EPP Global Tender Survey Results
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- Pauline Cox
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1 EPP Global Tender Survey Results Prepared: September, 2016 We partner with our clients in the Life Sciences & Healthcare industries to provide direct access to the leading experts every day on every project.
2 Introducing the Speakers Manish Sharma Business Lead, Global Pricing & Market Access Program* Manish is a self-motivated, innovative professional with comprehensive background creating business strategies through multi-cultural and multi-functional teams for global organizations. Multi years of experience in both Pharmaceutical and Medical Device industry. Manish offers a unique and proven experience in the area of business, information technology (IT) and change management. Exceptional industry knowledge, leadership and interpersonal communication skills to enhance customer relationship management (CRM) strategies and revenue management solutions. Ruven Remo Eul Associate Director, Life Sciences Europe Ruven is an Associate Director of the European Life Sciences team based out of Zug, Switzerland. Ruven has worked for around 8 years at companies such as Pfizer and BMS in local, regional and global roles. Ruven comes from a deep background in the areas of Commercial Excellence with strong domain experience in Commercial Analytics and Tendering working with industry leading products such as Model N, Revitas and Veeva. Ruven has been involved as a SME and interim staffing for Global Tender Management has provided strong delivery and advisory on Global Revenue Management Assessments. *the perspectives expressed are the presenter s personal opinions and are not representative of or otherwise associated with Shire Unauthorized Distribution or Duplication Prohibited. 2
3 Agenda Global Tender Environment From Tendering to Contracting Specific Challenges in Tendering Solving Tendering Challenges with IT Perspective from the industry Global Approach to Tendering Best-In Class Tendering Program Tender Benchmark study Introduction Results Typical Tendering Organization Conclusion Unauthorized Distribution or Duplication Prohibited. 3
4 Agenda Global Tender Environment From Tendering to Contracting Specific Challenges in Tendering Solving Tendering Challenges with IT Perspective from the industry Global Approach to Tendering Best-In Class Tendering Program Tender Benchmark study Introduction Results Typical Tendering Organization Conclusion Unauthorized Distribution or Duplication Prohibited. 4
5 Global Tender Environment Tender & Contracting is a sales channel customers choose (or are obliged to use) to procure products Customers are represented less by HCPs but more often by procurement specialists Generally purchase price accounts for ~70% of bid award criteria Centralized procurement of hospital drugs has significantly increased since the financial crises in 2008 in EU More than 25% of the global pharmaceutical market is Tendered and Contracted Emerging markets, including India & China, are also exploring tendering opportunities to achieve cost savings Unauthorized Distribution or Duplication Prohibited. 5
6 Key Challenges in Tendering Efficient tender management process operations require a high level of resources to create the optimized level of value Lost Revenues Tender Strategy Published RFP RFP Screened Evaluated RFP Missed opportunities all along the tender funnel Poor analytics not enabling proper competitive intelligence 1 4 Awareness & Planning Evaluation & Decision Response Fulfillment Tracking Based on your tender planning cycle before the RFP is published The RFP is published and on your table Ready for bidding Reflect the outcome Monitor the success 6-12 months before RFP Approval Process Prepare Bid Bid Award Contract Duration Suboptimal decision making based on poor data 2 3 Missing documents for Tender Package and no harmonized Templates Optimal Bid Price Lost Revenues Unauthorized Distribution or Duplication Prohibited. 6
7 Transparency, Integration, Reach Solving Tendering Challenges with IT Modern IT enables Global Tender Management to efficiently facilitate global processes.xls templates Immediate (limited) implementation Enables process education & iteration Cumbersome update & no integration SQL & SharePoint 2-3m implementation improved Tender lifecycle mgmt. Existing technology with global reach, integration limited Globally Integrated Tender and Pricing Software 2-3y implementation End 2 end GTM Full x-functional integration t Unauthorized Distribution or Duplication Prohibited. 7
