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All things Pharma

Maximising Opportunity in a Changing Marketplace

In a fast-changing NHS, just how are pharma companies going to align sales and marketing resources to market potential, asks Gareth Thomas?

FOLLOWING THE UNPRECEDENTED CHANGES that occurred throughout the NHS during 2006, the coming year looks set to continue the major overhaul in sales and marketing strategy and structure for pharma companies.

The challenge for pharma companies is that they simply cannot sit back and wait for the dust to settle. In a highly competitive marketplace, organisations have got to become far smarter with their sales and marketing budget. For 2007, the key has to be: just how can pharma companies most effectively align resources to market potential?

All Change

Pharma companies may have woken up to the extraordinary changes being wrought across the health service, but there are many, many unanswered questions regarding just how the new NHS structure will affect front line prescribing. From levels of compliance to PCT guidelines, to defining the new Key Opinion Leader (KOL) networks and assessing the opportunity cost of working far more closely with the NHS to support the creation of new treatment regimes, the potential implications on pharmaceutical sales are yet to be assessed.

And while many companies have already begun to dabble with promoting reps to key account manager positions, reassigning territory areas along PCT boundaries and, in some cases, have recognised the need for new, targeted differential messaging, it is simply too early to assess the success of these strategies.

Certainly there has been a fundamental shift in buying patterns. The majority of GP practices are now part of commissioning groups and taking advice from a diminishing number of PCTs. But how has that actually affected behaviour? Are GPs following the formulary guidelines and, if so, are they doing so across the board or only in specific therapy areas? Where are the greatest areas of compliance and who are the GPs still adhering to their traditional prescribing habits?

In fact, according to the most recent figures from Cegedim, there has been an extraordinary shift towards on-formulary prescribing, with only minor differences between therapy areas. Within 12 months of the change in policy, on-formulary prescribing in line with PCT directives has risen to between 70 and 85%. This will only continue to grow.

Influence Sphere

This change in prescribing practice creates a completely new set of demands and challenges for the pharma company. There must now be a far greater emphasis on keeping up to date with constantly changing prescribing trends, the new influence networks and policies at Strategic Health Authority, PCT and commissioning group level.

With increasing demands from shareholders for more effective sales strategies, pharma companies need to attain a far more complete understanding of sales – encompassing not just prescribing trends but working with a much better knowledge of each local health economy as well as the KOL networks.

Undoubtedly the information is now available to attain that understanding. A few years ago, pharma companies could do little more than measure performance by territory. Today companies can assess sales data at practice, commissioning group, PCT, SHA and national levels – as well traditional territories for those that have not realigned around PCT boundaries.

Add in QOF data, which reveals how each practice within a PCT is performing to specific guidelines, and pharma companies can now ascertain the prescribing potential of individual doctors. Critically, information is now available on product switching, which will become more and more important as GPs comply with formulary guidelines.

Pharma companies now have access to far more detailed information on the new influence networks – a key requirement given the on-going change, both in structure and shift towards professional and administrative level influencers. Indeed, there are a huge number of new influencers, such as prescribing advisors and those working in disease networks, who will benefit from help and input from pharma companies.

Align and Measure

Understanding these new networks is essential. The companies that benefit will be those that are helping PCTs, commissioning groups and practices to create the right treatment regimes. Those companies that get embedded with treatment protocols and become part of the directive will be in a very strong position.

But in a time of constant change, organisations need to be constantly measuring and monitoring performance to ensure effective alignment of resources. In today’s NHS, policies cannot be set in stone. Good performance equates to good value and that value needs to be measured to a far greater detail than ever before. Each commissioning group is now its own micro market. Companies need to understand those markets – and how they are changing day to day – and tailor both the allocated resource and message to the potential offered by that market.

In this highly competitive, increasingly political marketplace, pharma companies cannot afford to waste resources by spending money in areas that do not offer real opportunity and will never provide a return. Companies are under increasing scrutiny and need to understand individual PCT policies on new tactics – such as the funding of nurses to support specific therapy areas – to ensure the right approach is tailored to each PCT. The overall NHS objective may be to move towards a far more consistent approach, but local differences prevail and understanding those differences and how they are evolving will remain critical.

There are massive opportunities for quick wins but only for those organisations ready and willing to commit to understanding a market in flux and prepared to embark on a raft of new strategies in those areas identified as offering the greatest commercial potential. Failure to make very real efforts to understand the market today, even whilst it continues to change, could be a very costly mistake.

Gareth Thomas is Managing Director of Cegedim UK. Cegedim is a European leader in the production, use and distribution of data and services linked to medical information and CRM activities. For more information, contact Cegedim UK at www.cegedim.co.uk.
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