Category Archives: Pharmaceuticals

Why the current approach to Commercial Model innovation won’t be successful.

“In a 2015 survey, a majority of executives believed their companies would be restructuring their commercial models over the next two years”. That’s how the recent EyeforPharma whitepaper on Integrated Commercial Models began and continues by highlighting the lack of certainty and direction across the industry.

But the reality is that Pharma has spent years and years, and tens of millions of dollars attempting to innovate, improve, renovate and more often than not, restructure its commercial model. And this recent and renewed enthusiasm and focus on developing a new commercial model is nothing new, it’s being bubbling along for more than a decade.

And what has the industry to show for all this effort and expense?

Not a lot, in my opinion. The model stubbornly refuses to change significantly and as an industry, pharma seems content to milk the cash cow that is the current model, albeit with some relatively minor tweaks and changes.

Why is this the case? Why have strategic innovations such as Customer Focus, Customer Experience and more lately Patient Centricity failed to deliver the breakthrough they promised. For me, the issue is pretty simple.

Pharma is clearly resistant to change, but apart from that, it is looking for tactical solutions to a fundamentally strategic problem.

Whatever has been done to the existing commercial model in recent times, ends up only a weak attempt to restructure, develop an integrated sales and marketing function, change the sales model or some such tactic. While the basic, underlying problems are that the model is fundamentally broken, and can only be ‘fixed’ if one understands and address 2 critical issues:

  •  The reasons why the broader business model is broken and what that means for the commercial model
  • What aspects of the business model need to change – either stopped, amended or started

And then, and only then, one needs a strategic change of direction first and then design a commercial model to deliver on that strategy.

I take my hat off to GSK, perhaps the highest profile pharmaco to take serious action on their commercial model beyond merely restructuring it. But even the highly ‘controversial’ approach of not rewarding reps on product sales, is neither truly innovative nor strategic, and certainly won’t solve the many issues that face GSK, but at least it will help address a particular tactical issue.

Today, as it has been for decades and decades, pharma is focused on selling products (I won’t call them brands). That has been, and it still mostly is, still the main motivation for the industry. It is all about the products.

The old model has been pretty effective in days gone by and it is hard for the industry to leave it behind, either though most would agree that the model is broken, but moving away from a successful model to something else is frankly, perhaps, a bridge too far for most of pharma.

Sending reps out to deliver product messages to primarily physicians remains the essence of the current model. OK, supplement it with some multi channel, add in some new roles, KAM and the like, but it is still about products.

Patient Centricity has the potential to drive a strategic shift across the industry but the reality is certainly more rhetoric than action, and again, more tactical in practice. Take a look at how resources are allocated across pharma today. The percentage of people and money dedicated to Patient Centricity is miniscule compare to traditional product sales and marketing. You are either Patient Centric or you are not – its like pregnancy – you can’t be piloting Patient Centricity or learning to be patient Centric, it is a strategic decision. I’d say pharma is not pregnant with Patient Centricity.

The recent whitepaper even says in the conclusion “pharma finds itself with a broader arsenal of weapons with which to talk about the value it brings”, which pretty well sums up pharmas approach to selling. Pharma continues to want to talk about ‘the value they bring’, while customers determine value for themselves. If the industry needs to continue to upsell the value then perhaps that is a big issue, and no amount of ‘education’ from the manufacturer will convince customers.

The conclusion of the report is spot on “many of those now running pharma organisations have come through the ‘golden age’ of pharma and so may be reluctant to change”.

But it is more than simple reluctance. Most do not see, or believe, that there is a better alternative to the traditional approach, and that there are new business strategies that will provide significant benefits over the old model in terms of revenues, costs, customer engagement, trust and sustainability. Yet, for the most part, they remain unwilling to confront the risk of change.



Building trust with customers is achievable. But is it worth the effort?

It seems that most folks agree that the industry is suffering from a trust deficit and that it needs to change the way it is perceived, but, I think it is important to say that while this is a problem common right across the industry it is a problem that needs to be addressed by each individual company and they should not wait for the industry as a whole to act.

