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The Evolution of Sales Models in the Indian Pharma ... - IMS Health

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<strong>The</strong> <strong>Evolution</strong> <strong>of</strong> <strong>Sales</strong> <strong>Models</strong> <strong>in</strong> <strong>the</strong><br />

<strong>Indian</strong> <strong>Pharma</strong> Industry<br />

By AmArdeep Udeshi, engAgement mAnAger, ims ConsUlt<strong>in</strong>g groUp And mohit BAhri, ConsUltAnt, ims ConsUlt<strong>in</strong>g groUp


Dear colleagues,<br />

We are proud to present to you <strong>the</strong> outcome <strong>of</strong> a unique <strong>in</strong>itiative jo<strong>in</strong>tly undertaken by OPPI and <strong>IMS</strong><br />

Consult<strong>in</strong>g Group (<strong>IMS</strong>CG). As part <strong>of</strong> <strong>the</strong> OPPI Committee on <strong>Sales</strong> Force Excellence (SFE), a decision<br />

was taken last year to understand <strong>the</strong> prevail<strong>in</strong>g practices and emerg<strong>in</strong>g trends with respect to Sale<br />

Forces, aimed at driv<strong>in</strong>g SFE across <strong>the</strong> <strong>Indian</strong> <strong>Pharma</strong> <strong>in</strong>dustry. As part <strong>of</strong> this study, OPPI and <strong>IMS</strong><br />

<strong>Health</strong> undertook a survey amongst key senior management personnel, where<strong>in</strong> <strong>in</strong>formation was captured<br />

related to sales force structures, <strong>the</strong> pr<strong>in</strong>ciple beh<strong>in</strong>d <strong>the</strong>ir set ups and <strong>the</strong> challenges faced <strong>the</strong>re<strong>in</strong>.<br />

Fourteen companies responded to this survey. What is presented here is a brief glimpse <strong>of</strong> <strong>the</strong> f<strong>in</strong>d<strong>in</strong>gs <strong>of</strong><br />

this survey, with<strong>in</strong> <strong>the</strong> context <strong>of</strong> chang<strong>in</strong>g sales models <strong>in</strong> <strong>the</strong> <strong>Indian</strong> pharma <strong>in</strong>dustry. Support<strong>in</strong>g this<br />

data are <strong>in</strong>sights provided by <strong>IMS</strong> Consult<strong>in</strong>g Group based on <strong>the</strong>ir expertise and knowledge <strong>of</strong> <strong>the</strong> <strong>in</strong>dustry<br />

and its chang<strong>in</strong>g dynamics along with <strong>in</strong>puts from o<strong>the</strong>r <strong>in</strong>dustry experts associated with OPPI.<br />

What this paper attempts to do is to showcase how sales models are be<strong>in</strong>g, and will cont<strong>in</strong>ue to be, re<strong>in</strong>vented<br />

and redesigned across <strong>the</strong> <strong>Indian</strong> pharma market landscape <strong>in</strong> <strong>the</strong> years to come. We do hope<br />

you f<strong>in</strong>d this article and <strong>the</strong> subject as <strong>in</strong>terest<strong>in</strong>g as we found it to be while br<strong>in</strong>g<strong>in</strong>g this paper to you.<br />

Thank you,<br />

Tapan Ray Ram Kalyana<br />

Director General Country Pr<strong>in</strong>cipal, India<br />

OPPI <strong>IMS</strong> Consult<strong>in</strong>g Group<br />

2


<strong>the</strong> only ConstAnt is ChAnge itself<br />

<strong>The</strong> ever chang<strong>in</strong>g face <strong>of</strong> <strong>the</strong> <strong>Indian</strong> pharma <strong>in</strong>dustry<br />

and its ability to adapt <strong>in</strong>novatively has re<strong>in</strong>forced<br />

<strong>the</strong> fact that adaptation is <strong>the</strong> only way to survive. With<br />

every pass<strong>in</strong>g decade, a new commercial challenge has<br />

emerged; which <strong>in</strong>-turn has provided <strong>the</strong> <strong>in</strong>dustry with<br />

an opportunity to ride <strong>the</strong> waves to reach newer heights.<br />

An annual turnover <strong>of</strong> Rs 600 Bn with a CAGR <strong>in</strong> excess<br />

<strong>of</strong> 15% is a testimony to <strong>the</strong> fact that key players<br />

have emerged, w<strong>in</strong>n<strong>in</strong>g over time. With time, newer and<br />

<strong>in</strong>novative commercial approaches have been adopted<br />

and implemented, thus demonstrat<strong>in</strong>g that <strong>the</strong> companies<br />

have adapted <strong>the</strong>mselves to <strong>the</strong> fluidic nature <strong>of</strong> <strong>the</strong><br />

<strong>Indian</strong> pharma market.<br />

As Fig.1 below <strong>in</strong>dicates, follow<strong>in</strong>g <strong>the</strong> announcement <strong>of</strong><br />

a formal patent structure <strong>in</strong> 1995, <strong>Indian</strong> players started<br />

gear<strong>in</strong>g up for <strong>the</strong> product patent regime. Dur<strong>in</strong>g this<br />

time, a transition from conservative sales models to ag-<br />

Figure 1: Chang<strong>in</strong>g <strong>Sales</strong> Dynamics <strong>in</strong> <strong>the</strong> <strong>Indian</strong> <strong>Pharma</strong> Industry<br />

Announcement<br />

<strong>of</strong> patent regime<br />

• Companies start gear<strong>in</strong>g up<br />

for expansion<br />

• sf and portfolio ramp up<br />

• Avg new products launched/yr<br />

650-700<br />

• started <strong>in</strong>vestments <strong>in</strong> r&d<br />

massive restructur<strong>in</strong>g<br />

and scale up<br />

product patent<br />

implemented<br />

• rapid adoption <strong>of</strong> bus<strong>in</strong>ess unit structure<br />

• expansion to extra-urban geographies<br />

• emergence <strong>of</strong> newer sales model like<br />

taskforce, <strong>the</strong>rapy experts<br />

• Co-promotion/licens<strong>in</strong>g agreements kicked <strong>in</strong><br />

• rise <strong>of</strong> organized retail<br />

gressive and <strong>in</strong>novative sales models was observed. Companies<br />

geared up <strong>the</strong>ir R&D efforts to meet <strong>the</strong> product<br />

patent criteria, and undertook an aggressive expansion <strong>in</strong><br />

early 2000s from a gradual ramp up <strong>of</strong> portfolio and sales<br />

force <strong>in</strong> late 90s. So aggressive was <strong>the</strong> portfolio expansion,<br />

that <strong>the</strong> average number <strong>of</strong> new brands launch <strong>in</strong>creased<br />

from nearly 700/year <strong>in</strong> <strong>the</strong> late 1990s to >2,500/year<br />

between 2000 and 2005. At <strong>the</strong> same time, companies expanded<br />

