It is well-known that today’s pharma industry must undergo structural changes in the face of the patent cliff and pressure on healthcare costs around the world. The industry’s finance, human resources and IT functions have already gone through varying degrees of rationalization; now the question is whether sales, sales operations and marketing can undergo similar rationalization. This question is especially apt for another change the industry is adjusting to: the growing importance of emerging markets as a growth vehicle for pharma companies. Sales and marketing organizations are being asked to do more, with fewer resources.
Our contention is that there are significant savings—as much as 30%—to be had by centralizing the program management of global sales and marketing efforts. Many sales and marketing functions are already outsourced, through the use of contract sales organizations, marketing services providers and advertising agencies. Typically, global pharma companies manage these outsourced services locally, causing considerable duplication of effort, problems with nonstandardized procedures, and lack of effective coordination.
Many life sciences companies are currently making minor adjustments to keep up with the changing demands. While sales and marketing organizations have accelerated activities to reach customers through new digital channels and centralized, highly automated call centers, sales jobs have been steadily reduced. Selective changes have also been made to reduce other costs, such as using contract sales organizations and selecting niche providers for things such as remote detailing and mature product promotion.
This is not nearly enough. In most cases, these approaches have provided only short-term cost relief. The need for a new operating model and capabilities is clear, yet it remains significantly under-pursued.
The new managed services model differs from past models where specific areas such as advertising or promotion were given to an outside agency. Instead, the future winners will rely on third-party providers that operate a multitude of sales and marketing functions for the company around the globe–24 hours a day, seven days a week. At Accenture, we have helped several clients create new sales and marketing models with dramatically positive results. Opportunity areas include:
- Better use, and re-use, of digital content. With more and more marketing activities going online, the value of digital content grows. Coordinating content development and publication centrally reduces both operational costs and management burdens.
- Regulatory compliance of sales activities. While there are many specific local requirements for pharma regulatory activities, there is also a need for company standards to be maintained to a common level of performance. US laws, such as the Foreign Corrupt Practices Act, are just one example of this.
- Flexibility in allocating resources. A centrally managed arrangement enables timelines to be better met; to reallocate resources as demand warrants; and to bring in additional resources as needed. The disaggregated approaches usually taken by pharma companies are wasteful and time-consuming.
It was not too long ago that the pharmaceutical industry looked at outsourcing of clinical data management in R&D with great skepticism. Today, the practice is commonplace. The next challenge is for life sciences organizations to hand over the sales and marketing reins to managed services without fearing the consequences.
ABOUT THE AUTHOR
Craig Robertson is the global lead for Accenture Life Sciences’ sales & marketing practice.