Towards Value Innovation In Pharma SFE Conference London 062007
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Towards Value Innovation In Pharma SFE Conference London 062007

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Presentation with initial thoughts about the need for pharma company's to develop a new business model

Presentation with initial thoughts about the need for pharma company's to develop a new business model

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    Towards Value Innovation In Pharma SFE Conference London 062007 Towards Value Innovation In Pharma SFE Conference London 062007 Presentation Transcript

    • Towards Value Innovation in Pharma 31 May, 2007 Drs. A. R. J. Halkes MHA PR54936/RHA/GZA Perspectives for an imaginative role in health care
    • The growing problem…
      • Pharma revenues and margins are under threat
      • The pharmaceutical industry has an ever more diminishing access to target audiences:
        • Customers, health care workers, as well as patients, consumers
      • Influence on prescription gets more and more mediated through networks of several kinds around the doctor
      • Growing sepsis in public and media about integrity and the sustainability character of the industry
      • There seem to be less and smaller blockbusters among us than might be necessary for several companies to uphold their current positions in the market?
    • IMS study : changes in pharmaceutical markets are underway globally, with the most emphasis in the advanced markets of the industry 1 1. Trends in Sales Force Effectiveness, IMS 2005 USA UK Ger Can France Italy Iber L.A. Japan China India Turkey Benlx Nordic
      • Developing healthcare systems
      • Information sources poor
      • Pharma looking for sales deployment models
      • Pharma in wait mode, not a burning platform for change
      • Relationship selling, access not yet an issue
      • Basic methodologies for sales deployment
      • Prescriber access challenge
      • Major ROI concerns
      • Industry reputation
      • Distribution complexity
      • Increasing no. of stakeholders
      • Shifting portfolio
      Advanced Markets (60%) Urgent need for change Mature Markets (25%) Some pressure for change Emerging Markets (15%) Changing/Developing models
    • What would be a negative response from the pharmaceutical industries in advanced markets?
      • To put more and more effort and investment into an ever growing sales force
        • More effort into a lesser approachable target group floats contacts to individuals who come to shut the door
      • Focus on targeting systems
        • When the base of information about ‘intimacy’, depends on estimation of sales reps about actual ‘sales’ to doctors – problems of mismatching effort with individual doctors, will result in resentment to the industry
      • Enhancing volume of marketing towards consumer
        • What information will come across to what audiences?
      • Search for molecules in competition
        • When biddings on promising findings pushes stress on revenues, yet uncertain, how to manage this ever growing gap with diminishing revenues?
    • Market perspectives under such conditions
      • In a worst case scenario, imagine what being in a price fighting market, would do to your industry
      • In a context of growing sepsis about the value of (certain) pharmaceutical companies to health care, there’s the risk of intensifying government rules over the industry
      • When investment power comes instead of intelligence and innovation in research will we then wind up with a war on molecules?
    • Other responses are available
      • CRM and multi channel management, when applied correctly, poses the promise of adequate and positive relating to targeted audiences and of overcoming the commercial trap in relation management
      • Remodelling R&D logistic management may lead to enhancements through different phases of time to market
      • But, most of all, rethinking the concept of value innovation may emerge into changed market positions and positive relations with enthusiastic audiences
    • ‘Adding value’
      • Originally grounded in efficient market theory
      • Implies:
        • Thinking in chains
        • Measurable in discrete quantities
        • A specific activity (favorably conducted in cooperation)
        • A proper – unique – value to specific target groups
        • With perspective of optimalisation and discovering opportunities
      • Clients of the Pharmaceutical industry
        • Prescriber – ‘Customer’
        • Patient – ‘Consumer’
        • In the chain of care delivery,
        • added value to the one may
        • result in added value to the other,
        • and vice versa
    • Value innovation Product benefits Brand benefits Service benefits Acquisition costs Customer Value-surplus Costs of - buying -production - handling - services - etc Margin Creation of Customer Value (W. Reijnders 2005) Price
      • E.g.: Information search Travel expenses
      • Wait time
      • Consult or guidance
      • Annoyances of
        • Building
        • Personnel Others
      • et cetera
      E.g.: - accessibility - consult / service - attitude problem solving client directed friendly et cetera Brand characteristics Confidence Function Emotion Et cetera Customer desired product range: breadth, length, depth of assortment Complementarities Cohesion Services Guarantee Et cetera
    • Creating added value by the pharmaceutical industry – a positioning issue
      • Sources for added value:
      • Disease management
      • The care delivery value chain
      • Compliance efforts
      • Technology
      • The creation of added value by Pharma poses the industry for its fundamental question of identity. Positioning is all about choosing a distinctive customer value proposition Porter, M. (2001), Interview in Fast Company (March 2001)
    • Sources for Value innovation in Pharma
      • Information and education
      • Compliance Patient empowerment
      • Care Delivery Value Chain from a “transaction” perspective:
        • Medical Perspective
        • Customer perspective
        • Organisational Perspective
      • Customer Value: De “customer experience cycle”
      • Organisational Perspective
        • Logistics
        • Administration and registration (EPR)
        • Technology
