1. business and industrial
2. pharmaceutical industry

TM
MEDICINMAN
February 2015 | www.medicinman.net
Field Force Excellence
Since 2011
PHARMA'S
TWO MOST
AWAITED
EVENTS OF
2015
ARE HERE!
SEE INSIDE FOR DETAILS
CONTENTS
(Click to navigate)
1. Leadership Begins with Self-Awareness ..........6
MedicinMan Volume 5 Issue 2 | February 2015
Editor and Publisher
Leadership begins with asking yourself: “What kind
of a leader do I want to be?”
Anup Soans
K. Hariram
Chhaya Sankath
2. Digital Technology and Patient Centricity ......9
Digital technology as a force multiplier to reach
consumers at their exact point of need.
Salil Kallianpur
3. A Unique Model of Patient Adherence .........13
The pharmacist is uniquely situated to facilitate
patient compliance. Is pharma taking note?
CEO
COO
Arvind Nair
Chief Mentor
K. Hariram
Advisory Board
Prof. Vivek v; Jolly Mathews
Editorial Board
Hanno Wolfram
Salil Kallianpur; Dr. Shalini Ratan; Shashin
Bodawala; Prabhakar Shetty; Vardarajan S;
Dr. Mandar Kubal; Dr. Surinder Kumar
4. Incentive Compensation Design ....................14
International Editorial Board
How companies can design their compensation
plans based on a fair and effective set of guiding
principles.
Amit Jain
5. Discounts Kill! ...................................................19
Lowering prices as a singular competitive strategy
will lead to a death spiral in the industry, lowering
profits and creating oligopolies.
Hanno Wolfram
Hanno Wolfram; Renie McClay
Executive Editor
Joshua Soans
MedicinMan Academy:
Prof. Vivek Hattangadi, Dean, Professional Skills
Development
Letters to the Editor: [email protected]
13th March 2015, Mumbai
BRANDST RM 2015
BRAINSTORMING FOR PHARMA BRAND MANAGERS
Morning Session – Networking Breakfast 0830 onward
Session 1 - 0930 – 1100 – UCPMP and MCI Guidelines:
How Can Pharma Marketing Address these Challenges
Effectively?
Pharma is under pressure globally as unethical business
practices come under scrutiny and penalty of regulators.
Salil Kallianpur
Salil Kallianpur, Brand Director, Europe @ GSK looks at
new ways of marketing in an era of tighter regulatory and
social controls. Followed by panel discussion and Q & A
from delegates.
Tea Break and Networking 1100 to 1130
Session 2: 1130 – 1230 PM Marketing Practices of
Mankind Pharma – Lessons to be Learnt by Dr. VK Sharma,
Vice President at Unichem Labs and formerly with
Mankind Pharma followed by Q & A
Session 3: 1230 to 1330 – Seretide Case Study by Nandita
Dandekar of GSK
Dr. VK Sharma
Lunch – 1330 to 1430
Session 4: 1430 to 1530 – How Can Indian Pharma
reinvent the Field Force – Doctor Interaction through
use of Digital and Social Media – 2 Case Studies: One
International and one Domestic pharma by Anup Soans
Tea Break: 1530 – 1600
Session 5: 1600 – 1700 – How to Optimize Healthcare
Communication Creative Agency Services
Session 6: 1700 – 1800 – Career Planning and
Advancement for Marketing Managers – What are the Key
Competencies
Anup Soans
14th March 2015, Mumbai
FFE 2015
MEDICINMAN

Morning Session – Networking Breakfast
0830 onward
Session 1: 0930 to 1000 - Changing Role
of Field Force – Keynote Address by Sanjiv
Navangul, Managing Director, Janssen
India.
Session 2: 1000 – 1115 CEO Roundtable
Discussion on Optimising Field Force in the
Changed Market Conditions moderated by
Sujay Shetty, Pharma Lead at PwC
FIELD FORCE EXCELLENCE






Tea Break – 1115 to 1145
Session 3: 1145 to 1330 Field Force Learning and
Development – Best Practices of Leading Pharma.
Presentation followed by Panel discussion and Q & A by
delegates.
