The evolving CSO landscape

Outsourced field sales is becoming only part of what CSOs are offering their pharma clients


W. Scott Evangalista Mary Anne Greenberg Michelle Keefe Nancy Lurker Paul Mignon
W. Scott Evangelista
Quintiles
MaryAnne Greenberg
Ashfield
Michelle Keefe
Publicis Touchpoint
Nancy Lurker
PDI
Paul Mignon
inVentiv Health

In a way, contract sales organizations (CSOs) have had to contort themselves to the same pressures that their pharma-manufacturing and -marketing clients have: the growing difficulty of reaching physicians; the pressure to deliver better results at lower costs; the growing complexity of multichannel marketing campaigns; and the underlying, digitally based technologies that support those channels. Conversations with the leading CSOs—among them, Ashfield Commercial & Medical Services (part of United Drug), Quintiles, inVentiv Health Selling Solutions, Publicis Touchpoint Solutions and PDI—show them to be trying out new business models, broadening their palette of service offerings and making internal investments in new technology platforms. Meanwhile, a slew of smaller CSOs, less geared, perhaps, to multinational, multibrand manufacturers, are carving out specialized opportunities within niches in the market.


Overall, however, the business advantage of CSOs, from a cost-per-rep basis, remains the ability to “dial up and down” the rep count, based on the duration of a contract with a pharma client. “Flexibility and quality—those are the two things pharma clients want with an outsourced CSO service,” says Paul Mignon, president of inVentiv Health Selling Solutions (Somerset, NJ). “CSOs need to be able to service all aspects of the product life cycle,” adds Nancy Lurker, CEO of PDI (Parsippany, NJ). “That can range from a few months of making calls on primary-care physicians to handing out samples and literature for a product near the end of its patent life cycle, to highly specialized, experienced sales teams for the launch of a new specialty product.”

Two milestones define the CSO environment: a turnaround in the industry count of employed reps (indicating heightened expectations of business growth by their employers); and the growing complexity of reaching and interacting with prescribers, as evidenced by the growth in “no-see” physicians.

From a peak of around 102,000 in 2005, the count of reps has declined 39% through mid-2014, according to data compiled by ZS Associates (Chicago, IL), a marketing-consulting firm. Pratap Khedkar, managing principal at ZS Associates, says that a turnaround appears to be in the works, driven in part by the growth of specialty product introductions, and in part because brand-to-generic drug conversions have peaked (meaning that fewer sales forces will be affected when drugs go off patent). Whether the turnaround has begun or not, at least the industry shouldn’t be subjected to “death of the pharma rep profession” headlines that have been published for the past few years.

evolving CSO graphic
Credit: QuantiaMD
 
pharma sales process graphic
Quintiles’ view of how the pharma sales process has become more involved. Credit: Quintiles

CSO proportions have held relatively steady during that downturn; outsourced reps represented about 8% of the US workforce around 2010–11, says inVentiv’s Mignon, and now are about 11%; by comparison, outsourced reps are roughly a third of the workforce in Europe, where the practice has traditionally been more commonly accepted. That higher proportion is one of the reasons CSOs operating in the US see potential growth. “The European market, being mostly a single-payer one, is more difficult to handle for sales and marketing,” notes W. Scott Evangelista, president of Quintiles Integrated Commercial Services and Solutions (of which contract sales is a significant part).


The “no-see” physician issue is more problematic, yet most sources agree that this development is automatically a limitation on the effectiveness of sales reps (whether employed or contracted). The no-see data are widely known: upwards of 53% of healthcare providers were “not easy” to access in 2014, according to ZS Associates polling, compared to 23% back in 2008. Not only are many physicians more resistant to rep visits (usually citing their limited free time); more of them are employees of integrated health systems, many of which impose strict rules on physician access.

