It’s easy to blame the pandemic for disruptions in pharmaceutical sales. Without boots on the ground, marketers pointed fingers to the COVID-19 crisis as a reason for their brand’s stagnant growth. But let’s be frank. The traditional sales model has been shifting long before the pandemic even began. The sales force, which once ballooned to more than 100,000 to call on large numbers of homogenous customers, has been declining for years. The fact is, big, one-size-fits-all sales forces are less nimble and less able to customize their approach based on the changing and more heterogenous needs of their customer base.
Because healthcare delivery has changed, pharma has to shift its approach to sales as well. Our industry is transitioning from a fee-for-service, incentive-based model toward an integrated, coordinated care model based on outcomes and value. In fact, a number of pharma companies have used the pandemic period to revisit their sales model. The transformation is necessary as the number of physicians that sales reps can see continues to dwindle. Marketers will play a crucial role in shaping this transition.
When the Complexity Began
According to the AMA’s 2018 Physician Practice Benchmark Survey, 53.8% of all U.S.-based physicians reported participating in at least one Accountable Care Organization (ACO). This data is up from 44% in 2016. For the first time in the survey’s history, the majority of doctors in the U.S. are now part of an ACO.
In another first, the AMA’s 2020 survey found that only 49% of healthcare professionals (HCPs) involved in patient care were part of a private practice. In other words, the majority of physicians in the U.S. are now employees, with less autonomy and less decision-making authority over which treatments they select for their patients.
The number of ACOs in the U.S. has steadily increased since the passage of the Affordable Care Act in 2010, reaching its peak at 561 in 2018. And while that number has since plateaued, the overall number of patients under the care of an ACO reached a zenith in 2020 at 11.2 million lives. With the Biden administration nominating and confirming many former Obama-era officials to key positions, these trends are likely to continue. As marketing and sales leaders, it is imperative we understand these new dynamics and shift our thinking about HCPs as independent decision-makers on an island to members of an integrated team that are now part of a much larger group of cross-functional stakeholders.
During the blockbuster era (the preceding 30 years or so before the passage of the Affordable Care Act), the model was relatively straightforward. The marketing team did the research, created the sales materials, and launched a well-funded promotional campaign. The sales force targeted high prescribers, established strong relationships, identified unmet needs and opportunities, and then detailed their products accordingly. In this old model, success came quickly. First with Tagamet (cimetidine) in the late 1970s, then later with Prozac (fluoxetine HCL) and Mevacor (lovastatin) in the late ’80s and early ’90s.
Managed Market account managers negotiated the formulary coverage with national and regional health insurance companies and the medical team supported everyone with available clinical and scientific evidence necessary to help make appropriate decisions. Each department had its own mandates with its own, largely distinct, customer segments. Each department even had its own data sources to manage performance. The best products and latest innovations usually met or exceeded expectations. As long as the teams were well resourced and the volume and share goals were met, the system worked. Patients could access the latest and greatest products, HCPs had the information and autonomy to make treatment decisions at their discretion, and the pharma industry largely thrived.
The Pendulum Swings
However, the pendulum had begun to swing with the passage of the Comparative Effectiveness Research Act of 2008 and then the Affordable Care Act of 2010. Both pieces of legislation ushered in a new era of drug evaluation, opening the door to a discussion of value and health outcomes. As shared earlier, over the last decade we have seen the rise of the ACO, the Integrated Delivery Network (IDN), and the advent of the Medical Home. No longer are safety and efficacy the lone factors in deciding which medicines reach which patients. The private practice HCP, as business owner and primary decision maker, has now been joined by the chief medical officer, the pharmacy director, the patient experience officer, and the CEO. Each one now has a say in the success of brands.
As we think about personalized and customized promotional HCP journeys and architecting omnichannel ecosystems, are we really ready to support this new account-based model? Do we have to start over and build everything anew? Of course not. But we do need to realign our brand strategy and assumptions about how treatment choices are being made. Is it time to make sure Medical Affairs and Managed Markets colleagues have a seat at the table when we build and approve next year’s integrated brand plan? You bet it is!
Insights from the Sales Force
A 25-year, pharma sales executive revealed that his most important customers increasingly do not have the designation of “MD” at the end of their name. Working in specialty pharma, his sales team not only has to gain access to the actual prescribers and learn about their treatment preferences, but the team also needs to understand the business dynamics at play in the practice.
Historical prescribing data and call notes from previous interactions are no longer enough. As many as 10 distinct individuals are involved in any given patient treatment choice and on-going treatment plan. A truly valued sales professional now needs to understand who is interacting with the patient, when, and why. Social workers, dietitians, radiologists, pharmacists, and financial counselors are now all working in an integrated and coordinated fashion, alongside the treating physician, to improve their patients’ health outcomes, as well as their employers’ bottom line.
Always keen to mirror their customers’ mindset, sales reps are being asked to coordinate and orchestrate an integrated approach. In this new environment, marketers have an opportunity to serve as an internal, home-office hub to support these efforts and develop a segmented strategy based on the account type of various HCPs.
Using AI and Machine Learning to Improve Account Selling
To support this new customer model, marketers and their partners will need to apply their strengths—honed during the pandemic—to uncover insights and turn them into actionable plans to build their brands.
Now more than ever, data will play a significant role in helping sales fully understand their segmented markets not only to engage with HCPs at the individual level, but also to the larger organization they work for. Building these types of personalized, one-to-one engagements requires digital native marketers or partners with the ability to understand how to comb through data from various sources and integrate the knowledge gained through AI into effective communication tools.
Sales will rely on content libraries built from marketing, medical communications, and finance to ensure that all the various promotional, educational, scientific, and financial resources are organized, easy to access, and quick to deploy through omnichannel strategies. Technology and marketing automation will allow for a timelier customization of content to meet customer demands for greater relevance. AI-driven recommendations will help the sales force prioritize actions, reduce their manual efforts, and reach out only to those contacts at the right time with tightly created messages just for them.
As pharma continues to adjust its sales strategy to this new environment, gaps are sure to emerge and complexity and coordination will no doubt cause frustration. However, adherence to similar principles that drove our healthcare system toward evidenced-based decisions and value-creating priorities can also help the industry shift from selling and support toward an account-based mindset.
To Thrive, Pharma Must Execute this Necessary Change
The pharma sales transformation is a long time coming. Like digital marketing, COVID-19 accelerated the pace of change. Despite the shift in healthcare delivery, the integration of data, and expanded use of multiple channels, one thing is clear—the sales force will not disappear anytime soon. While it may look very different from years past, the shift to account selling is a necessary change. When it comes to selling in the account-based space, it’s critical that the pharma sales model take into consideration its uniqueness. Building a sales model for a market where physicians (and patients) are much harder to penetrate and engage with is a significant hurdle that will be difficult to overcome.
Yes, the customer model has more stakeholders and the barriers to entry have increased, but we know who they are, and we can tap colleagues who have spent years building relationships with them. Marketers can pull the necessary data and systems to serve these large accounts, providing them with compelling, value-based, support for the brands.
Let’s use the pandemic and its disruptions as an opportunity to transform the sales force incentive model. Additionally, let’s use the reopening of our healthcare system as a catalyst to providing sales partners with the data, insights, and resources they need to best partner with customers, significantly improving both patient and population-based health outcomes.