Why? A couple of reasons stand out: it is incredibly difficult to change the perception of a whole industry. There is always likely to be an individual company that ‘lets the whole side down’, and the other reason is that there should be an incredible competitive advantage to the company that changes it’s behavior and is perceived as being different and better than any of its competitors.

I don’t think we need to discuss the economic benefits of being trusted or the compelling benefits of being a trusted organisation, lets take that as a given, and focus on some of the practical measures that can be taken to build trust with customers and stakeholders?

It’s actually not that hard, and contrary to popular belief, it does not take too long and it is not expensive, but it does require change.

So, like most programs this is all about change management and as such requires some basic fundamentals:

  • Clear ownership linked to the executive committee and responsible for installation into the company culture
  • Senior level active sponsorship
  • Articulate the need for change, the burning platform
  • A clear, succinct, well articulated strategy, preferably one that is written down and available across the organization
  • This is not a project, or a pilot, or a test. This is how the organization as a whole will operate from now on
  • Provide tools and training so that people know what to do
  • Align rewards and recognition to outcomes

There is nothing in this list that is new or difficult per sec. The issues exist around implementation and execution.

First, it is important to keep in mind that this requires action, not words. Telling stakeholders that they should trust ‘you’ most often has the opposite effect. When the Chief Executive Officer of Pfizer, Ian Read recently told UK MP’s that they needed to trust him in the potential AZ merger, the message probably did not have the effect Mr. Read intended. Building trust and being trustworthy are built by actions over time.

I think most of us, as human beings know what it takes to build trust. Identifying what needs to be done is relatively easy and most corporations would already have a pretty clear of what needs to be done. Doing it is another issue.

Charles Green, author of Trust Based Selling, identifies the single most important behavour that limits building trust, and for him it is ‘self interest’. When an individual or company is focused on itself first, and has an expectation of reciprocity then it is difficult to be trusted.

In other words, I will only do this because I get a benefit from doing it and I expect something in return.

Pharma have a reputation and track record of being not only internally focused but also self-absorbed so this shift away from self-interest is going to be hard.

So what can a pharma company do today?

My recommendation is to start small, after all it is the little things that have the most power to surprise and delight customers (they expect the big things to work and to be right).

Again, Charles Green’s recipe for building trust is:

  •  Speak more truth
  • Intimacy – take more risks
  • Reliability – do more service
  • Self orientation – think more of others

David Horsager in his book Edge of Truth has 8 foundational pillars:

  •  Consistency
  • Clarity – people trust what is clear
  • Compassion – think beyond yourself
  • Character – do what is right over what is easy
  • Contribution – results are powerful in building trust
  • Competency – staying fresh, relevant and capable
  • Connection – ask questions, listen, establish genuine connections
  • Commitment – stick with it

There is no rocket science here but it takes effort and purpose, and in pharma’s case a commitment to make it happen. For me the biggest hurdles for the industry are twofold; transparency and self-interest.

Let’s look at these two aspects in more detail and while they are obviously closely related it is worth looking at them individually.

Transparency is more than just around clinical trials, although there continues to be a heated debate on this topic as there is around pricing, and while the industry is addressing aspects of both of these they remain major stumbling blocks.

Of course the current approach is usually defended on the basis on commercial sensitivity, and while this is true to some extent, it should not stop the company being more transparent than it is today. And there are other things that can be done.

For example with Account Management, does your company have a clear account plan for each account, is it written down, measured and monitored and most importantly, was it co-created with the client and shared with them and agreed with them. Building a plan with the customer, sharing with them the measures that you will use and the success measures you will both be comfortable with is an amazing way to build trust. If you want to build trust – and build fantastic relationships, building account plans like these are very powerful tools.

Self-interest is perhaps more complex. Today, many folks look at the industry and see ‘profits before patients’ and this perception is reinforced with pricing policies, the single minded focus on the company’s brands, the aggressive push around adherence, the approach to side effects and more.

In a trusting relationship, customers do not need to be convinced by companies that they have their best interests in mind, they know it. Pharma has a long way to go before its customer base is convinced that they have their best interests at heart.