Lunch: 1330 to 1430
Session 4: 1430 to 1530 – Mindset Change: The Key
to Transforming Field Force to Meet Challenges of the
Changed Marketplace – Anup Soans
Sanjiv Navangul
Sujay Shetty
Tea Break: 1530 to 1600
Session 5: 1600 – 1700 – Role and Responsibilities of
Front-line Managers – First Line, Second Line and National
Sales Managers – By Hariram Krishnan and Deep Bhandari
– Presentation, Discussion and Q & A
Session 6: 1700 – 1800 – Closing Address – Career
Planning and Advancement for Sales Professionals – What
are the Key Competencies
Deep Bhandari
Subroto Banerjee
K. Hariram
Amlesh Ranjan
Nandita Dandekar, Marketing
Manager, GSK
Sunder Ramachandran
Faculty and Final
Program Schedule
will be available
by February 15th
on request –
anupsoans@gmail.
com
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E
LEADERSHIP BEGINS
WITH SELF-AWARENESS
Leadership begins with asking yourself: “What kind of a
leader do I want to be?”
K. Hariram
I
n my coaching sessions with various clients, one common
question I get asked is is “how do I develop my leadership
skills?”
This word ‘Leader’ or ‘Leadership’ means many things to many
people. It is often associated with the title or the mantle that
people carry in their organisations.
Most of the times the word is approached from an ‘ego centric’
point of view rather than from a ‘responsibility-based’ thinking.
We all know and there are so many articles written on the subject with variety of viewpoints. To me, Leadership is the ability
to inspire and influence and it is directly related to work. This
applies to families as well as organisations or, for that matter, any place with a set of people converging for a common
purpose.
I strongly believe that developing leadership qualities and
skills can only come through work and not independent of
it. Every individual, in all walks of life has some qualities that
relate to leadership skills. However, developing the same in
various contexts require conscious efforts.
Hence, I am a strong believer in defining the role of a LEADER
as “someone who develops people through work.”
6 | MedicinMan February 2015
Like any other development, the starting point of leadership
development is, “Do you know what you are as of now or what
kind of a leader you are?”
K. Hariram | Leadership Begins with Self-Awareness
This self-awareness in the individual who is an upcoming leader helps in moving into the next step of “what
kind of leader you want to be?”
This means one has to be clear of the intent (leadership intent) and also the impact. In an article that
appeared recently in HBR titled, ‘What Kind of a Leader
You Want to Be?’ written by Rebecca Newton, the term
‘leadership footprint’ is used to describe both intention and impact. She further goes on to talk about
the central points to develop leadership footprint as
below:
´´ Defining the kind of leader you want to be
Most often, it is vagueness
that stifles progress or
development. Asking relevant
questions brings clarity and
helps in directing the learning
efforts to reach the desired
level.
”
´´ Knowing clearly how that aligns with, and help
achieve, your organizational vision and purpose
´´ Fostering self-awareness, reflecting on your own
behaviour and encouraging others to give you
feedback
´´ Recognizing differences that may arise between
your intent and your impact
´´ Self-regulation - The strength and the challenge
of self-regulation is ensuring that you have coherence between your personality, your behaviour,
and your leadership goals.”
´´ Choosing the assumptions about yourself and
others that you need to rely on for your leadership footprint to be realistic and sustainable
Most often, it is vagueness that stifles progress or
development. Asking relevant questions brings clarity
and helps in directing the learning efforts to reach the
desired level.
In an internal engagement survey done by an MNC,
97% of employees reported that they can see how
their work is linked to the purpose of the company.
Does this apply in a larger context is something one
should look at.
I repeatedly coach my clients about their ability to
define themselves and also what kind of a leadership culture they want to build around themselves.
This also calls for their own observations and others’
feedback. This helps them to know whether they are
on track and more importantly, realign themselves to
keep building it on a day-to-day basis.
K. Hariram is the former MD (retd.) at
Galderma India.
He is Chief Mentor at MedicinMan and a
regular contributor. [email protected]
7 | MedicinMan February 2015
So when any one is talking about their leadership
development, do ask and answer “what kind of leader
do you want to be?”
“At its best, leadership development is not an “event.” It’s
a capacity-building endeavour. It’s a process of human
growth and development.” -KH
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E
Digital technology
and
patient centricity
Digital technology as a force multiplier to reach consumers
at their exact point of need.
