The New NHS Structure and how it is affecting Sales Forces and Targeting. Roger Cuff In2Focus Sales Development Services

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2 The New NHS Structure and how it is affecting Sales Forces and Targeting Roger Cuff In2Focus Sales Development Services

3 Content A journey through time The New NHS Digesting the Elephant Additional drivers of change Impact on the Pharmaceutical Sales Force Impact on Targeting

4 A Journey Through Time 20 years ago Individual doctor prescribing decisions Representatives responsible for territory sales Relationship based selling Easy access Ownership Emergence of multiple divisions Co Promotions in their infancy Outsourcing emerging as added noise

5 A Journey Through Time The 90 s (the Thatcher effect) First wave NHS changes Fund holding NHS management influence on prescribers Pharmaceutical advisers MEREC PACT data Etc. Sales and marketing focus share of voice Multiple sales forces behind leading brands Quest for the marginal rep NAFDOG! Product P&L driven

6 A Journey Through Time Today NHS changes are frenetic and frenzied The customer base has changed significantly Provider driven to Commissioning driven NHS General market pressures and PR are having a marked impact on the industry The current environment is forcing companies to re-evaluate promotional strategies, with a greater emphasis on targeting and ROI Chasing National share of voice not always a cost effective strategy CSOs are increasingly being used more for their flexibility and know how than just added noise

7 Delivering the New NHS Digesting the Elephant

8 Blairite Healthcare Reforms Labour came to power in 1997 and in a hurry Large raft of significant health initiatives in play Devolution of health is creating four NHSs NHS Plan in England is still driving the agenda Blair s 3 rd Term more of the same Flush with cash; short of money Commissioning a patient led NHS All of these initiatives are impacting on UK Pharma From the old world to a new world

9 On The Boil In England In New pharmacists contract Non-physician prescribing Managing long term conditions PCT Commissioning Health and Social Care Health of the public New national standards from CHAI Practise based commissioning Payment by results Extending roles NHS Foundation Trusts Patient choice PCT/SHA Mergers Last of the NSF s New NICE Private providers

10 The NHS In England October 2005 Department of Health 28 SHAs 302 PCTs 8 Care Trusts 250 Acute Trusts

11 Commissioning A Patient Led NHS Appeared in the summer whilst a lot of people away! About strengthening PCT commissioning, but PCTs to halve numbers by October 2006 SHAs to reconfigure by 2007 PCTs to divest provider role by 2008 Has caused a lot of anger

12 The NHS In England April 2008 Department of Health Monitor Healthcare Commission Private Primary Care 11 SHAs 100 PCTs A Market Regulator Independent Sector Treatment Centres 200 Foundation Trusts GP PBC NHS Primary Care

13 First Wanless Report April 2002 The NHS should be a system where primary care delivers an increasingly wide range of care, including diagnosis and monitoring, and where the majority of general and less specialised medical and surgical care has moved out of large hospitals

14 Repackaged Primary Care Unpacked Hospital A&E Specialist Hospital Care Day Procedures Repackaged Primary Care Therapists GPs Rehab Community Nurses Outpatients Minor Injuries Home Care Specialist Nurses

15 Practise Based Commissioning Back to the future Accelerated to 2006 Indicative budgets for practises Real savings Likely to lead to service shifts Will require good patient population data Will require good referral data

16 The Good Old Days Representative GP/Hospital Rx

17 Into The New Millennium Medical Managers LDPs/SLAs PbR NHS Foundation Trusts Targets and Standards Formularies NHS Managers New Consultant and Pharmacists Contracts Account Manager Doctor/ Manager Rx/Supply Rx Budgets EU Commissioning Consortia PBC Healthcare Commission ngms NICE SHAs PCTs

18 Old World vs. New World Factor Old World New World Customer base Local control Prescribing 1 Prescribing 2 Central control S&M Rep skill base Market Access issues Nurses and Pharmacists Simple Unmanaged Hospital-led Non-evidence based No NICE, HC, NSFs Traditional S&M Simple Unmanaged entry Traditional Complex Managed Care PCT-led Evidence based NICE guidance statutory More sophisticated S&M More complex Managed entry Extended

19 Complacency Must Go The pharmaceutical industry is currently experiencing a sharply worsening climate In this environment, there is no room for complacency a new industry dynamic is required The pharmaceutical sector must learn it s lessons and keep pace with developments in healthcare We all need to take a fresh and honest analysis of our ways of working and decide whether they enhance or erode the reputation of our industry. If it is the latter, we must act decisively for change. The reputation of the industry a battery but its restoration is in our hands. Richard Barker, ABPI Director General Ref: European Pharmaceutical Review, Issue 2, 2005