<strong>the</strong>ir sales forces aggressively <strong>in</strong> attempts to reach<br />

out to <strong>the</strong> geographical corners <strong>of</strong> <strong>the</strong> country, <strong>in</strong>clud<strong>in</strong>g<br />

rural markets <strong>in</strong> <strong>the</strong> late 2000s. In a bid to <strong>in</strong>crease revenue<br />

fur<strong>the</strong>r, <strong>in</strong>novators engaged <strong>in</strong> co-promotion <strong>of</strong> <strong>the</strong>ir<br />

patented products and out-licens<strong>in</strong>g. At <strong>the</strong> same time,<br />

with limited options to expand portfolio and near saturation<br />

<strong>in</strong> <strong>the</strong> top cities <strong>in</strong> India, companies started adopt<strong>in</strong>g<br />

newer commercial models and sales force structures<br />

(like task forces, <strong>the</strong>rapy experts, Key Account Manager<br />

structure, Contracted <strong>Sales</strong> Operations, etc.) to more efficiently<br />

target <strong>the</strong> market.<br />

shr<strong>in</strong>k<strong>in</strong>g pipel<strong>in</strong>e and<br />

rise <strong>of</strong> pharmerg<strong>in</strong>g markets<br />

events likely to impact<br />

future sales models<br />

• health <strong>in</strong>surance<br />

• govt. adopt<strong>in</strong>g health security<br />

measures for certa<strong>in</strong> sections<br />

<strong>of</strong> society<br />

• gst regime<br />

• emergence <strong>of</strong> new stakeholders,<br />

sales channels<br />

• likely adoption <strong>of</strong> newer sales<br />

model like channel management,<br />

KAm, Cso, etc<br />

1995-2000 2000-2005 2005-2010 2010<br />

and beyond<br />

Future<br />

Source: <strong>IMS</strong> <strong>in</strong>telligence<br />

• Aggresive portfolio & sales force<br />

expansion, >2,500 new products launched/yr<br />

• gradual adoption <strong>of</strong> bus<strong>in</strong>ess unit structure<br />

• mnCs enter<strong>in</strong>g <strong>in</strong>dia and also launch<strong>in</strong>g<br />

global portfolio<br />

3


Companies who aggressively ramped-up were able to<br />

ma<strong>in</strong>ta<strong>in</strong> <strong>the</strong>ir bottom l<strong>in</strong>e, thus <strong>in</strong>dicat<strong>in</strong>g that <strong>the</strong>se<br />

strategies paid <strong>of</strong>f. A Top-level f<strong>in</strong>ancial assessment<br />

Figure 2: Pr<strong>of</strong>itability trends - Key companies<br />

40%<br />

35%<br />

30%<br />

25%<br />

20%<br />

15%<br />

10%<br />

5%<br />

0%<br />

MNCs<br />

However, <strong>in</strong> an ever chang<strong>in</strong>g market environment, <strong>the</strong><br />

susta<strong>in</strong>ability <strong>of</strong> <strong>the</strong>se models <strong>in</strong> terms <strong>of</strong> pr<strong>of</strong>itability<br />

needs to be carefully considered. Hence, it’s imperative<br />

for <strong>the</strong> <strong>in</strong>dustry to look with<strong>in</strong> for <strong>the</strong> opportunities to<br />

CUrrent sAles models<br />

<strong>The</strong> sales force cont<strong>in</strong>ues to be <strong>the</strong> biggest promotional<br />

<strong>in</strong>vestment for pharma players. Industry has<br />

evolved around mak<strong>in</strong>g most use <strong>of</strong> this resource and<br />

has adopted <strong>in</strong>novative commercial models, from sales<br />

and market<strong>in</strong>g structure to bus<strong>in</strong>ess unit structure to<br />

specialized task forces, as per <strong>the</strong>ir needs – <strong>of</strong>ten proactively<br />

adapt<strong>in</strong>g exist<strong>in</strong>g sales models to market realities<br />

In a survey jo<strong>in</strong>tly undertaken by <strong>IMS</strong>CG and OPPI<br />

amongst lead<strong>in</strong>g companies related to sales practices<br />

and models, it was observed that nearly 80% responded<br />

to hav<strong>in</strong>g changed <strong>the</strong>ir sales model at least once <strong>in</strong> <strong>the</strong><br />

last 5 years. Nearly 80% <strong>of</strong> <strong>the</strong> companies contacted<br />

by <strong>IMS</strong> have already adopted multiple bus<strong>in</strong>ess unit<br />

models, with or without additional specific task forces;<br />

with <strong>the</strong> number <strong>of</strong> bus<strong>in</strong>ess units rang<strong>in</strong>g from 2 to<br />

10, depend<strong>in</strong>g on portfolio width.<br />

(See Fig.2 below) shows that <strong>the</strong>se <strong>in</strong>itiatives have<br />

proved to be fruitful and provided healthy bottom<br />

l<strong>in</strong>es.<br />

2006 2007 2008 2009 2010<br />

-5%<br />

-10%<br />

2006 2007 2008 2009 2010<br />

novartis merck pfizer ranbaxy drl<br />

CiplA<br />

Astra<br />

% operat<strong>in</strong>g pr<strong>of</strong>it = operat<strong>in</strong>g pr<strong>of</strong>it/ operat<strong>in</strong>g <strong>in</strong>come<br />

source: www.money.rediff.com<br />

operat<strong>in</strong>g pr<strong>of</strong>it %<br />

<strong>Indian</strong> Companies<br />

Abbott Aventis glenmark sun pharma<br />

40%<br />

35%<br />

30%<br />

25%<br />

20%<br />

15%<br />

10%<br />

5%<br />

0%<br />

drive up efficiencies, be it through streaml<strong>in</strong><strong>in</strong>g operations,<br />

adapt<strong>in</strong>g <strong>the</strong>ir sales model to market realties, or<br />

enhanc<strong>in</strong>g efficacy <strong>of</strong> <strong>in</strong>itiatives.<br />

As an <strong>in</strong>dustry executive says, “We moved from a <strong>Sales</strong><br />

and Market<strong>in</strong>g structure to a Bus<strong>in</strong>ess Unit structure<br />

to br<strong>in</strong>g more accountability, manage evolv<strong>in</strong>g bus<strong>in</strong>ess<br />

needs and use equity <strong>of</strong> organization for reach<strong>in</strong>g<br />

to <strong>the</strong> middle <strong>of</strong> <strong>the</strong> accessible pyramid. We have<br />

also created a horizontal strategic excellence team across<br />

<strong>the</strong>se BUs for process evaluation.” Ano<strong>the</strong>r <strong>in</strong>dustry executive<br />

mentioned that adopt<strong>in</strong>g specialized field forces to<br />

promote super-specialty products, us<strong>in</strong>g a traditional field<br />

force to promote o<strong>the</strong>r less specialized products, and a CSO<br />

