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Evolving Your Model to Support the Transition from Individual to Network-Based Relationships

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Disclaimer

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Navigating the Complexities of Working with Health Systems

● Designing a Go-To-Market Platform to address the Customer’s evolving needs and decision making processes

● Evolving the engagement approach across your entire Organization between KAMs, DM& Reps, Medical, HEOR and Marketing

● Understand how to set-up collaboration from the Enterprise- to the HCP level

Agenda

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Pharma’s

It Starts with Creating Customer Centricity

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Sunovion

But many are confused about “Customer Centricity”, it’s still about Selling Ketchup!

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First define your Commercial Strategy; eventually evolving tactics to market/operational improvements

CUSTOMER FOCUS & GROWTH STRATEGY

GO TO MARKET STRATEGY

MARKETING & SALES OPERATIONS

• Needs• Buying processes &

preferences• Attitudes, perceptions &

satisfaction• Profitability• Potential

• Strategy• Strengths & weaknesses

Competitor Insight

CustomerInsight

Segmentation & Targeting

• Market offering • Pricing• Brand strategy• Positioning• Value

proposition

• Sales force design (direct, indirect)

• Structure & roles

• Critical activities & processes

• Roles, metrics & enablers

Sales Channels Strategy

Sales Process

How

How

What

Value Proposition

What

• Account to channel alignment

• Sizing & resource allocation

• Territories

• Investment levels• Targeting & sequencing

• Knowledge• Skills• Behaviors• Values

Competency Model

Sizing & Deployment

Marketing Mix

Hiring, Training & Coaching

Success Measures

Compensation & Motivation Programs

Performance Management

Information & Tools

Marketing & Sales Analytics

Who

Phase 1 – Establishing a Standard Baseline Phase 2 – Scaling & equipping the model

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Question:

Has your Organization

moved to a more Customer

Centric approach?

If so, now did you do it?

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Collaboration across all Team Members within the Account Team Model Provides a Consistent Customer Experience

SP&C supports development of Brand and Channel Contract Stratagies & Implementation

KAM

Sales Colleague

Works with Key Accounts to identify shared agenda, develop plan and execute throughout organization in concert with Customers

Focuses on efficiency and quality in appropriate categories to pull through shared agenda

Enable Customer-focused selling

Develops Tools

/ Resources

appropriate for

“Organized

Customers,

Pull/push mutual value opportunities through organization

Identify impact of mutual value collaborations

MM AD

Others

Leads Payer Account Initiatives, aligns with team to focus on pull-through & aligned payer / provider opportunities

Aligned Stakeholders that can support the development or execution of Customer Planning, Stratagies and Tactics; Govt. Affairs, Training, etc.

MSL & HEOR support both Payer Customers and Health System Customers

HEORMSL

Inst. Sales Colleague

LEADERS(CEO, CFO, CMO)

Organized Health Systems

PAYERS

Focuses on delivering a tailored & compliant brand messaging to prescribers aligned to their needs

SP&CMarketing

EVALUATORS(KOL, Med. Director, Quality Director)

PRESCRIBERS(Individual Provider, Office Manager, PA/NP)

Source opportunities Up to Leadership

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What Are We Trying to Accomplish?

StructureToo many overlapping relationships – multiple

roles calling on the same leaders Limited coordination, no governance – risk of

missed opportunities

StructureAn Enterprise Account Manager will lead

engagement with Key Customer and coordinate all Pharma resources

Enabling Functions will adapt to support as needed

Current Approach New Approach

Hypothesis Improved EFFECTIVENESS of interactions and leads to a better value proposition – supporting revenue improvement Greater EFFICIENCY of engagement – supporting cost optimization, productivity improvements

Pharma

(All physical channels)

Customer

(Major Health System)

Senior Leadership C - Suite

CGC AM Medical Leadership

PCBU KAM Quality Mgmt. Leadership

ONC SAM Therapeutic Area Leadership

EPBU AM Academic & Research Leadership

SCBU AM System Management & Finance

VACC AM Pharmacy (Health Plan)