Salil Kallianpur
“Patient centricity is something you see in
CEO messages but rarely in action”. With those
words I thought I had stuck my head into a
beehive recently at the ‘DigiSights 2015’ event
on the sprawling campus of SIES College in
Navi Mumbai. Surprisingly, I was stung not by
bees but by the fact that the audience agreed
with my statement. A thought that was intended to provoke thinking and challenge, was
accepted matter-of-factly by the assembled
group of industry executives and students of
the college.
What is patient centricity?
Salil Kallianpur is an executive from the
pharmaceutical industry. He is a very interested
observer of the health care industry, its politics and
strategies. Being a change evangelist, he thinks
pharma can do a lot more on the intersection of
public policy, technology and health care delivery.
9 | MedicinMan February 2015
Patient centricity is not about how you can take
your brand to the patient. It’s neither about
engaging the patient, nor about compliance.
Generally these are the three angles on which
pharma thinks. Hence we see a slew of patient
awareness leaflets, patient engagement/assistance programs and compliance enhancers
and tips from pharma companies. I’m not saying that these tactics are unimportant. I’m just
saying that’s not patient centricity.
Salil Kallianpur | Digital Technology and Patient Centricity
...patient centricity is as
fascinating a concept
as it is contradictory. It
is fascinating because it
puts power into the hands
of the patient. And it is
contradictory because
pharma does not like
giving away power over
its messages or processes.
”
Patient centricity is often easily confused with engagement and compliance. Engagement is defined
as “actions individuals must take to obtain the greatest benefit from the health care services available
to them.” Compliance is following the orders of your
doctor diligently. Both these are not patient centricity. This makes engagement and compliance patient
oriented but not patient centric.
Patient centricity is slightly different and has been
defined as ‘a dynamic process through which the
patient regulates the flow of information to and from
him/her via multiple pathways to exercise choices
consistent with his/her preferences, values, and
beliefs. This fundamentally transformative concept
affects how health care decisions are made and who
has the authority to make them.’
To me, patient centricity is as fascinating a concept
as it is contradictory. It is fascinating because it
puts power into the hands of the patient. And it is
contradictory because pharma does not like giving
away power over its messages or processes. Pharma has traditionally never enjoyed interaction and
has depended on ‘pushing’ messages across rather
than having ‘conversations’. It probably also explains
why we make do with medical reps who are not the
sharpest knives in the drawer and scarcely do anything about it.
Why are we not patient centric?
Healthcare is an industry characterized by an asymmetry of information, which means that the seller
knows a lot more about the product than the buyer.
While this is often used as a statement to instill a
sense of pride in sales reps (“no one knows as much
about your product as you do”), it can also mean that
the consumer does not have enough information to
make an informed decision. And when he doesn’t,
he decides on the only thing that he can use to
compare, which is the price of one product versus
another.
10 | MedicinMan February 2015
This can dramatically change in the information age
when the internet allows access to information to
almost anyone. Availability of information suddenly
allows patients (consumers) to participate in decisions about their health. Can you imagine how valuable this can be in a self-pay market? If price sensitivity of consumers is pharma’s greatest challenge, why
can’t pharma think seriously about patient centricity
Salil Kallianpur | Digital Technology and Patient Centricity
How about building
long-lasting relationships
(with consumers) through
services that they value
rather than through
branded messages
which they don’t? In the
connected world where
every person and thing
is connected to the Net,
consumers tell us so much
about themselves every
single day.
”
11 | MedicinMan February 2015
which can create transparency and trust in a consumer about a company and its products and services?
Won’t services that create such trust in consumers
empower them more? Won’t such empowerment
make them advocates of pharma’s products?
The issue is that pharma rarely thinks beyond the
doctor. We route every single piece of information
through the doctor. At the conference as I spoke
about how the ubiquitous internet allows us to
make information available directly to consumers, I
realized that the word DTC is taboo. It is so because
pharma only thinks of pushing brand messages to
everyone it addresses. This, while study after study
shows that consumers trust branded messages lesser
than credible third-party alternatives. It would be
funny if it wasn’t ironical that pharma seems blissfully
unaware that it ranks somewhere between Big Arms
(weapons manufacturers) and Big Tobacco (cigarette
manufacturers) on trust and credibility! Despite this,
we continue to talk about creating trust and transparency for our stakeholders.
