Pharmaceutical Commerce - July/August 2017 - 11

Business/Finance
and development. Based on their core
competencies, companies can strategically
choose what they do themselves and
what they outsource, depending on their
strategy. If the strategy is growth, DKSH
offers increased reach in a more effective
manner than they could do themselves.
We have built on more than 150 years of
uninterrupted presence in Asia, serving a
variety of companies. With 4,200 sales and
marketing specialists and a tireless drive on
sales and marketing excellence, we employ
the largest dedicated healthcare sales force in
Asia. This economy of scale is impossible for
many companies to achieve.
Another often-heard advantage is that
DKSH's flexibility in deal modeling allows
clients to adapt strategies to their needs while
keeping costs more variable. We offer clients
a business model that suits their needs,
which may vary from market to market. We
have the capabilities to adapt strategies or
collaboration models as the market or client
demands change.
We recently commissioned a research
among Asian healthcare leaders around
commercial outsourcing. The study found
that almost twice as many companies expect
to increase (36%) versus decrease (20%) the
outsourcing of sales, marketing and other
commercial services in Asia in the next 12
months. Geographical expansion (into new
markets) is by far (68%) the main area where
outsourcing partners' support is considered;
followed by expansion of pharmacy (47%)
and medical channel coverage (37%).
Asked about the main drawbacks of
commercial outsourcing versus executing
sales, marketing and other commercial
services in-house, most respondents cite the
fear of reduced or no control. I see this as
an opportunity to educate companies about
how collaborating with DKSH works. With
DKSH, clients are always in the driver's seat.
Transparent communications with clear
KPIs and business reviews at local and, if
needed, regional levels ensure that we remain
aligned and can adapt to changing market
circumstances, opportunities and threats.
And as a listed company in Switzerland,
we have an unwavering commitment to
transparency, quality and compliance. We
provide clients with access to real-time data
from DKSH's global SAP platform, which
is unsurpassed among commercial service
providers to the healthcare industry in Asia.
What this means for clients is transparency.
Thanks to our direct capillary distribution
model in most markets, clients have full
visibility on sales, reducing the likelihood of
overstocking and stock-outs. And since we
offer commercial, as well as distribution and
logistics services, data is always in one pair
of hands. This gives DKSH clients a clear
advantage over others, allowing them to
maximize return on assets.
Beyond pharmaceuticals and into
over-the-counter and consumer health,
we see a convergence of channels, such
as 7-Eleven integrating pharmacies into
their convenience stores in Thailand. With
DKSH's broad reach into retail outlets and

e-commerce, we are uniquely positioned to
help OTC companies grow across channels.

3

What's the basic sales proposition
of DKSH in terms of economics and
efficiency as an outsourced provider?

Companies tell us they work with us for
several reasons; for example, our reach: we
serve 160,000 hospitals, clinics, pharmacies
and other healthcare professionals across 12
Asian markets. And-particularly important
for over-the-counter and consumer health
companies-into 300,000 retail outlets, as well
as e-commerce channels; all from one pair
of trusted hands. Our capillary distribution
network of unique scope and depth means
that we serve these customers directly where
possible, bringing products into operating
rooms if needed.
Having been ingrained in many markets
for decades means that we understand
which customers-pharmacists, doctors,
specialists-have the highest propensity to
purchase or prescribe. For example, we have
been in Myanmar for 21 years, long before
many companies even considered entering.
This means that there, but also in other
markets, we can target our efforts to the right
prescribers, who place trust in DKSH thanks
to our longstanding relationships.
In terms of annual sales, DKSH is ranked
among the top-10 pharma companies in
seven of the markets we operate in. This
includes Malaysia, Thailand, Myanmar and
Vietnam. We combine this economy of scale
with flexibility and adaptability to our clients'
needs. While some clients require our full
range of services, others are only interested
in distribution and logistics or regulatory
services. We often see that collaboration
expands along with the clients' growing
presence in Asia and with their expansion of
the product portfolio.
Sustainable and profitable growth for
our client and DKSH is at the heart of our
business, across every market. We thereby
never compromise on quality and compliance.

4

DKSH promotes the concept of
'market expansion services' for
healthcare products. How is this
different from conventional wholesaling?

We help our business partners grow by
providing a complete range of specialized
services along the value chain. This starts
with high-quality, reliable distribution and
logistics, ensuring that our clients' products
reach the patients' hands under the right
conditions. Our 4,200 marketing and
sales specialists meanwhile visit healthcare
prescribers daily and ensure that products
are available and visible in pharmacies.
Complementary telesales and telemarketing
ser v ices help our clients reach more
customers and expand contact frequency.
Market Expansion Services goes deeper.
For example, we know that many clients
are struggling with the complicated, everchanging regulatory framework across Asia.