(Contracted <strong>Sales</strong> Operations) model for rural geographies<br />

has worked well for <strong>the</strong>m. Thus, <strong>the</strong> <strong>in</strong>dustry has seen an<br />

adoption <strong>of</strong> multiple k<strong>in</strong>ds <strong>of</strong> sales forces – an improvement<br />

over hav<strong>in</strong>g a ‘traditional sales force only’ model.<br />

While most <strong>of</strong> <strong>the</strong> companies have adopted this Bus<strong>in</strong>ess<br />

Unit structure, a few pushed fur<strong>the</strong>r ahead by adopt<strong>in</strong>g<br />

newer <strong>in</strong>novative promotional models like patient activation<br />

teams, <strong>the</strong>rapy specialists, or creat<strong>in</strong>g patient awareness<br />

through mass media.<br />

4


As seen <strong>in</strong> Fig.3 below, while key determ<strong>in</strong>ants <strong>of</strong> <strong>the</strong><br />

sales force structure are <strong>the</strong>rapy focus, portfolio width,<br />

Figure 3:<br />

<strong>the</strong>rapy focus<br />

portfolio (number <strong>of</strong> brands)<br />

specialty focus<br />

nature <strong>of</strong> product<br />

(otC/hospital based)<br />

geography focus<br />

stage <strong>in</strong> lifecycle <strong>of</strong> <strong>the</strong> portfolio<br />

mix <strong>of</strong> different pr<strong>of</strong>ibility brands<br />

realignment <strong>of</strong> brands due to<br />

merger/acquisition<br />

5.5<br />

0 2 4 6<br />

A few <strong>of</strong> <strong>the</strong> models seen <strong>in</strong> <strong>the</strong> pharma <strong>in</strong>dustry (see Fig. 4 below) are:<br />

and target doctor specialty, a few companies have also<br />

aligned <strong>the</strong>ir models around geographies and pr<strong>of</strong>itability.<br />

• <strong>the</strong>rApy foCUs promotion: Generally seen where a portfolio is specialized, <strong>the</strong>rapy focused, and scripts are<br />

driven through chosen few doctors; generally <strong>in</strong> chronic segment.<br />

• ChAnnel mAnAgement: Mostly <strong>in</strong> OTC /OTX bus<strong>in</strong>ess; mature products with wider portfolio width.<br />

• hospitAl tAsKforCe: Exclusively to manage hospital bus<strong>in</strong>ess.<br />

• speCiAlty driven sAles model: Applicable <strong>in</strong> scenarios where portfolio is built around 2 or 3 specialties.<br />

• tAsK forCe: Generally adopted for niche products <strong>in</strong> urban areas, such as fertility cl<strong>in</strong>ics or for new launches<br />

where <strong>the</strong> focus is on select top rung physicians only.<br />

• oUt-soUrCed sAles forCe: Generally used for expansion <strong>in</strong> extra-urban geographies or with companies for<br />

whom medico-market<strong>in</strong>g is secondary (such as OTC or Consumer <strong>Health</strong>care companies).<br />

Geography<br />

Figure 4: Newer <strong>Sales</strong> Force <strong>Models</strong> adopted<br />

Urban<br />

Urban<br />

+<br />

lower<br />

town<br />

classes<br />

rural<br />

task-force<br />

<strong>the</strong>rapy<br />

experts<br />

<strong>in</strong>stitutional<br />

sales force<br />

Channel<br />

sales<br />

distributor<br />

sales force<br />

superspecialty<br />

focus/<br />

niche<br />

hospital<br />

focus<br />

otC<br />

Portfolio<br />

non-exhaustive <strong>in</strong>dicative overview <strong>of</strong> <strong>in</strong>dian pharma sales models<br />

multispecialty<br />

broad<br />

portfolio<br />

multiple BU<br />

sales force<br />

rural sales<br />

force<br />

(owned /<br />

outsourced)<br />

6.7<br />

6.9<br />

6.9<br />

7.2<br />

8.9<br />

8.7<br />

9.2<br />

8 10<br />

<strong>the</strong>rapy focus<br />

specialty focus<br />

Acute vs chronic focus<br />

geography focus<br />

o<strong>the</strong>rs<br />

5


Different companies have adopted different strategies, but<br />

<strong>the</strong> key reason cited for adapt<strong>in</strong>g <strong>the</strong>se changes rema<strong>in</strong>s<br />

<strong>the</strong> same: to provide better customer focus and target<strong>in</strong>g,<br />

enhance efficiencies, facilitate expansion to newer bus<strong>in</strong>ess<br />

areas (both <strong>the</strong>rapies and geographies), and <strong>in</strong>crease<br />

accountability <strong>of</strong> <strong>the</strong> resources. One <strong>of</strong> <strong>the</strong> executives<br />

surveyed said, “We created multiple structures to expand<br />

coverage to new markets and <strong>the</strong>rapy areas <strong>in</strong> l<strong>in</strong>e with<br />

growth expectation, support new launches, and streng<strong>the</strong>n<br />

key markets & <strong>in</strong>stitutional sales.”<br />

For specialty products driven companies, task forces account<br />

for nearly 15% <strong>of</strong> <strong>the</strong> total sales force. Key determ<strong>in</strong>ants<br />

<strong>of</strong> adapt<strong>in</strong>g <strong>the</strong>se models are <strong>the</strong>rapy focus,<br />

width <strong>of</strong> product portfolio and target doctor specialties.<br />

Interest<strong>in</strong>gly, responses <strong>of</strong> those companies hav<strong>in</strong>g mature<br />

products tend<strong>in</strong>g to an OTX pr<strong>of</strong>ile suggest that channel<br />

management has already made <strong>in</strong>roads <strong>in</strong>to pharma sales,<br />

account<strong>in</strong>g for nearly 20% <strong>of</strong> sales forces, second only to<br />

traditional sales force.<br />

Geography also emerges as one <strong>of</strong> <strong>the</strong> key determ<strong>in</strong>ants<br />

<strong>of</strong> sales model adoption, which shows that companies are<br />

also look<strong>in</strong>g at realign<strong>in</strong>g <strong>the</strong>ir sales model around <strong>the</strong><br />

varied need <strong>of</strong> various geographies. An <strong>in</strong>dustry executive<br />

contacted by OPPI-<strong>IMS</strong> said “A new BU was created<br />

<strong>in</strong> our company to tap <strong>the</strong> opportunity <strong>in</strong> <strong>the</strong> lower<br />

town classes. <strong>The</strong> BU contribution to <strong>the</strong> overall bus<strong>in</strong>ess<br />

is close to 20%.” Ano<strong>the</strong>r executive said, “Emerg<strong>in</strong>g<br />

and untapped bus<strong>in</strong>ess <strong>in</strong> <strong>the</strong> Class 3 or 4 towns and<br />

rural sector will impact <strong>the</strong> future sell<strong>in</strong>g model,” thus<br />