    • Porter en Teisberg Accessing Measuring Informing Knowledge development Monitoring/ Managing - Monitoring and managing the Patient’s condition - Monitoring compliance with therapy - Monitoring lifestyle modifications Recovering/ Rehabilitating -Inpatient recovery - Inpatient and Outpatient rehab - Therapy fine- tuning - Developing a discharge plan Intervening -Ordering and administering drug therapy -Performing procedures -Performing counseling therapy Preparing -Choosing the team - Pre- intervention preparations - pretesting - pretreatment Diagnosing - Medical history - Specifying and organizing tests - Interpreting data - Consultation with experts - Determining the treatment plan Monitoring/ Preventing - Medical history - Screening - Identifying risk facotrs - Prevention programs Provider Margin Patient value (Health results per unit of cost) The care delivery value chain. Porter and Teisberg, 2006, 204 Feedback loops (Results management and tracking, staff/physician training, technology development, process improvement) (Patient education, patient counseling, pre-intervention educational programs, patient compliance counseling) (Tests, Imaging, patient records management) (Office visits, lab visits, hospital sites of care, patient transport, visiting nurses, remote consultation)
    • E.g.
      • Diabetes
      • COPD
      • Contraception
    • Added value to whom: Synergetic Marketing
      • The ADDED VALUE X RELATIONSHIP matrix
      • relates
      • Marketing and Brand management
      • from medical PROFILING
      • to
      • Sales,
      • to
      • Customer and consumer relationship management
      • and to
      • Communication, multi channel management
    • The “Added Value X Relationship” Matrix II Product support services Customer Individualizing surplus value
      • 1 Relation getting
      • No relation
      • Selling encounters
      3 Extended Rx 5 Enhanced Long term and life time 4 Long term 2 Ad hoc Rx V General practice and partnership IV Therapy enhancing support packages III Implementation and consumer directed support Services I General and selling communication and tools Terms of relation ship
    • A defined concept of pharmaceutical value in health care is at the bottom of the model Commercial processes
      • Content of contacts and service provision
      Selling processes
      • Development of intensified relationship
      • with customers
      From outbound communication to To interactive partnership
      • The concept defines
      • and formulates different:
      • Relationship patterns x
      • Level of value added, service provision x
      • Level of preferred relationship and partnership
      CRM Repeat Life time Long term Ad hoc Cross package Domain package Product service Core product Terms of relation ship Individualizing surplus value
    • Dimensions of value innovation
      • Development and management of Added Value Strategies on company and product level to value propositions for targeted audiences
      • Commercial sourcing of customer value management (segmentation and profiling) to differentiation of added value propositions
      • Defining approaches and communication conditions development and implementation of specific communication mix and multi channel communication to differentiated and targeted audiences
      • Defining organisation and process Creating and implementing organisation conditions to implementing new sales and marketing procedures E.g.: Account directed teams, front and back offices, dedicated brand teams etc., defining and creating system conditions
      • Innovation and change development
    • Some implications to the industry
      • Differentiation in market and target audience approach according to
        • Product – disease – combination
        • Country structure of health provision
        • Product phase of presence on market
        • Position and positioning of the company
      • “ Share of voice”
        • Entrance condition to the market more than sufficient sales
        • Optimizing more than maximizing
        • Creating awareness more than prescription
        • Exasperation more than “value”
      • Quality of reps
        • Reps?
      • Organisation
      • Client focus “outside in,” in stead of product focus “inside out”
    • References
      • Trends in Sales Force Effectiveness, Driving sales excellence in a complex market, IMS 2005 Pharma Futures: Long Term Value Outlook on the Pharmaceutical Industry WHO Priority Meds Meeting, 24 th November 2005, Sophia Tickell, Director IBM Business Consulting Services, Pharma 2010:The Threshold of Innovation. IBM corporation 2002
      • Bonini, S.M.J. McKillop, K and Mendonca, L.T., What consumers expect from companies, McKinsey Quaterly, 2007, nr. 2
      • Medicijnenprijzen kunnen veel lager, Elsevier, mei 2007
      • Minister neemt farmaceuten onder de loep, Trouw maart 2006
      • Pharmacists' Role in Healthcare Still Evolving. C. A. Kenreigh, PharmD; Linda Timm Wagner, PharmD, Medscape Pharmacists 2006;8 (2) 
      • Taking CRM to the Next Level: Web-assisted relationship- and community-building for the pharmaceutical industry. Datamonitor Dec. 2006
      • Porter, Michael, E. and Teisberg, Elizabeth Olmsted , Redefining Health Care. Creating Value-Based Competition on ResuHarvard Business School Press, Boston Massachusetts lts. 2006
      • 'Druk op farmaceuten stijgt' Financial Times, 23 jan. 2007
      • Factoren gerelateerd aan farmacotherapietrouw van chronisch zieken. Resultaten van studies uitgevoerd in Nederland sinds 1990. A. van den Brink-Muinen, A.M. van Dulmen, NIVEL 2004 Utrecht
      • Theo B.C. Poiesz en W. Fred van Raaij, Synergetische Marketing, Financial Times Prentice Hall, Amsterdam 2002
      • IBM Business Consulting, Pharma 2010:The Threshold of Innovation. IBM corporation 2002.
    • Van Spaendonck Management Consultants
      • Specialists in Pharma market business development consultancy
      • 20 years of experience in pharma market developments in the Netherlands
      • Expertise in actual developments and regulations in the Dutch health care market
      • Experience in working for all kinds of health care institutions and organisations
      • Track record in marketing and sales development
      • Track record in consultancy support for merger and alliances
      • Track record in roadmap development and implementation
      • Specialists in “strategic change”
      • Accounts
      • Abbott
      • Astra Zeneca
      • Boehringer Ingelheim
      • GlaxoSmithKline
      • Janssen Cilag Leo Pharma
      • MSD
      • Novo Nordisk
      • Nycomed (Altana)
      • Organon
      • Pfizer
      • Pharmacia
      • (Sanofi Aventis)
      • Sanofi Synthelabo
    • Rob Halkes
      • Senior Consultant in Health Care Development and Pharmaceutical Business
      • Drs. A. R. J. Halkes MHA Van Spaendonck Management Consultants Hogeweg 85                   T +31 418 578000 Postbus 2005                 F +31 418 578010 5300 CA Zaltbommel     M +31 653 420722 The Netherlands
      • E r.halkes@vanspaendonck.nl I www.vanspaendonck.nl