Opportunities for services to build trust
and loyalty
How about putting our money where our mouth is
for a change? How about telling consumers exactly
what they want to know. How about listening and
conversing with them and not merely pushing our
products? How about building long-lasting relationships through services that they value rather than
through branded messages which they don’t? In
the connected world where every person and thing
is connected to the Net, consumers tell us so much
about themselves every single day. What they’re
doing and eating. Where they’re visiting. When and
how well they’re sleeping. What issues they have with
raising children. What stress they go through. Etc. Etc.
How about active social listening? That would not
break any privacy data laws. Over years and through
assiduous collation of such data from the public
domain, trends begin to emerge. That is when health
becomes predictable.
If health could become predictable through Big
Data tools and analytics and we have a consumer
group that considers participating in health care
as very important, isn’t it a perfect match? Pharma
would probably not consider it important since it
wouldn’t relate to immediate product sales. But isn’t
a sustained relationship with a trusting and loyal
Salil Kallianpur | Digital Technology and Patient Centricity
Building sustainable
relationships with them
(the consumer) is definitely
possible. But not when
we only view them as
buyers of our products.
It can only happen when
we consider our product
sales as a by-product of
our relationship and not its
objective.
”
consumer group what every company in the world
seeks? Why then do we concern ourselves with only
selling our products? Why are relationships with
consumers unimportant to us? I speak about patients
who are the end consumers of our products. Sending
discount coupons or the occasional disease awareness leaflet to an aware and empowered consumer is
more an insult to intelligence than a service.
Building sustainable relationships with them is
definitely possible. But not when we only view them
as buyers of our products. It can only happen when
we consider our product sales as a by-product of our
relationship and not its objective. Our objective must
be to serve as a ‘go-to destination’ for their health
needs. Until then, we will only see patient-centricity
as an ethereal, futuristic and impractical inclusion in
CEO speeches, but rarely in action. No wonder the
audience at DigiSights2015 agreed. -SK
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12 | MedicinMan February 2015
E
A unique
model of
patient
adherence
The pharmacist is uniquely
situated to facilitate patient
compliance. Is pharma taking
note?
Pharmacists play a major
role in therapy adherence,
since patients have much
easier access to their
pharmacist and see them
more frequently than their
physicians.
”
Hanno Wolfram, is the founder and owner
of www.Innov8.de, a Germany based
company offering consulting projects for
pharmaceutical companies.
13 | MedicinMan February 2015
Hanno Wolfram
I
t is clear that patient adherence is key to the profitability
of the healthcare sector:
ˆˆ Only when patients adhere to therapy, a physician can
be successful.
ˆˆ Only when patients adhere to therapy, their health
will improve.
ˆˆ Only when patients adhere to therapy, the payer will
get what he paid for.
ˆˆ Only when patients adhere to therapy, a medication
can deliver what the drug promised in optimally managed clinical trials.
The interdependence between all stakeholders is clear,
and so is the problem!
“Medication non-adherence is one of the most serious
problems in healthcare, posing a heavy financial impact
on all constituencies. On the cost side, the New England
Healthcare Institute estimated that medication non-adherence is responsible for $290 billion in “otherwise avoidable
medical pending” in the US alone each year.” (Cap Gemini,
2012)
There can be an intriguingly simple solution:
Research by Durham University (published in the BMJ
in August 2014) proved, that 89 per cent of people in
England live within a 20-minute walk of a pharmacy.
This proportion rises to nearly 100 per cent for people in
deprived areas.
Pharmacists play a major role in therapy adherence, since
patients have much easier access to their pharmacist and
see them more frequently than their physicians.
Including pharmacists in patient adherence is a huge
opportunity to make money, save money and improve
patient outcomes. Or, to put it simply: becoming patient-centric.
The problem is, that Rx-pharma doesn’t even know the
pharmacist! There is a traditional “departmental wall” between the two pharma distribution-channels: Rx-reps promote products to physicians and OTC-reps fill the shelves
of pharmacists. In pharmaceutical companies the word
“patient centricity” circulates, but how can this become
true, when pharma fails to escort the simple “patient-journey” due to an antiquated(?) structural constraint?