Figure 5: Key benefits and challenges with various sales structures<br />

Account<br />

management<br />

Channel<br />

management<br />

hospital<br />

management<br />

task force<br />

structure<br />

Cso<br />

Benefits<br />

• high Customer focus<br />

• Customer management<br />

• Wider reach and frecuency<br />

• helpful <strong>in</strong> manag<strong>in</strong>g large portfolio<br />

• high focus on potential hospitals<br />

• high productivity for speciality bus<strong>in</strong>ess<br />

• high impact and productivity<br />

• service to focus customers<br />

• geographically better reach<br />

• flexibility <strong>in</strong> operation & reduces<br />

managerial cost<br />

acknowledg<strong>in</strong>g <strong>the</strong> seriousness around rural consumers.<br />

MNCs like Novartis, San<strong>of</strong>i-Aventis, Pfizer are actively<br />

expand<strong>in</strong>g to Tier IV cities and below, creat<strong>in</strong>g pr<strong>of</strong>itable<br />

bus<strong>in</strong>ess models around rural geographies. Extra-urban<br />

geographies require different sales models <strong>in</strong> addition to a<br />

different strategy <strong>in</strong> terms <strong>of</strong> portfolio, distribution, pric<strong>in</strong>g<br />

and promotion.<br />

It has also been observed that many companies have<br />

adopted a multi-pronged commercial model to target<br />

specific needs <strong>of</strong> <strong>the</strong> various customer sets. One <strong>of</strong> <strong>the</strong><br />

<strong>in</strong>dustry executives said, “We adopted multiple strategies,<br />

like divisionalization <strong>in</strong> different <strong>the</strong>rapy segment<br />

to br<strong>in</strong>g better focus on field implementation, creation<br />

<strong>of</strong> channel management to manage late life cycle brands,<br />

launch <strong>of</strong> an extra urban division to <strong>in</strong>crease reach, and<br />

launch <strong>of</strong> super specialty division like Derma & Cardio.”<br />

Previous studies from <strong>IMS</strong>CG suggest that this is not an<br />

isolated case, but is now a common practice followed by<br />

both <strong>Indian</strong> and MNC players.<br />

No one model fits all. As seen <strong>in</strong> Fig.5 below, different<br />

models have <strong>the</strong>ir share <strong>of</strong> benefits and challenges; <strong>in</strong>novative<br />

sales structures <strong>in</strong>crease customer focus, but with<br />

additional <strong>in</strong>vestment. Hence, one needs to study f<strong>in</strong>ancial<br />

feasibility <strong>of</strong> a adopt<strong>in</strong>g a new commercial model.<br />

While a few companies have started to reassess <strong>the</strong>ir sell<strong>in</strong>g<br />

model, many players still rely on traditional promotional<br />

channels, where doctor coverage, call frequency,<br />

and work<strong>in</strong>g days still def<strong>in</strong>e <strong>the</strong> KPIs for <strong>the</strong> sales force.<br />

Challenges<br />

• high <strong>in</strong>vestment<br />

• delay <strong>in</strong> payments<br />

• lower marg<strong>in</strong>s<br />

• resource constra<strong>in</strong>t for <strong>the</strong> wider reach<br />

• price war<br />

• formulary list<strong>in</strong>g for new products<br />

• scattered geography<br />

• Cost <strong>of</strong> operation<br />

• Compliance and quality <strong>of</strong> operations<br />

• tough to coord<strong>in</strong>ate and align Cso to<br />

parent company<br />

6


A closer look at current models show that <strong>the</strong>se models,<br />

though <strong>the</strong>y would have provided an edge to <strong>the</strong><br />

players, have largely focused around s<strong>in</strong>gle stakeholder,<br />

primarily doctors. A study by <strong>IMS</strong>CG shows that decision<br />

mak<strong>in</strong>g power <strong>of</strong> o<strong>the</strong>r stakeholders, <strong>in</strong>clud<strong>in</strong>g<br />

patients, hospitals, payers, and <strong>in</strong>surance companies, has<br />

Figure 6:<br />

Influential<br />

Weak<br />

International Scenario<br />

Doctors<br />

Media Promotion<br />

Payors Consumers<br />

Patient Groups<br />

Distribution channels<br />

Exist<strong>in</strong>g New<br />

Moreover, <strong>the</strong>re are fundamental differences <strong>in</strong> stakeholder<br />

evolution between Western and <strong>Indian</strong> markets,<br />

which to an extent expla<strong>in</strong>s <strong>the</strong> difference between<br />

commercial models <strong>in</strong> <strong>the</strong> West and <strong>in</strong> India. While<br />

doctors are still <strong>the</strong> center <strong>of</strong> healthcare <strong>in</strong> India, <strong>the</strong><br />

West has seen an emergence <strong>of</strong> consumers, payers, private<br />

<strong>in</strong>surance and patient groups as strong stakeholders<br />

<strong>in</strong> healthcare management. With Westernization <strong>of</strong><br />

<strong>the</strong> <strong>Indian</strong> healthcare market, newer stakeholders are<br />

been on a steady rise <strong>in</strong> recent years. Ris<strong>in</strong>g <strong>in</strong>fluence<br />

<strong>of</strong> new stakeholders <strong>in</strong> decid<strong>in</strong>g treatment pathway<br />

will force <strong>the</strong> market players to look at newer touch<br />

po<strong>in</strong>ts with new stakeholders and hence <strong>the</strong> promotional<br />

channels. KPIs for <strong>the</strong> sales team need to evolve<br />

to <strong>in</strong>clude <strong>the</strong>se new key stakeholders.<br />

Influential<br />

Weak<br />

<strong>Indian</strong> Scenario<br />

Doctors<br />

Distribution<br />

channels<br />

Consumers<br />

Media<br />

Promotion<br />

Insurance<br />

Patient Groups<br />

Exist<strong>in</strong>g New<br />

likely to ga<strong>in</strong> more importance, and thus will be <strong>the</strong><br />

need for newer ways and means <strong>of</strong> target<strong>in</strong>g <strong>the</strong>m.<br />

Lead<strong>in</strong>g MNCs like San<strong>of</strong>i-Aventis, Roche, Lilly,<br />

MSD, and GSK have already started engag<strong>in</strong>g newer<br />

stakeholders (patients) to ma<strong>in</strong>ta<strong>in</strong> <strong>the</strong>ir leadership <strong>in</strong><br />

<strong>the</strong> market. Awareness campaigns, as adopted by MSD<br />

for Gardasil or by GSK for its vacc<strong>in</strong>e portfolio or by<br />

San<strong>of</strong>i-Aventis for its top end brands have helped route<br />

<strong>the</strong> patients to <strong>the</strong>ir products.<br />

7


emerg<strong>in</strong>g trends <strong>in</strong> <strong>the</strong> heAlthCAre system<br />

OPPI-<strong>IMS</strong>CG has identified six key trends <strong>in</strong> healthcare which are likely to <strong>in</strong>fluence <strong>the</strong> way pharma companies<br />

adopt <strong>the</strong>ir sales models <strong>in</strong> <strong>the</strong> next decade. <strong>The</strong>se trends will see emergence <strong>of</strong> new stakeholders and promotional<br />

channels, that no company may afford to ignore, impact<strong>in</strong>g future commercial models. <strong>The</strong>se key trends are:<br />

