achieve that common driver of success, brand differentiation?

In the past, market access was generally viewed by marketing teams as a totally separate activity, which allowed them to subsequently ‘get on with the real job’ of persuading clinicians to prefer and prescribe our brands.  It was seen as a ‘one-off’ activity that was relevant only at the start of the brand lifecycle, which provided clinicians with the permission they needed to enable them to prescribe our brand.  The responsibility to develop and communicate necessary information to the budget holding customers “the payers’ was often given to the public affairs or separate market access team, completely independently from the marketing team.

Health Economics/QUALYs/burden of illness models etc are all part of the market access language and this complex terminology can serve to reinforce the “otherness” of what the market access team does and is quite alien to those working in marketing (who subsequently need to go away and use it).  This does not therefore facilitate collaborative working nor the understanding of the processes each have to go through and the impact of each processes the other function, all of which need to be made clear and understandable to ensure the best possible success and outcome for the brand.  In short, to deal with market access challenges, marketing and market access specialists have to invest time and effort to understand the others language and processes to ensure the overall brand strategy is joined up.

There is a very powerful argument for closer alignment between marketing and market access, given the impact the terms of market access can have on the ability prescribers have to prescribe our drugs and in fact we should probably have been working more closely with our market access colleagues much earlier too.

So, how do we engage more closely and understand the impact of each other’s process on each other?  Firstly, marketing teams need to know the complexities of what market access is about and how it fits in marketing terms.  I.e. we need to understand that market access is about ensuring the data we have is packaged in the right way and communicated to the right customer groups at the right time.  Understanding the requirements of the different stakeholders (the payers) who are involved in approving your brand will help you develop the right messages that will improve its ultimate success.

Add to that value-based-pricing which will start by 2014 where drug prices will be set according to the value of medicines provided (drugs that demonstrate innovation and provide solutions for unmet needs which impact patients most) plus the move to GP Consortia with 80% of budgets being controlled by GP commissioners, and we can now see how essential and important of a collaborative approach between you and your market access colleagues will become – There needs to be a consistency when talking to different customer groups to have a successful brand.

So how do we do that?

Simply put, what we need to do is have a common approach to firstly recognise and then understand how to integrate market access activities into our mainstream marketing and develop a collaborative approach with all departments working in tandem by undertaking a four-stage process:

Identifying stakeholders

It is essential that we gain a common view across the team of who the key market access customers are, particularly given the changing environment within the NHS.  Who makes the decisions on prescribing?  Who are the primary care commissioning purchasers/gatekeepers? What do we have to do in order to get closer to and communicate with these new prescribers? Who makes the decisions in the changing NHS, the primary care commissioners who have the money or secondary care specialists who hold the clinical knowledge?

Identifying the key stakeholders from an external point of view holds the key to success.  The patient and prescriber are the easy bit, but who the payers/budget holders are needs to be mapped very clearly and for some companies this might be more challenging.

This poses different challenges depending on the organisation. For example, for a company like Novo Nordisk, focussed on the single therapy area of diabetes, the market access team will have developed an in depth knowledge of their key therapy area and its stakeholders built over years of interactions in the area.  For a company seeking to service 4-5 different therapy areas the market access team focus will be much more diluted across many more customers, potentially necessitating a greater contribution to market access initiatives by sales and marketing personnel. Therefore thorough stakeholder mapping to identify who these key stakeholder groups are and who in the organisation should “own” each customer you need to communicate with is essential.

So, to whom do we need to clarify and communicate the economic value of the product?  As well as our traditional customers, who are these influencers, budget holders and policy makers?  We must look more widely at who our key opinion leaders (KOLs) are within the changing NHS and have a clear identification of who our ‘customers’ are and a thorough understanding of their needs.  These may include Commissioners, Prescribing Advisors, Heads of Medicines Management, NICE Implementation Leads to name but a few.  Adding additional impact and highlighting the need for market access and marketing to become more closely aligned will be the payers who will be separated out from the traditional PCTs and with the advent of GP Commissioning and GP Consortia, where some of our traditional clinical customers i.e. the GP are also becoming the commissioners.

The maps are changing with the payer and prescriber becoming much less separate and the need for single consistent messages to all stakeholders being crucial in this fragmented market.  Mapping may need to be undertaken at a much more local level, for example to primary care commissioning groups and input from market access and marketing will be crucial to get a clear understanding and avoid duplication of effort.

Identifying goals and objectives

The next step is to identify and understand the goals and objectives of each of your market access stakeholders.  You need to understand what the payer wants to purchase and what their motivations are and what is important to them.  This means considering outcomes beyond the QUALYs etc required to gain NICE approval, to understand where your brand could fit on the political agenda of the local commissioning group.

And although important, it is not just about demonstrating cost effectiveness of the product.  If you are a Primary Care Commissioning Group, you may be more interested in those companies providing added value to your local services.   Success will come, where companies identify and then demonstrate improvements for a local population that weren’t there before, allowing the new organisation to demonstrate the value they have added for the local population or help to support the priorities of the local health providers, rather than just selling their drugs.

A good example of this is Fresenius Medical Care, who operates dialysis services in partnership with the UK and run 53 clinics in the UK and Ireland, providing regular dialysis treatment for over 3500 NHS patients.  Rather than selling dialysis drugs they contract to provide the management of dialysis needs for patients in the local area. For the commissioner this can avoid the need to develop an infrastructure of clinics with staff and premises in a time of limited budgets.

Develop the optimal value proposition for the brand

The third step in the process is to look to develop the optimal value proposition of your brand.  Companies need to ensure that they are aligned with the move by the start of 2014 to Value Based Commissioning, where the three aims outlined in the Department of Health consultation paper are summarised as: better access for patients to drugs, more innovative drugs and better value to the NHS.

What are the unmet needs your brand addresses? What do you provide that is truly innovative. What does the commissioner want to buy?  To do this we need to highlight the impact of illness that amplifies the value of the brand.

Increasingly this necessitates looking from the patient point of view.   If the value based proposition (VBP) of the brand is based on the impact of the disease on the patient, it could attract a premium.  For example, if you have a drug that has a specific impact on the patient and there is an unmet need, the Government intends to pay a premium under the value based pricing system from 2014.  Therefore, the patient voice will be very important and we need to think of ways to raise the profile of the therapy area and conditions our brands treat effectively, where appropriate.  We need to add value that is worthwhile, not just a nice to have and clearly identify a logical tie in between the service you are providing and the drug. This is not just about breaking down barriers but increasing the value of your offering.

Novartis who produce Lucentis (ranibizumab) for treating patients with wet AMD developed a scheme where if patients required more than the 6 doses their evidence suggested (in contrast to the 14 doses in accordance with NICE TA 155), the company would reimburse the drug costs associated with additional further injections reimbursed by the company.  This Ranibizumab Reimbursement Scheme clearly demonstrates how companies and the NHS can work together to ensure that patients prescribed drugs such as Lucentis receive the best possible support whilst providing cost-effective care within a managed budget.  Novartis demonstrated their commitment to patients and confidence to prescribers that their drug works whilst containing unforeseen costs.

Implementation and communication

The final step is to ensure that communication to the key market access stakeholders (purchaser, prescriber and even the patient) is closely aligned, particularly given their increasing geographical proximity.

Knowing what your customer looks like and wants to hear and then making sure that within your organisation everyone is communicating to the key stakeholder groups with the same messages is the key to success.  This moves away from the small, super-specialist market access group talking to NICE whilst the sales force talks to prescribers with different messages.  This internal alignment within your organisation means that you are interacting with primary care organisations at a disease level and everyone makes sure everyone is communicating to the key market access stakeholders with the same messages.

So, in summary Pharma companies need to:

• Think about how market access and marketing need to work closely together to both remove barriers to prescribing and build a strong case to allow prescribers access to their brands
• Understand that the approach might now be more fragmented than in the past and therefore the need to work together is even more important to clearly define how your brand meets the aims and objectives set out by the Government and NHS
• Ensure that your organisation is clearly aligned alongside the needs of all your stakeholder groups
• Remember great brands are based on a brand vision, which is consistent across time and customers. Communicating consistent value to payers and prescribers is the necessary starting point to building a great brand

About The Author

Gerard Doherty is Managing Consultant

Originally published in Pharmafocus, April 2011 as “Integrate: marketing and market access must come together”

Jon Bircher argues that successful pharma companies need to develop a foresight into competitor strategies and activities if they are to develop robust strategies themselves.

“Conquerors estimate before the war begins, and they consider everything; the defeated also estimate before the war, but they do not consider everything.  Estimating completely creates victory; estimating incompletely causes failure.  When we look at it from this point of view, it is very obvious who will win the war.”

So wrote Sun Tzu, the ancient Chinese military strategist, often quoted in the context of business – with good reason, because in our increasingly competitive marketplace, being successful requires the same kind of strategic discipline.

What is particularly apt about this quote is the ‘estimating completely’ bit.  In pharma marketing terms, this is about understanding as much as I can about what your competitors could do in the future in order to make your strategy as robust as possible.  Most marketers realise the importance of gaining insight into their competitors, but translating today’s insight into future foresight, is much more revealing; helping us interpret what competitors could do.

The shift within pharma to more specialised markets highlights the need for companies to bring brands to market swiftly, with a keen eye on the landscape, including possible competitors.  At the same time, the EMEA has been quoted as wanting to encourage greater competition within the sector to improve innovation, quality, value and diversity of treatments available for patients – whilst applying scrutiny to strategies that are deemed as ‘anti-competitive’.  So pre-empting the competition needs to be done in an appropriate anti-trust context.  (see sidebar)

It is clear that in most situations we face competitors; but whereas in the past more specialist areas have been less competitive than the big primary care markets, we are now seeing the same level of competition in those areas too.  This also translates into biotechnology with more companies becoming proficient, plus companies such as Pfizer highlighting their desire to be market leaders in this field.  We are increasingly working with companies facing a significant competitive threat in orphan and rare disease markets, where traditionally only a few small companies played.

So competition is stronger than it has ever been, and in many ways that is very healthy.  From a customer perspective it helps keep drug budgets under control, it provides greater innovation in the system, and on the whole it provides patients with access to better medicines.

As with all planning, gaining true competitive foresight requires a circular process.  Using competitive foresight to adapt your strategies will cause the competition to make their move, to which you will need adapt – and so it never stands still.

Knowing Your Competitor

In an ideal world, you would spend enough time looking at all your competitors in detail.  You would consider everybody in the market or who is planning to enter and try to gain an understanding of them all.  However, this is often not viable.  So who are our core competitors?

Keep it simple; first, the market leader.  Understanding what they do to maintain that position, and seeing how they drive, challenge and alter the market itself.

Secondly, consider the fastest growing competitor, what are they doing to grow and how are they changing the market dynamic?  What are they doing differently that is driving success?

Thirdly, are there new competitors entering the market?  What is their likely strategy and how are they shaping the market?

Finally, look at companies which are strategically significant, or have strategically significant products.  They may not be obvious competitors but they will have similar goals to you, making them a disproportionately bigger threat.

Although we often recognise that there is a need for competitive analysis, many companies have no formal way of collecting the data.  They rely on past experiences, or assumptions that are made internally, coupled with gut feel.  However if we want to win the fight we need to gather data in a systematic way, with the goal of using it to decode competitors’ future strategies.  This is a big task, so the data needs to be utilised effectively, otherwise it simply becomes an information-gathering exercise – which is a little pointless.

The trick is to turn data into insight, and translate this into foresight.  Insights are those deep, penetrating things that you didn’t previously understand that helps you consider how to do business differently,  whereas foresight is understanding the implications of those nuggets for the future.

Understand Your Competitor

To understand your competitor, there are probably four ‘buckets’ of insight you need to grab which inter-relate with each other to provide you with the foresight you need to consider their strategies moving forward.

The four areas to understand are:

• The ambition of the company
• Their organisational views of the world
• Their current strategy
• What they are good at

Your competitor’s ambition will be central in influencing how they go about developing their strategy, and how they will react to competitors’ (i.e. your) moves.

Some questions you may want to consider include: what are their financial goals; short-term and long-term?  This will tell you whether they are going for absolute market growth or whether they are actually trying to gain as much profit from this product as they can.

What are their beliefs and values?  What current pressures are they under?  These will help you understand their hot buttons if you threaten them – and equally, the areas where you could go unnoticed or comfortably co-exist.

What is their attitude to risk?  Understanding that, and how they react to competition, is a pretty good indicator of how they might react to your own strategies.

Decoding a company’s goals and ambitions for the future is critical, because it ultimately helps you formulate the most appropriate strategy yourself.  Can you peaceful co-exist, and do you want to?  If not it helps you understand the consequences; if your competitor has a product which is important to them strategically and emotionally, tackling them head-on will require a completely different approach and skillset.

The second thing you need to understand is their organisational view of the world.  How do they understand the marketplace; how do they understand themselves?  If they have a particular view of the way the market works, then you may be able to work out a strategy where you don’t need to take them on head-on, so they won’t see you coming.

If, for example, their view of the world is that the whole ‘patient voice piece’ is simply irrelevant, and therefore they spend all their time and energy on the physician, you may be able to create a strategy which is about leveraging the patient’s voice, whilst going relatively unnoticed.  You get to see the opportunities by looking at their blind-spots in their view of the world.

Identifying this view of the world is relatively straightforward.  How does your competitor talk about its marketplace and the trends of the future?  How does it communicate about itself, about its future, about the opportunities that exist?  Where is it investing its energy and its resources?  How historically has the competition leveraged their offering?  How emotionally attached does it appear to be to this marketplace or this patient population?

Next comes their current strategy; understanding this will help you understand the strategy for the future.  Generally pharma marketers are pretty good at understanding the core components of our direct competitor’s strategy; we are less good at considering it in the context of the overall company.

There are lots of indicators of a company or product strategy.  For example, chief executives like to stand up and tell people about how clever their strategy is, what they are doing, and how they are approaching it.

Is your competitor aiming for growth through focused knowledge and energy in a certain therapy area or technology?  Are they diversifying their portfolio and managing risk that way?  If their strategy is about  becoming the number one bio-pharmaceutical company, what implications does that have on their future strategy?  Are they going to be the key specialist in rare diseases?  Are they going to be the number one in personalised medicine?

When considering the most appropriate strategy for your business unit or brand you must also consider the tier below.  What are the implications at business unit level?  If they are a company that has a broad strategy of diversification, but one particular business unit has real focus within a therapy area, what pressures does that put the business unit under, and what does their strategy look like moving forward?

The final part in the jigsaw is to understand what your competitors are good at.  You can consider a lot of different things at a whole company level, from the products they promote, their marketing capabilities, their distribution network, their clinical trial programme, their corporate management, or their financial positioning down to the tactical level around their sales teams and marketing materials.

This helps you understand how capable the company is at achieving its overall ambition – and the possible areas of danger.  If you go up against a company that has a fantastic, proactive legal department which will take on anybody who tries to challenge their patent or their position in the marketplace, you have to recognise the degree of risk involved.

This is a quick look at the different areas to find competitive insight.  You now need to look at those four buckets together, play them out decoding the competitor’s future strategy so as to optimise your own.

Generating Fresh Foresight

One of the best (and most interactive) ways of decoding strategy is through some kind of simulation – we use competitor rooms.  These can be run in many different ways depending on your challenge, but essentially they involve playing out different scenarios and different competitors.  They should use all the insight that you have gathered, internal knowledge and perspectives in order to get under the competitors skin and generate genuine foresight.

In a given situation, how will this competitor react to our move?  If we generate an aggressive market growth strategy what are the reactions, the implications?  What are the likely moves from competitor A and competitor B when we implement a new segment-based approach?

Interaction is important.  These sessions act as a ‘test bed’ for what could happen in reality, whether simulating competitor reactions to your strategic moves or simulating changes from a competitor, all will help you understand the strategic options available and their implications.

This then helps you decide the best strategy to put in place; for example, it may be, because of new competitive foresight, that you find a way to go unnoticed.  Your price-based strategy can work alongside their innovation and clinical-based strategy.  It’s not the space they own, it’s not the space they compete in, and you go unnoticed.

Equally, it is important to understand how they will defend when you make a threatening move.  What level of provocation will your attack cause, and therefore what is their likely retaliation?

If a company is really comfortable with its current approach, and it appears to be working for them, they are going to be pretty reluctant to change it.  However, if you hit them in a place where they are sensitive, or vulnerable, you might move them out of that comfort zone and take them on head-to-head when you didn’t need to.

The idea of this whole exercise is not about just getting loads of granularity around the competition for the sake of it; it’s actually about making sure your own strategy is as good as it possibly can be, robust enough and with the right components, built on your learnings from a competitive perspective.

And only when you have this level of understanding can you ‘estimate completely’ and ensure the strategy you build is as future proof as it possibly can be

Sidebar

With an increasing emphasis on regulation around competition, should the pharma industry be nervous about trying to gain foresight in to their competitors’ likely behaviour?  It is true that there is a nervousness about anti-trust laws, especially when it comes to primary competitive intelligence – employing people or organisations to speak to specific individuals.

It is important to point out that competitive analysis and competitive intelligence should not about breaking the law. Competitive intelligence is an ethical and legal business practice, as opposed to industrial espionage which is illegal. In the context of this article it is also not about formulating strategies that conflict with the anti-competitive laws.  It is certainly not about predatory pricing or illegal trade restrictions or M&A deals.

What it is about is understanding and anticipating your competitors in such a way that you optimise your own strategy and approach.  So in the context of ‘competition is healthy’ – because it keeps the market alive and keeps innovation happening – we need to understand more about our competitors to optimise our own approach.  And in optimising our approach, they will inevitably optimise theirs.

The one thing you can rely on is that in a market with more than one product, the approach and strategy of one company will be influenced by the other player or players in the market, and each will react to the competition’s moves.  So the whole interplay between the competition is in part what brings about better access to medicines, better pricing and better innovation.

In other words, having an insight into what your competitors are doing doesn’t lead to the stifling of competition, rather it provides future foresight that actually enhances the competition and potentially  ups everyone’s game.

About The Author

Jon Bircher is a Managing Partner

Originally published in Pharmafocus as “Anticipating the Competition”, March 2011

Commercial managers who are responsible for a number of brands face a constant challenge in choosing where across the franchise or portfolio to invest limited human and financial resources.  How can these choices be optimised?

As we know, the franchise can take a number of forms: the traditional therapy area portfolio with a number of constituent products; a brand with a number of indications each requiring resource; or, at a local level, the mature product portfolio where we need to decide on level of investment and support.

In this article, Paul Stuart-Kregor outlines some of the thinking required to effectively manage the franchise at a local level, including:

• Taking advantage of the move to more ‘total healthcare solutions to help deliver shared customer and franchise goals
• Adding true value by helping to develop better patient care pathways and so meet our customers agenda through our franchise commitment
• Working with purchasers who are increasingly looking at the use of our portfolio of drugs on a more macro basis.

Considerations for success

In the previous article, published in the October issue of Pharmafocus, general principles to managing the franchise were identified, which apply equally at global and local level.  It is helpful to review these key principles again, before we look in more depth at those issues relating specifically to the franchise at a local level.