The solution to both lack of transparency and self interest are action orientated – pharma needs to be proactive and look for opportunities to engage stakeholders and, as you look down this list of some of the things one can do to build trust, it is remarkable how similar the list is to what needs to be done to be more customer or patient focused. Indeed, it is hard to be patient focused without having a level of two way trust established, and this is clearly one of the reasons that such past initiatives have failed to produce the promised impact.

17 things you could start doing today that would help build trust:

  • Conduct meetings as if the customer was sitting at the table with you. How would that change your meetings?
  • Share objectives and plans with customers – not just brand plans. Be transparent!
  • Co-create account plans
  • Measure what is important to customers and share the results
  • Access your metrics for success and ensure right balance between long and short term objectives
  • Look beyond ROI to customer lifetime value and return on customer to ensure you are actively increasing customer value by building trust
  • Talk about customers, often and everywhere
  • Learn about customers, be curious, and share customer stories
  • Invite customers to become involved in customer advisory boards to have input into company strategy and planning (not brands)
  • Begin every problem solving discussion by asking what would be in the customers best interest
  • Provide easier access to clinical trial data
  • Stop pushing brand messages through marketing detail aids and truly engage customers in discussions that are more relevant to them
  • Encourage customer feedback – they don’t all want to talk to you about side effects, they have other concerns that you could help them with if you bothered to ask.
  • Engage the legal department and involve them in what needs to change – get them involved early with a clear expectation that their role is to help make this happen.
  • Be clear about expectations. Just because some of this is hard, don’t let it get derailed.
  • Dare to be different.
  • Involve all customer types not just HCP’s. Building trust with patients, payers, hospitals is critical.

Most important though is to stop doing things that do not actively build trust. Pharma does a lot of ‘stuff’ with customers, and like customer centricity and it’s newer relative, Patient Centricity, it is often thought of as doing something else, on top of what you have always done before. This is not an additive model, indeed, often doing less is more effective and in the case of building trust it is imperative that the company stop doing things that do not build trust.

And for most of pharma this is incredibly difficult to do.

Accenture wrote about the need to build trust and the importance of ‘aligning business strategy with customer values’ where company vision, messages and offerings are aligned with their customer’s core values. This alignment demonstrating to customers that the company is not merely focused on generating a profit.

How well aligned is most of pharma’s strategy with customers, for example payers? In simple terms payers want to improve patient outcomes and reduce the costs of healthcare delivery while maintaining quality and they want their customers to be satisfied with the healthcare they are receiving. And while pharma can clearly align with better patient outcomes, for pharma, that can only come at a price.

Marilyn Carlson Nelson ex CEO Carlson Companies summed it up very well ‘trust reduces transaction cost, it reduces the need for litigation and speeds commerce, it actually lubricates organisations and societies’.

Sounds like a whole lot of effort, but is it worth it? For me, I am not sure how you can become patient centric or customer focused or continue to be successful when so many of your customer don’t trust you and don’t see your company as trust worthy.

Only time will tell.




What do you KNOW about your customers?

No, this is not going to be about segmentation and targeting, we’ll save that for another day, what I want to do is focus on what ‘we’ the pharma industry know about our customers.

I’ve had lots of folks tell me how customer focused their company is; how the company works with customers everyday, and how many resources they allocate to customer facing roles and how much money they spend on customer research and so on. But when you scratch the surface, and I recommend you go and scratch it at your organization, I am sure you will uncover some very interesting insights.

As a start, it is an interesting exercise to ask your colleagues ‘who is the customer’? I’m sure you’ll get a bunch of different answers to this simple question. And, if you can’t agree on who the customer is……..what can I say?

I’ve heard lots of answers, including one that even identified company colleagues as customers, ‘internal customers’. How does that work? Is it still doctors, or does it now include nurses and other HCP’s, what about patients, caregivers, hospitals, payers, pharmacists, healthcare consumers? Clearly, having a good definition is a great way to start, that way your company will be aligned and focused on what matters most.

Pharma is a product-orientated industry. That probably is not going to change, this customer centricity, patient centricity discussion is not about moving from being product focused to customer focused, that is too big a step change for pharma right now, so this is about being more customer inclusive, realizing the importance and value of the customer and ultimately, for most businesses, it is the realization that ‘you’ will sell more product and be more profitable if you become more customer centric. It’s simply a better way of selling!