8 Agenda Global Tender Environment From Tendering to Contracting Specific Challenges in Tendering Solving Tendering Challenges with IT Perspective from the industry Global Approach to Tendering Best-In Class Tendering Program Tender Benchmark study Introduction Results Typical Tendering Organization Conclusion Unauthorized Distribution or Duplication Prohibited. 8
9 Why Project Quantum? The current state in Legacy Baxalta was not optimal. Global Visibility Approval of Exceptions Project Quantum Pricing Analytics Decision Support Project Quantum was seen as an opportunity to optimize tender management processes through the implementation of a Global IT solution Unauthorized Distribution or Duplication Prohibited. 9
10 Ensure the Benefits of Project Quantum Come Alive To achieve winning locally, Global Tender intelligence should be leveraged. Resource Efficiency Gains Decision Support & Control Regulatory Risk Mitigation Revenue Leakage Protection Project Quantum strive to achieve both Global visibility & In Country tender execution Solely with unified best practices the Global Approach can reach all its benefit Unauthorized Distribution or Duplication Prohibited. 10
11 First of its Kind and Best-In Class Tendering Program Stepping from an Excel spreadsheet to a SharePoint solution ending up into a globally integrated system developed along with multiple partners. Global Template Creation Global KPIs Framework Empowering countries locally and involving global functions is a pre-requisite to achieve Global Tender Visibility & Excellence Unauthorized Distribution or Duplication Prohibited. 11
12 Agenda Global Tender Environment From Tendering to Contracting Specific Challenges in Tendering Solving Tendering Challenges with IT Perspective from the industry Global Approach to Tendering Best-In Class Tendering Program Tender Benchmark study Introduction Results Typical Tendering Organization Conclusion Unauthorized Distribution or Duplication Prohibited. 12
13 Introduction Benchmarking Study provides insights to crucial question Performed online Increased importance of Tenders Best Practices Tender 39 respondents from more than 30 companies Industry Data & Technology Decision Making Benchmarking Study 53 questions on process, people, technology & data 3 months response spread from June to August Unauthorized Distribution or Duplication Prohibited. 13
14 Respondents Different types of companies are represented with an emphasis on Research based only companies. 91% of the respondents are in companies having products subject to tenders. Primary Focus of the respondents Research Based Only Medical Devices Only 50% 25% 8% 17% 5% 6% 3% 3% Generic Pharmaceuticals Only Research Based + Med Devices + Diagnostics Research Based + Diagnostics Research Based + Generics Research Based + Med Devices Research Based + Devices + Generics More and more Research Based companies are becoming involved in the tendering process Unauthorized Distribution or Duplication Prohibited. 14
15 Respondents (continued) All the variety of the industry are represented both in size and employees. 91% of the respondents are in companies having products subject to tenders. Companies Sales Companies Employees 10% 18% 21% 51% > $5 Billion $1 Billion $5 Billion < $1 Billion Other 8% 18% 13% 61% > 5,000 1,001 5,000 < 1,000 Other Survey results may be generalized to the industry as the companies are well distributed along sales & sizes Unauthorized Distribution or Duplication Prohibited. 15
16 Tender Authority What are the Tender Authorities for your products? Do you have tenders which are divided? Tender Authority Allotment HOSPITAL 26 BY REGION 22 REGIONAL GOV 25 BY NATIONAL 19 NATIONAL GOV PURCHASING GROUP LOCAL GOV INSURANCE DISTRIBUTOR BY PRODUCTS/MOLECULES BY THERAPEUTIC AREA BY MD&D BY DISEASE INDEPENDENT 3 BY GEOGRAPHY: OTHER 6 PHARMACY 3 NOT SURE Hospitals & National Government are the most common tender authority which involve a Geographic type of Allotment Unauthorized Distribution or Duplication Prohibited. 16
17 Tender Duration & Renewals What is the average length of your tenders? Do your tenders have the option of being extended/prolonged? Tender Duration Tender Renewal 20% 34% months 6-12 months 10% 13% Yes 13% < 6 months > 36 months No Not sure 13% 20% Not sure 77% Tender Renewal is very common in the market place, creating the need to know how to manage them and provide the right information to the stakeholders Unauthorized Distribution or Duplication Prohibited. 17
