Inflection Point Strategies: Enabling High-Performance through the Marketing and Sales Function in the US Biopharmaceutical Industry

With significant challenges facing the US biopharmaceutical sector―slumping investor confidence, pricing pressure, patent expiration, increasing compliance challenges―Accenture's new study shows that the industry has reached an "inflection point" where organizations must move from the old ways of doing business to new approaches in order to remain competitive.

A particular concern for pharmaceutical companies is that the traditional "reach and frequency" marketing and sales model is no longer working. While it has certainly delivered in the past, the wide replication and adoption of this approach has, more recently, alienated physicians and eroded sales force effectiveness.

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A large promotional budget and hard-hitting sales force no longer define high performance in biopharmaceutical marketing and sales.

To help identify and define a new approach to sales and marketing within the pharmaceutical industry, Accenture recently conducted a High Performance marketing and sales study. The study includes surveys and interviews with executives from 18 major pharmaceutical and biotech organizations in North America, focusing on the capabilities and skills required to succeed in the future. The study revealed that companies are executing a number of strategies to overcome the shortcomings in their current sales and marketing models. The common elements of these strategies include: improving critical aspects of the current business model, instituting new capabilities to drive competitive advantage and "changing the game" by defining new business practices.

Perhaps most concerning, widespread replication of traditional "reach and frequency" marketing and sales tactics has alienated physicians and eroded sales force effectiveness.

Study participants revealed that pricing pressures are the No. 1 challenge for these executives. They also acknowledged an urgent need to fix relationship gaps, especially with physicians. Only 15 percent say that they have trust-based relationships with customers across all major customer categories. All the executives surveyed confirmed that talent, appropriately skilled and nurtured, will play a critical role in creating the capabilities to bridge the gap between today's model and tomorrow's success.

Industry executives express varying degrees of confidence in the ability of their marketing and sales functions to address these challenges. But as they increasingly recognize the shortcomings of today's model, their commercial focus is steadily shifting.

There is no single approach to developing a strategy to deal with an inflection point. Since much depends on a company's product portfolio, its organizational readiness and tolerance for risk, transition times can be very different for each organization.

Any inflection point, however, provides the opportunity to erect the building blocks of high performance and achieve differentiation. A company in an industry at an inflection point can set a trajectory toward industry leadership. Now is the time for US biopharmaceutical companies to seize that opportunity.

During an inflection point, an organization is forced to prepare for tomorrow while still operating today. As our research shows, US biopharmaceutical companies have adopted different responses to that challenge as executives begin to recognize the shortcomings of today's model. While companies are not necessarily creating a single, comprehensive and coherent strategy, some common strategic elements are beginning to emerge.

Our research revealed three general strategies for inflection point success:

• Ready today's model by improving critical aspects of the current business model in an attempt to slow declining performance.
  
  
• Institute new capabilities to drive competitive advantage and boost performance.
  
  
• Change the game by defining new business practices to create a new performance trajectory.

Relative to each strategy, our research tested a series of emerging imperatives:

• Sales Reinvented: future emphasis on reinventing and improving the physician dialogue.
  
  
• Industrialized Analytics: establish more fact-based, decision-making processes.
  
  
• Large-Scale Cost Removal: free up resources and capital and redirect them toward core areas of the business to drive future growth.
  
  
• Multichannel Marketing: design, execute and assess customer-focused initiatives across all channels, integrated data and coordinated processes and automation.
  
  
• Commercial Compliance: mitigate risks by leveraging customer information, business processes and supporting analytics to provide a total view of the interaction and relationship with health care providers.
  
  
• Non-Mega Brand Excellence: requires more targeted promotional strategies and tactics.
  
  
• Innovative Product Differentiators: to better communicate the clinical benefits and economic outcomes of a product.
  
  
• Patient Relationship Management: creates the opportunity to differentiate by establishing and maintaining long-term relationships with patients that go far beyond traditional, mass-media, direct-to-consumer relationships.

Biopharmaceutical companies should pursue a mix of all three inflection strategies—ready today's model, institute new capabilities, and change the game—focusing especially on readiness and the institution of new capabilities, to achieve the new model.

Executives who lead today will win tomorrow by defining their own inflection point strategy. This should be based on a point of view about the future industry landscape. It should also evaluate current capabilities and portfolios, define risk tolerance (and thus the degree of aggressiveness with which to pursue the strategy) and create a change agenda and corresponding set of imperatives.

Successful companies will align the leadership team around this change agenda, fast-track their chosen imperatives, evaluate and reconfigure their talent base, and create a program structure robust enough to manage the ongoing transformation journey to high performance.

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