On the other hand, a number of data sources show that the desire for access to information about drugs is as strong as ever—and that reps serve a valuable function in helping physicians obtain desired information. Capgemini Consulting did a study (“Working the System: Four Trends Driving New Opportunities for Engaging Physicians in Organized Provider Systems”), with the online physician community Quantia this fall, finding that just over 40% of physicians see value in “partnering” with pharma companies for self- and staff-education. (The survey of Quantia-connected physicians also found that the number of no-see docs had risen from 27% in 2013 to 42% in 2014.)

Another study, by Publicis Touchpoint Solutions and the online community SERMO, found that in fact, more than half (56%) of physicians would like to see more sales reps—specifically those in primary care. Specialty physicians had an even higher percentage—91%.

Neither of these studies is rigorously objective—starting from those who participate in the two online forums; however, one could expect that such connected physicians would be even less inclined to favor sales rep visits than the broader cross-section of all physicians. All of which points to the effect that the combination of employer restrictions, and formulary decision-making being taken out of the hands of prescribers, is having on physician preferences these days.

Both studies—as well as other market-research data—point to the synergy between having a rep in contact with physicians, and having a well-performing web presence or digital outreach. The Cegedim/Quantia study showed that 76% of physicians have a preference for online communication channels; the Publicis Touchpoint Solutions study showed that physicians want informed reps, coming to them with iPad-enabled digital presentations, disease-specific websites and more use of e-mail in communicating with them. The topper is the ZS data, collected in that company’s newly established ZS Affinity Monitor service, that shows that a) e-mails from the sales rep are opened at two to three times the rate of anonymous e-mail blasts from the manufacturer or a third party; b) the existence of rep detailing drives nearly 20% of brand website traffic; and the highest “message retention” by physicians occurs when nonpersonal promotion is combined with the rep interaction. “Digital and personal promotion are not in competition with each other,” says ZS Associates’ Khadkar, managing principal at ZS Associates.

These findings represent a new level of evolution in the impact of digital communications on pharma marketing; the dominant view for several years now has been that as nonpersonal promotion rises, rep activity (and the number of reps) should fall. The CSOs are responding to this environment with programs that explicitly combine digital and personal communication, leading to what ZS calls the “orchestrator” of communications, and what Touchpoint calls the “hybrid” sales rep.

“The hybrid rep who can manage multiple communication channels, acting as the quarterback of a variety of customer services to the physician is where the growth is,” says Michelle Keefe, newly appointed president of Publicis Touchpoint Solutions. “We’ve overhauled our internal IT services to enable this true multichannel type of work.”

“Physicians interacting with our reps derive a great deal of benefit from the combined personal and digital communications that our field forces are equipped with,” says MaryAnne Greenberg, president, NA, of Ashfield Commercial  & Medical Services. She emphasizes how Ashfield’s combined services of field sales, call centers, sample distribution programs and clinical educators offered to the industry are particularly appealing to emerging pharma companies where all of these services might not be available or desirable within the staffing of those emerging companies.

inVentiv’s Mignon adds that the company’s staffing in Europe—and the European rep business generally—is more experienced in digital communications than much of the US market, and inVentiv is bringing that expertise more and more into the US market.
A “holistic” solution is how Quintile’s Evangelista characterizes its approach: “Clients want a business solution that knits together the range of communication services, and to tailor those solutions to the market conditions in segments of the healthcare industry, both operationally and geographically.”

sales force reduction chart
credit: ZS Associates

SFA—plus analytics
All of the CSOs tout their expertise in, and flexibility with, sales force automation (SFA) tools, notably the customer relationship-management systems that are de rigeur in selling today. And while all of them make a point of mentioning Veeva, the cloud-based system that has proven widely popular since the iPad became an essential salesforce tool, all of them, too, emphasize that they’ll adapt to any SFA system that a client prefers—something that could be especially critical when an outsourced sales force is working alongside the company’s own team. However, just as 2015 began, Publicis Touchpoint Solutions announced a strategic relationship with Cegedim Relationship Management (now in the process of becoming a business unit of IMS Health). The announcement is notable in that Touchpoint was the first CSO to adopt Veeva, back in 2007.