1.         Brand prioritisation

Resources must be allocated to the strongest and highest performing assets. This entails detailed analysis of customer targets, brand relevance, and the brands’ impact on business results to identify which are stars and which should be pruned. For a detailed ‘how to’ approach see my earlier article.

2.         Build, protect, and leverage brand assets to maximise the value of the portfolio

Once the portfolio is tightened, the remaining brands should be assessed for short-term and long-term growth opportunities. Brand managers must proactively manage their brands and determine the extent to which the brands can be extended organically or “lent out” to grow new products or services.

3.         Establish and empower a portfolio ‘manager’

Most businesses lack the management structures, systems, or processes to effectively manage a franchise or brand portfolio strategy. What’s needed is a dedicated brand portfolio manager. At the very least, a ‘brand steward’ can help address the marketing effectiveness conundrum. This individual can manage and monitor the portfolio’s performance (including individual brands’ contributions to the business), better understand what the company is actually spending in aggregate on brand and marketing support, and offer knowledgeable insights to guide resource allocation decisions.

Effectively managed, your franchise or brand portfolio has the potential to wield significant power as a vehicle for driving business growth. Combining a sound strategy with best practices in brand management will help ensure that the value of the portfolio, rather than simply the number of brands within it, grows over time.

Six of the ways in which portfolio management at a local level enhances growth are:

• Clear prioritisation of future focus
• Prioritisation by brand and product
• Concentration of spend on priority opportunities, brands and products
• Operational cost savings through simplified business
• Disposal of brand assets which don’t fit clearly within the portfolio
• Gap filling by product development and/or acquisition

Opportunities

Most healthcare systems in the world are currently undergoing fundamental change as the relevant stakeholders battle with the challenge of increasing demand for healthcare balanced against a need for financial restraint.

The good news is that the focus in many markets is likely to be more on total ‘healthcare’ system efficiency. In the UK we have started to see the merging of social and healthcare budgets to avoid the potential for savings in one area being lost as the expenditure is from another budget.

Following the publication of the NHS White Paper, we will see even more extensive changes to the NHS.  Service provision and commissioning is being pushed out to Primary care, or the community, in many markets as well as non-traditional providers being considered as alternatives to the existing structure; diagnosis, treatment and management pathways are being completely rebuilt.

The importance of the various healthcare technology assessment functions will increase as healthcare systems seek short term cost savings in the face of both short term but also longer term pressures. However, as we have seen recently in the UK with the change in attitude to treatments for Alzheimer’s a more holistic view to disease management will potentially become the norm.

The advent of approaches such as the “Joint Working” initiative is potentially going to revolutionise the relationship between Pharma and the NHS. NHS stakeholders are reaching out to Pharma in an unprecedented way; moving from an adversarial stance to “real” co-operation. There is much common ground which presents the potential for some serious win-wins.

Pharma is being seen as having the skill set and resources to assist the NHS to reach its objectives providing huge opportunities to help shape this new environment. Already Pharma is seen as a partner in early diagnosis and screening (e.g. cardiovascular disease) and a partner in developing and monitoring adherence to guidelines (e.g. anticoagulant use) as well as providing value added initiatives such as patient education programmes.

Traditionally ‘added value’ has been about providing services which have been hard to link to tangible business performance. Now by realising synergies with our customers and our franchises by demonstrating commitment to a therapeutic category there is real potential for business gain. Of course by adding value through education and services but more importantly in helping to design and provide end to end management solutions. For example in the case of the development of a new care pathway, industry provided strategic planning expertise and support by facilitating clinician engagement and developing skills in relevant stakeholder groups.

At local as opposed to global level we can make the most of the customer interface in managing our franchise. We may also build brand equity within patient and healthcare provider communities which will pay dividends for the existing and, if we take a more medium term view, the future portfolio.

The therapy area franchise

A number of companies have focussed their activities in a relatively narrow range of therapeutic categories e.g. Galderma in dermatology and NovoNordisk in diabetes, thus demonstrating a long-term commitment to the management and effective treatment of patients. This has provided benefits through developing and maintaining longstanding relationships with key stakeholders and developing stronger reputations in their respective areas of focus than some of their competitors.

There is no doubt this has driven product preference where differences are marginal. Better products will always win but being able to leverage relationships and heritage is a strong defence when there is not a lot to choose between offerings.

However, traditionally this has all been about driving usage and preference but what this new environment now provides is the platform to engage with customers in service redesign. If we are ‘trusted’ then we are in a strong position to work with our customers in partnership in helping to build more efficient and effective patient pathways that could provide benefits both to the customer and to established brands through more effective use.

The outcome of the redesign will depend on the customer’s agenda. It may be about cost, it may be about efficiency (and hence cost per treated patient) or it may be focussed on helping to develop the new commissioning process, albeit the details of this are still up in the air.

There always has been a shared agenda in ensuring prescribed products are used effectively. The environment now is much more conducive to working together to achieve that but on a far broader basis than just prescribing the most cost effective treatment. We have seen effective examples of this in a number of chronic diseases and long term conditions.

Where we have a number of products and expertise in a particular therapy area we should be looking to maximise the benefit from our customers interactions across the healthcare delivery system to build a true franchise with our customers, where we help them achieve their goals and as a consequence help to meet our commercial objectives.

Mature products

An increasing number of companies have realised that the long ‘tail’ of mature and relatively non-promoted products present a significant profit maximisation opportunity.

Medicines management have begun to realise that older drugs ‘tick a lot of boxes’. They are generally cheaper than newer products and have a long track record and strong heritage so any problems are well known and managed accordingly. Physicians trust these brands and are comfortable with how and when to use them and what to do should they encounter any safety or tolerability issues.

We have long moved away from the view that ‘better is best’. The population approach to the prescribing of statins admirably demonstrates that in some instances and for some situations ’80% is good enough’. That way more people can be treated for less, improving outcomes across a wider population, which is what modern healthcare systems are all about.

So managing the mature product mix may well appear like traditional portfolio management, but we need to consider how we choose to identify where and how we focus.

We are starting to see basket dealing of drugs become of interest to some:

“Basketing proposals are welcome if drugs are on the formulary. I would entertain an approach of a discounted basket of drugs which are a key focus for us. We could in turn partner in maximising cost effective use of other drugs in the portfolio” PCT procurement lead

But this quote from Medicine Management demonstrates that these key purchasers are now willing to go further than that. Pharma can potentially offer a range of cost-effective solutions to financially challenged PCT’s (e.g. equalisation deals, franchise, population based). We could look at helping to drive use of certain of our drugs to reduce costs elsewhere in the health system (e.g. methotrexate in rheumatoid arthritis rather than the more expensive disease modifying drugs).

Consequently, when we come to prioritise the medicines in our mature portfolio for sure we will look at their importance (‘low’, ‘strategic’, ‘financially’) and their future (‘under threat’, ‘resilient’, ‘potential upside’) but we also need to consider the scope for action (‘low’, ‘medium’, ‘high’) in a far wider context.

We now see that the ‘Scope for action’ is far broader than ever before. We need to look at the whole patient care pathway to see if there are opportunities to meet our customer’s agenda through more active marketing of one or a number of products. There should be a distinct shift away from purely selling commodities, rather to offering solutions to problems. And not only at the clinician end as we may be able to facilitate moves towards more diagnosis and treatment in the community setting to win large pharmacy deals

Using the key principles of portfolio management, while considering the value of an ability to create real synergies will provide us with a richer range of options:

This will then lead to a range of options from ‘strategic imperatives’ to other more ‘opportunistic’ ones.

In conclusion

In the past franchise management at a local level for the most part has involved a product-therapeutic category approach focusing on driving brand preference and usage for major promoted products.

The healthcare environment, particularly in the UK, is now more conducive to wider ranging involvement of healthcare companies in helping our customers achieve their health provision goals.

When it comes to franchise management, this provides any healthcare company a wider range of options for establishing and developing a true therapy area franchise centred on our promoted products, where we address the customers wider agenda and achieve both parties objectives.

The mature brand portfolio should not be ignored either. Increasingly customers are looking for cost effective whole care solutions. The range of products in that ‘tail’ provides great opportunities to enhance the interaction with key customers and thus drive commercial gains.

The Author

Dr Paul Stuart-Kregor is Director

Originally published as “Take a mature approach to relationships with customers”, in Pharmafocus, December 2010

Planning should be a more circular process. In this article, Jon Bircher argues that we must regularly challenge, refresh and refine our view of the world in which we compete to ensure that our planning is as robust as possible. Jon discusses how a circular planning approach can help marketers be more proactive, more innovative and have greater foresight in ensuring that their plans work in the real world, focusing on a few of the key elements that could help make the process a success.

Circular not linear

As senior managers and marketers we all understand the value of planning, whether strategic or tactical. At its most basic, planning is about understanding where we are, where we want to be and how we will get there. But plans cannot be written in stone, they need to live and breathe, they need to be implemented, challenged and revised. With this need for continued (circular) input and refinement, we have observed a discrepancy between what planning should be and what planning is.

We do not live in a static world; markets are dynamic by nature, they change, and they evolve. Planning, in order to be effective, should therefore aspire to be more ‘circular’ than ‘linear’. Plans can then be iterative; as we discover how our actions influence the market, the customer and the competition; adapting our plans accordingly.

Internal pressures and constraints often mean that planning timelines are not ideal. Processes and templates can override the thinking which they are supposed to stimulate distracting us from the real purpose of planning- to deliver something robust, competitive and sustainable for our organisation or brand.

Developing a more circular approach to planning is vital when bringing together the wider cross-functional team. Plans which have a life engage teams better and ensure a willingness to learn and adapt the plan based on new and relevant understanding.

As a consultancy we have a unique opportunity to work with many of the top pharmaceutical companies (from embedding planning processes to pressure testing brand plans). Having been on the ‘client’ side we also understand the challenges and frustrations that come with organisational planning.

From these experiences we are able to offer some practical observations about what appears to work and what appears to get in the way of a circular approach to planning. Often only simple tweaks in approach are required to make something dead and outdated live and breathe.

Stifled by PowerPoint

Increasingly the desire for consistency means that companies demand a comprehensive deck of PowerPoint slides to represent the ‘plan’. Having reviewed many organisations’ templates and plans it is clear that slide decks can often run to more than 100 slides of ‘information’. Working with brand teams it is also clear that these processes (and the templates) can end up driving the plan rather than the thinking behind them. The quality of thinking suffers, creativity is stifled and the wider brand team become disengaged and disillusioned, seeing planning as nothing more than a ‘template filling’ exercise.

On the whole marketers’ motivations are in the right place, genuinely wanting to deliver the best for their brands. But to move towards a more engaging and iterative approach to planning, where as the year unfolds we are flexible and are able to adapt our strategy and subsequent activities, we need to re-think our approach to the phrase ‘planning cycle’.

What can we do better?

Based on our observations there are things that can be done more often to encourage good circular planning.

Clearly we need to be less driven by templates. Rather than focusing on quantity of information we should concentrate on quality of thinking. If senior management require you to fill in a comprehensive slide deck then develop a working document for the core team – a more manageable, slimmed-down version focused on the critical insights and the key strategic thrusts.

We should not allow team members to become disillusioned, causing planning fatigue and ultimately lack of ownership. We should instead reprioritise where planning fits in organisational importance.  Set out to engage the full brand team throughout the development of the plan, its ongoing review and adaptation. Organise exciting and creative workshops, giving people work to prepare and actions to take away. Try to focus on the critical business issues, find consensus, and force prioritisation. That way we can build on what has been done previously, develop the best plan possible based on current knowledge and ensure the whole start set out on a  journey of constant, circular planning.

It is also vital to ensure that the same level of commitment and emphasis is applied at all stages of plan development and its evolution. For example we often see teams’ spending all their time and energy on situational analysis and then getting fatigued by the time they get to tactical planning.

Accountability within planning is critical.  Help the team to clearly understand their role throughout the year, the skills they bring and their individual responsibility for identifying, anticipating and meeting customers’ needs.

Cause and effect

One of the consistent themes in working with clients through the planning process is their assumption that they are working in isolation. That may seem strange at first, given that companies go through extensive situational analysis as part of their annual planning – reviewing customers, competition and market dynamics.  However to truly move beyond working in isolation we need to remember that everything we do has an impact on our customers, competitors and the market itself.

Equally planning must be a continual and fluid process. We need to put regular opportunities in place for challenging our thinking, learning from the future, developing contingencies and adapting our plan as the year progresses.

There are many tools that help us do this but the simplest is to make sure that the plan is not simply a yearly tick box exercise but becomes a ‘living and breathing’ practice. This is as simple as scheduling monthly reviews for people to bring new learnings to the table, discussing as a team the impact these have on the plan.

Ian Wilson was famously quoted as saying that: “The main dilemma in business is developing a robust strategy which accounts for the future when all our knowledge is based in the past!” When we initially develop a plan, we should build something which is as robust as possible at that point in time. However in order to stay ahead of the game, we need to constantly learn, adapt and be flexible.

Iterative planning

Once again based on our exposure to different organisations here are some thoughts on how to make planning more iterative

Allocate time on a monthly basis to constantly check, challenge and refine your plan, your strategy and activities. This could be as simple as 1 hour sessions individually or with the team. We need to ask what is working, what is not working, what lessons we are learning and where the gaps are. Learning from the future requires the whole team, a natural route for further engagement.

Develop ‘indicators of the future.’ Identify the competitive and market indicators that you need to track, research and measure. This will help you understand what is changing versus your core assumptions. Track the activities that you have put in place and ascertain the impact that they have had on the dynamics of the market. Recognise that each activity will impact your marketplace: don’t just measure ROI, measure market reaction.

Consider using workshop-based processes such as scenario learning and competitor rooms to pressure-test your thinking and consider competitive response.  These can be run every 6 months and are great catalysts for engaging the team in the thinking, allowing you to ensure a more future-proof strategy.

Whose role is marketing anyway?

If Barwell and others are correct and marketing is a “customer focused philosophy, not a system or organised structure” and if marketing is “founded on the belief that profitable sales can only be achieved by identifying and anticipating customers’ needs and desires” then it is everyone’s job, as part of the wider brand team, to ‘market’ our brands.

Therefore, not only do we need to engage people in the vision and strategy for the brand (or organisation) but we must also invest in helping them understand the marketing tools and processes used to develop creative thinking, generate insight and build robust plans. The most cohesive and engaging brand plans are built in companies where the wider team has a good commercial marketing mindset, where everyone understands the value of marketing, and where everyone sees planning as fundamental in getting close to our customers and making a difference with the medicines we are selling.

Investing in people’s commercial capabilities has an additional benefit in aiding overall engagement across the team. This means that plans tend to be challenged and thought through more effectively, planning workshops are energising, proactive and creative, and the final plan is more valuable, more believable and, ultimately, implementable.

We have seen small changes have a great impact. For example, setting up training interventions (e.g.  ’Marketing for non-marketers’), focusing individuals’ and departments’ skills appropriately throughout the planning cycle, and providing clear accountability for aspects of the plan and its iterations (e.g. tracking competitors or KOL opinion). A simple but effective approach is to start every planning workshop or update meeting with a piece of marketing training, introducing new tools, or demonstrating best practice approaches.

The best chance of success

The critical question is do we believe planning should be circular in nature rather than linear, static and annual? Should planning help us feed in new information and help us modify the plan itself?

In observing many companies and in working with numerous brand teams my recommendation would be to create a more iterative approach. This involves more creativity in terms of attitude and style, more pragmatism around process (you may still need to complete the 100 slides required corporately) and more focused (monthly) strategy reviews. But it essentially means that as a team you genuinely have a living and breathing plan, which is flexible to the dynamics of your market.

Teams that get it right also appear to have fun along the way. They come up with interesting and creative ideas and are more than willing to stop doing things which are ineffective. They also have the confidence to know that, even though no-one can precisely predict the future, a circular approach provides the best chance of delivering a robust, competitive and sustainable plan. And ultimately the best chance of success.

Top tips to a more circular approach to planning

• Make your plan genuinely ‘live and breathe’ – it should not be set in stone. Feel free to learn and adapt as you take on board new learning
• Set up monthly workshops to review new learning

• Engage everyone in the development and evaluation of the plan
• Let your collective thinking lead the plan not the templates
• Pressure test the plan regularly using scenarios of the future
• Regularly consider your competitors’ response and build appropriate contingencies
• Remain focused – don’t let the templates distract you from the core issues you need to deal with and need to be good at
• Set up trackers to help you understand the impact of your activities – what works and doesn’t work and how the market reacts

About The Author

Jon Bircher is Head of Bespoke Consulting.

Originally published in Pharmaceutical Marketing, November 2010

What’s the plan?

Planning should be a more circular process. In this article, Jon Bircher argues that we must regularly challenge, refresh and refine our view of the world in which we compete to ensure that our planning is as robust as possible. Jon discusses how a circular planning approach can help marketers be more proactive, more innovative and have greater foresight in ensuring that their plans work in the real world, focusing on a few of the key elements that could help make the process a success.

Circular not linear

As senior managers and marketers we all understand the value of planning, whether strategic or tactical. At its most basic, planning is about understanding where we are, where we want to be and how we will get there. But plans cannot be written in stone, they need to live and breathe, they need to be implemented, challenged and revised. With this need for continued (circular) input and refinement, we have observed a discrepancy between what planning should be and what planning is.

We do not live in a static world; markets are dynamic by nature, they change, and they evolve. Planning, in order to be effective, should therefore aspire to be more ‘circular’ than ‘linear’. Plans can then be iterative; as we discover how our actions influence the market, the customer and the competition; adapting our plans accordingly.

Internal pressures and constraints often mean that planning timelines are not ideal. Processes and templates can override the thinking which they are supposed to stimulate distracting us from the real purpose of planning- to deliver something robust, competitive and sustainable for our organisation or brand.

Developing a more circular approach to planning is vital when bringing together the wider cross-functional team. Plans which have a life engage teams better and ensure a willingness to learn and adapt the plan based on new and relevant understanding.

As a consultancy we have a unique opportunity to work with many of the top pharmaceutical companies (from embedding planning processes to pressure testing brand plans). Having been on the ‘client’ side we also understand the challenges and frustrations that come with organisational planning.

From these experiences we are able to offer some practical observations about what appears to work and what appears to get in the way of a circular approach to planning. Often only simple tweaks in approach are required to make something dead and outdated live and breathe.

Stifled by PowerPoint

Increasingly the desire for consistency means that companies demand a comprehensive deck of PowerPoint slides to represent the ‘plan’. Having reviewed many organisations’ templates and plans it is clear that slide decks can often run to more than 100 slides of ‘information’. Working with brand teams it is also clear that these processes (and the templates) can end up driving the plan rather than the thinking behind them. The quality of thinking suffers, creativity is stifled and the wider brand team become disengaged and disillusioned, seeing planning as nothing more than a ‘template filling’ exercise.

On the whole marketers’ motivations are in the right place, genuinely wanting to deliver the best for their brands. But to move towards a more engaging and iterative approach to planning, where as the year unfolds we are flexible and are able to adapt our strategy and subsequent activities, we need to re-think our approach to the phrase ‘planning cycle’.

What can we do better?

Based on our observations there are things that can be done more often to encourage good circular planning.

