UNLEASHING MEDICAL AFFAIRS

Transcription

1 UNLEASHING MEDICAL AFFAIRS DEC 2017

2 UNLEASHING MEDICAL AFFAIRS Sweeping changes across the pharmaceutical industry have heightened the expectations for Medical Affairs and have created an unprecedented opportunity for the function to play a central role for a company s success. Medical leaders can tap this potential by identifying the areas where their teams can add unique value, and then systematically aligning the organization and culture to focus on these. We recently helped a leading medical affairs organization through such a transformation, and we outline how we got them there in Unleashing Medical Affairs, the first paper in our Medical Affairs Academy Core Learnings series. AN INDUSTRY UNDERGOING TRANSFORMATION Over the last two decades, the pharmaceutical industry has undergone a transformation in response to significant external changes in the global healthcare market as well as to internal factors related to R&D. [Figure 1] 2 Shift to specialty care With aging populations in established markets, the prevalence of complex and costly diseases such as cancer, continues to rise. Together with the increased complexity of treatments and medicines, this leads to an accelerated shift of focus toward specialty health care providers. 3 Limited access to customers In most geographies, regulations have been put into place that limit direct access to health care providers through traditional sales channels. As this trend continues, scientific engagement with stakeholders becomes increasingly important. 1 Complex and expensive medicines The product portfolio has continuously shifted from cheaper, generally safer and easier to use medicines toward much more complex and expensive drugs. In the US, seven out of the top 10 best-selling drugs are now specialty medicines including four that are also biologics 2. 4 Cost containment In response to slow economic development, governments across the developed world, particularly in the EU 1, have tightened regulations to contain drug costs. This leads to a growing emphasis on value based reimbursement or pricing. 5 Crowded markets While fierce competition is nothing new, core areas such as immunology have become crowded products based on a variety of complex mechanisms of action. Finding the right medicines for the right patients has become increasingly difficult, and physicians needs are difficult to meet with traditional sales tactics. Figure 1: Changes affecting the industry and transforming the role of Medical Affairs 2 (1) GDP per Capita CAGR 05-15: 1.2% (2) In 2003, eight on the list were non-specialty medicines

3 Most pharmaceutical revenues in the 1990s and early 2000s came from small-molecule therapies that targeted widespread chronic conditions that were typically treated by primary care generalists. To be successful, companies relied on large sales forces to promote their products to tens of thousands of general practitioners. The need for Medical Affairs expertise was not paramount, given the often relatively straightforward nature of these medicines and the conditions they treated. In that environment, Medical Affairs could primarily play a supporting role by answering medical queries and reviewing commercial materials for medical and scientific accuracy. In the early 2000s, the so-called Primary Care Model came under pressure in the face of patent expiries of blockbuster medicines and a dearth of new drugs to replace them as pipeline failures multiplied in the areas of traditional focus (e.g., cardiovascular disease, mood disorders, etc.) [Figure 2]. Further, payers were becoming ever more influential and demanding, putting greater downward pressure on prices to curtail rapidly increasing healthcare costs. These factors coincided with advances in biotechnology, and together, they have driven a shift in the pharmaceutical industry s focus and investment to more complex and challenging diseases such as chronic inflammatory and neurologic conditions or cancer that are treated primarily by specialists Lipitor, Pfizer (5.5) Prevacid, Takeda (3.6) Zocor, Merck (3.5) Nexium, AstraZeneca (2.7) Zoloft, Pfizer (2.6) Celebrex, Pfizer (2.2) Zyprexa, Eli Lilly (2.2) Neurontin, Pfizer (2.1) Effexor XR, Pfizer (2.0) Advair Diskus, GSK (2.0) Humira, AbbVie (8.2) Abilify, Otsuka (7.9) Sovaldi, Gilead (6.9) Crestor, AstraZeneca (5.9) Enbrel, Amgen (5.9) Harvoni, Gilead (5.3) Nexium, AstraZeneca (5.3) Advair Diskus, GSK (4.7) Lantus Solostar, Sanofi (4.7) Remicade, Janssen (4.6) Figure 2: Top-10 medicines 2005 vs (USD billion), Specialty Care medicines in bold; biologics are italicized (1) Drugs.com (2) IMS, 4/14-3/154