FBM Pharmacy (System)

DBMs / RMs (All BUs) Health Plan Management

Reps (All BUs) Oncology HCPs / KOLs

Regional / Customer Marketing Specialty HCPs / KOLs

R&D Primary HCPs / KOLs

Pharma

(All physical channels)

Senior Leadership

CGC AM

PCBU KAM

ONC SAM

EPBU AM

SCBU AM

VACC AM

FBM

DBMs / RMs (All BUs)

Reps (All BUs)

Regional / Customer Marketing

R&D

Customer

(Major Health System)

C -Suite

Medical Leadership

Quality Mgmt. Leadership

Therapeutic Area Leadership

Academic & Research Leadership

System Management & Finance

Pharmacy (Health Plan)

Pharmacy (System)

Health Plan Management

Oncology HCPs / KOLs

Specialty HCPs / KOLs

Primary HCPs / KOLs

!

Enterprise

Account

Manager

Coordinates

account

activity

Manages

senior

relationships

Single point

of contact

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New Competencies may be Required

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● Demonstrates the Ability to Achieve Mutual Business Goals

● Possesses sufficient Tenure and Acumen with Health Systems

● Superior Negotiation Skills

● Collaboration Skills to identify Solutions that Preserve or Enhance the Customer Relationship

● Identifies and Provides Programs that Meet Customer Needs and Ensure Measurable Value

● Balances Interactions that Support both the Customer Need and Their Organization Objectives

● Consensus Selling Skills

KAM Competencies must also be Evolved

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Question:

Has your Organization

adopted an Enterprise

Approach?

If so, how is it working?

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Case Study

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FROM TO

Case for change

• Sophisticated Health uses over 150 treatment protocols embedded in the EHR system, covering over half of

Sophisticated’s patients. Protocol decisions are based on outcomes making evidence of value of our medicines

critical.

• While not the highest, Sophisticated has a 88% generics rate, which can be driven higher (or lower) based on the

medication recommendations embedded in treatment protocols.

• Sophisticated is collaborating with 5 major US health systems to aggregate data and create care models to inform

use of new reimbursement models. Further supporting the need for assessments of value our medicines bring.

• The payer arm of Sophisticated Health Care, influenced by recommendations by Sophisticated “Opinion Leader”

physicians and by rebate levels, calling for integrated Account Management structure.

• Sophisticated turning to digital tools and announced a significant partnership in Jan 2013 to create mobile apps for

clinical care, physicians, nurses, patients and health plan members

Sophisticated Health System Case Study

Account Managers by Business Unit loosely together, with

traditional reps

Fully integrated Account team across products and across Business

Units to create one point of accountability and communication

Sales reps providing 1:1 medical information to independent

HCPs and focus on brand marketing

System reps to influence where treatment protocols present doctor

choice/Medical to interact with treatment protocol makers to show

value

Limited use of alternative channels to interface with

physicians

In person interactions used where effective and required , balanced

with digital channels used more broadly

Traditional model investment in studies and promotion Sequential investment to develop outcomes data to prove value

before deployment of commercial resources

Market development driven by promotion and traditional

advertising and marketing channels

Market development driven by guidelines and “Opinion Leaders” within

advanced systems

Proving clinical efficacy and safety for regulatory bodies Proving significant product efficacy/ safety & value based on outcomes

advantage against accepted standard

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Sophisticated Health case study