Clearly we need to be less driven by templates. Rather than focusing on quantity of information we should concentrate on quality of thinking. If senior management require you to fill in a comprehensive slide deck then develop a working document for the core team – a more manageable, slimmed-down version focused on the critical insights and the key strategic thrusts.

We should not allow team members to become disillusioned, causing planning fatigue and ultimately lack of ownership. We should instead reprioritise where planning fits in organisational importance.  Set out to engage the full brand team throughout the development of the plan, its ongoing review and adaptation. Organise exciting and creative workshops, giving people work to prepare and actions to take away. Try to focus on the critical business issues, find consensus, and force prioritisation. That way we can build on what has been done previously, develop the best plan possible based on current knowledge and ensure the whole start set out on a  journey of constant, circular planning.

It is also vital to ensure that the same level of commitment and emphasis is applied at all stages of plan development and its evolution. For example we often see teams’ spending all their time and energy on situational analysis and then getting fatigued by the time they get to tactical planning.

Accountability within planning is critical.  Help the team to clearly understand their role throughout the year, the skills they bring and their individual responsibility for identifying, anticipating and meeting customers’ needs.

Cause and effect

One of the consistent themes in working with clients through the planning process is their assumption that they are working in isolation. That may seem strange at first, given that companies go through extensive situational analysis as part of their annual planning – reviewing customers, competition and market dynamics.  However to truly move beyond working in isolation we need to remember that everything we do has an impact on our customers, competitors and the market itself.

Equally planning must be a continual and fluid process. We need to put regular opportunities in place for challenging our thinking, learning from the future, developing contingencies and adapting our plan as the year progresses.

There are many tools that help us do this but the simplest is to make sure that the plan is not simply a yearly tick box exercise but becomes a ‘living and breathing’ practice. This is as simple as scheduling monthly reviews for people to bring new learnings to the table, discussing as a team the impact these have on the plan.

Ian Wilson was famously quoted as saying that: “The main dilemma in business is developing a robust strategy which accounts for the future when all our knowledge is based in the past!” When we initially develop a plan, we should build something which is as robust as possible at that point in time. However in order to stay ahead of the game, we need to constantly learn, adapt and be flexible.

Iterative planning

Once again based on our exposure to different organisations here are some thoughts on how to make planning more iterative

Allocate time on a monthly basis to constantly check, challenge and refine your plan, your strategy and activities. This could be as simple as 1 hour sessions individually or with the team. We need to ask what is working, what is not working, what lessons we are learning and where the gaps are. Learning from the future requires the whole team, a natural route for further engagement.

Develop ‘indicators of the future.’ Identify the competitive and market indicators that you need to track, research and measure. This will help you understand what is changing versus your core assumptions. Track the activities that you have put in place and ascertain the impact that they have had on the dynamics of the market. Recognise that each activity will impact your marketplace: don’t just measure ROI, measure market reaction.

Consider using workshop-based processes such as scenario learning and competitor rooms to pressure-test your thinking and consider competitive response.  These can be run every 6 months and are great catalysts for engaging the team in the thinking, allowing you to ensure a more future-proof strategy.

Whose role is marketing anyway?

If Barwell and others are correct and marketing is a “customer focused philosophy, not a system or organised structure” and if marketing is “founded on the belief that profitable sales can only be achieved by identifying and anticipating customers’ needs and desires” then it is everyone’s job, as part of the wider brand team, to ‘market’ our brands.

Therefore, not only do we need to engage people in the vision and strategy for the brand (or organisation) but we must also invest in helping them understand the marketing tools and processes used to develop creative thinking, generate insight and build robust plans. The most cohesive and engaging brand plans are built in companies where the wider team has a good commercial marketing mindset, where everyone understands the value of marketing, and where everyone sees planning as fundamental in getting close to our customers and making a difference with the medicines we are selling.

Investing in people’s commercial capabilities has an additional benefit in aiding overall engagement across the team. This means that plans tend to be challenged and thought through more effectively, planning workshops are energising, proactive and creative, and the final plan is more valuable, more believable and, ultimately, implementable.

We have seen small changes have a great impact. For example, setting up training interventions (e.g.  ’Marketing for non-marketers’), focusing individuals’ and departments’ skills appropriately throughout the planning cycle, and providing clear accountability for aspects of the plan and its iterations (e.g. tracking competitors or KOL opinion). A simple but effective approach is to start every planning workshop or update meeting with a piece of marketing training, introducing new tools, or demonstrating best practice approaches.

The best chance of success

The critical question is do we believe planning should be circular in nature rather than linear, static and annual? Should planning help us feed in new information and help us modify the plan itself?

In observing many companies and in working with numerous brand teams my recommendation would be to create a more iterative approach. This involves more creativity in terms of attitude and style, more pragmatism around process (you may still need to complete the 100 slides required corporately) and more focused (monthly) strategy reviews. But it essentially means that as a team you genuinely have a living and breathing plan, which is flexible to the dynamics of your market.

Teams that get it right also appear to have fun along the way. They come up with interesting and creative ideas and are more than willing to stop doing things which are ineffective. They also have the confidence to know that, even though no-one can precisely predict the future, a circular approach provides the best chance of delivering a robust, competitive and sustainable plan. And ultimately the best chance of success.

Top tips to a more circular approach to planning

• Make your plan genuinely ‘live and breathe’ – it should not be set in stone. Feel free to learn and adapt as you take on board new learning
• Set up monthly workshops to review new learning

• Engage everyone in the development and evaluation of the plan
• Let your collective thinking lead the plan not the templates
• Pressure test the plan regularly using scenarios of the future
• Regularly consider your competitors’ response and build appropriate contingencies
• Remain focused – don’t let the templates distract you from the core issues you need to deal with and need to be good at
• Set up trackers to help you understand the impact of your activities – what works and doesn’t work and how the market reacts

The Author

Jon Bircher is Head of Bespoke Consulting at The MSI Consultancy Limited

Originally published in Pharmaceutical Marketing 2010

Commercial managers who are responsible for a number of brands face a constant challenge in choosing where across the franchise or portfolio to invest limited human and financial resources. How can these choices be optimised?

The franchise can take a number of forms: the traditional therapy area portfolio with a number of constituent products; a brand with a number of indications each requiring resource; or, at a global level, a single brand with a number of local markets each one competing for investment and support.

In this article, Paul Stuart-Kregor outlines some of the skills required to effectively manage the franchise at a global level, including:

• The use of key marketing tools to help optimise investment into each individual brand
• Identifying the considerations beyond revenue that may impact which elements of the franchise are supported
• Optimising the whole franchise whilst accounting for portfolio objectives and potential synergies between individual brands

Learning from other industries
Various studies have shown that branded consumer businesses generate up to 90% of their profits from fewer than 20% of their brands. This suggests that many companies, pharmaceuticals included, are missing an opportunity to gain both more efficiency and effectiveness from their brand portfolios.

What’s required goes beyond the de rigueur brand rationalisation. A better solution is to look more comprehensively and strategically at the portfolio of brands as a whole or within distinct franchises and to set up a system for managing the brand assets in those groupings as true portfolios. A cohesive brand portfolio strategy will help guide the processes by which brand assets are most effectively created, deployed, and managed — at the same time, supporting both top- and bottom-line business growth.

The idea is to create value by optimising brand assets to meet marketplace needs while recognising internal operating realities. In the consumer world, value is created when relationships among brands are better managed to avoid conflicts and overlaps, and by striking a better balance between category (where relevant) and product brands and extensions. Optimal value is created when waste and inefficiencies are reduced, so brand building is more cost-effective, with fewer and stronger brands getting the support they merit.

Most critically, a well-orchestrated franchise or brand portfolio strategy needs to be fully integrated with the company’s business model, tying in with such economic factors as pricing and profit policies (e.g. PPRS in the UK Pharma market), manufacturing scale, and distribution policies.

Getting there requires marketers to adopt a more ‘investor-like’ mindset in managing their brand assets. Like investors, they must first build the asset base, then protect it, and finally seek to further leverage these assets for growth. To safeguard them requires balancing the dual tensions of near-term profit-and-loss demands with the creation of long-term asset value. Too many fail at these responsibilities, allowing their brands to be overextended (damaging their equity) or overprotecting them (stifling equity growth). And the complexities only increase when it’s a portfolio of brands that comprises the asset pool.

What’s the relevance to Pharma?
With pharmaceutical companies changing their business model from a few blockbusters to a wider portfolio of relatively smaller brand assets, the need for franchise or portfolio based thinking has to increase; added to which, many Pharma companies are now realising that their ‘tail’ of non-promoted or ‘mature’ brands is a significant source of profit.

These two extremes tend to play out at a global level on the one hand and a local or regional level on the other. This article focuses primarily on the global level and a follow up article will address the local/regional level.

Considerations for Success
However, no matter what level you are operating at there are three considerations for success:

1. Prioritise your brands
Resources must be allocated to the strongest and highest performing assets. This entails detailed analysis of customer targets, brand relevance, and the brands’ impact on business results to identify which are stars and which should be pruned. By identifying and nurturing the stars and eliminating underperformers, companies will ensure their investments are helping to drive top- and bottom-line growth. How to prioritise is covered in more detail later in this article.

2. Build, protect, and leverage brand assets to maximise the value of the portfolio
Once the portfolio is tightened, the remaining brands should be assessed for short-term and long-term growth opportunities. Brand managers must proactively manage their brands and determine the extent to which the brands can be extended organically or “lent out” to grow new products or services. Overprotection is just as dangerous as overextension; left underleveraged, brands will under-perform as a driver of organisational growth. Striking the appropriate balance is critical.

3. Establish and empower a portfolio manager
Most businesses lack the management structures, systems, or processes to effectively manage a franchise or brand portfolio strategy. What’s needed is a dedicated brand portfolio manager — a role that may nominally fall to the most senior-level marketing officer to juggle amongst myriad other responsibilities, and hence may well not get the attention it deserves. At the very least, a ‘brand steward’ can help address the marketing effectiveness conundrum. This individual can manage and monitor the portfolio’s performance (including individual brands’ contributions to the business), better understand what the company is actually spending in aggregate on brand and marketing support, and offer knowledgeable insights to guide resource allocation decisions.

Effectively managed, your franchise or brand portfolio has the potential to wield significant power as a vehicle for driving business growth. Combining a sound strategy with best practices in brand management will help ensure that the value of the portfolio, rather than simply the number of brands within it, grows over time.

Six of the ways in which portfolio management at a global level enhances growth are:

• Clear prioritisation of future focus by major market
• Prioritisation by brand and product
• Concentration of spend on priority markets, brands and products
• Operational cost savings through simplified business
• Disposal of brand assets which don’t fit clearly within the portfolio
• Gap filling by product development and/or acquisition

So, how do you prioritise your pharmaceutical brands?
We are all familiar with the classic portfolio tools (BCG Matrix, McKinsey / GE Matrix; its more friendly version the Directional Policy Matrix (DPM)) but there are some real drawbacks to these as tools. Like a company balance sheet, they represent snapshots of the situation; they are often associated with prescriptive solutions to the situations that emerge; they seldom, if ever reflect the interaction of several product or therapy based strategies embarked upon or considered by the company applying the model; the criteria by which opportunities and capabilities are assessed are often very limited and the models are often aimed at top management decisions, and are not able to be effectively used in a consistent manner by other managers within the organisation.

Added to which the use of portfolio planning matrices has been shown empirically to harm businesses not help them – firms that used BCG had a lower return on capital (probably because BCG assumes market share equals profits); firms whose decisions were consistent with these portfolio planning methods lost market value.

What is needed, particularly in the pharmaceutical industry, is a model that attempts to project, over the life cycle of the product, annual cost and revenue streams as the basis for an evaluation of the rate of return from investing in that product, a Portfolio Asset Assessment (PAA).

A well prepared PAA should be transparent and involve by markets of key importance:

• Identifying and projecting the product life cycle annual treatment prevalence for a disease state;
• Identifying and projecting the current direct costs of treating patients in that disease state (medical and pharmacy costs);
• Identifying and projecting patient switching scenarios over the product life cycle;
• Identifying and projecting development costs, reimbursement and sales and advertising costs; and
• Identifying and projecting sales revenues

While this may appear daunting in black and white, the process is less onerous than it looks. Data is often a challenge, but there are usually surrogates that can be used where actual country data is missing. Analogues of other brands in similar markets can provide good fuel to help pressure test assumptions, which are inevitable given the ‘future focussed’ nature of this assessment.

How this is developed and the financial ‘output’ required will vary by organisation. Use of Net Present Value calculations may be mandatory, but recognise that these do not by themselves help you decide between options.

Once the ‘financial’ picture and the expected commercial value is clear, there is then a need to look at the wider picture, namely the overall business strategy and how each brand can work to help achieve that.

There are a number of ways of doing this, but our preferred approach is an objective scoring model.

The essence of the model is to judge each of the components against a defined (and agreed) set of criteria that go beyond the commercial. An example of this may be:

1. Reward (to the company – the financial piece)
2. Business Strategy Fit
3. Strategic Leverage (ability of the product to leverage the company resources and skills)
4. Probability of Commercial Success

By using a wider set of criteria, each clearly defined and tied into the overall business strategy, it is far easier to see which brands within a franchise, which markets for a particular brand and even which franchises should receive what level of the company’s finite resources.
And which markets, brands or franchises are less critical, and perhaps should be ignored or divested also becomes clearer.

It is all too easy to assume that just because a brand, a franchise or a brand in a particular market is making money that we should continue to support it; just because a pharmaceutical brand is still delivering revenue after patent expiry does not mean it is worth maintaining.

Any brand asset uses finite resources, be that people, manufacturing capacity, supply chain space or marketing budget. We need to be more astute about which assets we choose to maintain and those we choose to divest or kill.

Maximizing the value of the portfolio
This is all about balance – finding the optimal mix between risk and return, maintenance versus growth and short-term versus long-term within the franchise. While it is always attractive to assume you can achieve the maximal possible result over time, experience suggests that this is rarely achieved for a number of different reasons, some within our control and some not. Given as a global franchise manager you will not have direct control over much of the implementation of your franchise strategy, it is safe to assume that the franchise overall will not potentially fall short of the absolute maximum.

So what are we looking for in maximising the value of the portfolio?

Clearly over and above what the individual components can deliver (as per their PAA) synergies spring to mind. Within each of the asset assessments to what extent the individual brand can add to or support the franchise should have been included, in ‘Strategic Leverage’ for example.

A number of scenarios need to be built where we consider how we can potentially ‘punch above our weight’ by making use of common situations across brands.

One approach could be to use the patient flow by brand to identify where and why bottlenecks to potential brand growth are occurring. In brand planning mode this enables marketing solutions those brand bottlenecks to be identified and where to spend marketing budget for disproportionate impact to achieve your desired behavioural objectives.

In franchise management mode you are looking for common problems for a number of brands where one solution can address both bottlenecks or where one of the brands can open closed doors for another. While we are not often able to market baskets of brands per se, there is no doubt we may be able use one marketing solution to facilitate penetration of more than one brand if we consider a common customer for example.

As well as identifying activities that will most efficiently drive brand value, the patient flow is also useful to assess the potential benefit from market expansion activities. This is critical to maximising your franchise in the long term, and by amortising the costs across a number of brands may be more likely to gain approval and funding.

The franchise manager
Using these approaches is key if the franchise manager is to have the fuel for strategic thinking.

More importantly it is key that this role is recognised as critical to the organisation’s success and to not just add to an already busy individual’s responsibilities.

In conclusion
With pharmaceutical companies changing their business model from a few blockbusters to a wider portfolio of relatively smaller brand assets, the need for franchise or portfolio based thinking has to increase.

While quite a challenge at a global level there is no doubt that there is a need to prioritise brand assets and then build, protect, and leverage those brand assets to maximise the value of the portfolio.

Without the right processes and the right people to do this, it is all too easy to manage brands as a series of individual and independent assets and not gain full value from synergies and economies of scale.

How to manage the ‘mature’ brands in a local portfolio will be addressed separately in our future article.

The Author

Dr Paul Stuart-Kregor is Director of The MSI Consultancy.

Originally published in Pharmafocus, October 2010

When NASA launches a rocket, most of the hard work is already done.  The flight itself is relatively short, yet months and years of preparation have gone into making sure it takes off with the right trajectory and the flight is successful.

A good analogy, then for the launch of a pharmaceutical product.  Various research has shown that on average there are just six months post-launch to make a new product successful – and that period is halved for launches in chronic or specialist fields.  The trajectory you establish in those first weeks of your product’s flight will essentially define the long-term success of your brand.  A sobering thought.

As overall pharmaceutical growth is reducing, there is more and more pressure on launches, and they are ever-more challenging in today’s market conditions.  There is an increasing concern over risk, with more rigorous studies and more pharmacovigilance required.  At the same time, there are more hurdles to reimbursement, with a greater requirement for health outcomes and to demonstrate value

On top of this, many companies are now investing in growth areas such as biopharmaceuticals, specialist pharmaceuticals and, increasingly, rare diseases and genetic disorders, that often require different approaches to launch.

The challenges and investment in bringing a brand to market and the high failure rates in the period of discovery to launch, puts the six month time window for defining your sales trajectory into clear perspective.

There is no ‘off the shelf’ launch template to guarantee your success but there are some guiding principles that can be applied to your individual company, brand and market situation.  We have outlined ten simple things that you should be considering in the period before launch.  Think of them as a countdown to success…

10… Allow Enough Time

Given these challenges and the tiny period to set your sales trajectory – it is vital to allow yourself enough time pre-launch: a full 2½ to 3 years is desperately needed.

Often when a product is in market, you don’t have the time to step back and thoroughly assess the market drivers and understand the challenge.  Make sure you give yourself appropriate thinking time before launch; this is the opportunity to set the direction of travel.

Getting the best product label requires doing the right clinical trials which meet the unmet needs of all key customers, to developing relationships which will help you prepare the market.

You should also be starting lifecycle planning.  You need to know where you product is going, and start the relevant trials long before you have launched.  Roche as a company is very good at thinking through and developing a true lifecycle strategy, using multiple trials to investigate how products such as Avastin can be used in many different ways.  This has given a second and third bite at that crucial six month trajectory.

9… Build The Right Team

It is all about consistency: your goal should be to retain the same people on the brand from pre-launch through to launch, something which is actually quite rare.  Pick people who you believe will add value, last the course, and keep them focused and motivated.

Ideally the team should be run by an experienced project manager – or at least a marketer with a particularly strong project management skillset.  Leading a successful launch team requires managing a whole host of different processes and cross functional teams – including marketing and market access, manufacturing, supply chain, medical and regulatory.

Obviously the team leader needs to be commercially savvy, but more than that it is about making sure the launch team works well together, is going in the right direction, key milestones are hit and is fully engaged in the plan and in the brand.

It is important to share organisational learning, to keep lessons learnt within the corporate memory.  Novartis did this well when transferring learning from the successful launch of Glivec to help the success of brands such as Lucentis.

8… Create The Right Global:Local Dynamic

As more organisations are being lead through Global or European structures, this is a relationship which needs to be established early.  Clarity on boundaries, roles and responsibilities, and communication are critical to avoid getting bogged down in internal issues and maximise time on market and customer facing activities.

