Optimising commercial operations

Over the last fifty years the pharmaceutical industry has built up its sales forces and refined its marketing practices principally around targeting primary care physicians and selling blockbuster products. Today these operations consume 20 to 25 per cent of a company’s revenues. Yet they are becoming increasingly ineffective as providers are restricting sales representative access to physicians, results from direct to consumer advertising are disappointing, and payers are ratcheting down prices.

It is now clear that pharma’s commercial operations need to change. But how should they change? At the same time as commercial operations are stagnating, the products coming through the pharma pipeline, increasingly, are specialty products, which are focused on smaller patient populations and specialists. And although these products promise much more in their ability to decrease morbidity and mortality, they will also come to market costing much more per course of therapy. This will accentuate the pressures between pharma commercial operations on the one side and payers and providers on the other.

We believe that to succeed, pharma’s commercial operations must reach beyond just trying to create value for the industry, and adopt a posture of seeking to provide value to payers, providers and patients.

  • The first step is to focus on what is being sold, in the context of how it is sold:
    • Rigorously reviewing the research & development pipeline from the payer’s perspective will help to reveal products which may meet expectations for efficacy and safety, but fall short of what the payer will buy.
    • Removing these products from the pipeline will save millions of dollars and allow scarce resources to be funnelled to other, more promising candidates.
    • Building the payer’s perspective into the planning process earlier will protect the pipeline, and increase the opportunities for marketing and sales to succeed.
  • The second step in the process is to create a specialty products culture through-out the enterprise. This will facilitate commercial operations that effectively bring to market products enrobed with diagnostic markers, physician education and patient compliance programmes, all focused on ensuring a positive clinical, as well as economic, outcome. In the process, sales forces will be right-sized to target a smaller specialist physician audience instead of primary care physicians.
  • Finally, it is important to work with payers and providers to achieve common goals. The value chains for payers, providers and pharma are not as independent as they once were; one stakeholder cannot succeed if the others fail. Pharma commercial operations therefore should focus on finding opportunities to work with payers and providers to pilot new ideas utilising the best capabilities of each organisation.
How PwC can help you

PwC pharmaceuticals & life sciences practice, offers a wide array of services to help pharmaceutical and biotech companies meet the challenges of this changing environment.

We have teams working closely with leading payers and providers across the globe, and we understand the issues around the use (and cost) of pharmaceutical products from both their perspectives and yours.

We are well positioned to help you research, develop and pilot novel approaches to marketing and selling your products be they for specialty or blockbuster and can help differentiate your organisation in the market, forming the basis for sustainable commercial operations.

For further details, please read Pharma 2020: Marketing the future.