The external environment for pharma sales has fundamentally changed. Traditional detailing alone is no longer consistently effective. Increased affiliation of physicians with hospitals and large group practices has profoundly disrupted the effectiveness of legacy pharma sales practices. Traditional detailing assumes that the physician is the decision maker. As the percentage of independent physicians has decreased from approximately 60% in 2000 to 30% today, decision making authority has shifted to include a broader range of stakeholders.
As IMS analysis demonstrates, this shift has negatively impacted the ROI of traditional detailing:
To address this, pharma and biotech companies need to change their legacy commercial models, roles and incentives. Failure to do so will decrease the ROI of the sales force and negatively impact market share growth. Here are three specific areas that require attention to be successful going forward.
Segmentation: The traditional approach to customer segmentation in pharma sales relies primarily on historical prescribing habits. Given the rapid changes in account affiliations, the influence of managed care, and the shift toward greater centralized purchasing at the Integrated Delivery Network (IDN) level, historical prescribing habits are not accurate. To develop a more accurate segmentation model sales and marketing must work together to capture field intelligence on current and trending buying patterns and influence points. Integrating this knowledge with marketing insight will produce a more effective targeting strategy.
Commercial Model Design: Commercial models need to align increasingly with accounts not just physicians. Account Management roles are very important to cover top accounts across multiple geographies as well as geographically based physician practices. Today’s Account Manager roles are broader than contracting and include account strategy and orchestration of field resources to cover affiliated accounts. Similarly, traditional physician focused detailing roles are evolving to increase emphasis on large account coverage.
Quotas and Sales Compensation: As commercial models evolve, target setting and sales compensation also need to change. An example of this is the salient need to develop compelling sales incentive plans for Account Management roles. Due to the challenge in setting accurate goals for Account Managers, many companies are defaulting to group or company measures with an MBO component. However, this design often limits the upside opportunity. This decreases the attractiveness of these roles to top performing account management talent. To attract and retain high caliber account management sales talent, pharma and biotech companies must develop a more robust approach to target setting and plan design.
Learn more about how to transition your pharma sales model.
Pharmaceutical Sales Practice Leader: Doug Beveridge
Originally published by Linda Mahoney.