Be proactive and take the opportunity to input early.  Affiliates often sit waiting for a global plan, thus missing an opportunity to engage with and shape the activities of the global team – something the global team actually wants.

You need to look for opportunities to flex.  There will be core elements to the global plan, but there will also need to be flexibility, depending on the market requirement.

A good and well-known, example of this is Lipitor.  Of course there was a constancy and an organisational momentum behind the strong message about lowering cholesterol, but how that was communicated was flexed at a local level, and even when a local market required a different brand name or visual to meet local market needs the overall consistency and essence of the Lipitor brand was not lost.

7… Assure Reimbursement And Access

You can do nothing if you don’t get reimbursed in some way, so this is obviously critical.  You need to think about trial design: are you engaging internally with the right people in R&D and Health Outcomes?  Are you working with countries with similar challenges, learning from each other and avoiding repetition?  What other options are you assessing?  How can you leverage value-based pricing?  Have you looked at risk-sharing?  Have you looked at packaging the product up with other offerings around it?

Reimbursement doesn’t necessarily have to be for a whole population of patients with a particular disease; it could be for a particular segment, based on work you have done around segmentation and positioning where particular patients derive more benefit.

6… Develop Deep Customer And Market Insight

You need to know who drives the market, how decisions are made, and exactly what your customers need.  Be prepared to take action based on what you hear from customers in research – don’t just ignore it because it doesn’t fit with your product profile.

Get under the skin of the emotional as well as the functional, and that includes your payer or policy-maker, whoever they may be.

Engage with a strong research agency and ensure you gain genuine insight which allows you do something differently as a result, but also don’t under-estimate the power of less formal KOL conversations, clinic visits or ’chats’ with customers.

Finally, spend time understanding the trends, events, customers and competitors which are moulding and shaping your marketplace and ultimately influencing the success of your brand

5… Build A Robust Strategy

This is about converting genuine insight into organisational foresight.  Use your deep customer insight, market knowledge and understanding of current trends to develop future scenarios with which you can interact, and from which you can learn; then thoroughly develop your strategy to make sure it is as robust as possible.  This requires an organisation being prepared to learn, adapt, challenge think and come up with strategic options which are hopefully a little more creative.

This, of course, requires time, but provides you with a plan which can adapt to market or environmental events, rather than a static and reactive plan that has little foresight.

4… Get The Positioning Right

You need to build a positioning which is credible, adds real value and which ultimately differentiates you, plus is sustainable from day one.   It must also have organisational belief.

This is about using your deep insights with creative segmentation, making sure you consider the emotional, functional and price-based benefits to develop real clarity and power around your position..

Your positioning should relate to your segmentation and customers’ needs, encompass your brand values, and link into your long-term vision and strategy including market access.

This is not just about speaking to patients or physicians – it is speaking consistently to all customers.  You might use slightly differently messages and emphasis, but there must be common ground, a common position.

Lilly’ Cialis was a good example of the strength of good positioning.  Launching into an ED market dominated by Viagra, which was hugely known and highly successful, Lilly were able to build their positioning around ‘Le Weekend’, giving patients their sex lives back for a period of time, and when they chose.  Although the actual differentiating benefit was relatively small, they owned the emotional space in patients’ and physicians’ minds.  It allowed them to challenge for market leadership.

3… Shape The Market

We have discussed shaping the product and the organisation; we also need to shape the market.

Market shaping is all about paving the way for your brand, driven by the gap between today’s market insights and where the market needs to be for a successful launch.  This requires multiple activities, from KOL advocacy to working with patient organisations, governments, clinical trialists, and so on.

Importantly, though, we need to choose the right advocates, and these may not be the most obvious.  Think carefully around your criteria for an advocate.  You should research carefully before making that choice, a step many people miss out.  Who really influences?  Who do people listen to?  Who do they take advice from?  Is it different in the online space?  Who are the influencers of the future?

It is important to ensure that market shaping is in line with your customer and market mindsets; all too often companies are accused of trying to ‘create’ new medical conditions such as ‘restless legs’ and ‘cardio metabolic syndrome’.  But there are good examples, like the work Pfizer initially did around Viagra which understood that ‘impotence’ restricted potential, was viewed as shameful and was not being actively treated; but that ‘Erectile Dysfunction’ described a medical condition which was not the patient’s fault, and was in line with their market and customer insights

2… Develop A Consistent Balanced Scorecard And KPIs

To maintain credibility with management you must be able consistently to show progress towards your goals, and that means having KPIs linked to your strategic drivers and operational plans.  This entails agreeing internally what success looks like which gives you the ability to communicate and show progress, building excitement and momentum, both pre-launch and through the launch period itself.

At the time of agreeing the KPIs, you need to pressure-test them, just as you did your strategy.  And don’t simply take the most obvious ones, there is no standard approach to launch success.  They will be operationally specific, therapy area specific, product specific; for example, the markers of success for a specialist biotechnology drug and a big primary care blockbuster will be very different.

1… Develop Internal Motivation And Excitement

Traditionally excitement around the launch was focused on the sales force, but this is no longer the case: it’s about the whole mix of people.  Recruit, train up and invest in the right people, making sure they have the right capabilities.  Ask yourself: what do we need to deal with and what do we need to be good at?  Let that define who are the right people to achieve what you are trying to achieve.

Particularly key is that anyone who could have contact with customers, even by phone, is completely engaged, trained and supported.  Ensure they understand the strategy and are motivated by the KPIs.

Above all, engage people as early as possible in these ten areas, not simply by handing out a ‘launch plan’ at a launch conference weeks before entering the market.

Take-Off!

Although we have only scratched the surface, these principles are a useful guide to assessing where you need to focus your time, energy and effort.  Having prepared the way, you then need to make sure your messages fit with your strategy and with your positioning; make sure you are targeting the right physicians or the right patients based on your segmentation; make sure you have the right value proposition for your different audiences; make sure that your sales teams have the right training and materials  and are motivated, that they understand what it is that you are trying to deliver.

Make sure you have contingencies in place based on different futures unfolding, and that you are tracking the different things in the marketplace that are challenging your success, ensuring the competition can’t pull apart what you are doing.

You have a tiny amount of time to set the trajectory for your launch.  If you follow these ten steps, you can better ensure that at the time of launch, that trajectory is as steep as possible.

The Authors

Jon Bircher is a Head of Bespoke Consulting and Joanna Potts a Senior Consultant at The MSI Consultancy.

Originally published in Pharmafocus, September 2010

As big pharma desperately seeks to re-invent the way it does business, one interesting outcome has been the increasing attention paid to more specialist markets. This has even been in evidence in the smallest possible orphan and rare disease markets, such as rarer oncology, genetic disorders, immunology and infectious disease.

Earlier this year both GSK and Pfizer announced the formation of new standalone R&D units dedicated solely to the development and commercialisation of medicines for rare diseases.

Big pharma’s interest in the sector is not just restricted to building R&D capability, however. Making acquisitions and forming partnerships are also rife: in March, Abbott Laboratories announced its acquisition of Facet Biotech, to access therapies for multiple sclerosis and multiple myeloma, while in December 2009 Pfizer signed a deal for the worldwide rights for Protalix’s therapy for the ultra-orphan Gaucher’s Disease.

But why the interest in these specialist markets? Despite the smaller overall cash opportunity, these markets offer big pharma a potentially highly lucrative environment in which to diversify corporate risk. Lower investment in clinical development, infrastructure and marketing expenditure means not only significantly greater profits, but also that companies can afford to invest in several of these brands simultaneously. This allows them to spread the corporate revenue risk away from one or two blockbusters and across different brands and markets.

For those of us already working hard in these more specialist markets, what are the implications of the encroachment from big pharma?

Big fish, little pond
There are two likely scenarios. The first, for the lucky ones, is the potential for partnership. This new big pharma strategy offers a major opportunity to bring in expertise, resource and capabilities that would not be available otherwise. This is what occurred in the case of GSK’s 2009 alliances with Prosensa to fight Duchenne Muscular Dystrophy and with Genmab for Arzerra (ofatumumab) in the area of refractory follicular non-Hodgkin’s lymphoma.

However, in the majority of cases, a second scenario is more likely: that the advent of big pharma in the marketplace will represent a new, highly-skilled and well-resourced competitor for smaller companies.

Rather than focusing on the first scenario of developing partnerships and alliances, I am going to look at what we need to consider when, as David, we face the big pharma Goliath. To continue to be successful you will need to understand how the opportunities change, what new challenges arise and what you need to do in order to remain competitive.

You might not thank me for reminding you that it is very likely that your new big pharma competitor’s substantial resources will extend not just to cash, but also to organisational skills and expertise.

It will be unlikely that smaller companies will be able to match big pharma in terms of resources, it will be essential to work smarter to ensure success. You need to be confident that you’re doing the right things and that, crucially, you are doing those things well.

There are three crucial points to consider. Firstly, we must ensure that we will not be caught out by any changes resulting from a new competitor entering the market. Then, in the changed environment, we need to understand what, as a marketer, we can do better to ensure we’re still accessing those customers that drive our business. Finally, given our limited resources, we must ask what we can do to make sure we’re getting the most from our spend by doing the right things and doing them right.

The changing market
The first thing we need to ensure is that we are not caught out by any changes resulting from a new competitor entering the market.

Unquestionably, on entry of a new competitor, the competitive dynamics of the market will change. In light of this understanding, how can we guarantee that we are well prepared?

Essentially, we must evaluate the market’s reaction to this new competitor; specifically the implications for how our customers’ attitudes might be affected. What strategies and tactics will our new competitor use to win, and use against us? Only once we are confident of what is likely to happen in our market can we test how well our strategy will perform, identify our internal competitive priorities and then, where necessary, adjust these strategies to be future proof.

Many organisations have good competitive intelligence in the forms of facts, figures and historical analysis. However, in this situation, looking at history and current performance doesn’t help. Instead, we need to predict the future as best we can. One way to do that is through ‘war gaming’.

War gaming is the name given to a role-playing workshop, during which participants play the role of their competitors. Stepping into the other side’s shoes allows participants to develop an informed prediction of the competitors’ most likely strategy, as well as prepare for the market’s likely reaction. The team also gains valuable insight into the workings, thinking and priorities of its most important competitors. Armed with this insight, war gamers are able to pressure test their current intentions, which can then guide any changes the team might need to make.

Customer retention
As a marketer, what can we do better to ensure that, in this changed world, we’re still activating those customers that drive our business?

One answer to this question is to optimise segmentation, positioning and tailored messaging, through which smaller companies can gain a competitive advantage even if they are less well resourced.

However, segmentation and positioning tend to rely on generic market research, which doesn’t have the required level of insight, meaning that the result is frequently of poor quality.

Creating better positioning requires a real insight into customers’ attitudes, beliefs and motivations, as well as a deep understanding of real customer language. To achieve this demands implementing one of our most useful (and often underrated) marketing tools – truly insightful customer research.

To ensure that market research is delivering the required level of insight, there are several key steps:

1. Define clearly the critical business issue you need to address and formulate a hypothetical answer. You can then confirm or reject market truths and identify any knowledge gaps against your initial hypothesis
2. Ensure research objectives are clear, appropriate and focused. Challenge and agree the methodology to avoid any unclear results
3. During fieldwork, ensure you keep focused on the key research questions and, as often as possible, attend qualitative research in person
4. Make sure that when you assess the research diagnosis, the team has the capability and resource to meet the challenges identified.

Using limited resources
Given our limited resources, what can we do to make sure we’re getting the most from our spend by doing the right things and doing them right?

Ensuring the budget is working hard and producing the maximum possible impact can be done in two steps: establishing clarity about the barriers to growth and the commercial challenges that are of the highest priority, and creating and maintaining a transparent and realistic view on return on investment (RoI).

Usually RoI analysis fails because it is being used on marketing plans that have been created in a rush and in which the activities and outcomes are not clearly linked to the opportunities in the market.

However, it is possible to analyse RoI successfully by using the two steps described above. Through the planning process it should be possible to build a detailed picture of the barriers to growth. Once this has been achieved, you will be able to identify your commercial challenges and which levers are able to drive change. This then allows you to focus on RoI.

Executing plan implementation to optimise RoI requires a detailed understanding of where revenue can be generated and is currently lost. This can be done easily by using a tool such as the Patient Flow, which maps the total market opportunity to actual brand value, enabling us to identify where we can drive business growth efficiently and helping us to uncover the behaviour changes needed to drive increased sales.

Once the necessary behavioural changes have been identified, the next step is to define which tactical objectives and priority marketing and sales activities will be needed. Using a measurable scale of tactical objectives (such as the SMART objectives) will create a connection between the activities where investment is being made, the cost allocated to these activities, the priority behaviour change and the commercial uplift.

Next steps
As noted above, given the increasing infiltration of big pharma into specialist markets, if smaller companies are not in a position to use their resources and skills in partnership, it is essential that they have a well prepared defence in place to enable them to survive instead.

Critically, smaller companies must ensure they are well prepared for the most likely eventualities in the marketplace, and that their strategies reflect this. This will help the companies avoid the nasty surprise of being caught out by any changes in the market.

Ensure that segmentation and positioning is based on meaningful market research insights. This will then activate those customers that drive the business, allowing companies to gain the greatest competitive advantage possible through their communications.

Finally, companies much check that their spending is working as hard as it can by linking investment in activities directly to major sales drivers and opportunities.

These tips for success will prepare any small company for the increasing changes to the competitive landscape in the specialised and orphan drug market.

The Author

Michael Craig is a senior commercial strategy consultant at the MSI Consultancy.

Originally published in Pharmaceutical Marketing August 2010.

SKILLS AND TOOLS FOR THE ORD MARKETER – ARE YOU ARMED FOR SUCCESS?

Introduction

In our previous article, published in last month’s issue of Pharmafocus we discussed why as a pharmaceutical marketer you are likely to market an orphan or rare disease brand during your career, an area that most of will find unfamiliar.

We highlighted that orphan and rare disease (ORD) brands are an increasingly important part of Pharma companies’ portfolios because, with lower commercialisation costs in these less competitive and highly motivated markets with significant unmet needs, they offer a less risky and more attractive solution to broadening the revenue base.

However, despite being attractive in some ways, these markets offer distinct challenges when compared to more mainstream areas of Pharma marketing:

1. Orphan and rare disease markets by their nature are small, and given the few occasions when a small, highly specialist group of clinicians actually get the opportunity to prescribe your brand, it becomes all the more essential that you are their preferred option. Particularly as there isn’t much opportunity available if you aren’t.

2. The diversity and level of clinical and market information available is very different in ORD markets.

For instance given the severity of most ORDs, many clinical trials conducted use less robust methodology (e.g. RCTs can be unethical given survival rates) and have to be accepted as best practice. This often makes clinical comparisons difficult resulting in a lack of consistency in therapeutic management.

And when conducting market research, given the small number of target customers, that have probably been interviewed several times already, it becomes much harder to obtain unbiased insight. As a result, commercial decisions can become more of an artform!

3. Also, disease management tends to be inconsistent and fragmented, as ORDs are rare and many clinicians will be unaware of either how to diagnose appropriately or of any referral infrastructure. For many patients this results in delays to diagnosis and treatment.

4. Finally, a key barrier for all brands regardless of market is access to product, usually because of formulary or distribution challenges. For ORD brands, which tend to have very high unit costs, access is even more challenging. Access decisions are often made on a case by case basis, each requiring their own business proposition, which makes it a constant battle to convince the different influencers involved in the decision. Imagine going through a formulary process everytime you wanted to get a patient on your drug!

So the ORD marketer must ensure that their brand is always front of mind, using diverse and limited information in a market which is likely to be underdeveloped, whilst overcoming significant access barriers.

So how does the successful ORD marketer address these challenges?

To be successful, ORD marketers need an open mind to approaching things slightly differently.

To entrench the brand as the preferred choice on those few occasions that the small number patients will receive a therapy, the ORD marketer must own the relationships in the key centres and prevent the competition building better rapport or stronger relationships. Unlike other more mainstream brands, if you don’t win with these KOL prescribers there really is nowhere else to get the business.

In addition to building the rapport, the brand will not be the preferred choice unless the ORD marketer can clearly communicate a significant value over other therapeutic options. Not just to the prescribers, but also to those holding the purse strings involved in the case by case assessment. The good news here is that given a lack of clinical concensus, and the more personal nature of these markets, there is a better opportunity to build value for a brand through the non clinical aspects, particularly from support services and positive relationships.

Another area in which the ORD marketer has to be skilled is in overcoming the diverse and limited data. Because of the limited but very dynamic nature of the clinical data in the market, an ORD marketer will need to be a knowledgable and creative scientist who is on top of the most recent and relevant clinical information as customers will expect materials to include the most current abstracts. And in addition, to get the most from the very small market research sample, ORD marketers need to consider creative and innovative ways of gaining market insight. For example, have you ever considered video interviews including tours of the clinic?

Finally a likely priority for the ORD marketer will be improving patient diagnosis and referral by supporting the development of a disease management infrastructure. This is usually managed through a mututally beneficial partnership with both KOLs and NHS managers. So unlike their more mainstream colleagues, the ORD marketer needs to understand that brand success and the allocation of their resources requires a very different emphasis when compared to more classical Pharma marketing.

The small disease management community, although sceptical will be much more likely to want to work in partnership, so to gain their trust and maximise the benefit for the brand, the ORD marketer (and the ORD organisation) must have the expertise, skills and confidence to negotiate with NHS infrastructure builders, as well as understand where they will get the most return for supporting clinicians.

How do they do this?

For the ORD Marketer to ensure success for their brand, they need to approach several key areas in a different way.
• Increasing and making the most of customer intimacy
• Maximising the increased value of the non-clinical benefits associated with the brand
• Having an efficient organisation in which individuals have the breadth of skills to match the diverse audience

Increasing and making the most of customer intimacy
For all pharmaceutical brands we need a clear picture of our key customers behaviours and drivers. But given the critical importance of each individual prescriber in ORD markets, the ORD marketer needs to generate a much deeper understanding of what it is that drives individuals, ie their personal motivations and aspirations.

Why do we need this information?

So we can ensure that our medical marketing and sales activities, conversations and support are all aligned, fulfilling both ours and our customers’ goals. In so doing, you are sure to create an unassailable relationship, a true partnership, and crowd out the competitors – retaining that essential first place.

We probably already have a reasonable level of information on our key centres and our KOLs, but there is always room for improvement. So how can we do that?

We need a very detailed picture of the market which combines quantitative metrics such as centre sales performance, a picture of where referrals are coming from, and current clinical trial / Investigator Initiated Research (IIS) involvement etc.

In addition we need to overlay individual qualitative aspects of the accounts, such as the level of influence of the KOL, the aspirations of the centre and what is behind any prescribing barriers.

This picture helps us prioritise where and who we are going to work with, as well as identifying what we should be doing with them. We would usually leave this level of detail and customer management to the local rep, however given the increased importance of each customer, the whole organisation becomes responsible for ensuring this is optimised and implemented.

Maximising the increased value of the non-clinical benefits associated with the brand
As with all Pharma markets, we need to align our most valuable product benefits with clinicians and fundholders key needs so they are motivated to choose our brand over any other options. But the difference here is the value and importance of aspects of our brand other than simple claims of clinical efficacy.