“Our clients are connecting with their customers through a wide range of channels, from in-person to virtual, and we design custom solutions to support their multi-channel engagement,” said Keefe of Publicis Touchpoint Solutions, in a statement. Cegedim’s cloud-based customer relationship management (CRM), closed loop marketing (CLM), and remote detailing solution (Mobile Intelligence) is now its CRM of choice when no other client preference is expressed.

CSOs—and the SFA vendors that support them—have been moving the yard markers on what constitutes a state-of-the-art CRM system: the game is now to incorporate market data and analytics (which may or may not originate in the pharma clients’ own systems) into the resources on hand for field sales teams. PDI has a service called PD One; Touchpoint has a service called T-App. Both are intended to bring clinical and market data into the mix to enable sales reps “to make good decisions” in the field, as Touchpoint’s Keefe puts it. These services compete with a wide range of other analytics, from standalone IT companies to industry heavyweights like IMS Health, Symphony Health Solutions and many others.

At Ashfield, an integration of services is going on between the commercial team and other acquisitions made by Ashfield’s parent, United Drug, notably KnowledgePoint360, a group of consulting and market-research firms that can lend subject-matter expertise to the reps’ sales efforts.

Quintiles’ Evangelista uses the term “nimbleness” to characterize how its sales reps, empowered with analytics on physician preferences and clinical data, provide a higher level of value for the investment that a pharma company makes in outsourced sales. “Historically, a pharma company would put in an order for a quantity of reps” to be sent into the field, he says, but with Quintiles own management of sales force utilization and analytics support, a better value can be obtained. In a recent test, the company managed 50% of a client’s sales force (with Quintiles reps) while the company managed the other 50%; after six months, a demonstrably higher level of performance was seen with the Quintiles half.

Not just repping
Another pronounced trend in the CSO business is that it’s no longer a matter of field sales reps alone—now the efforts are more distributed across call-center customer service staff, nurse educators and medical science liaisons, as well as reps. Ashfield’s Greenberg, while noting that a call center “still has the best ROI” (return on investment) of any of these outsourced services, highlights the substantial growth the company has seen in its nurse educator services, with that staff tripling over the past three years. “The new specialty products, with complicated self- or office-administered injections, make these nurse educators very valuable to doctor’s office staffs, and that, in turn, opens the door for reps getting face time in those offices,” she says.

Coming from a quite different direction—but having the potential to bring a new level of service expertise to the market—PDI has recently invested in a pair of molecular diagnostics companies, Asuragen and Redpath Integrated Pathology. Molecular diagnostics is widely recognized as the coming thing in personalized medicine, and is becoming an essential part of oncology care. “It’s widely recognized that FDA approvals of some of the recent new oncology products come with required companion diagnostics,” notes Nancy Lurker. “At the same time, molecular diagnostics companies struggle to gain commercial acceptance.” At the current time, PDI is managing sales efforts for the molecular diagnostics businesses it has acquired, but Lurker says “I can foresee when our expertise in companion diagnostics will position us well to handle product sales for pharma clients.”

Quintiles and inVentiv Health, both with major clinical research organization (CRO) services for drug development, make a pitch for a new, higher level of services integration for pharma companies by bringing elements of their CRO business together with their CSO business. inVentiv combines its CRO with its Contract Commercial Organization that provides consulting, sales teams, market access, communications and other commercial services across the product life cycle in an outsourced model.

Quintiles’ Evangelista notes that clinical data is a more and more crucial part of formulary decisions at hospitals and pharmacy benefit managers—and that dynamics is drawing the industry away from the “traditional CSO vendor relationships.” Clients will need “market access solutions that pull through demand” for a drug, and help healthcare providers—especially those aligning with accountable-care organizations, where the reimbursement is based on therapeutic outcomes and not fees for services—“truly understand the value of a therapy.”