KAM in Pharma 3.0 offers food for thought about a new
business model leveraging cross–functional collaboration.
-HW
KAM in Pharma 3.0
by Hanno Wolfram
Key Account Management is a major issue in the
pharmaceutical industry. This topic is driving
pharma companies and their professionals since
it is an essential approach when it comes to
renovating and updating the sales model of the
past.
The contribution of the pharmaceutical industry
to prolonged, healthier life and the reduction
of infant mortality undoubtedly remarkable. It
positively affects people around the globe. It might
be a good point in time and a valuable idea to alter
the business model from "simply selling drugs" to
actively participate and contribute to healthcare.
There evidently is no other instance, storing more
knowledge and expertise around specific disease
than the pharmaceutical industry. However, this
treasure often slumbers in research and medical
departments. Key Account Management needs
cross-functional collaboration. More value,
something beyond the pill, is needed, expected,
and demanded from healthcare providers. In
a globalized world, with universal access to
information, the variations of markets, determined
Avaliable on Amazon
(click to purchase)
by political will, the design of healthcare
and regulatory interventions are getting less
important.
One of the smallest common denominators is
that many HCPs and other players are readily
waiting for pharma to play a more active role in
the provision of healthcare, share their wealth of
expertise and provide appropriate medication.
This first edition of the probably first ever
textbook on Pharma Key Account Management is
meant to provide a basis for discussion between
professionals.
E
INCENTIVE
COMPENSATION
DESIGN
How companies can design their compensation
plans based on a fair and effective set of guiding
principles.
Amit Jain
I
ncentive schemes act as a strategic tool to align salesperson’s behaviour with business objectives. It acts as
a catalyst to motivate the salesforce. Incentive Compensation is the primary tool to differentiate between
salespeople based on performance and helps retain top
performers by clearly calling them out. It also plays a
significant role as part of total compensation structure
and acts as a lever to attract top talent.
Guiding Principles
What are the guiding principles that drive the structure
and definition of an incentive plan.
1. Is it aligned with desired business objectives? For
example does the plan drive the right customer
segments to be targeted?
2. Does it pay for performance? For example are the
salespeople being paid for capturing market share?
3. Is it fair insofar as it provides equal earning opportunities to all salespeople irrespective of their geography, historic sales, etc.? For example are the salespeople with larger geographic territories inherently
at an advantage?
15 | MedicinMan February 2015
Amit Jain | Incentive Compensation Design
4. Is it financially responsible? For example, Is the
final payout expected at the national level in line
with the expected achievement with respect to
the national forecast?
5. Is the pay competitive in the current labour market? For example, does it retain top performers?
6. Is the plan easy to understand for the sales force?
Can this plan be executed using existing IT infrastructure and can a fully automated process be
defined for successful operations?
Guiding Principles
Aligned with
business objectives
Pays for performance
Equal Earning
Opportunities
Defining the TTC (total
target compensation)
depends on how much
the organization weights
compensation as part of
it’s value proposition to
its employees. It is also
important to review
industry TTC benchmarks
for competitiveness
and clearly define
organization’s desired
market position.
”
16 | MedicinMan February 2015
Financially
Responsible
Competitive in the
labour market
Easy to understand
and implement
There are inherent counteracting pressures between
these guiding principles.
++ Need for the incentive plan to be simple to understand but also remain fair
++ The Incentive plan should be engaging but at
the same time it should be financially responsible
++ The Incentive Plan should support underlying
business objectives but at the same time be
manageable
++ The incentive plan should be implemented with
flexibility for future needs but the implementation should be fast and cost-effective
Design Framework
Given these guiding principles what design framework components are important to consider while
defining an Incentive Plan?
Total Target Compensation
How much should a salesperson should be paid in total? What should be the total compensation structure
including base salary and potential incentive payouts? The organization’s compensation philosophy in
general has large bearing on this element. Defining
the TTC depends on how much the organization
weights compensation as part of it’s value proposition to its employees. It is also important to review
industry TTC benchmarks for competitiveness and
clearly define organization’s desired market position.
