The performance of the Managed Markets sector of a pharmaceutical company directly affects the overall success of the organization as access to formularies and relationships with managed care organizations have become crucial to top-line growth. In the past, it was common for the Managed Markets Account Executive to work relatively separate from the rest of the company. And, with few reliable tracking metrics by which to gauge individual performance, the executives typically experienced less oversight. However, the infrequent use of metrics or performance benchmarks has given rise to a demand for better tools by which to measure the performance of Managed Markets account executives. Study Objective: This research was launched to identify common practices in measuring Managed Markets account executive performance, gain insight into the principles of effective measurement of this function and to determine what specific measures are used to drive successful activities in Managed Markets account management.

1. Managed Markets Account Management
Assessing the Performance of Account Executives
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2. Table of Contents
Page
Project Overview 2
Participants and Experience 4-5
Participant Overview 6
Key Insights 10
Detailed Study Findings 14
Organizational Fit/Structure/Reporting Relationships 15
Acct Management Changes Trends Next 3 Years 23
Staffing Benchmarks & Program Trends, 25
Time Allocations 33
Activities & Measurements 35
Pitfalls and Challenges 45
Appendix 46
Additional Quotes
About Best Practices 51
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3. Project Methodology and Study Objectives
Thirty-two participants made up the Total Benchmark Class (TBC), sixteen of which
represented companies in the Large Pharma Segment (LPS).
Research was conducted through survey and interviews
Key study objectives
Identify common practices in measuring Managed Markets
account executive performance
Gain insight into the principles of effective measurement of this
function
Determine what specific measures are used to drive successful
activity in Managed Markets account management
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4. List of Participating Companies
Large Pharma Other Participants
Abbott Laboratories Abraxis
Allergan Apria Healthcare
AstraZeneca Bausch and Lomb
Bayer AG Celgene
Boehringer Ingelheim EMD Serono
Eli Lilly and Co. Honeywell
Genentech IDS
Johnson & Johnson King Pharmaceuticals
Merck & Co. Laboratorios Deramtologicos Darier
Novo Nordisk Lundbeck
Pfizer Q-Med Scandinavia
Roche Sciele Pharma
Sanofi-Aventis Skila
Schering-Plough Smith & Nephew
Wyeth Ther-Rx Corporation
Valeant
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5. Participants’ Experience with Managed Markets
Accounts
More than 75 percent of participants reported having more than six years of experience
dealing directly with Managed Markets accounts.
Total Benchmark Class Large Pharma Segment
22% 25%
38%
41%
0-5 Years
6-10 Years
Over 10 Years
38%
38%
n=32 n=16
Q. How many years of experience do you have in dealing directly with managed markets accounts?
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6. Products with which Managed Markets Account
Executives Are Involved
Most respondents reported having six or more products in the market, plus three or more
in the pipeline, with which Managed Markets account executives are currently involved.
LPS companies tended to have slightly more of these products, especially in the market.
Number in the Market- Total Benchmark Class Number in the Pipeline- Total Benchmark Class
7%
26%
35% 1-5 Products 1-2 Products
6-10 Products 47% 3-4 Products
More than 10
Products More than 4
47% Products
n=30
n=31
39%
Number in the Market- Large Pharma Segment Number in the Pipeline- Large Pharma Segment
6%
19%
38%
44%
56%
n=16 38% n=16
Q. How many products, in the market or in the pipeline, are your Managed Markets account executives involved with?
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7. Structure and Organizational Alignment
Separating Managed Markets from Sales provides a clearer focus on
objectives and easier measurement of results
Coordination and cooperation between these separate groups can be
harder
The rationale for having national and regional account executives
report to the same individual (in either organization) is similar:
coordination
“When groups have separate reporting structures for national and
regional accounts, they don't get the level of collaboration, and our
customer base is more intertwined than ever before in terms of the
relationships between customer segments.” – Executive Vice President,
Top 50 Pharma
Maintaining separate groups with responsibility for Managed Markets
strategy and/or marketing often brings to bear the perspectives of the
brands and therapeutic areas
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8. Optimal Methods and Measures for Assessing the
Value of Managed Markets Account Management
Open-ended data revealed four main categories of optimal methods/measures for
assessing Managed Markets account management (some respondents made multiple
comments).
Formulary status, sales, and share (50%):
Formulary status, Share movement
sales, and share
50% Penetration of products
Formulary access
Formulary penetration
Sales pull-through
Unit demand
Profitability and
55% Profitability and financial results (55%):
financial results Profit goals
Profitable growth
Profitable access
Financial performance
Performance Contract performance and profitability
against objectives
27% ROI of contracts achieved
Performance against objectives (27%):
Clear MBOs
Business plan execution
Appraisal every quarter for agreed parameters
Other 32% Strategic objective accomplishments
Other (32%):
Competency measures
# of effective quality/health initiatives led
n=22 0% 20% 40% 60% Customer input
Markets comparisons
Q. What do you think are the optimal methods and measures for assessing the value of Managed Markets account management?
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9. Managed Markets Account Management
Organizational Alignment
The majority of respondents reported that Managed Markets account management is
centralized in another department or function rather than integrated into a sales
department.
Total Benchmark Class Large Pharma Segment
9% 0%
34%
38%
Part of an
integrated sales
department
Centralized in
63% another
department or
function
56% All Other
n=32 n=16
Q. Which of the following statements best describes how Managed Markets account management is organized in your company?
[All Other = “distributed among various product/brand managers” and “central function for all customer segments”]
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10. Challenges and Pitfalls in Measuring and Managing
Managed Markets Account Executive Performance
Open-ended data revealed three main categories of challenges and pitfalls in managing
Managed Markets account executive performance (some respondents made multiple
comments).
Measurement and compensation (46%):
Aligning comp to attainment and sales
Decreased profits not always measured
Measurement and Ensuring that IC plan is seen as fair
compensation
46%
No direct control of sales force activity
Indirect impact on product performance
Lag time/long time frame for results
Measuring access without understanding impact
Organization and Ability to get quality data
alignment 31% Organization and alignment (31%):
Activity takes precedence over results
Certain geographies more conducive
Lack of ownership of accountability
Integration with global marketing plans
Other 27% Interaction between sales and MM
Other (27%):
State mandates/restrictions
Economic environment volatility
0% 20% 40% Calling beyond pharmacy/focusing on quality
n=26 Training and convincing sales channels
Q. What are the biggest challenges and pitfalls in measuring and motivating Managed Markets account
executive performance?
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11. About Best Practices, LLC
Best Practices, LLC is a research and consulting firm that conducts work
based on the simple yet profound principle that organizations can chart a
course to superior economic performance by studying the best business
practices, operating tactics and winning strategies of world-class
companies.
Best Practices, LLC
6350 Quadrangle Drive, Suite 200, Chapel Hill, NC 27517
919-403-0251
best@best-in-class.com
www.best-in-class.com
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