1. pAtients <strong>in</strong>CreAs<strong>in</strong>gly BeCom<strong>in</strong>g strong stAKeholders:<br />

Increas<strong>in</strong>g education, awareness, and <strong>in</strong>come have prompted patients to actively seek a healthy life-style. Patients<br />

have emerged as stronger stakeholders <strong>in</strong> <strong>the</strong> overall treatment cha<strong>in</strong>, command<strong>in</strong>g what <strong>the</strong>y want, at<br />

<strong>the</strong> price <strong>the</strong>y want, where <strong>the</strong>y want and by whom. Demand for preventive treatment, ra<strong>the</strong>r than curative,<br />

is <strong>in</strong>creas<strong>in</strong>gly becom<strong>in</strong>g prom<strong>in</strong>ent amongst patients. Vacc<strong>in</strong>ation is a case <strong>in</strong> study, where companies like<br />

GSK and MSD have targeted primarily <strong>the</strong> end-user to ramp up patient acquisition. Increas<strong>in</strong>g use <strong>of</strong> health<br />

check-up packages, awareness creation through media promotion, and government <strong>in</strong>itiatives <strong>in</strong> rural healthcare<br />

will only lead to fur<strong>the</strong>r streng<strong>the</strong>n<strong>in</strong>g <strong>of</strong> patients as key stakeholders <strong>in</strong> <strong>the</strong> healthcare system.<br />

• Engages patients by provid<strong>in</strong>g services at<br />

<strong>the</strong>ir home for products like Arava and<br />

Actonel • engages patients by provid<strong>in</strong>g services<br />

at <strong>the</strong>ir home for products like Arava<br />

• Typical services <strong>in</strong>clude<br />

and Actonel<br />

• Counsel<strong>in</strong>g<br />

• Delivery <strong>of</strong> starter kits<br />

• Medical typical services Insurance <strong>in</strong>clude<br />

• Exercis<strong>in</strong>g • Counsel<strong>in</strong>g equipments<br />

• Physio<strong>the</strong>rapy • delivery starter sessions kits<br />

• Diagnostic Tests<br />

• medical <strong>in</strong>surance<br />

• Personalized visit<br />

• Emergency • exercis<strong>in</strong>g help equipments<br />

• physio<strong>the</strong>rapy sessions<br />

• Doctors • diagnostic are reported tests about <strong>the</strong> status <strong>of</strong> <strong>the</strong><br />

patients • personalized visit<br />

• Patient • emergency doesn’t has help to pay anyth<strong>in</strong>g extra<br />

• doctors are reported about <strong>the</strong> status <strong>of</strong><br />

<strong>the</strong> patients<br />

• patient doesn't has to pay anyth<strong>in</strong>g extra<br />

MNCs have been actively engag<strong>in</strong>g customers by provid<strong>in</strong>g disease management services to retail patients<br />

tak<strong>in</strong>g <strong>the</strong>ir products. Counsel<strong>in</strong>g, physio<strong>the</strong>rapy sessions, and diagnostic tests are all services be<strong>in</strong>g provided<br />

to patients. Patient reach programs will require different set ups and servic<strong>in</strong>g teams with specific skill sets.<br />

A lead<strong>in</strong>g MNC vacc<strong>in</strong>e player reaches out to <strong>the</strong>ir patients through an SMS rem<strong>in</strong>der service. An <strong>in</strong>dustry<br />

executive mentioned use <strong>of</strong> call centers for chronic disease management as a possibility. Thus, implementation<br />

<strong>of</strong> patient engagement programs will require adoption <strong>of</strong> different sales and service models, and hence<br />

newer capabilities by market players<br />

2. emergenCe <strong>of</strong> neW heAlthCAre delivery ChAnnels<br />

• Program is called as SPARSH<br />

• • •program Typical services is called <strong>in</strong>clude as spArsh<br />

• Counsel<strong>in</strong>g<br />

• Diagnostic tests<br />

• typical • Query services handl<strong>in</strong>g <strong>in</strong>clude via call center<br />

• Counsel<strong>in</strong>g<br />

• diagnostic tests<br />

• Patient doesn’t has to pay anyth<strong>in</strong>g extra<br />

• Query handl<strong>in</strong>g via call center<br />

• patient doesn't has to pay anyth<strong>in</strong>g extra<br />

<strong>The</strong> hospital segment is strongly emerg<strong>in</strong>g <strong>in</strong> <strong>the</strong> <strong>Indian</strong> healthcare sector. Private and corporate hospitals<br />

have grown at a 15-20% on YOY basis, and <strong>the</strong> trend is expected to cont<strong>in</strong>ue for <strong>the</strong> next 5 years as well.<br />

Penetration <strong>in</strong> Tier II cities and medical tourism will fur<strong>the</strong>r boost growth <strong>of</strong> corporate hospitals. <strong>The</strong> upcom<strong>in</strong>g<br />

<strong>in</strong>crease <strong>in</strong> number <strong>of</strong> corporate hospitals will result <strong>in</strong> a structure where players will not only require<br />

a hospital sales force, but also <strong>the</strong> key account managers to handle relationships with wider set <strong>of</strong> stakeholders<br />

like purchase managers, adm<strong>in</strong>istrative staff, and nurs<strong>in</strong>g staff. Most <strong>of</strong> <strong>the</strong> companies surveyed by <strong>IMS</strong> ei<strong>the</strong>r<br />

already have a hospital division, or are plann<strong>in</strong>g to have one <strong>in</strong> next 2-3 years.<br />

8


3. UptAKe <strong>of</strong> generiCs By government hospitAl seCtor<br />

Mandated prescrib<strong>in</strong>g <strong>of</strong> generics by government hospitals is expected to strongly impact <strong>the</strong> sales <strong>of</strong> branded<br />

drugs <strong>in</strong> <strong>the</strong> long run. Mandated generics prescription <strong>in</strong> <strong>the</strong> West has already led to emergence <strong>of</strong> new sales<br />

model aimed at generics promotion. Though <strong>IMS</strong>CG does not see this trend impact<strong>in</strong>g India much <strong>in</strong> next 5<br />

years, over next decade or so it will be <strong>in</strong>terest<strong>in</strong>g to see what new commercial models pharma players adopt.<br />