4 UNMET EXPECTATIONS FOR MEDICAL AFFAIRS With these changes, traditional commercial tactics have lost much of their effectiveness, and in some payer-driven markets, such as the UK, the relationship between commercial investment and sales has broken down in many cases. Faced with this new reality and the need to replace revenue from patent expiries, pharmaceutical executives have been looking to other functions to help fill the gap. To many, Medical Affairs seemed like a promising candidate. Because of its highly skilled scientifically and medically trained workforce, the function is well equipped to engage in discussions with specialty physicians about complex medicines that treat challenging diseases and to make a convincing case that these treatments add value, to counter cost-containment arguments. The similarity in background between Medical Affairs staff and healthcare professionals could enhance customer access and engagement and help a company gain a more prominent voice in competitive crowded markets. As a result, the expectations for Medical Affairs have grown significantly within many companies. This increased attention and perceived importance are seen as positive by many of our Medical Affairs clients who are eager to play a bigger and more active role in drug development and commercialization, and welcome the greater resources that often follow. But this change has not come without pain and frustration both within and beyond the Medical Affairs function. Medical Affairs Colleague Cross-functional partner We don t have a clear enough strategy They should align better with our strategy No one truly understands what we bring to the table It is not clear to us what their priorities are We are told that we are not commercial enough Medical could do more to support the business We are perceived as non-collaborative They are difficult to deal with Figure 3: Symptoms of sub-optimal performance and alignment. Quotes from conversations with Medical and Marketing Leaders 2

5 In conversations with Medical Affairs leaders, we frequently hear about frustrations with the expectations of company or unit leadership, which are perceived as naïve, unrealistic and potentially at odds with the legal and ethical constraints associated with maintaining medical and scientific integrity that is at the core of the Medical Affairs function. At the same time, our senior clients from other functions such as Marketing often express their own dissatisfaction with what they see as inflexibility and unwillingness on the part of Medical Affairs to be a creative partner, leading to a perception that the function has failed to reach its full potential [Figure 3] Part of this pain and frustration reflects real limitations to what Medical Affairs can do and excessive expectations from leaders and other functions. But based on our experience, there is a way for Medical Affairs to play a more central and important role, not just in the future, but beginning today. UNLEASHING THE POTENTIAL OF MEDICAL AFFAIRS We frequently encounter the belief promoted by some of our consulting colleague that Medical Affairs can only achieve its potential by fundamentally changing and adopting new approaches, such as moving away from traditional ways of generating data to reliance on real-world evidence. While these ideas are not without merit, in our experience, bigger and much more immediate impact comes from focusing on fundamentals and taking a systematic, collaborative approach that builds on the inherent strengths of the Medical Affairs function [Figure 4] DIAGNOSE CLARIFY MISSION PREPARE AND DESIGN IMPLEMENT FOLLOW-THROUGH Reflect on Core Purpose of Medical Affairs Align on Goals and Scope of Project Collect Feedback from Internal an External Customers Assess Capabilities and Experiences Sharpen Mission Pressure Test Mission with Partners Agree on Collaboration Charters Develop and/or Review Strategy Identify Gaps Generate and Prioritize Initiatives Design Solutions Design and launch Communication Plan Pilot prioritized Initiatives Initiate Roll-Out Support Culture Change Check and Reinforce Results Figure 4: Typical project flow from a client example with recommended actions for each phase 3

6 The process should begin by reflecting on the unique and differentiated benefits that Medical Affairs can bring to both the company and to external stakeholders, followed by a clear articulation of the mission, role, and goals for the specific Medical Affairs team. In general, we are skeptical of Vision and Mission exercises as they often add limited value. But that is not the case here: a clear articulation of the mission, overall role and goals for Medical Affairs, and an explicit agreement with key partners on roles and expectations, is an important and necessary exercise. It creates clarity for team members and cross-functional collaborators. We frequently find this clarity lacking, making it unnecessarily difficult to resolve misunderstandings, agree on strategic priorities, and make way for real progress. There are, of course, a multitude of ways to position a Medical Affairs team. One of the more natural approaches that has the potential to effectively support the business is to build on existing strengths that are unique to the function. While the function is responsible for many tasks, what truly differentiates Medical Affairs is its ability to serve as bridge between science and clinical reality, and between external customers and the internal organization [Figure 5]. When Medical Affairs plays this role effectively, it can add tremendous value internally by helping to ensure that the company s decisions and strategies are designed to meet the real needs of patients and healthcare professionals and externally, by providing customers with information that helps them identify patients mostly likely to benefit from a company s medicines and make treatment decisions that are best for them. With this as a starting point, the Medical Affairs team should ask how it can most effectively serve this core role given the specific organization, market and products, and translate the answer into a tailored and focused mission, role and goals [Figure 5] SCIENCE OF MEDICINES AND THEIR APPROPRIATE USE EXTERNAL CUSTOMERS MEDICAL AFFAIRS INTERNAL CROSS- FUNCTIONALCOLLEAGUES CLINICAL REALITY Figure 5: Role of Medical Affairs as bridge between the internal and external world 4

