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Value Innovation To Pharma - What Changes To Busisness, Zurich 2008

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Value innovation to pharma - What changes to business?
Presentation to the Eyforpharma Marketing Summit, Zürch 2008
Rob Halkes

Published in: Health & Medicine
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Value Innovation To Pharma - What Changes To Busisness, Zurich 2008

  1. 1. Value Innovation to Pharma What changes to business? Interactive Symposium Marketing Summit October 2008 Zurich October 20th, 2008 Rob Halkes
  2. 2. <ul><li>What would be the new zone of sustainable profitability in Pharma? </li></ul><ul><li>Back to basics.. what is the business of pharma? </li></ul><ul><li>Can we go on as we do? </li></ul><ul><li>The perspective of Value Innovation to Pharma? </li></ul><ul><li>How to implement and adapt the organisation? </li></ul>
  3. 3. I. So, what’s the business of pharma?
  4. 4. In what business is pharma in? <ul><li>When you get paid for your stuff, you deal in commodities … </li></ul><ul><li>When you get paid for physical products you deal in goods… </li></ul><ul><li>When you get paid for your actions, you deal in service….. </li></ul><ul><li>When you get paid for the time you spend with customers, you deal in experiences… </li></ul><ul><li>When you get paid for distinguishable results for your clients, you deal in transformations…. </li></ul>Pharma does all Generics Specialty drugs Professional Training and the like Support to patients Healing
  5. 5. Whether we are capable to continue doing all: Core questions must be asked <ul><li>Who is my customer ? </li></ul><ul><li>What value do I want to bring to him? </li></ul><ul><li>How do I make this happen? </li></ul>
  6. 6. The basic pharma playing field What Clients General Standardised Approach Account Focus Detailing by Reps to individual doctors Communication One-way Push Product based Value Product profile Organisation Silos Medical Marketing Sales
  7. 7. II. Can we go on as we do?
  8. 8. About Profit….. If these are, the relevant competencies of a pharmaceutical company*…… What volume does a company need to cover all area’s incl. innovation efforts on each? <ul><li>Where lies the guarantee to ROI? </li></ul><ul><li>Volume </li></ul><ul><li>Focus vertically on diseases </li></ul><ul><li>Focus horizontally on company functions </li></ul><ul><li>Looking to develop a director-governing role </li></ul><ul><li>… what are the consequent business models? </li></ul>R&D Product Innovation Production, Administration, and Distribution Infrastructure management Sales and Service Customer Relationship Management * Hagel, J. and Singer, M., “Unbundling the corporation”, Harvard Business Review , March April 1999, 136- 141
  9. 9. Pharma excellence: make a choice… R&D Product Innovation Administration and Distribution Infrastructure management Sales and Service Customer Relationship Management Core question: What is the USP of producing new drugs? how to exploit that to create business? The key factor to success is: exploitation of the knowledge about the drug, gathered in R&D, in health care itself.
  10. 10. III. What then, is the perspective of Value Innovation?
  11. 11. Value Innovation is more than sales adaptation . It takes a process of repositioning to customer and consumer in the process of care delivery that makes the distinction to USP. Positioning is all about choosing a distinctive customer value proposition “ A (marketing) strategy must start with a different value proposition. Strategy delineates a territory in which a company seeks to be unique. It is about making choices. “ You can’t be all things to all people” Porter, M. (2001), Interview in Fast Company (March 2001)
  12. 12. Shifting perspectives in the basic playing field What Clients General Standardised Approach Differentiated activities for different segments Account Focus Detailing by Reps to individual doctors Integrated coordinated multidisciplinary account specific management Communication One-way Push Product based Multi channel interactive platforms on health care Value Product profile Outcome of health care for consumers Organisational Change Silos Medical Marketing Sales Integrated account focused units
  13. 13. The concept of Value Innovation: <ul><li>A new way of thinking to Life Sciences about market approach, marketing, sales and services </li></ul><ul><li>It’s about: </li></ul><ul><ul><li>Differentiation between target audiences , From all doctors, there are those who are clients , and those who are not ; </li></ul></ul><ul><ul><li>Delivering value : Clients have more right to added services and support (value) than non clients . </li></ul></ul>
  14. 14. Value innovation: Basis for commercial differentiation and co creation of value in health care Differentiated Approach of Targeted Audiences and selected accounts Delivering Value to Health Care Steps in development of commercial partnership Steps in adding value and value innovation <ul><li>Steps in development of marketing strategy : </li></ul><ul><li>Product Marketing </li></ul><ul><li>Relationship </li></ul><ul><li>Services Marketing </li></ul><ul><li>Co creation Experience </li></ul>
  15. 15. IV. What changes to the organisation ?