That is why we have a team of more than
70 dedicated regulatory experts ensuring
that products are registered and licenses
are maintained.
While the core is stable, our offer moves
with market demands. We have a mindset to
proactively look for growth opportunities.
For example, we are noticing an increased
demand for patient services, which includes
access, affordability and adherence. That is
why, among other initiatives, we are signing
partnership agreements with innovative
healthcare companies from the USA,
allowing healthcare companies to expand
their patient adherence programs to Asian
markets. And in Taiwan, for example, we
have a program in which DKSH field nurses,
equipped with modern technology, educate
patients about the correct and timely intake
of their medicines.
We see clients with challenges; we solve
those, and replicate and localize them across
markets very quickly. Having access to
all these services, across 12 Asian markets
and from one trusted provider, is very
different from having a different wholesaler
in every market.
Important to note is that we serve clients at
every stage of expansion-from market entry
to renewing growth of mature products-and
of any size-from small- and medium-sized
companies to large multinationals.

5

A key part of DKSH's market
expansion service for pharmaceuticals
involves regulatory approvals
and licensing. How does this work in
Southeast Asia, generally speaking?
What do regulatory authorities look
for in permitting the distribution of
drugs from the US or elsewhere?

In general, health authorities require
recognition of Western approval (reference
countries), legal documents such as
Certificate of Pharmaceutical Product
(CPP), Good Manufacturing Practice
(GMP) license, Certificate of Free Sale
(CFS), pricing approval, embassy document
authentication, stability data support for
Zone IVb (+30°C/75% relative humidity)
and clinical trial data.
This year, ASEAN celebrates its 50th
anniversary. This long-term collaboration
is intensified with the recent establishment
of the ASEAN Economic Community
(AEC). This has led to a certain level of
standardization, yet at the same time,
regulatory differences between countries
re m a i n . T h e m ove tow a rd s a s i n g l e
registration process and other efforts will
harmonize the market somewhat, however,
each country within the region maintains
the right to retain its own regulatory system
with varied requirements and registration
systems. This means that, for example,
medicinal products (new chemical entities
and new combination of APIs that have been
circulated) that have been marketed for less
than five years in their country of origin (or
reference country) need to undergo local

clinical trials in Vietnam. This is a unique rule
that does not apply to other markets in the
ASEAN region where local clinical trials are
not required, even if medicinal products are
marketed for less than five years.
To further complicate matters, regulations
in emerging markets are changing rapidly and
labeling requirements vary across countries.
Furthermore, health authorities often struggle
with having limited resources, leading to long
review timelines for product registration.

6

Likewise, pharmaceutical marketing
looks to be very different in Southeast
Asia relative to the US market, if only
because drug advertising to consumers
is not permitted. Is most DKSH marketing
directed at physicians? Do you have reps
that knock on physicians' doors? What
would a US marketer need to know to
take advantage of DKSH's services?

The route-to-market depends on the
evolution of reimbursement and the
presence of strict guidelines. In many Asian
markets, the decision on which treatment
to provide is still largely with the doctor,
as opposed to the USA, where doctors
have very strict prescription guidelines,
often dictated by insurance companies and
Pharmacy Benefit Managers. In addition,
in many Asian markets, pharmacies act as
a trusted partner of patients. In some cases,
patients never even visit a doctor, relying
on their pharmacist as their primary
healthcare practitioner and adviser.
Different from the USA, direct-toconsumer marketing is not permitted
in Asia. The direct contact between the
sales force and healthcare prescribers is
therefore extra important. Most of this is
in person; telesales and telemarketing are
relatively new and underutilized methods,
which DKSH has adopted to increase reach
and frequency of contact, particularly with
pharmacies. Results show that pharmacies
that receive a combination of direct
contact by sales reps and a tele sales follow
up, have a higher impact on both top and
bottom line performance.
At DKSH, we are highly focused on
salesforce excellence. This starts with
selection. As we are often among the
largest healthcare employers in many of
our countries, we have access to the best
talent, who we, in turn, develop through
ongoing training and coaching, led by
our Center of Excellence for Sales and
Marketing and in-house Fantree Academy,
the 'DKSH university.'
This pays off. Take Thailand: during
2010-2016, our medical sales
representative were credited at a 96% rate,
on average, while the overall industry
average was 67%.
We e n s u r e t h a t a l l i n t e r a c t i o n s
with prescribers adhere to the strictest
compliance guidelines through regular
training and the strict Interaction with
Healthcare Professionals (IHCP) manual
to which every salesperson signs.

July | August 2017 Visit our website at www.PharmaceuticalCommerce.com 11


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Table of Contents for the Digital Edition of Pharmaceutical Commerce - July/August 2017

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Pharmaceutical Commerce - July/August 2017 - Cover2
Pharmaceutical Commerce - July/August 2017 - Table of Contents
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Pharmaceutical Commerce - July/August 2017 - Cover4
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