Less consensus on clinical superiority and the increased customer intimacy of ORD markets, offers a greater opportunity for ORD marketers to use these non-clinical benefits of their brands.

Building the benefits of strong longer term personal relationships, demonstrated commitment to making the disease management easier and relevant financial support, over and above simple clinical efficacy messages will increase the customers’ emotional attachment to the brand and help to provide a rationale for much higher product costs.

To do this we really need to acquire a detailed understanding of what goes on in the minds of the clinicians or fundholders when they are choosing what to do with appropriate patients. What are their motivations behind selecting our brand and what are their perceptions of the competitive benefits of different therapeutic options? Are there specific attributes that they are looking for from a product, over and above the usual requirements of efficacy, safety and tolerability?

Then it becomes a question, once we understand the product differences, of what services or support we could offer to improve the competitive perception of our brand? For instance, do we need a dedicated nurse team to provide support at initiation, or even potentially specialist skills to initiate? Should we be financing extra clinician time in the clinics to help the specialist centres increase their capacity for the increasing volume of patients?

Finally we need to wrap these benefits together in a compelling and motivating story and provide it to our small and expert community in a conversation and tone as individually tailored to their needs and their role as possible. Should we really spend so much on producing beautiful Detail Aids or could the money be used more profitably supporting a group of Registrars attending and presenting at a European congress?

Having an efficient organisation in which individuals have the breadth of skills to match the diverse audience
For most marketers, being involved in defining the relevant structure of the organisation for the brand is unlikely to be a major part of the job role. However, in ORD there is generally more scope to input into the decision around having the right capabilities.

With the different market challenges and a necessarily small organisation serving a diverse group of customers, the balance of skills that individuals in the teams require is different to the more classic secondary care sales approach. The team you have will need to be able to do it all: being expert in the most advanced clinical science with a Professor one minute then selling health economic value to Commissioners the next. And with a critical emphasis on owning the relationships in the key centres, there needs to be demonstrable commitment to developing a long term partnership across the whole team. So the level of turnover seen in more mainstream sales teams would not be suitable for ORD teams.

To understand what capabilities would be most suitable for the success of the brand we need to overlay our brand aspirations and priorities on our customer needs whilst also taking into account the most likely future of the market.

We will already be clear on the aspirations and priorities of our brands, and should be very clear on the critical customer needs, so what we then need to understand are the implications of the most likely future on the right organisation. By using scenario planning we can uncover the key themes of potential futures and draw enough of a picture to understand what skills we need to build to continue to succeed.

A checklist to guide where we need to focus

In light of these key areas of success, chances are we can clearly see distinct areas for improvement, a useful check is asking “Am I entirely confident that…”
– We fully understand, in detai,l the internal dynamics, team aspirations and motivators within each of our key centres.
– We are totally clear on what really motivates each of our KOLs, e.g. IISs, leading the development of shared care or writing national guidelines and concensus, congress trips or maybe speaking internationally, plus have aligned our strategies and activities to ensure that we support them in this.
– We are communicating the most compelling value for our brand, using not just the usual competitive clinical data statements, but also clearly communicating our commitment to the development and evolution of the disease area, through all of the other services and projects that we currently support.
– We have built the most efficient infrastructure with the right balance of capabilities to suit our priorities and customer needs, now and in the most likely future.

Summary and Conclusion

With an increasing number of organisations choosing to market profitable ORD brands, it is likely that you will at some stage have to work in this highly specialist area.

Because of the small and specialist nature of the market it becomes even more essential for ORD brands to be entrenched front of mind at the moment of prescribing because there is limited room for No.2. And in addition with inconsistent and fragmented clinical management it is likely that developing the disease infrastructure in partnership with KOLs and NHS managers will be a priority.

So to deliver brand success as an ORD marketer you will require a broader personal expertise, confidence in your clinical knowledge, a willingness to be involved creatively in the wider commercial aspects of the brand and a desire to be managing across the internal teams. Good Luck!

The Author

Michael Craig is a Consultant at the MSI Consultancy.

Originally published in Pharmafocus, January 2010

Jon Bircher turns cartographer as he suggests ways that Pharma marketers might map out the future, helping them find their way to more robust and innovative strategies.

‘Where do you see yourself in ten years’ time?’ A clichéd interview-type question that we are asked, and that we ask ourselves, repeatedly. Unsurprisingly, it’s one that we all find difficult to answer. We look at the future, we try to make the best decisions, but all we find is lots of uncertainty.

How do we decide what kind of career to pursue, when it’s not clear what industries will exist in ten years’ time? More fundamentally, how do we know what will be important to us then? Many things impact that: the life stage we are at; what has happened in our career; our financial situation; how the global recession actually pans out; all of these things may alter our values and aspirations. Who knows? In ten years’ time perhaps you will be off saving the last few orang-utans!

This uncertainty about the future is just as acute in business. The difference here is that senior managers are constantly being asked to build robust marketing strategies for a future we don’t know yet. This is exactly the dilemma of many Pharma marketers.

Just as early explorers set out across uncharted lands with little to guide them apart from a clear hypothesis and knowledge of the world they knew, the dilemma we face in business is that all of our knowledge is about the past, but the decisions we are making are about the future.

In business, we are faced with ‘mission-critical’ decisions all the time. You have a choice; you can do one of three things:

1. You can let all the uncertainty freeze you into doing absolutely nothing, and just carry on as normal…
2. You can delude yourself that you can see past all the uncertainty, and just carry on oblivious…
3. Or, you can attempt to paint pictures of the future, so that you can learn from them and ensure that you have the best chance of making the right decision.

Personally I prefer option 3…

Painting pictures, or developing scenarios, is the best way of mapping what the future could look like, and then you can start to build strategies that would work in those futures.

If we are going to map the future, perhaps we should think about exactly what a map is? Personally, I like Wikipedia’s definition: a map is “a visual representation of an area, a symbolic depiction highlighting relationships between elements of that space, such as objects, regions and themes.”

A map is physical – something which we can touch, something that we can interact with, something tangible that we can interpret. How valuable would it be to have one of those for the future? The good news is that using scenarios, you can do just that. You will still have to interpret those pictures of the future, just as you would an Ordnance Survey but at least you won’t be setting out on your journey blind.

The scenarios you develop should be like a map is: tangible, plausible, describing relationships between different systems, customers, trends, market forces, regions, and so on.

So, how do we go about mapping a future world that doesn’t yet exist? Actually, the process is not so dissimilar to creating and interpreting a map; both can be broadly split into five sections.

1. Provide the Coordinates

The most important thing you do in developing a scenario is to isolate the key business question that you are asking (or key decision that you making). The challenge, if you leave it too open, is that created scenarios may not be relevant, or may not provide you with the right stimulus to interpret the direction in which to travel

Map-makers start by defining the coordinates to focus their map-drawing. In the same way when writing scenarios you need to start by agreeing what the key business question is and what the timeframe is. Be specific.

Only by doing this can you ensure that the futures you develop provide the stimulus and challenge that a good scenario should; focusing our effort, energy and creativity in the right place. In essence the maps that you are building are providing different perspectives on the future world, which allow you to pressure-test the key question that you are asking or decision you need to make.

Remember that this is a creative journey you are likely to be taking as a team, therefore agreeing the focal question/decision is crucial, in having a common starting place

So what kind of questions might be suitable for scenario learning? Perhaps you’re looking to bring a new diabetes product to market and your question is related to how the market is going to react given increased regulatory pressures and recent safety concerns? Maybe your question is a bigger organisational one? What is the right business model for us in the future? What is possible given our focus, our values and the balance of our pipeline in 2016?

We are seeing increasing price pressures on healthcare systems globally, the number of blockbusters losing patents and increasing EU focus on generic uptake . So maybe you have a series of products going off-patent in the next five years, and want to understand what the most appropriate strategy is for your company? Once again, developing different scenarios will help you innovate and explore different possible approaches that may play out across different futures

You are going to build and embellish scenarios later, but at this stage let’s make sure we have set and agreed the coordinates. What is the right strategy for us given the number of patent expiries we need to manage?

2. Define the Boundaries

Now you can start developing your maps, (your scenarios). And just as in map-building where you would define the boundaries e.g. where the county lines are or where the mountain ranges and valleys’ are, the same goes for developing scenarios – you need to set your boundaries

In other words, you know the key coordinates, the centre-point; it’s about how far you want to expand the map. There is no point just looking at one point. It’s about looking at the relationships within the system and space as in the Wikipedia definition.

So the first task is to identify as a team, what the possible driving forces and trends are. Those likely to influence the development of different possible futures

Given our recent coordinates perhaps you have noticed recent EU Commission reports suggesting they are going to be much harder on originator companies in terms of marketing activities, exclusivity deals and patent litigation at the end of patent life. Or you have noticed the increased focus on pharmacy substitution across the EU with pharmacists driven to using the cheapest generic. What you need to do now is capture these and other trends to help define the boundaries – which areas do you want to explore in more detail?

The usual environmental (PESTLE) prompts will help your thinking; what is happening Politically; what are the Economic issues, the Sociological issues; the Technological issues, (includes competitors), the Legal and Ecological issues.

Use these prompts as a team to brainstorm all the possible trends and forces (boundaries) that may be important influencers on your future, based on your key question. Some elements will be almost ‘pre-determined’ e.g. an ageing population or continued pressure on the health economy. These should be included in all scenarios but the difficulty then comes in which trends and which driving forces should we ‘define’ our scenarios by?

3. Plotting Locations and Features

So we have captured all the boundaries, you can now start plotting features on your map. In scenario development terms, this means starting to decide which trends will define the future worlds, thus prioritising the most critical uncertainties.

We have this whole list of ‘stuff’ that we know could be in our world, could be on our map, but what should we emphasise?

As with map-building, there are lots of different ways you can draw the map. In the pharmaceutical industry, given the fact that there are lots of influencing factors, we need a methodology that cuts through the complexity.

Go back to what a map is all about ie it’s about different elements and the inter-relationships between them. Take any road map. Everything is not featured, but it still does the job. To interpret it, you don’t necessarily need to see where every tree and every fire station is.

In scenario learning jargon, a deductive process can be followed, effectively, forcing yourself to focus on the critical uncertainties. You have your business question e.g. going off-patent. What are the trends that are most critical in impacting your decision? As a team, make a judgement. Perhaps it is the level of Pharmacy substitution and the level of patent protection your particular brand has?

Now we need to uncover where are we most uncertain. What do we mean by this? We mean that we are uncertain how (not if) this trend will unfold in the future. Do not fall into the usual trap of defining uncertain as if it is important.

This can be difficult to understand, but essentially a critical uncertainty (the features that you want to build your map/scenario around) are those trends or forces which you believe will critically impact what your final strategy looks like, where there are different possible ways that that critical trend could unfold E.g. Pharmacists become more influential; incentivised heavily to substitute within brands and within class vs. continuing to appear as a priority but becoming no more influential than they are today.

4. Draw and Embellish the Map

Finally we can build our scenarios. Our views of the future. As a team you have already done much of the hard work in terms of isolating the driving forces and prioritising which ones will be the anchor of our various scenarios

At this stage be creative, but remain pragmatic in your embellishment. You could spend months, taking the senior leadership team out of action, developing beautifully crafted, innovative and challenging scenarios. But, remember the purpose. A road map does its job perfectly well but it’s not a work of art.

Flesh out your thinking using creative techniques such as ‘headlining’ to show how scenarios have evolved over time, providing a narrative that people can key into. Consider the relationships and interplay between different features in your scenarios. Then supplement your creativity with gap filling research, focused on ensuring credible worlds are developed. Peter Schwartz, co-founder of the GBN puts it succinctly: “You can tell when you have good scenarios when they are both plausible and surprising.”

So in a world where Pharmacists rule and the EU take heavy legislative action against originator companies, what is the right LoE strategy? What about in a world where Pharmacy substitution becomes less influential, the patient has greater say and originator patents become harder to challenge. What then?

5. Read and Interpret the Map

Just as the map is not the ultimate goal but the journey you take is, so scenarios are not the ultimate goal, they are there to help you make the right decisions and build the best strategies. It’s a little bit like scaffolding to a building. The scaffolding is important, it helps you create the structure, but the most important thing, the focal point, is the building (strategy) itself.

You have developed these credible and surprising worlds, now you must learn from them and create the most robust strategy. In the same way, you can have the most beautifully crafted map, but if you don’t interpret it right, you are going to take the wrong turning.

Consider each scenario; what are the opportunities? What are the competitors likely to do? What capabilities are required to compete? What are the indicators of that future unfolding? What strategic options are available to us? What contingency plans may we need to make?

Also, look at the scenarios as a whole and ask whether there are strategies you can employ which play out across all or most of these worlds? Where are our exposure areas? As a team you can now decide on the most robust strategy, highlighting indicators of possible exposure areas that may need contingency plans

The Right Route

So, you have drawn your map, interpreted it, and are en route. The last stage is doing something. If you sit in your car with your route plotted, you still won’t go anywhere until you start driving. You may need to go back to the map over time and take another look you may learn new routes and features but now you are proactively engaging with the future and giving yourself the best chance of success

Take yourself out of your comfort zone; feel motivated by the possibilities presented by different futures; and now answer the question – what are you going to be doing in ten years’ time?

The Author

Jon Bircher is Head of Bespoke Consulting at The MSI Consultancy.

Originally published in PM Europe, January 2010

In the current climate, job seeking pharma marketers need to be more flexible in their thinking, argues Paul Stuart-Kregor.

This isn’t the first time that we have seen pharma companies trimming their workforces, but in the current climate, things are different.  Organisations are not just ‘cutting the fat’ now – they are having to shed good people as the economic and structural realities start to bite.  And there are unlikely to be too many openings at other big players, because they are all in the same boat.  So everyone could be affected – and everyone needs to be prepared. Read More…

From the middle of the last century, the likes of GSK, Pfizer, AstraZeneca, BMS and others have made billions from a business based on the development and commercialisation of medicines for conditions such as high cholesterol, asthma and depression with populations numbering millions.

As Andrew Whitty highlighted when taking on his role as CEO at GSK “It is clear that our industry is facing a rapidly changing environment. Demand for innovative medicines and healthcare products continue to grow, however we are also presented with increasing challenges, such as cost containment, regulatory pressures and generic competition.”

However as James Cornelius CEO of BMS puts it, companies still have: “to increase revenue, expand profit margins and improve cash flows so we can boost shareholder value while also delivering a steady stream of innovative medicines to patients fighting serious diseases and do all this by being both competitive and compliant.

It appears that the industry is employing three strategies to counter these pressures and to ensure the future success of Big Pharma, with less reliance on the blockbuster model.

As ever, there is a focus on expansion into new markets, with particular excitement about the prospects of the hyper-growth BRIC countries. In 2006 the emerging markets such as China, Russia, South Korea and Mexico grew by 81% compared to 5.7% for the US and the other nine biggest markets. Interestingly, Whitty recently announced the development of a new division within GSK solely responsible for sales to these emerging markets.

As well as expanding globally, Big Pharma has been snapping up vaccines, generics and OTC companies in a rush to broaden their revenue base. sanofi-aventis has offered over $3 billion for a Czech generics house, a British vaccines manufacturer and an Australian vitamins business whilst Daiitchi-Sankyo has purchased the Indian generics manufacturer Ranbaxy. Novartis invested early in this strategy and in their 2008 half yearly results reported that their generics (Sandoz), vaccines and diagnostics and consumer health divisions all grew faster than pharmaceuticals.

Finally, organisations are increasingly going specialist. But going specialist can be done in a number of different ways. Hyper growth speciality Pharma companies are successfully focusing on niche products and specialist infrastructure, whilst Big Pharma is more interested in orphan drugs for rare diseases with some organisations reorienting themselves into BioPharmas, a nebulous name suggesting a cross between the innovation and large molecule therapies of Biotech and the size and both commercial and developmental expertise of Pharmaceuticals.

For example, in 2005 BMS was considered one of the top 5 global pharmaceutical firms with over 70% of total 2005 revenues coming from their highly successful cardiovascular portfolio. With the loss of patents on leading therapies Pravachol and Plavix, 2005 cardiovascular revenues of $7 billion declined to $5.5billion in a year, with sales of Pravachol declining at over 50% and Plavix by 15%.

Forced to reconsider their rapidly declining business model, BMS has undergone a significant strategic restructuring reorienting “from a Big Pharma company, into a next generation BioPharma company”. Cornelius commented ‘While businesses are always in a state of flux, it’s not common for a company to launch a top-to-bottom transformation of its organization and operational philosophy.’   The aim of this restructuring was “to combine the strengths of a traditional pharmaceutical company such as its global reach and its integrated commercial and manufacturing infrastructure, with the advantages of agility, entrepreneurial thinking and flexibility that are characteristic of many successful biotechnology companies” reflected in BMS’s pipeline which currently boasts twice as many oncology candidates than any other therapy area.

But why are organisations going specialist?

Speciality Pharma

One business model which has seen extensive growth over the past 5 years is speciality Pharma. Companies such as Meda, Shire, ProStrakan, Almirall and Archimedes focus on therapies for niche conditions in promising late-stage development, which are below the radar of Big Pharma and are promoted only to specialist clinicians. This model reduces both the development costs and risks to the firm, and with a smaller dedicated specialist sales team means lower organisational costs; driving profit and cash flow. The positive cash flow allows rapid expansion; Meda a Swedish speciality Pharma company has seen hyper expansion over the past 6 years growing annual sales of $30m in 2001 into an incredible $1,252m in 2007 a growth of 85% year on year. However the challenge is purchasing a competitive, innovative and successful portfolio in the face of Big Pharma. Share prices fall quickly and new venture capital is hard to raise for organisations that expand too quickly, because portfolios become unfocused and inefficient to manage.

Rare Diseases and Orphan Drugs

There is evidence that large Pharma companies see their future to a greater or lesser extent in specialist pharmaceuticals, rare disease areas, biological products and therapies with orphan indications. Over the last 3 years AZ has spent $18 billion on acquiring Cambridge Antibody Technology and Medimmune, Shire spent almost $2 billion on Transkaryotic Therapies and Jerini while Roche is currently negotiating an offer for Genentech for an enormous $44 billion. Just this August, BMS offered $4.5 billion for Imclone and Eli Lilly bought an Oncology biotech specialist SGX Pharmaceuticals Inc. Why? Global sales of biotech prescription drugs increased 12.5% to more than $75 billion in 2007, growing at nearly twice the rate of the pharmaceutical market and a look at the top 20 therapies worldwide over the last 5 years highlights the increasing importance of biologic therapies with names such as Enbrel, Remicade, Rituxan, Aranesp, and Avastin appearing.

And organisations are not just buying their way into specialist pharmaceuticals; Oncology is currently the darling of the industry development pipeline, with companies such as Genentech, Roche, BMS, Eisai, Novartis, Takeda, Merck KGaA, Genzyme and GSK focusing on this therapeutic area for their future. The success of therapies such as Rituxan, Avastin, Glivec, Erbitux and Herceptin has highlighted that by concentrating on orphan diseases and novel lifecycle management strategies, organisations can create super blockbuster brands, in a potentially less challenging and more lucrative market environment.

