This is the first post in a three-part series on commercial resource planning.
The ground is shifting under pharma companies’ very foundations. Pharma’s customer bases are transforming, as private practices give way to complex provider systems, and influence over treatment decisions spreads well beyond the physician. The role of the end user is changing as the patient journey grows increasingly intricate and individualized. Data, analytics and other technologies are changing the way that therapies are developed, delivered and assessed. Value is edging out volume as the primary performance metric—and the definition of value varies by stakeholder.
Amid all of this change and increasing complexity, the way that pharmaceutical organizations now handle commercial resource planning isn’t fundamentally different from how they handled it 25 years ago. But we know that it no longer makes sense to deploy armies of sales reps to private physician practices across the U.S., as companies did when what worked in Seattle also worked in Miami, and everywhere in between. Changes across the healthcare ecosystem are calling for this decades-old model to shift. Industry players need to optimize their resources—from field reps and support and service roles to digital marketing channels—to meet the needs of a 21st-century, heterogeneous customer set.
I recently called my colleague Jude Konzelmann, a ZS managing principal and leader of the firm’s resource planning and deployment practice, to explore how companies can trade in a national, retail-based mindset for a customer-focused, localized strategy. Here’s an excerpt from our conversation.
Q: Given the increasing complexity that pharma companies are dealing with, what does the ideal state for commercial resource planning look like? How should companies structure that change?
A: First of all, the local construct will become more important within commercial resource planning, and here’s what I mean by that: In the older way of doing things, we had more of a top-down, push approach to commercial resource planning. Many organizations would devise a set of rules, a set of guiding principles, design a strategy around that, and then essentially push that same thing to all parts of the country. Now, with more heterogeneity, what we want to be doing is a little bit of push and a little bit of pull. We want to make some options available for local leaders in the field, who are closer to the customer, to pull and pick from to provide the right set of roles and resources around a customer in their local area.
The second thing is that pharma firms need to identify patterns in patient drop-off rates and then deploy their commercial resources accordingly. If we think of the “patient funnel,” representing the patient’s progression from the pre-prescription stage (when she receives a diagnosis and may be identified for a category of treatment and needs to select a brand) to the post-prescription stage (she has received a prescription and now needs to fill it and begin treatment), the patients in the “brand selection” section make up the funnel’s middle. Pharma has created a lot of different roles and resources—such as reimbursement support managers, nurse educators, patient navigators, co-pay assistance programs and patient hub services—to try to address the drop-offs across these areas, but they’re often not coordinated and planned together, and there’s lost opportunity there. Having different types of resources planned in silos doesn’t necessarily ensure that you’re putting them in the right place.
Q: We know that we have 60,000 or 70,000 reps, and that they’re all focused on the middle part of the funnel when brand choices are made. Is it legitimate to think that if I could just have 10% less effort focused on that part of the business or add 200% more effort somewhere else, we’d see some success?
A: In certain [therapeutic] categories, that’s entirely possible. If you think about diminishing returns, we’ve been in a share of voice battle. I’m not saying that’s unimportant, but you almost have to believe that the last 5 to 10% of the effort is really still at a fairly flat portion of the curve, especially given the way that it’s been planned without specifically thinking about local opportunity. There could be some low-hanging fruit on some of the downstream steps in the funnel, like reimbursement or fulfillment, where you can see massive drop-off rates. In fact, about one out of three written prescriptions never get filled.
We’ve actually gotten past what we’ve classically believed was the biggest hurdle: getting the doctor to put pen to paper and decide something. Now, whether through logistics or financial reasons, or any number of things, patients simply aren’t following through on doctors’ treatment decisions. If you could begin to save even a portion of that gap, like one-third of that 30%, that’s probably quite a bit more than you would be able to generate through continuing to battle for more brand share.
Q: Are there other dimensions to this change? Moving from a centralized approach to one that’s more local is one dimension. What are some others?
A: Companies talk a lot about agility, and the need to be able to change things more quickly to react to the marketplace. And, we know that customer change continues to be dynamic. In 2017 alone, there were 115 hospital mergers and acquisitions, which means that more than two deals were signed each week. There’s constant change where you have customers getting larger and merging with other customers, purchasing clinics, just doing things to change the way that they deliver care. And while these things may not seem like they add up that quickly at a national level, they could matter a lot in a local market. If, in a local market, two major competing health systems have now merged and suddenly start to own 50 to 60% of lives in an area, and one of those maybe was quite favorable to my set of products and had protocols in place, that can change my opportunity very quickly.
Traditionally, commercial resource planning needs were addressed during the company’s next major restructuring. Outside of that, it would be a very difficult process with a lot of human capital and ad hoc analytics and thinking about how to go about addressing this problem. If anything, there’s going to be more need for significant local deployment restructuring in the future, not less. These are no longer exceptions.
There are many organizations that manage by exception, in places like northern California, Utah and Massachusetts. And if there were really only going to be three or four areas in the country that you had to worry about, that may be OK, but what if there are 20? What if there are 40? What if those 40 changed from year to year? Companies need to build in an agility model to be able to deal with that.
Building a system that can contain a lot of this information and be always up to date would be a boost to both the commercial analytics and operations folks so that they don’t need to take on loads and loads of additional ad hoc analysis. It also would create a lot more value because now we can be far more responsive and even proactive in managing these changes in the field.
Q: Is there a role for marketing in this change?
A: I think that there’s a very big role for marketing because many marketers have a good sense of the patient journey. They research it and look for leverage points. It isn’t clear how all of that is getting pulled through, and if it’s being quantified locally and mixed and matched and traded off against what’s happening with the field role. There’s absolutely an opportunity for much greater coordination between channel planning and field planning to ensure that, in a particular market, the mix is right. If I have a low-access market, but I have good digital, I’m able to connect those dots in a lot more seamless fashion.
It’s become a trend for people to coordinate on the execution side, but we believe that there’s value in doing some of that upstream as well. In tactical planning and in thinking about where to put resources, companies should be a lot smarter about understanding how these two things connect in the local area against local opportunity.
There are big organizational challenges that we’ll need to overcome, either through changing structure or through—and probably more likely, in the near term—changing business process to operate in a different way. Many pharma organizations have a fairly brand-led planning process. Each year, it’s sort of up to a local brand leader to think about all of the different resources that they might need, and that’s really how things get planned and decided.
What companies are not nearly as good at is coming up with a local plan of how to balance out all of the resources across products for a specific set of customers. If you wanted to be radical about it, you would start reorienting the entire company structure around local markets as opposed to brands, but that change is probably a lot farther off. But I think, process-wise, bringing the two sides together a lot earlier in the planning process would be very valuable.
Stay tuned for the second post in this three-part series, which will focus on technology’s role in pharma’s commercial resource planning strategy.
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