  16. 16. The dilemma to sales force effectiveness.. <ul><li>“ Sales driven” </li></ul><ul><li>Targeting of individual doctors </li></ul><ul><li>Rx potential as dominant selection criterion </li></ul><ul><li>Detail as communication framework </li></ul><ul><li>Rep as professional </li></ul><ul><li>Face to face communications </li></ul><ul><li>Effectiveness is seen as number of RX </li></ul><ul><li>Pharma time is a burden to general GP time </li></ul><ul><li>“ Patient driven” </li></ul><ul><li>Targeting of health care community centres </li></ul><ul><li>Potential in Health Care quality development and thus growing quantity </li></ul><ul><li>Cooperation in health care support to the patient is frame of cooperation with pharma </li></ul><ul><li>Multidisciplinary team of experts to support GP’s and centres </li></ul><ul><li>Multichannel interactive communications </li></ul><ul><li>Patient satisfaction and improvement of QoL in line with Rx </li></ul><ul><li>GP and health care centres have frequent health care related contacts (training, case studies, projects and the like) </li></ul>
  17. 17. The dilemma to marketing excellence <ul><li>“ Sales support directed” </li></ul><ul><li>Product marketing based; </li></ul><ul><li>Finding the right message and translating it into a detail-flow; </li></ul><ul><li>Message communication in standardised ways: product oriented; </li></ul><ul><li>Communication in one-way oriented channels </li></ul><ul><li>Getting the message out there </li></ul><ul><li>Message, primarily to the medical doctor </li></ul><ul><li>General awareness to consumer, If possible, DTC </li></ul><ul><li>“ Value co-creation” </li></ul><ul><li>Health care oriented, New Disease management, Integrated care; </li></ul><ul><li>Looking for and creating health care surroundings rather than just Rx-doctors; </li></ul><ul><li>Developing better care in cooperation and selected partnerships with healthcare professionals and other stakeholder; </li></ul><ul><li>Treating target audiences as potential partners to develop customer-consumer-stakeholder communities; </li></ul><ul><li>Building interactive communication and relation systems aimed at better care; </li></ul><ul><li>Promotion of health care approach together with partners in health; </li></ul><ul><li>Specific patient awareness of added value, basis for relationship development </li></ul>
  18. 18. How does this work? Three policies: <ul><li>Segmentation and targeting of health care DMU’s With consequent account management: customer excellence </li></ul><ul><li>Progressive development of value innovation towards the DMU as health care support to consumer - compliance directed monitoring and support </li></ul><ul><li>The exchange of capacity and manpower from mere rep calling (share of voice) to sensible, directed and focus face to face meetings with segmented accounts. (in so doing continuing “share of contact”) </li></ul>I Commercial Promotion III Patient services and support II GP and Specialist Support IV Partnership Adding value Increasing Relationship - Rx + Rx GP in network -/- +/+ Network relevancy -/- +/+ Commercial potential
  19. 19. Goals for Sales /Account management: Differentiated Network approach and covering the individual GP’s within. - + Access to network -/- +/+ Network relevancy -/- +/+ 1.B Enlarge the ROI of the network 1.C Cover all GP in the network 1. Get access to or develop the networks with the highest potential and relevance 1.A Get to a healthcare based relationship based on your product 1.D Continue and warrant your health care relationship by practice and patient support 2 Access those networks with less but still relevant potential O. Stay away from networks with low potential , or migrate at least through your contact to the related network with a larger potential 2.A Enlarge the acknowledgement of your product 2.B Enlarge the group of GP’s using your product Commercial potential A
  20. 20. Marketing Synergy between Targeting and Added Value Indication Orientation Company orientation Product Orientation Customer Oriented Consumer Driven Customer Defined B Product Support services Customer Individualizing surplus value Customer Individualizing surplus value 1 Relation getting - No relation - Selling 3 Extended Rx 5 Enhanced Long term and Life time 4 Long term 2 Ad hoc Rx E General practice and partnership D Therapy enhancing support packages C Implementation and consumer directed support Services General and Selling Communication and tools B Product support services Customer Individualizing added value 1 Relation Building - No relation - Selling 3 Extended Rx 5 Enhanced Long term and Life time 4 Long term 2 Ad hoc Rx E General practice and partnership D Therapy enhancing support packages C Implementation and consumer directed support services General and selling communication and tools Conditions of Relation ship A Brand Driven I Commercial Promotion II Support to medical doctor III Support to patient IV Partner