The Benefits of Orphan Drugs

“Orphan drugs” are developed to treat rare diseases, defined as diseases where less than 1 in 2000 patients are affected (in the US it is any disease which affects less than 200,000 people in total). In most cases no effective therapies have been developed for these diseases, as under normal market conditions there would be little interest for companies to develop and market products; as it would be unlikely that the cost of bringing a medicine to market would ever be recovered.

Governments have therefore created economic incentives to encourage companies to focus on these areas, initially in the US in 1983, reaching Europe in 1999.

Although numbers for an individual rare disease are small, there are between 6000 and 8000 rare diseases with an estimated total population in Europe of 30 million people. The paradox being that even though the diseases are rare, it is not unusual to have a rare disease!

Usually, orphan drugs are not expected to create high revenues, however in 2006 50 orphan drugs broke that rule with annual revenues exceeding $200 million and out of these, 19 attained the $1 billion blockbuster mark, mostly because of their ability to treat several rare diseases. For example, Glivec, currently licensed for two orphan cancers, is effective in at least four other rare diseases and in 2007 delivered $3 billion becoming Novartis’s second largest brand.

Organisations are also using orphan indications as a gateway into larger markets; Remicade was initially launched for the orphan indication of Crohn’s disease before receiving approval for the much larger rheumatoid arthritis market, and as an end of lifecycle “evergreening” defence mechanism; Topamax, initially indicated for epilepsy, extended patent protection through the additional orphan indication for Lennox-Gastaut syndrome a severe form of epilepsy.

The main incentive of orphan drug legislation is market exclusivity, after the granting of marketing authorisation, for a period of 10 years (7 years in the US). By preventing direct competition, an organisation gains substantial protection during the critical brand launch phase, something not seen in mainstream pharmaceuticals. Organisations also get reduced fees for the market authorisation process, and support in designing trials to be submitted for authorisation.

As well as direct incentives, Orphan designation offers other benefits:

Costs to market are lower and timelines shorter

Clinical development programmes cost less, as they are usually in smaller numbers of patients (patients are rare and difficult to find) and have shorter timelines. There is also evidence that the regulatory authorities approve orphan drugs faster, which allows organisations to recoup their smaller investment costs and attain break even much earlier. In addition, as the audience is much smaller, the infrastructure required to market an orphan therapy is simpler, with the resulting smaller cost base; TKT-Europe commercialised Replagal for Fabry’s disease with 20 employees!

Stronger relationships

At launch, the small population of both patients and expert specialists often have similar needs to the drug companies. Almost certainly the key opinion leader (KOL) network will have had very little support for developing their services, and the need to drive disease awareness, formalise a clinical management network and ensure access to both a disease network and therapies, builds strong relationships. Orphan drug teams often find themselves much closer to their prescribers and end users and during the initial growth phase successful marketing can build strong brand loyalty quickly, creating higher barriers for any future competitors.

Orphan therapy has a faster time to peak sales

Although diagnosis of rare diseases can be difficult, many patients will already be diagnosed, motivated and informed through active patient organisations and so are actively awaiting new treatments. Disease specialists are also likely to be aware of new therapies, having been involved in the phase III trials and the limited competition is likely to require complex and expensive management. Because of this, uptake is usually swift, and the high unit prices which companies can command and the likely high market shares of a monopoly, mean organisations can aspire to generating peak sales faster.

Despite lower clinical and infrastructure costs, the ability to build strong brands quickly on close relationships and shorter time to peak sales, there remain significant challenges for marketers to overcome.

The Challenges

Single orphan markets are small, so to overcome this and become blockbusters orphan therapies have to expand into a variety of different indications. With shorter timelines, managing successful lifecycle is unusually urgent. Developing a ‘Brand Vision’ early in the life of the product is essential to guide the best lifecycle strategy, which can then be valued and tested, before finalising programmes.

Orphan therapies often have a clear clinical advantage; however exclusivity from competition is a misnomer. Many clinicians have difficult to change beliefs about the management of rare diseases with personal preferences for older, unproven but very cheap therapies or complex surgical interventions, and can be reluctant to try new therapies in sick patients. In addition, the clinical data with which a marketer is working can be small and the endpoints complex and non-comparable. Communicating both disease and brand benefits, with unusual clinical data, to an audience with deeply fixed beliefs requires creativity and a deep understanding of the needs of all stakeholders. Mapping all stakeholders involved, researching their real needs and developing a clear brand proposition is essential. In the UK this needs to be developed long before marketing authorisation, to ensure specialist commissioning teams don’t position your brand for you!

Understanding an orphan disease environment is a skill in itself and must be considered when developing teams. Success of a new therapy will rely heavily on orphan expertise in both development and commercialisation. The regulatory process is a significant challenge as trials may never have been run in the disease area before, and patients are hard to find. Following marketing approval, knowing how to develop a rare disease management network and who to work with to access funding are necessary for success. When assessing an orphan market, drawing on knowledge of rare disease management in different countries will guide recruitment of people with the correct balance of skills.

With high unit costs and a lack of understanding of the disease, the biggest challenge to launching an orphan therapy will be ensuring smooth access to therapy for patients. By developing processes and relationships with key funding stakeholders early, directly and through KOL and patient advocates, teams can keep fund holders happy supporting managed entry.

Conclusion

With the growing importance of specialist drugs, organisations should recognise that different marketing skills are needed to maximise the success of specialist brands. Orphan indications offer many benefits, although marketers face significant challenges.

Much as the tools that marketers need to support both clinicians and patients are recognisable to any pharmaceutical marketer, in an orphan disease, the balance of where and how to use them is very different. An emphasis on the development of both a formalised clinical management network and funding process requires insightful use of the small pool of advocacy, creative value added services and early development of a clear value proposition.

The Author

Michael Craig is a Consultant with The MSI Consultancy.

Article originally published in Pharmafocus, October 2008

Whilst no-one has a crystal ball, why is the pharma industry so bad at creating future-proof strategies? Jon Bircher, of the MSI Consultancy, explains what we can learn from using scenarios.

“Our ultimate dilemma is that all of our knowledge is about the past, and all our decisions are about the future,” wrote Ian Wilson, principal of Wolf Enterprises. If you wanted to sum up why making decisions about what to do in the future is so difficult, it’s hard to put it more succinctly.

We only have knowledge of the past; so it’s neither surprising nor necessarily a bad thing that we tend to refer to what has historically happened when developing our future strategies. Using research to develop insights into the different forces that interact with each other, gaining an understanding into how systems work is critical when building our plans. We can’t discount what we have learnt from the past because it’s the only thing we’ve got reference to. What we must do is keep an eye to the future.

Put simply, building or pressure testing a particular strategy doesn’t just need knowledge, it also needs foresight. There are possible events and influences in the future which might get in the way of a successful strategy, for example changes to the marketplace, unexpected competitor strategies or even natural disasters. Unfortunately, until someone invents a time machine, we won’t be able to accurately predict the future. But that doesn’t stop people trying!

One common tool used in our industry – and many others, for this is not just a pharma dilemma – is the use of scenarios. Scenarios in our vocabulary have very much become a forecasting term, which attempts to find the most predicable or most likely future. A strategy is then built to account for that world, and we may adjust the scenario to help us define upsides and downsides in financial terms. There are many downsides to this approach, but critically it doesn’t use scenarios as they are intended: to build pictures of distinct worlds enabling appropriate creative, innovative and robust strategies to be formulated.

If you’re serious about building a strategy which is as robust as it possibly can be, then you’ve got to put the time, money and investment aside to look at it. In today’s competitive and changing environment it’s not good enough to just say, “I’m going to build my strategy simply within the boundaries and bias of what the world looks like today.”

It’s also not good enough to build a strategy based simply on what we think is the most likely future. Spending time developing different scenarios allows us the time to build, evolve and pressure test strategy, learning about what should or could be achieved.

Scenario Learning

Firstly using the term ‘scenario planning’ in itself doesn’t help. You can’t plan for a future unless you know it’s going to exist.

I’m not alone in my scepticism about the term. Michael Porter, in his book Competitive Advantage, writes, “Scenarios aim to stretch thinking about the future, and widen the range of alternatives considered.”

This way of thinking is backed up by Liam Fahey and Robert Randall, who in 1997 published a highly-recommended book called ‘Learning From The Future’. In it, they introduce the concept of ‘scenario learning’ rather than scenario planning. It’s not about predicting, but rather about thinking through the consequences of potential futures. Put another way, it’s about spinning stories about the future. These can help us develop fuel for new and innovative strategies or act as test beds for our current strategy.

At the end of the day, historical analysis alone is inadequate in its ability to be able to judge risk. If we’re trying to understand risk and trying to understand the optimal strategy, we can’t do that purely on the basis of the past, we have to create future worlds that allow us to work out how robust a particular strategy or a particular line of action might be.

So if we’re trying to look at possible futures, how do we identify those scenarios which are going to be useful to us? Peter Schwartz, co-founder of the Global Business Network, hits the nail on the head: “You can tell you have good scenarios when they are both plausible and surprising.”

In other words, it’s got to be something that could happen (although we shouldn’t be constrained by what we know today) but it also has to have a level of uncertainty about it – because you’re trying to work out things that you don’t know. So when you’re building a scenario, it is a mixture of things that you believe are pre-determined alongside those factors which are most important and most uncertain. You’re trying to learn new possibilities from the uncertain, but you are still grounded in what is plausible.

Danger of Paralysis

The danger is that in trying to avoid prediction, knowing that we can’t see past uncertainties, paralyses us into inaction. You could focus your whole thinking based on what you believe is predetermined, but, recognising that this is not enough, do you just freeze and do nothing, and therefore not know where to go – or do you create these possible maps of what the world could look like?

The answer is to remain focused on what you are trying to achieve. This falls into two main areas: pressure-testing existing strategies, or developing new ones.

You can use scenarios to say: I’ve got a strategy, is it really as robust as I think it is? And if the world looked slightly different, would it still play out?

On the other hand, it could be about building or developing new strategies – or anticipating potential contingencies for your current strategy. Then, it’s much more about creativity, about using scenarios to say what could be possible: what different ways could we do business, what different ways could we challenge particular questions. This is then cleverly using the scenarios to generate innovative strategic possibilities rather than testing one particular route of action.

Either way, you have to engage the company’s senior leadership team fully in the scenarios process. Their knowledge, insights and awareness of the areas of uncertainty are crucial in terms of constructing the final product. If you haven’t got everybody bought into what these possible futures could look like, how they feel and what the rules of the world are, then it’s going to be very difficult for people to engage in them, either to pressure test the strategy or to build new strategies.

There are many different approaches to building scenarios and linking them to strategy development. Some of these are hugely time-consuming; some link quite heavily into computer technology; some are very external expert driven, some workshop driven – but there are some core elements that are required however you choose to approach the scenario learning process.

The critical stage when utilising any scenario learning process is to be clear about the key business question that is being asked, the key decision focus of the whole process. For example, in the early 1980’s Shell’s top management famously asked “what if oil prices fell drastically?” and in working with the likes of Schwartz et al were able to fare much better than the competition when in 1986 prices did fall by almost half.

So isolate the key question, whether that be “what is the right way to fill our pipeline gap?”, “what is the impact of this new competitor on the dynamics of our market?” or “what is the most appropriate organisation for the future?”

Once you understand the key decision question, the focus of the scenario development process is orientated around that central query, ensuring that you are focused on the factors that may (or may not) influence the success of any consequential strategy developed. Everything else that we do including selection, building and embellishing of scenarios are all in the context of that central question ensuring strategic implications have clarity, relevance and credibility.

Ongoing Process

The final stage is to apply these learnings to your strategy or to refine the current strategy is. If you really believe in scenario learning and strategy development then it has to be an ongoing process where you keep challenging your views on what the future could hold.

This is an evolving and ongoing process; by using scenario learning we may have test-bedded our strategy against possible futures but we may also want to expose ideas to customers’ views, run further feasibility analysis, both internally and externally. Maybe we have spent a lot of time in our scenarios thinking about the market environment, but we haven’t devoted a lot of time to competitive reactions. Once you have spun stories about possible futures, you may want to check them from additional angles.

And don’t forget that your views on the future will change as time moves on. You know there will have been assumptions made, and this might have highlighted information gaps – which you can go and start to fill. Some of that might be about the present; some of it might even be about past.

Scenarios are an extremely useful tool when used appropriately – not for planning or for forecasting, but for learning about the implications of possible futures. Let yourself be taken out of the realm of comfort, and feel motivated by the possibilities of different worlds. As long as they’re both plausible and surprising, they will help you to ensure that you have a strong strategy in place whatever happens.

We will never be able to account for everything in the future – it’s too uncertain. But surely it is better to be broadly right than precisely wrong.

The Author

Jon Bircher is a Managing Consultant at The MSI Consultancy, and is one of the creators of FUTURES™, a new initiative to help pharma companies develop robust strategies that play out across possible futures.

Originally published in Pharmaceutical Marketing, September 2008

As a marketer in the international pharmaceutical world, it is very likely that the brand we are responsible for has a global presence, available and marketed in many different countries. But are global campaigns an increasing problem for marketers or do they offer an opportunity to support local needs with significant resource, freeing you up to focus your energies on other key, local issues? When is it that we should be raising concerns over a global campaign, and should we be rocking the boat at all?

In the world of Pharmaceutical marketing, how often is there some level of conflict (challenge) between the global brand team and local marketers? How often does the US voice in international brand team meetings generally shout the loudest, or seem to continually act independently regardless of global consensus. And how often as UK or even European marketers, do we find ourselves being advised to implement the US brand format across our own markets and having to fight hard to make any changes, despite our very different market environment?

This article looks at when we should consider if we need to and to what extent we should adapt a global brand and/or its campaign and also how we might better influence the development of the global brand. It will draw on some examples from FMCG highlighting why this could be a good environment to learn from, with its history, experience and expertise in global branding.

Why is this important to consider now?

It appears that the power balance in the pharmaceutical world is about to change which will affect how we should consider our global brand. Changes are occurring in the US and have already begun to have an impact on this historical bastion of Pharma profit. The American pharmaceutical payers and consumers, despite the latter continually swelling in numbers, is having a significant change in mind-set regarding health costs and are much less readily accepting of their mounting pharmacy bills. Given the economic difficulty in the near future for the US, since the widely reported ‘Credit-Crunch’, and 50 million American citizens being unable to afford medical insurance and essential drugs, it would seem likely that consumers and politicians will intensify their focus on the health economy and inevitably the US drug spend, our key profit source.

For many years the US’s market size, liberal advertising rules and relatively free pricing system has ensured its position as the focus for brand development, with global brand aspirations fulfilled through an international roll-out of the US campaign.

The changes in the US market means the Pharma industry will need to re-think the global commercial balance in the near future and re-visit investment and mid term strategies to support greater diversity outside the US. Part of this restructuring will involve a greater need to develop and execute truly global pharmaceutical brands.

However, with this shift in the commercial epicentre of the pharmaceutical world, it is important that we optimise results in other markets. As marketers we aspire to truly understand our customers, and work closely with complex local issues, such as culture, attitudes, beliefs and complex healthcare structures. Using a single culture based brand execution is therefore highly unlikely to result in the necessary local competitiveness required to sustain a successful future for our product.

A quick review: What is a brand and how do we develop a brand?

A brand is the sum of all the characteristics, both tangible and intangible which make your offering differentiated or unique in the minds of target customers, adding value and developing a relationship over a simple functional interaction. (How does popping a cork on a champagne bottle make us feel, why is it so different to drinking sparkling wine?)

So, how do we go about developing our brand? First we develop the Brand Vision which is the internal expression of the goals and aspirations for our brand, based on an insight about the future market that defines the brand’s opportunity, and uses relevant and specific language which reflect our core values. We then consider the more practical aspects of the product, outlining the consequences and emotional implications of the functional product attributes and the particular unique selling proposition we defined.

Having considered both our aspirations for the brand and the emotional benefits derived from the functional attributes of the product, we then need to consider what is the best balance of functional benefits, emotional benefits and perceived value for money, The Brand Value Equation (Why are we so much more particular about buying shoes rather than socks?). These processes then allow us to develop our Brand Positioning by considering what we want target customers to ‘know’, ‘believe’, ‘do’ and ‘feel’ about our brand and its opportunity for them.

Subsequently, our whole process is crystallized in the Core Proposition: A single consistent expression of the brand and its essence and finally the developed visualization and imagery is termed the Brand Identification.

Given an increasing acceptance of global communication, a greater focus on RoI by Pharma companies with strained pipelines and an economic storm meaning a less rosy future for the once lucrative US market place, our futures as marketers we will be increasingly driven by clear success and evidence of efficiency of our marketing. A global brand can therefore be highly attractive as it can deliver these efficiencies in cost as well as control and clarity of positioning,

However, there may be situations where adapting the global brand is likely to be the most successful and efficient option. Given the need for maximum efficiency and success at local level we should therefore be prepared to challenge the status quo, but on an objective, not a subjective basis. So, how can you identify that moment for your brand?

The first question you must ask yourself is ‘why do you want to change the global brand’? How often do we find the motivation for adaptation is based on a misconception; that the core brand is wrong locally, when in reality it is the local execution that is causing the trouble and in fact the Core Proposition has clear local relevance? It is crucial you that you make sure you are not confusing global brand with global execution. If we do jump to such conclusions, we are in danger of missing the opportunities to profit from greater brand efficiencies and larger global brand resources. By working back to core branding principles and assessing the global proposition in our local market we could save ourselves much time, effort and unnecessary expense!

When considering if we need to adapt the global brand, we need to be clear and ask:

1) Have our international colleagues really developed a global brand? If we are missing clarity on the Brand vision, the Brand positioning and the Core proposition, then we must raise the need to develop more clarity on the global brand.

2) Is the global brand is meaningful, credible, competitively differentiated, motivating and sustainable for our target customers? If not, then we may need to go back to the drawing board to help tighten things up.

On the basis that we do have the clarity, differentiation and sustainability on the global brand, then we need to consider whether the ‘brand drivers’ or the ‘market drivers’ are different in our market to those on which the global brand is based.

We all know of brands that have different names at a local level due to legal or language restrictions. While that does not affect the overall brand value, it is a key consideration if it fails to communicate the fundamental brand values.

For example: Motorola is pronounced ‘me de lou la’ in Cantonese, meaning ‘nothing to take’. In some southern Chinese dialects, the Peugeot 416 is pronounced ’si yi lu’ meaning ‘die all along the road’. The Coca-Cola name in China was first read as “Kekoukela”, meaning “Bite the Wax Tadpole” or “Female Horse Stuffed with Wax”, depending on the dialect. Coke then researched 40,000 characters to find a phonetic equivalent “kokoukole”, translating into “Happiness in the Mouth.” This is also culturally relevant, since the Chinese have a fondness for names that express goodwill. Far more in line with the core brand values but an example of local execution NOT a fundamental change to the brand.

Another vital consideration is that not all markets are in a similar state of development; perhaps the treatment paradigm is different with an emphasis on different classes of drugs, or the unmet need on which the brand opportunity is based is just not recognised in a particular market. In which case there is work to do at local level to develop customer’s thinking. The core brand may be valid but we will need to focus local communication more on establishing the ‘know’ of the brand positioning (i.e. that the unmet need is an issue) than the ‘believe’, ‘do’ or ‘feel’. Yet again, execution not brand per se.