18 Tender Challenges What are the Tender Market specific challenges your organization is facing? Tender Challenges 28% 26% 20% 12% 9% 6% Increasing purchasing power of the tender authorities Increased importance of building partnerships with Tender authorities New tender legislations impacting the procurement process Higher standards regarding tender specifications leading to participating barriers Other (please specify) Not sure Partnering with the tender authority seems to be the solution to the two main challenges linked to tenders Unauthorized Distribution or Duplication Prohibited. 18
19 Tender Award Criteria What award criteria are being used for your tenders? Awarding Criteria Price Supply & Logistics Efficiency Customer Service Safety Company Profile Research Based Med Devices Mixed Generic Price is expectedly the most common awarding criteria Unauthorized Distribution or Duplication Prohibited. 19
20 Tender Award Criteria What award criteria are being used for your tenders? Awarding Criteria Research Based Med Devices Mixed Generic Price Supply & Logistics Efficiency Customer Service Safety Company Profile Looking at differences across industries, it seems patterns are similar Unauthorized Distribution or Duplication Prohibited. 20
21 IT Solution to Tackle the Tendering Challenges Does your company undertake initiatives to tackle tender management challenges? Tender Management Solution In a local database (e.g. xdrive, excel, access) In a regional tender management solution In a global tender management solution Not sure In local tender management solution Local hard copies Planning an IT Solution Nothing Planned Companies having already a system in place see more needs to implement a new tender management solution Unauthorized Distribution or Duplication Prohibited. 21
22 Typical Tendering Organization The typical tendering organization is the following Dedicated Resources for TM Department Overseeing Tenders Yes No Other 10 Market Access Marketing Sales Supply chain Other Harmonized Governance Tender Leads No Regional Local Global In-Country Leads No Regional Leads Global Leads Typical tender organization has a resource dedicated to tender management sitting in the market access department Unauthorized Distribution or Duplication Prohibited. 22
23 Where Does the Industry Stand? How would you rate your own following processes? Tender Capabilities Benchmarking Tender Governance Tender Tracking Tender Intelligence Tender Planning Business Case / Evaluation Crucial Issues Regular Impactful Issues Regular small issues No issues Tender Submission Documentation Tender Planning is the main area where top organization differentiate themselves Unauthorized Distribution or Duplication Prohibited. 23
24 Global Tender Lead Role How is your Tender Management organization set up? Do you have a 100% dedicated resource overseeing the Tender Management Process? 28% 17% Dedicated Resources 0% 55% Crucial issues, current setup is inappropriate No big issues, current setup is fine most of the time Regular issues, but not hampering tender management execution Regular issues, hampering tender management execution 18% 14% 45% 18% 18% No big issues, current setup is fine most of the time Lead Roles & Tender Management Process 75% 43% 14% 25% 29% Regular issues, but not hampering tender management execution Regular issues, hampering tender management execution 33% 67% Crucial issues, current setup is inappropriate Other Local Regional Global Dedicating a resource to tender management seems to be key to enable a smoother process. This resource may sit either at a regional or a global level. Unauthorized Distribution or Duplication Prohibited. 24
25 Agenda Global Tender Environment From Tendering to Contracting Specific Challenges in Tendering Solving Tendering Challenges with IT Perspective from the industry Global Approach to Tendering Best-In Class Tendering Program Tender Benchmark study Introduction Results Typical Tendering Organization Conclusion Unauthorized Distribution or Duplication Prohibited. 25
26 Conclusion What are the key takeaways of the first tender benchmarking study? Most of the companies have a dedicated resources sitting in Market Access Stakeholders Process Companies rated themselves as a little bit above average in the overall tendering process Most of the tender data is currently sitting in local drive or excel Data Technology One third of the companies are planning an implementation around tendering Tender Management Landscape is evolving for Life Sciences Companies forcing to adapt and improve to tackle new challenges Unauthorized Distribution or Duplication Prohibited. 26
27 Questions? Get ready... here are the answers you re looking for. Unauthorized Distribution or Duplication Prohibited. 27
28 THANK YOU
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