But, you need to be careful. If all you are doing this for is a cynical strategy to sell more stuff then beware. One of my favourite quotes of all times comes from Martha Rodgers of Peppers and Rodgers fame, she said, “If your goal is to sell more stuff to your customers you will compete on price. If your goal is to add value to your customers, then you’ll end up selling more stuff’.

So being customer focused is a better, more effective and, yes, more efficient way to sell, and it begins with what you know about your customers.

Go ahead and look at your own data, really dig into it, try doing it from a customers’ perspective and you’ll be amazed. Put yourself in the customers’ shoes and ask ‘what does the company really know about me’?

Look at call data. Do you have a single view of a customer, can you see all the interactions across all channels, with a particular customer, start at an individual customer level – don’t be tempted to do the segment average type approach.

Here’s what you are likely to find?

  • You don’t know much about an individual customer
  • You have good call data, but likely not consolidated across all channels and brands
  • You have some contact information, address, business phone etc probably not personal email addresses and other critical business information
  • There will be very little additional customer data – often precluded by out dated and overly conservative legal policies
  • Representatives have more customer information that they do not share with the company
  • Spend a disproportionate amount of time and effort with the wrong customers
  • There is no factual reason one customer is seen more often than another – it could be simply that reps have access
  • Unable to identify your most important customers
  • Some customers are not profitable, you expend too many resources and calls on the wrong customers
  • You don’t treat different customer differently, other than call rate.

Overall, there is very little customer insight to be found.

Most of pharma still, if we are talking healthcare providers, allocate resources according to customer value (their value to us), so a high value customer subset – lets call them A customers, get more calls. This has been around for decades and is still alive and well today.

In primary care in particular, this call rate is usually by brand or in some cases therapeutic area, but when you see the same HCP customer called on by different reps across different channels, you see how much resource is actually allocated to this customer. It’s not a common view; the data is usually not looked at this way.

But go and look at your B Customers. Yes you see them less, perhaps, but the total amount of effort spent on this group will be significantly more that the effort spent with your highest value customers, because when you add it all up, there are more of them, more calls in total, more effort. And it continues to work down your list of priority targets, so that, in the end, the total effort directed at lower value customers is more than your highest value. Why would you do this?

Now lets go back to the individual data and look at what you actually know about your most important customers. I bet you know a lot about their prescribing, particularly if you are in the US and have access to prescribing data, outside the US you may use external services like IMS or others or you may just work on rep feedback to rate HCP’s, either way you will know, or think you know, more about their prescribing than you actually know about them as a customer.

What does your CRM system say about this customer, what facts does it contain? Try asking your reps what they know about their highest value customers and the chances are they don’t know much. Again, probably lots of RX data or impressions and probably a lot of personal stuff, but not much more about them as a customer.

Do you act differently with different customers based on what you know about them, or are you still focused on delivering messages that are important to you?

This situation is the result of the fact that pharma has not wanted, or felt it needed, to know about customers and has fears about the legality of gathering and storing this type of information. But now, it is critical to better understand customers.

This all sounds simple and obvious but the changes required to be more customer or patient centric are significant and it should not be thought of as something you only need to do with HCP’s.

Indeed, how do you become more customer focused with newer customer types like payers? I’d begin asking the same question –‘what do you know about this customer beyond Rx?’

Being more relevant to your customers is key; building trust, being trustworthy and delivering value are going to be significant differentiators in the future and I don’t know how you do this without knowing about what matters to your customers.

Things you can and should do starting today.