If we have looked at the drivers and found some inconsistencies, then we need to establish how far we need to adapt.

Is it just about execution?

When we work through the different drivers, what we often discover is that in most cases the vision, positioning and core proposition of our brands will stand up across international borders, and actually the majority of work we have to undertake is to ensure that our brand proposition is clearly communicated in a locally acceptable manner.

FMCG companies have been considering how to maximise their global brand potential for many years and have found that although many global brands are highly successful they do not always work. Many successful global brands express clear core values in a relevant and appropriate way which is adapted specifically for the local market; in the words of Intel successful brands express a “global chassis, local body” or as we classified earlier, a global core proposition and local brand execution.

Despite working for many years on establishing as tight a global execution as possible some FMCG brands have recognised the value of local execution but still want to achieve the efficiencies that result from centralised development. Coca-Cola replaced its global ad and branding campaign with more tailored local and regional strategies. In one case a core selection of 10 ads together with images and music was produced. Local managers could then put together and edit ad packages that were most appropriate for their local consumers. In another case, Mercedes-Benz implemented a similar local adaptation strategy using a single ad agency to create a menu of 5 campaigns. Brand managers in each country were then able to choose the campaign which suited their local market the best. This halfway house ensures that campaigns are of suitable size to benefit from the economies of scale and central control, whilst at the same time delivering a more tailored and more locally efficient result.

Although FMCG doesn’t reflect many of the complexities and technicalities of the complex Pharmaceutical market we are all working in, these examples do illustrate the ongoing search for an ideal global / local brand mix. By considering the real drivers behind our local brand elements we can optimize our marketing efficiencies.

Conclusion

We are all faced with global marketing to a growing extent, and when, why and how we adapt the global brand is a continual area for heated debate. While some arguments for global brands seem spurious, there is no doubt with the drive for cost efficiencies global brands are here to stay. However, by working through the core developmental elements of a brand, and understanding their relevance, local brand teams can identify which parts of their brand need adapting, whether it is the brand vision, the core proposition or simply the local brand execution. Given the shift in the commercial balance of power in pharmaceuticals globally and an increasingly global communications platform for brands, we need to get to grips at a local level with driving greater marketing efficiency. If we truly want to be successful, surely we are best placed by using the resource and efficiencies of our global brand and only adapting it where entirely necessary, to drive local advantage. However, it is just as dangerous to assume it will work as it is to challenge the global brand. Be brave and do what’s best for your market.

The Author

Michael Craig is a Consultant at The MSI Consultancy.

Originally published in Pharmafocus, June 2008

The pharma industry has traditionally lagged behind other sectors when it comes to measuring the effectiveness of its marketing activity. Jon Bircher, of the MSI Consultancy, says it’s time to take action and measure marketing activities in structured way.

Over recent years the pharmaceutical industry, has been unable to escape the mantra of ‘return on investment’ (ROI). Investment in just about everything – from R&D to clinical trials to sales force effectiveness – is being scrutinised, with ‘marketing effectiveness’ measurement and monitoring being thoroughly challenged.

But when it comes to ROI on marketing spend, the truth is that the marketers have struggled to find a way to measure all of it. Parts of the promotional mix that are more closely linked to sales (e.g. sales force effectiveness) are easier to measure if we look at inputs and potentially have very tangible outputs albeit that the link between them may not be direct. This is not always the case with marketing (depending on what the objective is), at least in pure financial (revenue) terms. And that’s what many people think of when they try to measure ROI: the balance sheet.

Perhaps when big blockbuster products were turning in so much income, a little wastage, or a lack of expenditure accountability, in the marketing department wasn’t so important, especially in the days when the markets were more defined and accessible – and hence the marketing job was arguably easier.

Even if this was true, the pressure to deliver more for less is certainly pronounced, and to achieve this, knowing what is working and what isn’t is more important than ever. We may smile at the old quote attributed to Lord Leverhulme: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half”. But increasingly pharma marketers are being called on to have a better insight than that.

Many marketers are still struggling to link measurement of the less tangible elements of the marketing mix, such as, changing perceptions, awareness or interest levels to actual return. But I believe passionately that we have to find ways to measure robustly what we are achieving, if we are to maximise the effectiveness of marketing in our industry.

This is a call to all people in the industry not just marketers. Marketers should have high expectations of the agencies they commission whether that be market research agencies, advertising agencies, communication, medical educational, PR companies or even consultancies! Any proposed project or activity should have clearly defined objectives and metrics that enable demonstrable alignment to what will drive future growth.

Measurement is not simply about comparing marketing spend to sales, the correlation is not that simple. Which is why some pharma marketers end up giving up and simply accepting sub-standard anecdotal ‘hunches’ that they are doing the right thing. These days that is not an option, it’s too important to take that tack!

Yes, it is sometimes difficult, and challenging, to relate sales to certain specific marketing activities, especially market shaping and market access activities, but it is important that as marketers we do it to ensure we demonstrate the value that ‘marketing’ can add in a predominantly sales-driven culture.

To measure marketing effort effectively you need to understand where you are impacting on the patient flow, you need to know what success actually looks like, plus where you are trying to move customers from and to.

Using the Patient flow enables marketers to measure effectiveness using an appropriate combination of qualitatively researched performance measures, as well as regression based sales analysis and benchmarking measures. The patient flow is the link point enabling marketers to connect qualitative KPIs to the ultimate goal – financial return.

You should be cautious about relying purely on past sales performance as a measure. Looking back, you can make correlations between marketing activity and sales, and from extrapolate to the future. But marketing activity doesn’t necessarily translate straight into sales, and it’s certainly not exclusively about direct sales effort – factors such as increasing the number of patients available for treatment or increased diagnosis also come into play.

To do this effectively requires above all an understanding of where in the patient flow you need to be concentrating your marketing activity, where the critical barriers are, and what success actually looks like. It’s no good simply saying that the finishing line is increased sales, and therefore marketing success can only be measured using that criterion. True, all successful marketing should contribute to commercial success, but often that end result is too far removed from the specific marketing goal to be the only valid metric.

Take as an example a patient consulting their GP with obesity. Your marketing aim may be simply to drive more diagnoses (knowing that if you get this right the patient is more likely to end up on your treatment). The starting point will be to understand the barriers which are preventing this happening (through insightful market research).

Perhaps the big barrier is that the HCP feels it’s more of a lifestyle problem, or the patient doesn’t realise that they have a medical condition. Identifying the barriers will flush out who needs to be influenced, and what changes in their behaviours must happen to make drive success which will in turn inform the appropriate use of the marketing mix.

Driving those changes in behaviour is the objective of any marketing activity, and therefore we should be identifying clear KPIs which can then be measured. Although in this case you will be hoping that increased diagnosis will lead to increased prescribing, and hence increased sales of your brand, that is a few stages removed and we need to ensure that we have markers or measures in place to highlight what success initially looks like, e.g. a mixture of awareness of obesity as a true medical condition and increased diagnosis.

Whilst getting the methodology of measurement right, there must also of course be an understanding of what it is that is being measured. Perhaps the biggest error that is made in the pharma industry is either to look too generally at the whole market, and thus miss effects which are happening in specific parts of it – or to get the segmentation hopelessly wrong.

Segmentation is something we talk about a lot, if we have truly challenged ourselves to go that step further in terms of segmentation: looking into customer goals, beliefs and attitudes, then equally we should spend the time ensuring we measure our marketing effectiveness by segment. This requires two key things 1) Markers so we can clearly identify one segment from another and 2) a review of the stages of the patient flow for each target segment separately. Once we have done this we will be able to find our segments and understand the differences in terms of growth levers and barriers that need to be removed through our marketing activities.

Considering the basis of segmentation, as groups of customers with distinct, different needs, we must account for this in reviewing marketing effectiveness. .Even where segments are well-defined, too often measurement of marketing success is based across the whole market, and not on the segments of the market which could – with the right messaging – make the biggest difference. Therefore let’s ensure we have identified differences in the patient flow by segment helping us understand the critical barriers to success, highlighting the levers of growth. This allows us to ensure marketing effort is measurable, aligned to qualitative and quantitative measures and is segment specific.

If we have decided to launch a particular brand into a specific segment, with similar needs and consistent messages, then we need to focus our measurement on only those segments, not the market as a whole.

So is it that the industry is not gathering enough data to be able to make meaningful assessments of marketing effectiveness or are we simply not making good use of the data we have?

An often used excuse for the shortage of marketing effectiveness in pharma is the relative difficulty of gathering data compared with the fmcg world. But whilst certain aspects of marketing are more difficult to measure than others, this is no different for fmcg than for pharma. Yes, it’s difficult to access the end-user in pharma, but we have much to learn from the techniques used by fmcg. And in fact in my experience there is less readily available data in fmcg.

The challenge for fmcg is the same – to work out which elements of the marketing mix are having the best return on investment. There is no reason why we cannot commission more market research with our customers to get a better understanding of where we are having the most impact, and then utilise these insights to inform and improve what we do moving forward.

Actually, most pharma companies I know are awash with data which could be used better with the correct tools and processes to ensure that we measure our effectiveness. If the data is not there, then challenge yourself – and your agencies – to understand what data you need, and look at approaches you can take to accurately measure marketing success and that won’t always be about demand or sales.

Those increasingly sophisticated metrics tools which are commonplace in fmcg are now finding their way into pharma. We are now using bespoke tools which have been developed specifically to meet the individual challenges of measuring pharma marketing effectiveness.

However you express it, the days of ‘digital hydrometry’ (i.e. finger in the air) are gone. Financial management and profitability are rapidly becoming a major part of the marketer’s daily workload.

A simple way to start marketing effectiveness is to imagine that it is your own business: your own money that you are investing. Marketers need to pay more attention to measuring their effectiveness – not just to be better marketers, but to understand what success looks like, and to gain competitive advantage. Would you really spend money on that programme if it was your business or are there better ways of achieving the goal?

I believe that there is a cultural shift required in understanding what is meant by the term ROI. It’s not just about increasing sales (at least not in the direct sense); it can be about a whole plethora of success measures, whether it’s awareness, perception, driving diagnosis or adoption of a particular technique.

The ultimate challenge we face as pharma marketers is to pick the right growth levers. Of course the ultimate goal is towards increasing sales, and profits. But to measure marketing effectiveness properly, we need robust qualitative markers to show that we are going in the right direction.

That’s not about suffocating creativity or innovation, but rather about informing it, improving it, and knowing when it has achieved your objectives.

The Author

Jon Bircher is a Managing Consultant at The MSI Consultancy.

Article originally published in Pharma Times, June 2008

It should be a very simple equation: if you can understand what motivates clinicians – and all the other prescribing influencers – to prescribe a particular treatment, you can adapt your marketing to ensure that you are pressing those ‘hot buttons’.

A vital part of this is understanding how shifting NHS priorities affect these prescribing triggers. In a healthcare system where an ever increasing number of stakeholders (both in the NHS and outside it) influence prescribing behaviour, ensuring that your marketing message hits the spot is the key to success in a complicated marketplace.

Using market research to try and find out exactly where and what that ‘spot’ is, is nothing new. But how often does it give pharma companies the real insight they need to adapt their marketing to be fully effective. Too often market research is used to try and prove what brand guardians (and often senior management) think is the case – rather than genuinely seeking out new knowledge to improve their understanding of the customer.

Truly insightful research should find something you didn’t already know previously, which will help you guide your marketing. To achieve this requires far more than a well-executed market research programme (although that’s vital too). What it needs is a level of focus which is sadly all too often lacking. But achieve it and you have a very powerful tool to pull those prescribing triggers and drive increased sales.

We so often assume that the first product to market in any particular therapy area will always be the one which sticks in the mind of the prescriber, but this is not necessarily so. The product which will stick best will be the first one which is positioned to best meet the customers needs – and this quite often means we need to communicate at an emotional as well as a functional level. As Rees and Trout say in their ’22 Immutable Laws of Marketing’: “Marketing is not a battle of products, it’s a battle of perceptions; and sometimes it’s better to be first in the mind than to be first in the marketplace.”

Get under the skin of your customers , develop true insight into their needs, and you can become positively positioned in their mindsets, even if your product is not first to market, or even on paper the best. It’s very powerful.

As ever, the starting point for this process has to be the customer (and not your product). You need to identify what change in behaviour you require from your customer in order to achieve your objectives. If you can understand that, and also who and what might influence your customer, then you can tailor your marketing accordingly, both directly to the customer and also to all of those influencers, both clinical and non-clinical.

In the end, what will persuade a customer to change their behaviour will be if they are convinced that in doing so their needs will be better met – whether this be functional clinical needs, role based needs or personal/emotional needs. Pharma has grasped this concept for some time, but traditionally we have concentrated on the basic, obvious needs of efficacy, safety and tolerability.

Many marketers will be familiar with Maslow’s ‘Hierarchy of Needs’, which identifies a pyramid of need ranging from the basic at the bottom, through to what he calls ‘self-actualisation’ at the top. In pharma marketing terms, efficacy, safety and tolerability are basic needs, and ones which most prescribers will now take as read.

So the differentiation can only come further up the need pyramid, and that means gaining a real understanding of the more complex and more sophisticated needs which will impact on their prescribing decision. Often pharma marketers only think in terms of what the solutions might look like, rather than trying to visualise the little details which will change behaviour.

Using research only to look at the basic needs of doctors may give you some data, but it certainly won’t give you customer insight – not in any meaningful way which will help you shape your marketing effectively.

In practice, the other needs we need to consider can be split into two categories: role-based needs, and personal needs. The first of these are defined by the factors which impact on what the clinician needs to happen to fulfil their role and accounts for the influences and influencers impacting them. These might be achieving financial targets or achieving agreed objectives with their employers. If a Trust’s priority is to keep a group of patients out of hospital and in primary care, then if the pharma company can persuade the prescriber that its product will achieve this, this message will have a big impact on prescribing. But you need to know what the priorities for the doctor are first.

In a system where the patient is increasingly viewed as a ‘healthcare consumer’, the need to keep the patient onside is an important role-based need for doctors. The NHS is increasingly building community-based services where patients must be motivated and empowered, and this impacts greatly on the prescriber’s decision-making.

The other – less rationale needs that we often need to account for are the personal needs of doctors. The more emotional, personal opinion that impacts on his beliefs, goals, attitudes and beliefs. Healthcare professionals will never directly say as much, but just like you and me, all prescribers are human, and therefore there will be emotional factors which will affect the way they make prescribing decisions.

Traditionally market researchers have shied away from digging too deeply into this important aspect of prescribing triggers, and not just because it is difficult to unearth the truth. It is sometimes said that because such emotions are intensely personal, that it is simply too complicated to build them into the equation.

However, a well thought-through and well-executed piece of research will be able to identify trends or segments with similar needs, beliefs, attitudes or goals.

What we are talking about here are emotions, and the doctor who wears his or her heart on their sleeve is few and far between. But just because they don’t immediately open up about it, clinicians – like all of us – have an emotional side which drives their decision-making; they are not just prescribing machines. Quantitative market research cannot capture those human and emotional triggers – that requires true insight.

So given all of this, how do you go about gaining the insight? How do we ensure we dig down deep enough into functional, role based and emotional needs to ensure we build a differentiating product proposition that ensures we are optimally placed in the customers mind?

Perhaps the first step is to identify what we really mean by insight. Chambers Dictionary describes it as “imaginative penetration”, which although incomplete as a definition, starts to express the difference between insight and data. It’s only insight if it tells you something you didn’t already know, which is useful to you.

In the pharma marketing sense, insight is about looking at the situation, understanding the challenge and, crucially, understanding the depth of information you need for your brand. If you don’t know this, then you cannot structure your research to find it, and then no matter how well-executed your research is, it won’t give you the insight you need.

Achieving it should be viewed as a four step process, with the implementation of the research not occurring until step three. This proper consideration and preparation is the key, because if you can’t identify what insight you need, you won’t know what to look for.

The first step is to define the problem, and agree the research objectives. What is our business issue? What level of insight do we require? How much do we need to explore role based and emotional needs? This means knowing the business issue you are facing, what information you need – and why. It’s important to stay focussed at this stage, and avoid the common temptation to ‘test something else at the same time, while we’re doing the research’. You’d be surprised how often this happens.

It is important that everyone buys into the objectives of the research at this stage, because you are setting out to gather things you don’t yet know. So inevitably some of those things will not fit into your current way of thinking, and you need to be prepared to take those insights on the chin and develop your approach accordingly. Accepting this before you are faced with the situation is easier to deal with.

Step two is developing the research plan and methodology, and this will be informed by the needs identified in step one. Clearly this is not as straightforward a process i.e. when you are seeking personal needs than when you are seeking more tangible treatment needs, so confidence in your market research agency is crucial.

At this stage you also need to work out what flexibility you will build into the methodology, because as you start to gain insight you may need to change the questions you are asking and revisit the whole process.

The third step involves implementing the research. Again, it’s useful to have interim steps here, including a pilot so that you can test whether you are gathering the insight you need and adjust the process as necessary. Many product managers are unwilling to challenge their market research agencies once the process is underway, but it’s important that you do. Constantly ask yourself – and the agency – “am I learning something new?” If the answer is no, you are missing out on the insight.

The final step is making sure that the results are reported. There is little point gaining insight if it is not acted upon. Because you will be hearing things that are new to you, and not just confirmation that what you thought is right, you need to be prepared to hear things in the presentation which may be difficult to accept internally.

You may need to pre-empt political problems by priming senior management. But if your organisation is genuinely committed to gaining and using customer insight to drive its marketing, then that does imply an open corporate mind.

Customer insight is a hugely powerful thing. To make the most of it means getting away from the too-often-seen situation where market research is driven by questions asked by senior management, rather than by a genuine desire to understand what drives the customer – and a willingness to change what you do accordingly, in line with the customers’ needs. The question in any organisation is whether everyone is prepared to buy into a process of, in Chambers’ delightful phrase, ‘imaginative penetration’.

Mapping Customer and Influencers

If we accept that the prescriber should be at the centre of any marketing campaign, then insight into his or her motivations is crucial. But unless you also grasp the drivers for all the people who will influence that prescriber – and who may have a big sway over their role-based and personal needs – then you are not getting the whole picture.

This too can be summarised in a four-step process:

Step One

Identify the Primary Customer and the behaviour change you require from them. This could be something as simple as isolating a group of clinicians and associating ‘perform the new treatment’ as the desired change in behaviour.

Step Two

Map what needs to be in place to allow this behaviour change to happen. These may relate to resources, support, guidance or procedure (such as training, support of professional bodies, equipment requirements or simple motivation to treat).

Step Three

Expand your ‘map’ to identify the individuals and groups associated with each individual requirement – the range could include medical colleges, patients, nurses, local payers, business managers, peers; the list can get very long.

Step Four

Categorise the customers and influencers in terms of the nature of their influence rather than by pure job or group titles. The nature and role of their influence is much more important and people with very different titles may have similar ways of influence e.g. commissioners vs. opinion formers vs. providers vs. goals setters or regulators.

The Author

Jon Bircher is a senior consultant with The MSI Consultancy.

Originally published in Pharmafocus, July 2007

Communicating with key people in a rapidly changing NHS requires looking at the bigger picture – and a better understanding of what is driving those changes, says Jon Bircher.