<strong>Pharma</strong> companies may also need to engage aggressively with government bodies like pric<strong>in</strong>g authorities, or<br />

approval committees.<br />

4. groW<strong>in</strong>g otC seCtor<br />

Use <strong>of</strong> media <strong>in</strong> driv<strong>in</strong>g brand promotion and reach<strong>in</strong>g out to masses has opened up a new avenue for <strong>Pharma</strong><br />

players to grow beyond traditional channels. Revital, Gelusil, Liv 52, Vol<strong>in</strong>i, No Marks, Croc<strong>in</strong> are <strong>the</strong> classic<br />

case studies, where pharma players expanded <strong>the</strong>ir reach through newer promotional channels like media<br />

promotion or <strong>in</strong>-store brand<strong>in</strong>g. Because OTC implies reach<strong>in</strong>g out to patients and consumers without<br />

doctor <strong>in</strong>tervention, it necessitates focus<strong>in</strong>g attention on pharmacies directly, develop<strong>in</strong>g new distribution<br />

models, pric<strong>in</strong>g and consumer target<strong>in</strong>g. <strong>Health</strong>care FMCG companies like GSKCH, Nestle and Britannia<br />

have a dedicated medical detail<strong>in</strong>g field force meet<strong>in</strong>g doctors and nutritionists to promote <strong>the</strong>ir brand<br />

too. Emergence <strong>of</strong> OTC is fur<strong>the</strong>r expected to catch-up <strong>in</strong> next 5-10 years, with many more companies<br />

eye<strong>in</strong>g to acquire a broader patient base through multi-channel market<strong>in</strong>g. Hence, pharmacos need to adopt a<br />

different model for target<strong>in</strong>g customers<br />

5. orgAnized retAil phArmACy ChA<strong>in</strong>s<br />

Increas<strong>in</strong>g spread <strong>of</strong> organized pharmacy cha<strong>in</strong>s like Apollo, Guardian and 98.4, will make pharma players<br />

th<strong>in</strong>k about manag<strong>in</strong>g <strong>the</strong> grow<strong>in</strong>g power <strong>of</strong> newer distribution channels. Accord<strong>in</strong>g to <strong>in</strong>dustry estimates,<br />

organized retail pharmacy cha<strong>in</strong>s already account for nearly 5% <strong>of</strong> pharma sales <strong>in</strong> India, and <strong>the</strong>ir share is<br />

<strong>in</strong>creas<strong>in</strong>g year on year. <strong>The</strong>se cha<strong>in</strong>s cannot be ignored any longer. Over a period <strong>of</strong> time, <strong>the</strong> role <strong>of</strong> organized<br />

players may evolve from mere distribution <strong>of</strong> drugs to manag<strong>in</strong>g patients’ health. <strong>Pharma</strong> companies may<br />

need to th<strong>in</strong>k about how to engage with <strong>the</strong>se cha<strong>in</strong>s to deliver more and more services to <strong>the</strong>ir patients.<br />

With <strong>in</strong>creas<strong>in</strong>g share <strong>of</strong> sales, <strong>the</strong> demand for fur<strong>the</strong>r discount<strong>in</strong>g by <strong>the</strong>se cha<strong>in</strong>s is not far away. Not only<br />

will <strong>the</strong>se pharmacies demand price discount<strong>in</strong>g, <strong>the</strong>y will impact <strong>the</strong> way <strong>the</strong> supply cha<strong>in</strong> is currently structured.<br />

With media promotion driv<strong>in</strong>g <strong>the</strong> customer pull, merchandis<strong>in</strong>g will take a bigger role <strong>in</strong> overall sales<br />

promotion at <strong>the</strong>se pharmacies. Thus, <strong>the</strong> association between pharmacos and <strong>the</strong>se cha<strong>in</strong>s needs to grow <strong>in</strong><br />

a manner that both parties benefit from <strong>the</strong> <strong>in</strong>ter-play.<br />

6. rise <strong>of</strong> heAlth <strong>in</strong>sUrAnCe<br />

Increas<strong>in</strong>g penetration <strong>of</strong> health <strong>in</strong>surance will <strong>in</strong>crease power <strong>of</strong> <strong>in</strong>surance companies to decide <strong>in</strong>clusion or<br />

exclusion <strong>of</strong> drugs <strong>in</strong> re-imbursement list. It is expected that <strong>the</strong> total population covered under health <strong>in</strong>surance<br />

will <strong>in</strong>crease from 2.3% <strong>in</strong> 2007 to 20% by 2015. <strong>The</strong> possibile emergence <strong>of</strong> a drug re-imbursement<br />

list by <strong>Indian</strong> <strong>in</strong>surance companies cannot be ruled out, which may eventually lead to dictat<strong>in</strong>g <strong>the</strong> bus<strong>in</strong>ess<br />

terms by <strong>in</strong>surance companies to pharma players.<br />

• Companies like ICICI Lombard are now eye<strong>in</strong>g to launch disease specific <strong>in</strong>surance cover<strong>in</strong>g cost <strong>of</strong><br />

medications as well. One such policy, called Diabetes Care, is already <strong>in</strong> <strong>the</strong> market.<br />

9


Includ<strong>in</strong>g <strong>in</strong>surance companies as a key stakeholder <strong>in</strong><br />

<strong>Pharma</strong> commercial model products will <strong>in</strong>creas<strong>in</strong>gly<br />

become crucial.<br />

Each <strong>of</strong> <strong>the</strong> above trends will impact <strong>the</strong> pharma sales<br />

model <strong>in</strong> <strong>the</strong>ir own way, pav<strong>in</strong>g <strong>the</strong> way for new commercial<br />

models <strong>in</strong> <strong>the</strong> pharmaceutical <strong>in</strong>dustry. Industry<br />

also seems to acknowledge <strong>the</strong>se trends as one <strong>in</strong>dustry<br />

executive stated, “<strong>Sales</strong> structures will evolve to manage<br />

new channels like corporate hospitals or modern format<br />

retail. Government policies, payers and healthcare providers<br />

will <strong>in</strong>fluence <strong>the</strong> sales models <strong>of</strong> pharma play-<br />

AdApt<strong>in</strong>g neW CommerCiAl models<br />

Emerg<strong>in</strong>g trends <strong>in</strong> healthcare delivery will force <strong>the</strong><br />

pharma players to re-th<strong>in</strong>k about <strong>the</strong>ir go-to-market<br />

strategy. Some key questions to ask are:<br />

• Is my current sales model susta<strong>in</strong>able <strong>in</strong> <strong>the</strong> future?<br />

• Is my current sales model optimal for future market<br />

scenario?<br />

• How should I evolve and adapt to <strong>the</strong>se changes?<br />

Answers are not easy to come by, but a few companies<br />

will lead <strong>the</strong> way. Accord<strong>in</strong>g to <strong>the</strong> OPPI-<strong>IMS</strong>CG<br />

study, key players <strong>in</strong> <strong>the</strong> <strong>in</strong>dustry believe that adaptation<br />

