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Branching out PharmaTimes November 2007

Pharmaceutical companies are in an ideal position to help doctor practices and PCTs with the business-to-business skills required to effectively implement practice-based commissioning. But the industry has been slow to take up the opportunity. What are the reasons for pharma’s trepidation?

While nearly three-quarters of all UK primary care trusts have signed up to practice based commissioning, many clinicians and commissioners are still struggling with the financial management, as well as the sourcing and purchase of services, that the new system demands. The pharmaceutical industry has these skills in abundance, yet it is failing to capitalise on this as a way to build strong, lasting and profitable relationships with customers.


As Jason Bryant, Director of the Pharmaceutical Business Unit at healthcare information specialists Binley’s, notes: “On the face of it there would appear to be an unprecedented level of opportunity, with PBC Groups openly admitting that they are in need of pharma’s business-related skills and products, yet closing their doors to sales representatives. We know that the PBCGs need to learn how to drive business planning in their local areas to achieve the commissioning of relevant services that meet local needs. We know that pharmaceutical companies can provide these skills and support to their customers, although their objectives preclude such ‘open-ended’ and immeasurable support arrangements…so pharmaceutical companies ought to be rubbing their hands with glee.”


But this doesn’t appear to be the case. The existence of ‘no representative policies’, and the fact that global brand strategies eclipse customer needs at a local level, have made it difficult for the industry to work with local practices and PBC Groups to ensure its products are used in the appropriate setting within local care pathways.


It would seem that 40 years of repetitive detailing has taken its toll on the doctor/ representative relationship and, while NHS customers are seemingly crying out for pharma’s help in terms of business-related skills, business planning and help in achieving their commissioning objectives, they are reticent to open their doors to the current incarnation of medical sales representative.


With entire teams of medicines management groups and primary care trusts now implementing a ‘no representative’ policy, Bryant suggests this might be the red light pharma needs in order to re-think the type and level of person it sends out to potential customers.


Industry expert Peter Dunkley agrees that much of the difficulty pharma now faces is of its own making. Medical representatives need to move away from the current sales model and be more flexible in their approach to customers, he suggests. “Healthcare development executives and managers would be better off saying they have a commercial imperative and find a genuine opportunity to add value. So, for example, if the PCT needs to lower waiting times then offer to help by doing a, b or c,” he says.


Medical representatives would also be in a much better position to gain access to doctors if companies placed less emphasis on meeting targets, and more on seeing people according to their function rather than their job title. He says it is no surprise the NHS asks representatives ‘why should I see you?’. “We need to be more circumspect about who we see and both parties need to feel valuable with a useful plan of action,” he says. We must encourage our representatives to understand local priorities and go into the visit in a position of knowledge so that they earn the right to further information.”


Supporting the HDM

Understanding the local NHS environment and the prescribing and clinical relationships between primary and secondary care has been the domain of the healthcare development manager or executive within an organisation, but many companies are failing to support this changing role. “There’s an attitude of ‘let’s just carry on’, says Dunkley, but “healthcare development managers or executives need to be able to reel off a list of who to see and which buttons to press. They could start by simply ‘Googling’ their customers before meeting them”.


Moreover, while the pharmaceutical industry operates, plans and thinks globally by brand, it fails to align itself with the needs of many locally planned and developed PBC Groups. Bryant believes there are thousands of opportunities for pharmaceutical companies to partner with them and have their products integrated into the various care pathways. But “these two very different planning and implementation models will simply not mesh,” he says.


A typical global pharmaceutical company will set out a global brand strategy, which is distilled down by country and then reverse engineered using a proxy measure (market potential, population, prevalence, etc) to region and territory. But Bryant doubts that many companies would allow their sales teams to distill the brand strategy down to individual PBC Group business plans. He maintains that account management models and account plans will not drive the business objectives unless they’re allowed to focus on areas such as localised agendas, care pathways and patient group directives. And this, he says, is something that will take a major rethink of how pharma plans its business.


However, there are small signs of change. The advent of the market access team has eased the route to “the right type of local health economy with the right kind of therapeutic proposition”.


Pharma evaluating its structure

A number of companies are evaluating their structures for 2008 and beyond, and are looking at differential resourcing models and key account management practices. Some are even considering their structures, taking into account commissioning boundaries, regional procurement influences and, of course, localised commissioning plans, PBCG business plans and PCT priorities around specific disease areas.


But he admits it will take a brave company to throw away the traditional sales model of representative-led message delivery in favour of a senior ‘relationship manager’ who handles all interactions between an allocated NHS customer group and their employer, with no hard and fast sales/market share targets to hit in the short term.



The problems and opportunities of PBC

PBC is the most important of the recent NHS reforms and is central to the future of the UK health service. “The sheer extent of the roll-out, the breadth of their agenda, the variety of local agendas, and the prevalence of supplementary prescribers to help implement reform are all markers that this is not another ‘flash in the pan’ or indeed a re-run of fundholding under a different name,” says Jason Bryant, Director of Binley’s’ Pharmaceutical Business Unit. At the same time, the new system is struggling to meet its objectives to improve the quality of patient services and access to care. For the scheme to be successful it needs to operate at a local level, with frontline staff directly handling the funds, but this has meant financial control being handed down to more than 1,000 PBC Groups.


Some practices have chosen to pool their budgets and form PBC Groups that operate as consortia, with shared decision-making responsibility. Typically, the spread of knowledge, skills and experience in these groups is drawn from collaboration between healthcare professionals, voluntary organisations, and members of the private sector. There is also a significant diversity in commissioning agendas between groups.


Implementation difficulties

A lack of clarity and poor levels of crossfunctional communication, as well as the wider problem of limited understanding of ‘business-to-business’ commercial processes, such as commissioning, negotiating and marketing, have hampered proper implementation of the process in many areas. In some cases, commissioning may be transferred to PCTs because of a PBC Group’s inability to carry out the role effectively. Senior commissioners within the NHS even go so far as to say that their commissioning is ‘sub-optimal’, says Bryant.


A route map for satisfying customers

Under PBC, all practices receive a minimum indicative budget that will be increased over time to support the purchase of services as agreed with the PCT. At the moment, budget is determined by list size, so if a practice is well run, and the service to patients improves, then more patients are likely to join the practice and the practice’s budget increases. Financial management and the sourcing and purchase of services demand very different skills from those acquired at medical school. Industry, of course, has these skills and is effectively being given a route map for satisfying its medical customers’ needs.

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