Is pharma sales coming of age at last?

Nick de Cent discusses the evolution of pharmaceutical sales, looking at what it takes for an organisation to be successful today in terms of its multi-channel marketing approach.

For an industry that routinely operates at the cutting edge of science, pharma is notoriously conservative in many other senses – not least in the way that it chooses to go to market. This is perhaps unsurprising given the way the market has developed, the traditional values of the various stakeholders involved and the need for compliance within a strict regulatory framework, which understandably can also act as a drag on innovation.

And yet, almost everybody in the sector would say that change is needed: the prescribers who no longer have time for conventional sales force interactions; the payers, who look to extract maximum value on behalf of the healthcare service; pharmacists with their evolving role in the supply chain; the regulatory authorities who have been dealing with numerous mis-selling scandals; and, of course, the pharma sector itself for which the former 'share of voice' model is no longer so effective or affordable.

Changes to the way pharma industry sells its products have been anticipated for many years now. Industry veterans will recall the 'demise of the rep' being discussed back in the day when they were still rookies, and yet innovation has been slow and patchy, often superficial, sometimes poorly implemented. Much has been written about 'selling value', utilising modern electronic sales and marketing channels and introducing key account management (KAM) to the sector, but pharma has been in limbo unsure of how to navigate an increasingly complex market landscape.

Today, the industry is poised for transformation and the way it sells will reflect the fundamental changes sales organisations are experiencing in the wider business landscape. Savvy suppliers will adopt the latest sales ideas, based around concepts like 'third-box thinking', taking time truly to understand their customers' requirements and those of their customers' customers. Meanwhile, pharma's customers will become increasingly driven by value and outcomes, and sales operations will need to learn to talk this language fluently if they are to be successful.

A key issue is a lack of customer centricity. For many customers, the way that pharma tries to sell to them is simply not relevant: it's often too self-focused, maybe even entirely product-centric. Over time, the approach will shift from a tactical, product-centric sales methodology towards a more strategic mind-set, involving effective market segmentation and closer alignment between sales and marketing to create brands with greater longevity.

Technology, in terms of product innovation, customer education, and marketing and sales channels, will help shape the sales landscape. As new types of products evolve, there will be greater emphasis on customer service and delivery mechanisms beyond the molecule itself.

Successful organizations will be those which take time to understand and interpret these forces for change within the marketplace. They are likely to implement a multi-channel approach, enabling different customers and stakeholders to interact with them via their channel of preference – or more than one – including social media and mHealth, KAM, a slimmed-down specialty sales force, teleDetailing, eDetailing or with the help of a contract sales organization (CSO). CSOs offer the advantages of flexibility, agility, and core sales management aptitude, as well as the ability to offer additional tactical sales support when needed; at the same time, non-traditional players from outside the pharma sector are likely to enter this space.

The massive sales forces of 10-15 years ago have already undergone very substantial pruning, but now is the time for a fundamental reappraisal of the role of salespeople themselves. The much-vaunted move towards KAM will be most effective where sales operations are able to anticipate the ramifications of such a strategy both in the marketplace and across their own organisation. Sales leaders need to be aware of the time it takes to implement a winning KAM approach. They are unlikely to be successful simply by rebadging existing reps as key account managers – for the simple reason that different types of sales role require different competencies. In addition to KAM, organisations are likely to be looking for reps either to specialise in specific outcome areas or to carry a wider range of products in order to eliminate parallel resourcing.

Small reactive changes to market requirements may not be enough to gain competitive advantage, however: now is the time to adopt a more entrepreneurial ethos, within the framework of compliance obligations. This requires a profound culture change, particularly among sales reps, and deep understanding of the way that stakeholders – healthcare professionals (HCPs), patients, payers and the industry – interact. For instance, new stakeholders are entering the stage: many pharmacists now have the ability to prescribe and, more importantly, review and promote adherence to drug regimens. Adherence has crucial revenue implications for pharma organisations.

One radically new approach to the market combines social media and electronic marketplace models which are familiar to us as consumers – think Amazon, EBay and LinkedIn – and transforms salespeople into entrepreneurs in charge of their own micro-businesses. The new Rimedio platform envisages reps (whether directly employed, as part of CSO teams, or as independent micro businesses) being joined by professionals, such as pharmacists, and interacting as part of an online marketplace that also includes patients, HCPs and payers.

The pressure on the pharma industry to update its go-to-market models will soon become overwhelming as the various stakeholders – patients, professionals and payers – seek change. Exactly when this revolution will happen, nobody can be exactly sure, and we have to note that commentators and industry thought-leaders have been predicting this transformation for several years now.

Nevertheless, the commercial and regulatory pressures are irresistible, forcing a choice between evolution and extinction for pharma companies. Change will be accelerated by the penetration of technology throughout the system. The tipping point will be reached when a critical mass responds to the increasing complexities of the marketplace by taking a more strategic approach to sales and marketing. This new marketplace will be dominated less by 'big pharma' and 'blockbuster' products, with more players operating in a wider range of niches. Consensus suggests the transition to new sales and marketing approaches will be evident by 2016-2018, with a new-look industry landscape by the end of the decade.

About the author:

Nick de Cent is a journalist, editor and social media specialist with 30 years' experience writing about business and management. He has retained an interest in sales performance issues since the 1980s and is a passionate advocate for professionalism in selling. He currently edits and writes for various print and online media, including The Times 'Sales Performance' supplement, Sales Initiative magazine, eyeforpharma.com and Pharmaphorum.com, as well as corporate clients such as McKinsey & Co, the Sales Leadership Alliance, Consalia and SalesAssessment.com.

Nick has launched and edited business magazines in the finance and sales fields and contributed to a wide range of publications in the national, business and IT press, including the Financial Times. He works extensively in social media on behalf of clients, particularly in the science and technology sectors. Nick has an honours degree in biology and is a Fellow of the RSA.

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