<strong>of</strong> current sales model will be a must for survival.<br />

With <strong>the</strong> emergence <strong>of</strong> <strong>in</strong>novative sales models like<br />

key account management, hospital task force, channel<br />

management, <strong>the</strong>rapy specialist, and media promotion,<br />

it is clear where sales models are head<strong>in</strong>g. Companies<br />

Figure 7:<br />

sales representative roles fairly<br />

standardized<br />

reach and frequency paradigm<br />

share <strong>of</strong> voice<br />

sf ma<strong>in</strong> promotional channel<br />

molecular target<strong>in</strong>g<br />

<strong>in</strong>dividual <strong>in</strong>centives<br />

technology used by <strong>in</strong>novators<br />

sfe function <strong>in</strong>frequent<br />

empirical decision mak<strong>in</strong>g<br />

ers,” while ano<strong>the</strong>r mentioned “<strong>Sales</strong> force will have to<br />

manage end customer connect besides market<strong>in</strong>g brands<br />

to doctors”. Ano<strong>the</strong>r executive feels patients will ga<strong>in</strong><br />

more importance <strong>in</strong> future, say<strong>in</strong>g, “Most companies will<br />

have focused approach and work towards better customer<br />

service lead<strong>in</strong>g to patient benefit.” OPPI-<strong>IMS</strong>CG feels<br />

that as <strong>the</strong> momentum <strong>of</strong> evolution <strong>of</strong> <strong>the</strong>se trends ga<strong>the</strong>r<br />

pace, so will <strong>the</strong> evolution <strong>of</strong> pharma commercial models<br />

<strong>in</strong> <strong>the</strong> next decade. With <strong>the</strong>se changes, <strong>the</strong> <strong>in</strong>dustry has<br />

witnessed an emergence <strong>of</strong> <strong>the</strong> concept <strong>of</strong> SFE – <strong>Sales</strong><br />

Force Excellence.<br />

are seriously look<strong>in</strong>g to have a dedicated team for rural<br />

markets. Each <strong>of</strong> <strong>the</strong>se models clearly po<strong>in</strong>ts towards<br />

targeted approach to new stakeholders, though it’s too<br />

early to predict <strong>the</strong> nuances <strong>of</strong> each <strong>of</strong> <strong>the</strong> models.<br />

<strong>The</strong> role <strong>of</strong> exist<strong>in</strong>g resources will also evolve from<br />

mere touch po<strong>in</strong>ts with customers to engag<strong>in</strong>g f<strong>in</strong>al<br />

consumers and manag<strong>in</strong>g <strong>the</strong> health <strong>of</strong> <strong>the</strong> patients.<br />

One <strong>in</strong>dustry executive po<strong>in</strong>ts out, “<strong>Pharma</strong> sales<br />

structure will slowly move towards a more scientific<br />

dialogue between <strong>the</strong> sales force and <strong>the</strong> doctor. This<br />

would require highly tra<strong>in</strong>ed MRs with good ability<br />

to engage doctors more effectively.”<br />

This question will be even more pert<strong>in</strong>ent go<strong>in</strong>g forward;<br />

especially keep<strong>in</strong>g <strong>in</strong> m<strong>in</strong>d how difficult it is gett<strong>in</strong>g<br />

to f<strong>in</strong>d good talent <strong>in</strong> <strong>the</strong> market and how to make<br />

exist<strong>in</strong>g talent more effective and productive through<br />

skill-set enhancement.<br />

yesterday today/tomorrow<br />

different roles: (KAm, relationships<br />

rep, sample dropper and power rep)<br />

relationship paradigm<br />

share <strong>of</strong> relationship<br />

mC2 = multi-client/multi-channel<br />

Atomistic target<strong>in</strong>g<br />

team <strong>in</strong>centives<br />

effective use <strong>of</strong> technology<br />

sfe function contribut<strong>in</strong>g to roi<br />

evidence-based decision mak<strong>in</strong>g<br />

10


<strong>The</strong> OPPI-<strong>IMS</strong>CG study predicts <strong>the</strong> gradual shift <strong>of</strong><br />

<strong>the</strong> traditional approach <strong>of</strong> meet<strong>in</strong>g <strong>the</strong> customer, to future<br />

approach <strong>of</strong> relationship build<strong>in</strong>g and engag<strong>in</strong>g with<br />

customers. Much will change. “Manag<strong>in</strong>g <strong>the</strong> patients toge<strong>the</strong>r”<br />

is perceived to be <strong>the</strong> key to success. Del<strong>in</strong>k<strong>in</strong>g<br />

<strong>the</strong> role <strong>of</strong> sales force from stockist management will help<br />

sales teams to focus exclusively on customers. Engag<strong>in</strong>g<br />

multiple stakeholders through multi-channel promotion<br />

and touch-po<strong>in</strong>ts will be <strong>the</strong> crucial. Segment<strong>in</strong>g <strong>the</strong> customers,<br />

from current Potential-Support Model to more<br />

evolved models like Behavioral Segmentation will provide<br />

<strong>the</strong> cutt<strong>in</strong>g edge to <strong>the</strong> players. e-detail<strong>in</strong>g, e-sem<strong>in</strong>ars,<br />

e-doctor meet<strong>in</strong>gs, and onl<strong>in</strong>e awareness campaigns<br />

will drive <strong>the</strong> patient flow to <strong>the</strong> healthcare system. Thus,<br />

KPIs for <strong>the</strong> sales forces may evolve as well.<br />

Industry experts also predict that evolv<strong>in</strong>g and harvest<strong>in</strong>g<br />

newer touch po<strong>in</strong>ts with patients will be a key to success.<br />

Study <strong>of</strong> patient flows <strong>in</strong> healthcare is likely to ga<strong>in</strong><br />

importance. Not only will patient flow study impact <strong>the</strong><br />

sales model, it will also impact <strong>the</strong> portfolio choice for <strong>the</strong><br />

players. An <strong>in</strong>dustry executive po<strong>in</strong>ted out, “Key Account<br />

Management will have <strong>in</strong>creas<strong>in</strong>g importance for MNCs<br />

with pipel<strong>in</strong>e <strong>of</strong> patented products and strategic partner<strong>in</strong>g<br />

<strong>in</strong>itiative will also impact sales models.”<br />

With<strong>in</strong> <strong>the</strong> last 5 to 6 years, companies have also created<br />

a dedicated SFE function, with <strong>the</strong> purpose <strong>of</strong> improv<strong>in</strong>g<br />

<strong>the</strong> productivity <strong>of</strong> <strong>the</strong> sales forces. <strong>The</strong> role <strong>of</strong> SFE is<br />

expected to evolve strongly over <strong>the</strong> next 5 years, <strong>in</strong>volv-<br />

Figure 8:<br />

Smaller field<br />

forces:<br />

removal <strong>of</strong><br />

mirrored field forces<br />

Right siz<strong>in</strong>g:<br />

each rep see<strong>in</strong>g<br />

30-40 doctors<br />

more <strong>of</strong>ten<br />

Account based<br />

sell<strong>in</strong>g: manag<strong>in</strong>g<br />

groups <strong>of</strong> prescribers<br />

based on % effort and<br />

not reach & frequency<br />

Key Account Mgt:<br />

relationship rep can<br />

call <strong>in</strong> specialized<br />

personnel as needed<br />

<strong>the</strong> sales<br />

model <strong>of</strong><br />

Today<br />

MNCs are expected to lead <strong>the</strong> change and that trend <strong>of</strong><br />

micro-target<strong>in</strong>g has already begun. Companies like MSD,<br />

San<strong>of</strong>i-Aventis, and Roche have shown that value, and not<br />

cost, drives <strong>the</strong> healthcare choice. Januvia, (though much<br />

lesser than <strong>in</strong>ternational price) is priced much higher and<br />

