Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - (Page 11) COMMERCIALISATION MODELS physician-centric, where traditional stakeholders are the relevant decision makers; and account-based, with institutional care providers as key customers, where decision-making involves complex networks of multiple stakeholders. marketing — and how these skills can be acquired and developed. The time is now Establishing a viable business model for the future means making strategic choices — now (see Figure 4). Companies that rise to the challenge will focus on addressing three key issues and their associated questions: 1. Re-defining the commercialisation model: ● Which model works best for my company / portfolio? ● What capabilities do I need in order to manage the new stakeholders and decision points effectively? ● What is the role of the sales force and marketing function in the world of account-based selling and contracting? ● How do I make sure the model is flexible and can adapt to further changes in the operating environment? Trends and implications through 2010 Over the next few years, we expect the relative importance of these three commercialisation models to change, as indicated by the arrows in Figure 2. There are a number of key harbingers that drive this assumption: ● Tender contracts with sick funds are expanding beyond generics to also include mature, patent-protected brands. ● Already in the US we have seen an example of the contracting model extending its reach and relevance across the entire pharmaceutical market. ● Vertically integrated care models create new institutional customers with reach into the traditional territory of physician-centric primary care. The public tender initiated by the AOK BadenWürttemberg for primary care provision, by-passing the professional association of physicians, is a case in point. ● At the same time, horizontal integration leads to account-like customer and channel structures. ● Pharmaceutical companies are increasingly taking control of their supply chain, for example through exclusive wholesaler contracts or direct-to-pharmacy distribution, bypassing wholesalers altogether. 2. Developing and communicating compelling value propositions ● What capabilities do I need to put in place to demonstrate superior value of my products? ● What evidence in terms of outcomes and economic data is required to support my value propositions? ● How can I leverage value-added services to differentiate my value proposition? 3. Creating flexible cost and capital structures ● What levers should I pull to make my cost structure more flexible? ● What is the optimal ownership structure for my assets and processes (for example, what opportunities exist for outsourcing)? Once the strategic choices have been made, the transition to a new business model must be managed very carefully to avoid a loss of focus Figure 3: Pressure to innovate the business model. Fewer, larger institutional customers Dependence on single, less frequent events (contracts) Margin pressure due to volatile demand and high fixed cost model Safeguard through differentiated value propositions New business model Risk-sharing Dynamic environment Elevation of new stakeholders and decisions points A call to action In answering the call to rethink their business model (Figure 3), companies will need to look at ways of managing significantly higher levels of commercial risk and volatility, making critical choices for their commercialisation model, developing and communicating compelling value propositions, and establishing flexible cost and capital structures. Critical elements to consider at this point will be the current and future portfolio as well as the capabilities required for the various functions in the new business model — such as sales and Figure 4: Critical choices pharmacos have to make today. Where to play Develop a clear vision for the future business • Portfolio focus decision (continue/enter/exit) Develop clear strategies • Which commercialisation model? • Which capabilities? • Which resource and investment levels? • Which cost and capital structure? Develop detailed transition roadmap • Which commercialisation model when? • How to manage the transition? How to play When to play www.pharmexeceurope.com 11 http://www.pharmexeceurope.com
Table of Contents Feed for the Digital Edition of Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 Pharmaceutical Executive Europe - February 2008 Contents Sales Force Commercialisation Models Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Pharmaceutical Executive Europe - February 2008 (Page 1) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Contents (Page 2) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Contents (Page 3) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Sales Force (Page 4) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Sales Force (Page 5) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Sales Force (Page 6) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Sales Force (Page 7) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Sales Force (Page 8) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Commercialisation Models (Page 9) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Commercialisation Models (Page 10) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Commercialisation Models (Page 11) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Commercialisation Models (Page 12) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Commercialisation Models (Page 13) Pharmaceutical Executive Europe - IMS Sales Environment Supplement - February 2008 - Commercialisation Models (Page 14)
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