  • Establish as sense of urgency.
  • Build a team of passionate patient advocates
  • Become more customer curious. Ask customers about their business, their challenges, what’s important to them and more.
  • Collect customer data. Try at every interaction to come away knowing something about your customer that you didn’t know before.
  • Store factual information, share it across the business, analyse it and then act on it.
  • Develop a comprehensive customer view – monitor and measure the collection of relevant, factual data.
  • Use your CRM system as a source of insight not just call reporting.
  • Build customer advisory boards not for brands but to better understand customers, get customers involved.
  • Segment not based solely on value to the company and Rx
  • Be open and honest about the data you gather. Would you be willing to share what you know about customers with that customer? You should be!
  • Focus on your most important customers and deliver differentiated services and offers to them in response to their needs.
  • Identify the top 6% of customers that generate around 40% of your sales and build an individual customer plan for each of them.
  • Demonstrate that this is not only for the field force – anyone touching a customer should enter data
  • Reward the right behaviours. Senior leaders should review customer data on a regular basis – not just sales managers
  • Review and change attitudes to customer data, engage the legal department in the change.

Of course, the next big challenge, once you’ve begun to better understand your customers is ‘what are you going to do with that knowledge?’ But lets take one step at a time.

What’s it going to take to ‘Rethink Pharma’?

What does that even mean?

Patricia Seybold, Founder of, once wrote “fasten your seatbelts!……Why? Because we’re in the midst of a profound revolution. And it’s bigger than the internet revolution or the mobile wireless revolution. It’s a customer revolution.

Customers have taken control of our companies destinies. Customers are transforming our industries. And customer loyalty – or lack thereof – has become increasingly important to executives and investors alike”

And now, even Pharma, once seemingly uncaring and impervious to customer feedback and dissatisfaction is feeling the winds of change. The long held practice of ‘staying below the radar’, not adding to the public debate and keeping a low profile, which worked so well for the industry for so long, seems out of date and a strategy long past its used by date. Public debate, dissatisfaction and lack of trust are plaguing the industry, drawing an ever more serious and growing voice of criticism of big pharma. But, what’s changed over the years is that the power and influence in healthcare has shifted, and the voices that could once be ignored are now dismissed only with potentially serious consequences.

A Patient Centric Revolution is taking place across healthcare, in every corner, in every sector, patients, healthcare consumers and you and me are taking more responsibility and control of healthcare. And pharma can no longer afford to ignore it. Or should I say, they can continue to ignore it, but at their peril. Pharma needs to rethink how it fits in this new changing landscape, a landscape that they will no longer be able to control and shape to fit their objectives as they once did.

So when we say ‘rethink pharma’ for me, it is really ‘rethink around healthcare consumers’ and ‘patient centricity’.

Most other industries now recognize and accept the power of consumers. Not just in whether they buy their products, but also how they buy them, through which channels, how much they pay, the things they like and don’t like and much more. Power lies with consumers. Most industries and organizations recognize and accept this.

The good ones even embrace it and benefit from their close relationships with customers.

This global phenomenon is not a trend, or a fad, or something that can simply be ignored. Pharma has struggled against it – and continues to fight against it, for example with its amazing lack of transparency and pricing policies, but, in the longer term, they will not be able to overwhelm consumer power. We are seeing the reaction to pharma’s continuing internally focused strategies with the steady decline of public trust in the industry and the growing barrage of negativity about the industry’s behavior.

We know the current pharma model is under huge pressure to change. It has been this way for perhaps as much as ten years, but the pressure is really building now. At least it seems that way.

Most senior pharma industry executives would agree that the model is not sustainable, but do not articulate what this actually means and being not sustainable is quite different from being broken.

Not sustainable can be code for; our cost base is too high, our prices are under attack with declining productivity and effectiveness. Therefore, we need to drastically cut costs and slash jobs in order to maintain our profitability. We need to keep working hard to discover and commercialize new products to replace older products coming off patent. We need to hang on, stay focused and weather this storm until things go back to normal and we discover new blockbuster products and boost our pipeline. None of this speaks to significant model change.


But many industry watchers do not believe this is going to be enough. Many commentators and consultants would say the model is indeed broken and needs fundamental and significant change. The old model is dying and a shot of innovation in the arm is not going to be enough. Wholesale, fundamental change is going to be required.

There is however a significant lack of agreement in how broken the model is and indeed, what aspects of the model are broken. And that leads to divergent opinions about why the industry needs to change today and not some time in the future.

A true burning platform, al la IBM’s financial position in the 80’s, does not exist for big pharma today and the potential risk to current financial performance is perhaps the major limiting factor in attempts to reform the industry.