20 Additional Drivers Of Change

21 Contributors To Market Growth / Decline New / discontinued pack Vol Changes Line Extensions New products Price Changes Combined price / vol changes Source: Pharma Marketing

22 Pharmaceutical Market General Market decline: Retail hit by PPRS 7% cut Poor blockbuster pipeline Patent brands Rx remains static 8 new drugs promoted to GPs only one is an NCE 2005 month on month growth behind 2004 Safety issues e.g. Vioxx Patent expiries: Zocor Fosamax Zoton Serevent Risperdal Proscar

23 The New NHS Customer Base Yesterday Individual Practitioner Relationship based Clinical Judgement Today Doctor Driven Price Sensitive Focus on Safety/Efficacy Influenced by KOL and PCO guidelines Individual/Practise Decisions Tomorrow Institutionally driven Health Economic Based Price Critical Complex Influenced Networks Organisational led

24 Complacency Must Go The pharmaceutical industry is currently experiencing a sharply worsening climate In this environment, there is no room for complacency a new industry dynamic is required The pharmaceutical sector must learn it s lessons and keep pace with developments in healthcare We all need to take a fresh and honest analysis of our ways of working and decide whether they enhance or erode the reputation of our industry. If it is the latter, we must act decisively for change. The reputation of the industry a battery but its restoration is in our hands. Richard Barker, ABPI Director General Ref: European Pharmaceutical Review, Issue 2, 2005

25 Impact On The Pharmaceutical Sales Force

26 Traditional Model Multiplicity of in-house Sales Teams Simplistic Targeting approach Focus on Share of Voice Fear of challenging accepted wisdom Movement towards Regional Business Management of multiple Sales Teams Outsourced extra noise Relationships jealously guarded

27 Concerns Top 40 Companies doubled sales force numbers Prescribing increased by 15% Survey by Pfizer 75% had > 1 representative per product 77% said unhelpful 81% would prefer one representative per product 73% restrict access 43% of representative calls lead to a face to face call Time in call reducing minutes 4 minutes 2 minutes Pharmatimes 09/2005

28 The Future Reduction in number of multiple teams on headcount Increase in utilisation of CSOs Flexibility in deployment of resources In house Outsourced National Team(s) National Team(s) Regional Hotspots Differential detailing Regional Marketing Global/National positioning but local tactics Takeda Model Do we accept no go areas?

29 But Focus on selling skills RBM role as a coach key Manage the message in a 90 detail Targeting Frequency Call rate Must get value out of representative

30 The Future Profile of Representative will change Account Management (cf Hospital Representatives) Commercially aware Relationships critical Partnership Knowledge base Dynamics of the NHS Disease Area / Competitors Product Consistency Hungry Strong selling skills The days of the talking detail aid are over!

31 The Future Greater Reliance on Contract Sales Organisations Product launches Defence strategies Seasonal deployment Geographical hot spots Specialist teams HDM Secondary Care Nurse Advisors Manages Risk Flexibility

32 Are CSO Representatives As Good As Pharma Representatives?

33 Often they re better!

34 Impact On Targeting

35 Marketing Strategy Today Doctor Driven Focus on safety/efficacy Price indifferent Simple decision making Homogeneous market Marketing approach: Sales success critical Product focused Targeting usage led Single targeted promotion Product p&l Tomorrow Institutionally driven Focus on clinical/cost balance Price sensitive Complex, bureaucratic Growing heterogeneity Marketing approach: Marketing success critical Customer focused Targeting influence led Multi-target promotion Account-based p&l Source IMS pharmatimes 10/2005

36 Impact On Targeting Practices are getting bigger and more complex The days of targeting strategies based only on high prescribers are over Targeting strategies need to change to meet expectations of growth and follow the product through its life cycle e.g. At launch early adopters and innovators Established broaden reach ; secondary targets for growth New competitor innovators and influencers for defence Strategies will be practice based and output focussed

37 New Target Model Influence Potential Attitude

38 Impact On Targeting Primary objective is to maximise ROI Strategic marketing rather than sales force superiority (noise) will be key Practice level will be new focus (key accounts) Account targeting and development strategies will be essential Targeting different segments of customer base Specific Communication and more tailored messages Representative rapport Commitment Loyalty New NHS customers add to targeting complexity Inaccessible target customers may be significant influencers CRM critical to understanding the account relationship map Data integration will drive strategy development TNS Integrated Practice Level Data Call rates and coverage still key metrics but value of call will be critical

39 Summary The NHS is continuing to evolve Sales Force deployment will need to radically change More sophisticated approach to targeting