<strong>in</strong>g <strong>in</strong>-depth analytics so as to lead to scientific decision<br />

mak<strong>in</strong>g; from coord<strong>in</strong>at<strong>in</strong>g sales force activities to manag<strong>in</strong>g<br />

ROI through <strong>in</strong>formed decision mak<strong>in</strong>g with an end<br />

objective <strong>of</strong> improv<strong>in</strong>g efficiencies <strong>of</strong> exist<strong>in</strong>g systems.<br />

As one executive said, “<strong>The</strong>re will be a concerted focus<br />

on SFE. Analytics will take over an important role <strong>in</strong> decid<strong>in</strong>g<br />

sales force size and predict<strong>in</strong>g sales forecast.” Measures<br />

<strong>of</strong> success will shift from PRPM model to carry-over<br />

models, thus, each <strong>in</strong>cremental sales rep be<strong>in</strong>g added to<br />

sales force will have its own justification. With erod<strong>in</strong>g<br />

product differentiation <strong>the</strong> sales and market<strong>in</strong>g capabilities<br />

will be <strong>the</strong> key differentiator. <strong>The</strong> <strong>Indian</strong> pharma <strong>in</strong>dustry<br />

will need to develop sales force competency and<br />

elements <strong>of</strong> SFE will take <strong>the</strong> driv<strong>in</strong>g seat. <strong>The</strong> reward<br />

systems will <strong>in</strong>corporate balance <strong>of</strong> sales achievement<br />

with equal emphasis <strong>in</strong> effort parameters.<br />

Consider<strong>in</strong>g that <strong>the</strong> largest resource allocation <strong>in</strong> companies<br />

takes place on sales teams, it becomes important<br />

that SFE as a function be evaluated more seriously. In<br />

order to <strong>in</strong>stitutionalize <strong>the</strong> discipl<strong>in</strong>e <strong>of</strong> SFE, companies<br />

will need to build capabilities for an enterprise-wide SFE<br />

setup which will be actively engaged <strong>in</strong> enabl<strong>in</strong>g <strong>in</strong>vestments<br />

<strong>in</strong>to <strong>in</strong>novative and hybrid sales models or demand<br />

generation models. To do this successfully and build a<br />

better bus<strong>in</strong>ess case for <strong>the</strong> same, companies will need<br />

to closely exam<strong>in</strong>e how <strong>in</strong>vestments are channelized <strong>in</strong>to<br />

each <strong>of</strong> <strong>the</strong> various <strong>in</strong>itiatives – balanc<strong>in</strong>g f<strong>in</strong>ancial rigour<br />

with overall implementability.<br />

Prescriber Knowledge<br />

opportunity - Accessibility - responsiveness<br />

Organizational <strong>Models</strong><br />

<strong>the</strong>rapy focused - team based - outsourc<strong>in</strong>g<br />

specialist - Key Account mgt.<br />

new bonus and compensation models<br />

patient flow - local guidel<strong>in</strong>es/Bodies<br />

<strong>in</strong>fluence to diagnose & prescribe<br />

Portfolio Treatment Pathways & Influence<br />

<strong>the</strong> sales<br />

model <strong>of</strong><br />

<strong>The</strong> Future<br />

entered recently <strong>in</strong> <strong>the</strong> market, has already clocked sales<br />

<strong>of</strong> >Rs 100 crs. Thus, its well said by a pharma executive:<br />

“<strong>The</strong> way <strong>of</strong> market<strong>in</strong>g differentiated products, depend<strong>in</strong>g<br />

on <strong>the</strong>ir life cycle stage, will be <strong>of</strong> utmost importance.<br />

Newer ways <strong>of</strong> promotion too will have to be considered.”<br />

11


Conclusion<br />

Decl<strong>in</strong><strong>in</strong>g effectiveness <strong>of</strong> current sales models will only<br />

lead to emergence <strong>of</strong> newer approaches <strong>in</strong> pharma sell<strong>in</strong>g.<br />

Though <strong>the</strong> approaches will vary vastly from company<br />

to company, <strong>the</strong> trend has already started. <strong>Pharma</strong>ceutical<br />

players should seriously start evaluat<strong>in</strong>g <strong>the</strong>ir options<br />

and envisage how <strong>the</strong>ir sales models should evolve <strong>in</strong> <strong>the</strong><br />

next 10 years to ma<strong>in</strong>ta<strong>in</strong> <strong>the</strong>ir competitive edge. Where<br />

does <strong>the</strong> future lie? Is KAM <strong>the</strong> solution,or is it <strong>the</strong> CSO<br />

that will emerge? Will channel management ga<strong>in</strong> most<br />

importance? To what extent should market coverage be<br />

<strong>in</strong>creased? How would one need to balance this with<br />

cost effectiveness?<strong>The</strong> answers will emerge only with <strong>the</strong><br />

time, but with market matur<strong>in</strong>g, patients actively seek<strong>in</strong>g<br />

healthcare, and newer stakeholders emerg<strong>in</strong>g, ano<strong>the</strong>r<br />

round <strong>of</strong> adaptation <strong>in</strong> pharma sales model is <strong>in</strong>evitable.<br />

No s<strong>in</strong>gle bus<strong>in</strong>ess model may suffice <strong>in</strong> future. <strong>The</strong> future<br />

will belong to hybrid bus<strong>in</strong>ess models, with different<br />

structures co-exist<strong>in</strong>g toge<strong>the</strong>r.<br />

We would like to acknowledge <strong>the</strong> contributions <strong>of</strong> <strong>the</strong> follow<strong>in</strong>g OPPI – SFE Committee Members :<br />

Mr. Rajan Tejuja, Chairman, OPPI SFE Committee and President & Executive Director, Johnson & Johnson Ltd.<br />

Mr. V<strong>in</strong>ay Gokhale, Vice Chairman, OPPI SFE Committee and <strong>Sales</strong> Tra<strong>in</strong><strong>in</strong>g & Development Manager, Abbott India Ltd.<br />

Mr. Sekar Sabapathy, Member, OPPI SFE Committee and Senior Director – Cardiology & Hospital BU, Aventis <strong>Pharma</strong> Ltd. (Group San<strong>of</strong>i Aventis).<br />

Mr. Biplab Chatterjee, Member, OPPI SFE Committee and Vice President – <strong>Sales</strong>, Solvay <strong>Pharma</strong> India Ltd.<br />

Mr. Partha Ghosh, Member, OPPI SFE Committee and Director, Commercial, Pfizer Ltd.<br />

Mr. Vivek Padgaonkar, Director, OPPI.<br />

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