How to preserve financial performance is at the heart of the resistance to change, with many people believing that any change in focus away from core business and current focus will adversely impact results, and getting into other non-core business areas will negatively impact the business. There remains a strong attachment to the current business model, with senior executives having limited confidence that alternative business models would be as good as, let alone better than, the current one, and therefore any change away from the traditional approach is seen as downside rather than upside benefit, so the inertia favors the old model with a clear focus on efficiency.

After years of pilots and tests, and a powerful load of PowerPoint presentations, pharma has not advanced much in terms of rethinking its business model. And despite the flurry of mergers and deals either underway or being contemplated right now, the model does not look like changing much anytime soon. Indeed, from past experience, we have seen that megamergers derail business model innovation as the company intensifies its focus on integrating the 2 organisations and eking out the efficiency gains that are required to justify the merger in the first place.

Sure, there have been advances and the industry is much leaner than it was, but the core of the business, it’s underlying thinking, many of the processes, the structures, sales and marketing tactics, approaches to customers, many of these things remain virtually unchanged.

The time for change is now. However, no one would suggest a big bang approach to organizational change in this industry, but there are things that should and could be changed today that would both positively impact short-term financial performance while better positioning the company for the future.

If you would like to contribute to this discussion or you have particular point of view you would like to explore, please let me know. Together we can help the industry take concrete action today and Rethink Pharma to become more patient focused.

The industry is here to make a profit

I read this statement about the pharmaceutical industry in the media yesterday and it literally stopped me mid sentence. I have seen the same sentiment uttered so many times over the years, in lots of situations and forums by pharma executives and employees alike.

But, for some reason, it really struck me yesterday. Why is this being said so often? Who is this directed at? What is the purpose?

And when I thought about it a bit more I realized that I have not seen other industries and companies saying this sort of thing. It is a given, companies exist to make money. That is the natural result of doing what they do, what they are entitled to do.

We understand this.

So why does pharma so often reach for this tired justification?

You can see it in a variety of contexts but probably most often springing up when pricing or drug costs are discussed. No surprise there, but also when innovation such as Value Added Services, Patient Centricity or Beyond the Pill are discussed as well.

It really is a terrific statement that is an effective debate stifler, but, as I said earlier, I am not sure who it is aimed at convincing.

For me, it seems particularly effective in internal communications, when the company is justifying it’s position and wants to communicate to its own people that one of the reasons for this decision is that the company needs to make a profit. Employees understand that if the company is not profitable then their jobs and livelihoods are at risk.

But beyond internal use I’m not so clear; it seems to be used mostly as a conversation stopper. Who can argue that any company needs to make a profit, but it is not very specific and it is very hard to refute.

In the on going argument about drug pricing it is sometimes used to justify the price, but it hardly addresses the issue from a customers’ perspective. It’s more than a bit dismissive in fact and if the objective is to stop discussion I would have to say it is effective. But. And it’s a big but, managing feedback from customers about cost is an important topic that deserves a serious response.

Of course a company can charge whatever it wants for its products. They have that right, but customers have the right to complain and to not buy the product if they so choose. Of course in healthcare it is not so easy, but customers should speak up about unreasonable pricing and they should demand, and receive a serious response that enables them to make an evaluation based on all the facts.

Pharma needs to take responsibility for the lack of trust that is so rampant among its stakeholders and customers. The lack of transparency breeds lack of trust and when sentiments like the one above are used to justify drug pricing then the industry needs to take the feedback on the chin and actively do something to address this very common concern.

Either they can clearly demonstrate the value of their products or they can’t. Simple.

But to see it so often brings to mind the famous quote from Hamlet “Methinks the lady doth protest too much”.


Is this the New Pharma Commercial Model in action.

Here’s a recent headline:


‘Lundbeck recruiting 200-plus sales reps for Brintellix launch’

Looks like some good news for Lundbeck with the pending approval of a new product, but with all the talk about new commercial models and stuff, and with the recognition that the ‘old model’ was dying – or dead – why would you go down what sounds like a very traditional approach.

So the old model doesn’t look so old when a new product comes along that has potential to be a blockbuster.

What do you think?