7 To make the mission and goals truly actionable and ensure that the organization remains customerfocused, an important next step is to agree on expectations and deliverables with key internal stakeholders, and to define ideally with the input of key external customers the focus of interaction and collaboration with the healthcare community. Once the mission and clearly specified expectations of key stakeholders and external customers are agreed upon, the Medical Affairs team has a strong foundation for identifying operational gaps. For the best possible outcome, it is important to consider all main levers [Figure 6] and carefully prioritize a subset of initiatives that is likely to address the identified gaps in the most efficient manner. Change efforts are difficult, and achieving focus and alignment before proceeding is critical to success. FIVE POTENTIAL IMPROVEMENT AREAS EXAMPLE INITIATIVES Medical Strategy Talent & Capabilities Customer Engagement Internal Processes Structure & Size Align Focus Areas with Business Strategy Agree on Vision, Aspirations, and Desired Future State Develop & Communicate Brand Narratives Assess Capability Gaps Optimize Training Curriculum Revise Hiring Strategies Develop Gold Standard Approach to Medical Advisory Boards Improve Key Opinion Leader Engagement, Management, Strategies and Tactics Sharpen Roles & Responsibilities across Medical Affairs Organization Develop Best Practice Medical Launch Management Optimize Medical Resourcing Untangle Global/ Regional/Local structures by Defining Roles and Responsibilities of Each Figure 6: Key Levers of Change 5

8 CONCLUSION Due to seismic shifts in the pharmaceutical industry and the healthcare landscape, the expectations for Medical Affairs have increased dramatically. So far, many of these expectations have gone unfulfilled, resulting in frustration both within and beyond the Medical Affairs function. While not all expectations are realistic, Medical Affairs has the potential to dramatically increase its contribution to the company and to patients. The key to realizing this potential is to focus on the unique role that the function can play as a bridge between science and the clinical reality of patients and customers and to systematically build an organization that enables the Medical Affairs team to fulfill this distinct and expanded role. ACKNOWLEDGEMENT The development of this white paper greatly benefited from extensive discussions with our partners, collaborators and clients. We particularly want to thank Marina Brodsky for providing in-depth review and feedback on multiple drafts of the paper based on her extensive experience as a Medical Affairs executive at Pfizer. We would also like to thank Dr. Michael Pani and Dr. Karl Krista for extensive input and discussions that helped us sharpen and crystalize our ideas. Finally, we would like to express our gratitude to Tamas Koncz and his team at Pfizer for sharing their vision and aspirations for how Medical Affairs can play a critical role in the success of a pharmaceutical company. While the paper benefited greatly from these contributions, the views it contains are solely those of the authors and may not necessarily reflect the views of all reviewers and contributors. NOTES 6

9 ABOUT THE AUTHORS Hahn and Bay Management Advisors is led by two of the foremost healthcare strategists, who jointly have more than 30 years of experience in helping pharmaceutical companies and their investors make critical decisions and address their biggest challenges. Our expertise is complemented by a global network of experts, who are brought on as needed to ensure the best solution for every client. To ensure the highest quality of our firms work and deliverables the partners work hands-on throughout every project. THOMAS HAHN Thomas is a leading consultant in the pharmaceutical and life sciences space with almost 20 years of global experience in heading initiatives across the industry for a broad range of clients. Prior to co-founding Hahn and Bay Management Advisors, he was a management consultant at McKinsey in Europe. Thomas is also a trained research scientist and teacher. He served as a professor of applied physics at the University of Miami and as a research director at the SUNY Research Foundation. Thomas holds a PhD in physics from University of California. ADVISOR FREDERIK BAY Frederik is a former senior executive at Pfizer and a leading expert on pharma strategy and corporate development. Prior to co-founding Hahn and Bay Management Advisors, Frederik spent 8 years at Pfizer, including 4 as Head of Strategy and part of the leadership for the Primary Care and Global Innovative Pharma Businesses. Before joining Pfizer, Frederik was a management consultant at BCG and McKinsey in the US and Europe. Frederik holds a PhD in Physics from Yale University. For further discussion, please contact us at: info@hahnandbay.com company/ / MARINA BRODSKY Marina has over two decades of experience, including 9 years in executive roles, leading teams of scientists and physicians in the design and execution of Medical Strategies and Clinical Development programs at Pfizer. Since October 2016, she is an independent pharmaceutical consultant. Marina holds a PhD in Neuroscience and Pharmacology from the Weill Cornell Graduate School of Medical Sciences. 7