RationaleCategory$4M

Sophisticated Health Expense

-20%

Account Mgmt Fully integrated Account team across products and

across the Company to create one point of

accountability

Reps System reps to influence choice in treatment

protocols

Customer-Facing

Medical (MSL) Medical to interact with physicians designing

treatment protocols to show value

Multichannel (MCM) In person interactions used where effective, balanced

with digital channels used more broadly

Customer Marketing Support for Account Management focus to provide value

propositions and customer solutions

Brand Marketing Reduction in brand promotion (adtg, promotion tools) to

drive patient and physician choice

Outcomes Evidence Proving product efficacy and safety, plus value based on

outcomes advantage vs accepted standard

Rebates Moderate increase , and shift focus to products

competing against medicines with similar value

Other Reduced operations support for field and marketing

promotion

$5M

Category

Act Mgmt

Reps

MSL

MCM

Rebates

Outcomes

Cust Mktg

Brand Mktg

Pre Post

Determine whether a Unified Customer Strategy /

Enterprise Account Management approach is the

optimal approach for our strategic value provider

customer accounts

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Partner Collaborative Transactional Stressed

Baxter 56% 26% 9% 9%

Merck 54% 24% 16% 6%

Sanofi 47% 7% 33% 13%

Pfizer 46% 43% 3% 8%

Hospira 43% 22% 18% 17%

Abbott 41% 41% 18% 0%

Lilly 31% 38% 28% 3%

Genentech 29% 46% 21% 4%

GlaxoSmithKline 27% 51% 17% 5%

Ortho-McNeil-Janssen 26% 42% 21% 11%

Industry average 26% 31% 28% 15%Source: Health Strategies Group, Account Management Advantage: Institutional Channel, June 2013.

Relationship Distribution: Top 10 Companies(Percentage health system/hospital c-suite decision makers indicating relationship status with company)

Improving Relationships with Health Systems

Partner Collaborative Transactional Stressed None

Pfizer 11% 34% 32% 21% 2%Source: Health Strategies Group, Account Management Advantage: Institutional Channel, June 2012

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• Colleagues are wired to be

brand-centric, not customer-

centric

• EAM capability development

may be needed to evolve to a

more customer-centric

approach

• Brand-focused approach with

heavy emphasis on HCPs

• Customer-focused approach

is difficult to execute within

current model (limited data,

processes, know-how, etc.)

• Enterprise view of Pharma’s

business (Rx, sales) at IDNs

does not currently exist

• Some customers expect this

approach

• Others have indicated that it

maybe too much for one

individual to manage

• Some competitors have

already implemented their

version of EAM

• We currently lack an

enterprise understanding of

organized customers

• There is limited coordination

and siloed interaction among

field colleagues covering

organized customers

• The approach will need to be

tailored for each customer

• Some customers are more

fragmented than others and

are working towards

integration

• Opportunities and resourcing

will need to be tailored to the

customer and their

environment

• Impact will depend on the

customer’s baseline, aligned

interests and time horizon

• Expect various outcomes for

each customer

– Revenue protection

– Revenue upside

– Better resource allocation

– Improved customer

satisfaction

Behind Early Adopter

CurveTunnel Vision Not One Size Fits All

Difficult to Get Things

DoneColleague Capabilities Flavors of Success

Key Learnings

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Engaging differentiated customers requires a flexible commercial approach

Paradigm 1Share of Voice

Traditional promotional messages

Focus on rep-based interaction

Paradigm 2Share of Voice “Plus”

Traditional messages with added cost, quality focus

Combination of reps and basic account management

Paradigm 3Key Account Management

Focus on value-adding solutions, partnerships and quality outcomes

True key account management, developing toward enterprise coordination

Complexity of approach

KA

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Ente

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+ +

Shar

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f V

oic

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s +

Low

Co

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han

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ls

There is not “One Model” as in the past

Low Customer Sophistication and Integration High

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Phase 1 Phase 2 Phase 3

TIME

CA

PAB

ILIT

Y A

ND

FIN

AN

CIA

L IM

PAC

T

ORGANIZED CUSTOMER APPROACH ESTABLISHED

COLLEAGUE CAPABILITY ENHANCEMENT

Evolving your Commercial Model will take time

Establishing a standard baseline

Scaling and equipping the model

Optimization and performance enhancement

Experience – to deliver

Investment – to develop

Capability – to enable

Support – to innovate

COMMERCIAL EVOLUTION

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Q A