The folks over at Deloitte are not so subtly pounding the drum about inevitable and dramatic change coming in life science sales methodologies – and are providing a rationale as to why pharma should in fact “blow up” the current sales force model. This is an important thesis to consider particularly if your entity is near enough to having an approved product in hand and ready for commercialization and the financing strategy is being architected around how best to acquire market share.

“Blow up the sales force. Replace the sales force model with something that adds more value to the process. Consider following the lead of the life insurance industry, which replaced captive sales forces with third-party agents that objectively represent multiple companies.” Deloitte Debates

Clearly the state-of-the-state is one that is undergoing some unique pressures; from impending patent expirations where approximately $60B in US drug sales will be lost between 2010-2012 (Source: Parexel Statistical Sourcebook), to the reduction of R&D productivity relative to an increase in expenditures as determined by the rise in R&D spend paired with the reduction in discovery of NME’s (Source: Parexel Statistical Sourcebook and Deloitte analysis). Add to these trends the anticipated yet amorphous health care reform; the increase in consumerism where customers are becoming more and more educated and active; a payor ecosystem undergoing a restructuring; an environment of pay for performance where treatment decisions may be increasingly influenced by quality measures; the delivery of care which is becoming more decentralized; and the accelerating march of health care related information technology innovation. These elements and beyond combine to impact the design of a go-to-market strategy.

Finite commercial resources that were once simply allocated to physicians, managed care and patients must now include planned spend on additional elements such as evidence generation, quality and clinical guidelines.

In order to build a competitive commercial market strategy it is important to:

1. Recognize that influence is consolidating as the needs of customers evolve and grow increasingly interdependent
2. Consider moving from a ‘Push’ to a consumer-centric model to create a dialogue, gather insights and translate customer needs into meaningful solutions
3. Leverage alternative channels to redefine reach and provide information the way customers want to consume it, and
4. Remain vigilant as the regulatory pendulum continues to swing and commercial practices become increasingly scrutinized

The general takeaway, courtesy of W. Scott Evangelista Principal with Deloitte, is that although companies do not necessarily need to blow up their sales forces today, a fundamental change to how products are sold is inevitable. Whether or not third-party independent representation becomes the sales model it is critical that action is taken now to become more customer-centric in the face of diminishing returns on commercial spend. Companies must put their products in a context that makes clinical sense for their customers. This requires a much deeper understanding of customers and the issues they face. Key focus areas to consider:

• Incorporate consideration for commercial implications early in product development. Collaborate early with payers and other key stakeholders to design studies and develop products, and then keep them involved throughout the product lifecycle. Enhance portfolio management to help assess the commercial viability of products in the pipeline and go/no-go decisions for moving forward. Focus on differentiated product value beyond safety and efficacy. Increase focus on health outcomes research and comparative effectiveness data to understand clinical differentiators and overall effectiveness. Incorporate focus on economic value and cost-effectiveness.
• Re-allocate resources to put more emphasis on meeting payer needs. Conduct research to gain insight about payers and appropriately segment and target key accounts. Enhance marketing and sales capabilities directed at payers. Improve the account management skills of individuals who interact directly with payers. Increase collaboration and use of payer partnerships to share risk, contain costs and create value.
• Use advanced analytics to optimize investments. Build superior data management and analytical capabilities to improve resource allocation and ROI. These advanced capabilities can be applied in a variety of ways, such as: enabling companies to better understand and optimize their marketing mix; extending physician targeting beyond top decile prescribers by incorporating other factors such as marketing mix, payer position and physician behavioral profiles; and reducing resources allocated to direct-to-physician sales and increasing the focus on non-personal promotion and new channels to boost ROI.
• Develop a more targeted approach to personal promotion. While the traditional product detail is no longer sufficient on its own nor valuable in many cases, it still has a place in the commercial toolkit. Build flexible field forces which can be leveraged across products and are deployed in a much more focused manner, based on physician preferences. These representatives can serve an important role in driving pull-through during specific inflection points in the product lifecycle such as launch and during competitive market events.

Some third-party life science sales orgs to keep an eye on include:

• Innovex (Quintiles)
• PDI
• inVentive Health