  21. 21. <ul><li>Promotion : </li></ul><ul><ul><li>Classic product based information to customers, but by Top Quality, </li></ul></ul><ul><ul><li>High level of quality calls as from medical, relational and commercial perspectives </li></ul></ul><ul><ul><li>Goal: </li></ul></ul><ul><ul><ul><li>Individual product preference </li></ul></ul></ul><ul><ul><ul><li>Analysis of DMU </li></ul></ul></ul><ul><li>Health Care practice support </li></ul><ul><ul><li>Projects that render support and service to prescription (e.g. patient screening) </li></ul></ul><ul><ul><li>For Groups and networks: support to cooperation between colleagues and other professionals, sponsors </li></ul></ul><ul><ul><li>Goal: continuing & expansion Rx and relation development with DMU </li></ul></ul><ul><ul><li>Account management: coaching and monitoring of Rx experience and use of drugs </li></ul></ul><ul><li>Patient Support: </li></ul><ul><ul><li>(Continuing) Health care program development in frame of new disease management </li></ul></ul><ul><ul><li>Warrant Rx by specific patient support and coaching </li></ul></ul><ul><ul><li>All kinds of technological support and innovation </li></ul></ul><ul><li>Further development of Health care practices (K.O.L’s) </li></ul><ul><ul><li>Innovation and development of integrated health care </li></ul></ul><ul><ul><li>Development of new protocols of cure and care </li></ul></ul><ul><ul><li>Launch of new drugs framed in health care programs/disease management </li></ul></ul><ul><ul><li>Research and clinical trials </li></ul></ul>Examples of propositions in adding value per segment:
  22. 22. Account segmentation, Focus and Management is crucial: Everything must be seen fit to the account Account Segment type Data and characteristics Targeting Investment: volume Commercial action plan Account management Related professional functions Process structures Monitoring Effects and output Information and communication Means and channels
  23. 23. Changes to Business: <ul><li>Key Issue in partnership : cooperation with health care parties to create, sustain and develop better care to patients </li></ul><ul><li>Key Issue in care : integrated service lines accumulating in super served patient care (monitoring, compliance, information and support, prevention) </li></ul><ul><li>Key issue to change in business model: Differentiate between schemes of added value to differentiated accounts. Promote this with a progressive build up of relationship in ROI and investment </li></ul>Down Up Capacity volume Sales Reps Account mngmnt New New Functions
  24. 24. What new functions to Sales and Marketing <ul><li>Indication Advisory: </li></ul><ul><ul><li>Product specifics (own product and competitions’) </li></ul></ul><ul><ul><li>Research (all…) </li></ul></ul><ul><ul><li>Health care protocols </li></ul></ul><ul><ul><li>Health care (integrated programs) </li></ul></ul><ul><ul><li>All kinds of medical and patient support </li></ul></ul><ul><li>Project management </li></ul><ul><ul><li>Excellent implementation and guidance of health care support </li></ul></ul><ul><ul><li>Medical expertise (specialised nurse, nurse practitioner, etc.) </li></ul></ul><ul><li>Account management </li></ul><ul><ul><li>Customer focus for customer excellence </li></ul></ul><ul><ul><li>New stakeholder relationship management </li></ul></ul><ul><ul><li>DMU management in partnerships </li></ul></ul>
  25. 25. Key issues in marketing, sales and medical <ul><ul><li>Differentiation </li></ul></ul><ul><ul><li>Segmentation of partnership (preferably: consortia) </li></ul></ul><ul><ul><li>Account and project management (KOL and advocacy +) </li></ul></ul><ul><ul><li>Integrated multi channel management to interactively communicate </li></ul></ul><ul><ul><li>Customer Focus DTC, value in the chain of health care delivery, possibly through third party involvement </li></ul></ul><ul><ul><li>Health care functions from pharma: product specialists, health care program specialists </li></ul></ul><ul><ul><li>Market Access: from best partners down…. </li></ul></ul>
  26. 26. Van Spaendonck’s BU “Value Innovation in Medical and life Sciences” is a focused consultancy firm. Van Spaendonck management consultancy supports and directs parties and professionals to proper choices and processes to create and develop their USP , a better market position and performance. In the dynamics of health care systems, pharmaceutical industry, health care insurers, social parties, and health care professionals will be challenged more and more to their added value. The business unit “Value innovation for Medical and Life Sciences,” has the needed expertise and experience to initiate and develop processes and clinics for health care, marketing, sales and management systems, professional development, and strategic organisational change. 20 years of consultancy expertise to pharmaceutical and medical industry, life sciences and health care. Actual research and publications in health care and marketing developments. Rob Halkes BU Van Spaendonck – Value innovation in Medical and Life Sciences T +31 418 578000 F +31 418 578010 M+31 653 420722 Postbus 2005 E r.halkes@VanSpaendonck.nl Hogeweg 85 W www.medicalandpharmamarketing.com 5300 CA Zaltbommel the Netherlands Rob Halkes BU Van Spaendonck – Value innovation in Medical and Life Sciences T +31 418 578000 F +31 418 578010 M +31 653 420722 Postbus 2005 E r.halkes@VanSpaendonck.nl Hogeweg 85 W www.medicalandpharmamarketing.com 5300 CA Zaltbommel T www.twitter.com /@ rohal the Netherlands

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