Most marketers in the pharma industry understand the need to get alongside and talk to key people in the NHS – and yet as an industry we haven’t yet cracked it. Because we don’t always fully understand why and how that investment in time, effort and resources can pay off, we are not always maximising the benefits of those communications channels.

Partly, of course, this is because pharma has always been driven by sales targets – in other words short-term goals, making an ‘instant’ return. That has some validity, of course, given that we are a business like any other, and one which has seen our opportunities to reap return on significant investment truncated by various pressures.

But there is a danger here. Thinking too short-term, and not investing in building longer-term relationships with our key NHS customers, will have profound effects. So why aren’t we doing it well enough yet?

Much has been written, both here and elsewhere, about the nature of the new NHS, and I don’t propose to repeat that now – if you don’t know yet what is going on, you’re in the wrong industry. We simply have to accept that the NHS contains pretty much all of our important customers in the UK, and so we have to build our relationships within the context of all that change, like it or not.

And understanding what is happening is the crucial first step to achieving that. As the number and type of customers grows, we have to get a grip on this new plurality, and consider carefully just who are the ‘key people’ we should be talking to.

Understanding Local Health Economies

Traditionally, pharma has divided NHS customers into distinct groups of stakeholders, and targeted different messages for each group. So GP teams spoke to GPs, hospital reps to hospital doctors, and for the more enlightened, NHS teams built relationships with non-prescribers. How well this ‘separate bucket’ model has worked is open to debate, but what is unarguable is that such an approach is no longer valid.

Instead, we have to consider our communications in the context of local health economies – increasingly the driving force behind most health decisions, including prescribing.

It’s clearly nonsense for NHS teams to undertake market shaping or patient identification work if the sales reps continue doing the usual short-term thing of trying to capture as many patients as possible. Likewise, how in tune are we with the local health economy, how much are we partnering the NHS if the hospital sales reps continue creating hospitals discount schemes that clearly don’t fit with the needs of the whole local perspective?

Surely we should be fitting our offer into the context of common health system goals. Pharma has to keep up with these, and make sure that its communications are consistent across local health economies to make sure that NHS needs are being met. Only then will we stand a chance of meeting our commercial objectives.

Communication with key NHS contacts will only be successful if we concentrate on customers needs, goals and priorities .This means getting an insight into what life is like within the NHS for these people, and especially understanding the sometimes contradictory priorities they face. If we in pharma can start to understand what that feels like, who and what are the major influencers/ influences, then we will start to really understand the needs of our customers, whoever they might be.

What Success Looks Like

The first thing to think about, then, is exactly who the key stakeholders are, and, crucially, how they fit in with each other. Alongside this, it’s important to look at two things in parallel: what those stakeholders’ needs, goals and priorities are; and how those can fit with our own commercial objectives. Understanding what success looks like is not as simple as it perhaps once was. It’s no longer about capturing short-term sales to meet targets against prescribers; it’s about making sure that our longer-term (commercial) objectives fit in with the needs of the whole local health economy.

Knowing what our customers’ needs, goals and priorities are is the first step. .We then need to establish what the desired behaviour change is and what needs to take place for them to do that. Once you have got to grips with that, you’ll know what the opportunities – and the barriers – are, and therefore what capabilities are required to align your activity and your communications.

It’s no good simply looking at one part of the NHS, though. Increasingly, there is interplay of influencers, and not realising what impact that interlinked influence has will mean your communication will be ineffective. Perhaps the biggest change of all in the NHS is that interlinking of influence on prescribing decisions – so you have to look at the whole picture.

Only when you have this level of understanding can you start to think about how to build effective and consistent communications with the NHS.

It’s about building genuine partnerships with specific health economies more than simply prescribing individuals. This requires much more of an account based focus where we align goals, agree the appropriate patient and consistently communicate to all stakeholders.

The word partnership is defined by some NHS people in a different way to how you or I might define it. In general, NHS people view partnerships, especially with the pharma industry, as being one-sided. But it is possible to find genuine partnerships, but only where all concerned are truly going for the same goal.

You simply can’t claim that you are partnering the NHS if your reps are pulling sales through inappropriately. Instead, you have to create a situation where you are helping to shape the environment alongside your key NHS partners – and then your reps are pulling through appropriate patients. And that means in many cases a fundamental change in thinking.

Overcoming Scepticism

Just as reps are going to have to think more strategically, it’s fair to say that NHS teams are going to have to start thinking more commercially. The new NHS is a world of increased transparency, so we can’t – and indeed shouldn’t – seek to hide why we are here as an industry. Provided we can convince our customers that our commercial objectives are in line with their own health and health economics objectives, that shouldn’t be a problem, although this will require a cultural shift from both sides.

That shift in thinking requires us to consider all the appropriate stakeholders in an environment, and that means waking up and thinking about how we’re viewing the customer, who they are, and what the joint objective is. And that can only happen in an atmosphere of openness and frankness, especially given that there is genuine scepticism on the NHS side, based mainly on their experiences of pharmaceutical companies pulling them in different directions in the past. (And let’s not ignore the fact that there is a degree of scepticism on the pharma side as well, and if we don’t overcome this, we have no chance of aligning ourselves with our customers’ objectives.)

Let’s not kid ourselves here: whilst there may be some scepticism about all business within the public sector, it reaches a peak in the way NHS views pharma, based on previous, behaviours and relationships.

Moving forward, then, we need to adopt a more contractual approach – perhaps the word ‘compact’, a popular concept in the public sector environment, suggesting a consensual and mutually beneficial statement of intent, is this time appropriate.

It’s no longer simply about doctors having all the power to write prescriptions. That this still needs saying in 2007 is in itself an indictment of our industry’s slowness in embracing change. Yes Doctors are still extremely important but many companies are still struggling to understand the fact that they need to account for the needs of all the customers that impact a prescription, although to be fair some have radicalised their approach, and some are looking at completely different models of provision.

Effective Communication

Of course, let’s not lose sight of the fact that the pharma industry needs to pull through sales in order to survive, and indeed to provide investment for research and development for future therapies. So ultimately the aim of building better communications and long-term relationships is indeed to pull through sales. What has changed is that those sales need to be appropriate, both for the pharma company, but also for local health economies (or ‘accounts’).

Having established exactly who the customer(s) is/are in the new NHS, what their needs are, and what needs to happen for them to change their behaviour, we now have to engage with these key stakeholders as soon as possible.

Building a clear and transparent relationship means putting your cards on the table about your own objectives, so that you can try and find commonality in your goals. If you can genuinely work together to identify and prioritise those goals, then you are in a position to capture those appropriate patients.

I mentioned that a new thinking had to be brought about across all teams in pharma, and that includes the sales teams, who of course still have a role to play in all of this. Once common goals have been identified, both GP sales teams and hospital sales teams can work with individual doctors to help them identify patients who are best suited for treatment. Getting the right patient on the right drug is – or certainly ought to be – high on the list of the industry’s objectives, just as much as it should be on the NHS’s agenda.

Another key advantage of this approach is that it becomes something more than selling product post-launch. If you can engage with the NHS and understand its needs, you can engage with people much earlier on in the process, well before launch. This means you can make sure that trial designs meet actual NHS needs, which in turn will lead to a greater chance of success of the launch itself, with your customers’ needs met, and your USP based on real, rather than assumed, customer requirements.

Building effective communications and strong relationships within the NHS is not simply about adapting to a new environment – it is much more than this. It’s about a significant cultural shift, for the industry and for the NHS. We need develop relationships that allow honest and transparent debate in order to align objectives.

The NHS is rapidly identifying the patient who would be most appropriate for our brands so lets work together, engage early and help them identify the appropriate patients that allow the NHS to hit its objectives and pharma to meet its commercial objectives. In order to do this we require deeper insight into the needs, goals, priorities and drivers across local health economies (‘accounts’) and consistent communication with all customers within them.

Get this right, and you can build a significant competitive superiority – and what company wouldn’t put that high on their own list or priorities?

The Author

Jon Bircher is a Senior Consultant for The MSI Consultancy Ltd

Article originally published in Pharmafocus, July 2007

Consultancy is widely used in the pharma industry. But are consultants adding real value? Steve Highley, MD of MSI, says that properly briefed, managed and measured consultants can reap big benefits to your marketing.

“A consultant is someone who borrows your watch to tell you the time” – a cynical view of the role of the consultant, a breed which is ubiquitous in many industries – including pharma. It’s easy to adopt such cynicism, especially given the amount that the industry spends on consultants.

According to the Management Consultancies Association, the worldwide market for management consultancy is now worth $100 billion. This represents a ten-fold growth over the past decade.

Whilst these figures cover all industries, pharma consultancy spending has also grown, although at a slightly slower rate. Management Consultancy magazine reports an increase in spending of 10% in the past two years.

Given the issues facing the industry (poorer product pipelines, increased cost of bringing products to market, need for peak sales earlier in the product life cycle, pressure from governments reducing costs resulting in increasing barriers within markets), coupled with a lack of the right kind of experience within some marketing teams, the case for using external consultants is stronger than ever – provided they are used wisely.

So what is the role of the consultant? Are they simply telling pharmaceutical companies what they already know, or do they add value? For example spotting opportunities which those close to a brand or a product cannot?

Having taken the decision to use the help of consultants, how do you choose which ones to work with? And how can you be sure that they are delivering real value – in other words, how do you measure their effectiveness?

All of these are common questions, often asked in a cynical tone – and who should be surprised at this? Over the years a number of books have been written talking about the ‘dark side’ of consultancy practice.

Common complaints include consultants who deliver pre-defined, ‘one-size-fits-all’ solutions to every client, with the only thing changing on the report being the company name and date; or alternatively, those who go in, spend lots of time on analysis, and then recommend solutions which are near impossible to implement, or, when implemented, take the company backwards rather than forwards.

This attitude is identified by Peter Block, author of Flawless Consulting, one of the seminal works about consultants. In an interview with US magazine Management Consulting News, Block states, “Consciousness about consulting has increased since it’s become such a big business. But clients are always going to be sensitive about bringing in consultants to tell them what they think they already know, or to implement what they don’t have the courage to do. Human beings just tend to be reluctant to accept help or admit their vulnerability.”

What this highlights is the importance of both consultant and client getting it right if there is going to be value added from the use of consultancy.

What is a Consultant?

Perhaps a good place to start a definition of what a consultant is – or should be – is to identify what they shouldn’t be. The tongue-in-cheek book Bluff Your Way In Consultancy implies that consultancy and bluffing are essentially the same thing – somebody who pretends to know how to do your job better than you.

With a string of companies downsizing over recent years, it’s true that many individuals and small bands of people have set themselves up as consultants almost overnight, with no consultancy training or experience. Many of these believe that because they have worked in a number of managerial roles, they are sufficiently qualified to be a consultant.

To be fair, there will be some who, over time, with a good contacts book, a professional attitude and experience, will start to provide a good service – but there are unfortunately others who provide fuel for books such as Bluff Your Way…

The key point is this: consultancy is not just about passing on experience, even if this can be one aspect of assignments. Professionally trained consultants are aware of best practice thinking in terms of appropriate processes, methodologies and project approaches. Experienced consultants also have the added dimension of applying appropriate project approaches in varied situations so that know often the most effective and efficient approach to solve client problems.

Vitally, consultancy is about providing that extra sizzle, insight, nuance, that bright or innovative idea that can make a difference in driving competitive edge.

This can manifest itself in a number of ways – the development of innovative launch strategies based on creative segmentation models and understanding of prescribing levers, redefining structures, refining or adding processes and methodology to address real marketing problems, as well as giving confidence to marketing teams to implement plans in the best and most effective way.

So why does it sometimes go wrong? Usually, it’s down to one or more of the following factors: the problem or issue that needs to be addressed is inappropriate for the use of an external consultancy; choosing the wrong consultancy; an inexact brief which leads to unclear expectations of both parties; the way the consultants are managed internally; and lack of measurement leading to an inability to judge results – with the potential for disappointment.

The Right Job

The first step in using consultancy successfully is to identify those tasks which are best suited to bringing in outside expertise – and understanding which jobs are better handled in-house. There is a danger we see consultancy regarded as a panacea for intractable internal problems best suited to internal solutions.

But choose the right task, and consultancy shows its true value. Briefly, there are three main reasons fro bringing in outside help:

• Where the expertise doesn’t exist in-house (capability)
• Where it may exist in-house, but resources are stretched (capacity)
• Where the client company needs an independent check on what they are doing (objectivity)

In a marketplace which is changing rapidly, consultants can bring a level of insight and experience borne out of working in many different situations, something which can be difficult to achieve internally for all – even the very biggest pharma companies. Without this level of insight internal teams are unsure what to do differently, with the inevitable tendency to ‘play safe’.

In this situation, a consultancy can provide ideas on new and/or improved ways of marketing the brand, bring experience of what might be a new market for the client, can sanity-check projected RoI, and crucially can bring understanding of the implications of what the client is planning – and advise on the things that need to be done to succeed.

This is especially useful in situations where there isn’t necessarily a problem to solve, but where the task is to use the benefits of current success to do even better in the future. One client we worked with was doing really well, but had no fixed idea about the implications of NHS changes. They used us to help them achieve innovative thinking in relation to how they should set up a organisational structure that aligned with the future marketplace based on NHS change, their future product portfolio and the competitive challenges they were facing.

They were able to do this knowing that it would be backed up with our expertise and experience. In this case, consultancy enabled them to support calculated risk-taking – the lifeblood of any enterprise.

In another situation a client wanted to move from what appeared to be an intractable number two position in the market against a strong competitor. This required a fundamental re-think of the market, resulting in a new segmentation approach. In turn this allowed the formulation of a new brand positioning, and series of messages allowing a link between the current brand identity and what was required in the future to drive share success.

This, combined with an innovative communication and promotional campaign, resulted in a shift in internal expectations on what was possible. Early testing showed that the new marketing approach would result in a significant share increase if executed effectively.

The client on their own would not have been able to generate this alternative approach. They needed outside expertise to develop an innovative project approach and manage all aspects of the assignment, from market research, to briefing of the ad agency, to sense checking progress during the new marketing campaign using appropriate quantitative, qualitative and interpretative techniques. They needed the challenge to think differently, as well as stimulus and fuel to allow alternative approaches to be explored.

But not all tasks are suited to consultancy, and understanding this can help avoid bad experiences. Trying to use consultants to back up internally a pre-defined view is rarely successful. Neither does bringing in outside help to act as a ‘referee’ in internal political disputes. And too often consultants are taken on to replicate the work of a perfectly capable management team – a waste of resources, and a sure-fire way of demotivating the internal team.

So the questions need to be asked: is this task appropriate for an external consultant? What type of consultancy is needed? What competence is required (branding, strategy, research, organisation, marketing execution, and so on)?

Brief Clearly

If you want to get the most out of your consultants, clarity of expectation and briefing is critical. If the client does not have a clear idea of what they want to achieve – then it won’t be a surprise if the consultant is unable to meet the objectives!

Be realistic Consultancy is seldom the ‘magic bullet’ (Just occasionally it is!), especially where it’s a question of introducing a me-too product. In addition make sure you are not asking the consultant to achieve results which are dependent on factors and decisions that are outside their control, they can strengthen the ability to succeed – rather than guarantee success.

We do come across clients who know that they need help, but are unclear exactly how the consultancy can aid them. Don’t be afraid to discuss the brief with potential consultancy partners. If they question the brief, don’t take it personally – more likely it is the sign of a group of people who are used to challenging thinking, and evolving it. That’s usually a good sign.

A below average brief doesn’t necessarily mean that the consultant will fail – a strong consultancy will still be able to deliver good work to a weak brief. But clear direction again maximises the chances of achieving the objectives.

A brief should contain the following elements:

1. A thorough, thought-through background to the project
2. An exact description of the challenge you are facing
3. Specific objectives you are asking the consultancy to achieve
4. Any constraints – internal or external – you are working under
5. Who the consultant will need to work with internally
6. Timescales
7. Budget

But be prepared to listen! After all you are often asking a consultancy to help because they have experience; take advantage of that. This may result in modifications to the proposed objectives but that is not necessarily a bad thing. Just evolution.

Making the Right Choice

Selecting the right consultancy for the job is the single most important part of making sure that results are achieved – and the area where the process most often goes wrong. So how do you set about getting your carefully-crafted brief into the hands of the right potential consultancy partners?

Finding consultants is much like finding any other set of professional partners – a combination of research, word-of-mouth recommendation, networks and market knowledge.

You should consider the size of consultancy which is right for you. Big is not always beautiful; it’s too easy to fall into the ‘no-one ever got sacked using IBM’ syndrome. Bigger consultancies can mean (although not always) a bigger project approach, bigger teams – and bigger fees. You need to judge whether your project justifies that, or whether you be better off working with a smaller consultancy which will be more flexible in its decision-making, and where you will see more of the senior people and principals.

There are several routes you can take to draw up a longlist. Directories such as Pharmafile are a useful starting point, although they don’t tell you that much about an organisation. So talk to colleagues to get recommendations, harvest your networks. Also, read the trade press – those who are being published regularly are likely to be up to speed with the latest thinking, and if they’re getting into print, they generally know what they’re talking about.

Combine your written brief with a verbal brief, preferably to the consultancy principal. This will enable you to gauge the culture of the organisation, and the consultancy to really understand the brief. When reviewing the proposals, there will be several criteria to take into account: do they demonstrate a clear understanding of the project?; is their methodology and process clear?; can you see innovative thinking?; can they deliver on time and on budget? Are they convincing you that they have the experience and competence necessary to achieve the project objectives?

It is especially important to make sure that you are not paying for the consultants to go up the learning curve with you. This is probably the main source of the ‘borrow your watch to tell you the time’ sentiment. You need to make sure that the people you will deal with are actually bringing skills and experience which you don’t already have in-house.

Equally important is personal chemistry. You will be working closely with the team, so make sure you are going to get on.

Getting Results

If picking the right consultancy is vital, then so is managing the ongoing relationship to make sure that the process is working. Pitfalls generally happen when the brief changes after the selection – surprisingly common – or when there is an inconsistency of personnel on either side. The client should appoint a project champion, who needs to be available, and possess the right skills, not someone who will be floundering out of their depth.

Preventing the natural mistrust that can occur when a team of consultants arrives on the scene is a question of communication. If internal people understand what the consultants are adding – and crucially, that they are on the same side, working to the same objectives – then much of the resentment and insecurity will vanish.

Ultimately, achieving RoI on money spent on consultants requires you to measure their contribution. As we have seen, this is much easier when there are clear objectives against which to measure. You should build in milestones into the project plan, and review progress regularly.

The wrong consultants, badly briefed and managed, will simply be a cost, and will lead to resentment and frustration and end up being an expensive luxury. But used properly, consultancy can add huge value, bringing capabilities, capacity and above all objectivity difficult to find even in the very biggest and well-resourced companies. And even then, it is very rare that companies, especially big companies, genuinely have the structure and culture to encourage truly challenging thinking.

If the brief doesn’t add value, then neither will the consultants. But get it right, and consultancy has a invaluable contribution to make to driving competitive advantage.

The Author

Stephen Highley is Managing Director at The MSI Consultancy.

Originally publised in 2006