This will help ensure that organization is able to
attract and retain right type of people.
Amit Jain | Incentive Compensation Design
Salary-Incentive Pay Mix
The pay mix should
ensure that the total
expected compensation
remains motivational and
yet financially responsible.
”
What should be the ratio between base salary and
incentives viz. the pay mix? The pay mix depends on
the extent to which the salesperson is responsible
for the final sale. For eg. Real Estate agent pay mix
leans towards higher incentives because the sales
are almost fully determined by salesperson capability. Sales Support roles usually tend towards having
higher base salary in the mix because of their lower
ability to impact the actual sale. Organizations that
don’t have adequate availability of data or confidence in measurement of performance also tend to
weigh incentives less. The pay mix should ensure that
the total expected compensation remains motivational and yet financially responsible. The pay mix
also plays a big role in signalling the type of salespersons to attract to that role.
Portfolio Definition
What portfolio of brands should you focus on for
each salesforce? One may choose to group all brands
sold by that salesforce into one basket and measure
on that. Alternatively, one may choose to provide one
incentive scheme to certain key brands that need
special focus and one incentive scheme for all brands
sold by that salesforce. Some organizations may
choose to focus certain individual brands sold as well
and measure each brand’s performance separately
to maintain higher focus. The portfolio definition
decisions are driven by the organization’s business
strategy, the brand focus they’re hoping to achieve.
Fine-tuning portfolio definition helps sharpen the
focus on which brands the organization wants to
push more.
Metric Definition
17 | MedicinMan February 2015
Once portfolios have been appropriately defined, the
next step is to define the metrics that define performance. What are the KPI’s that the business manages
around and how can those KPIs be rolled down to
sales performance metrics? Should a combination
of metrics be used? The metric should be chosen
such that it supports the desired business strategy.
Factors that affect the type of metric chosen are the
sales channel, the reliability of sales data and the
brand maturity. Ideally, one incentive scheme should
have no more than three plan metrics. A good metric
should be clearly measurable and specific. For example, a growth stage brand may be assigned a volume
growth metric but a mature brand may be assigned a
volume metric based on the organizatonal business
objectives.
Amit Jain | Incentive Compensation Design
Scheme Type Selection
... if the confidence in
national sales forecast is
low, a goal-based scheme
is not ideal. If variation in
territory potential is high,
a commission against
volume scheme type is not
ideal.
”
What sort of an incentive scheme should you choose?
Should it be goal-based to measure against predefined
targets? Should it use a matrix type scheme type to measure performance against two metrics simultaneously
(Primary vs Secondary data for example)? The selection
should be based on the organization’s specific needs and
the way it prioritizes the different guiding principle. For
e.g – fairness vs. simplicity, motivation vs. financial budget. Other factors which need consideration such as data
reliability, confidence in national sales forecast, variation
in territory potential etc. For example if the confidence in
national sales forecast is low, a goal-based scheme is not
ideal. If variation in territory potential is high a commission against volume scheme type is not ideal.
Curve Definition
What should the design of the payout curve assigned
to the component? Curve aspects like the threshold,
cap, kickers and multipliers should be considered? For
example, Does your organization believe in paying
incentives starting at 80% target achievement or only at
100% target achievement. At what performance should
you consider a multiplier to motivate top performers
more? How would my curve perform financially against
an unexpected higher national performance? Should I
cap top performer payouts at a point to guard against
outlier performances? Industry standards also play a role
to some extent in defining the upside and downside risk
depending on organization’s market positioning.
Incentive period definition
The incentive period definition also plays an important
role in incentive plan design. What is the measurement
period I should use for my incentive plan – Annual,
quarterly or monthly? How often should I pay my reps?
If a rep underperforms in earlier months, should I offer a
chance to catch up by the end of the year? When should
I run incentive calculations with respect to the end of the
measurement period? These depends mostly on data
reliability, expectations from the salesperson, system
capability and importance of meeting shorter term national forecasts vs. annual national forecasts.
Amit Jain is Co-founder and Director
of Operations at Aurochs Software, an
incentive compensation solution specifically
designed for the pharmaceutical industry
18 | MedicinMan February 2015
All the above attributes play a significant role in the
overall success of an IC plan. The qualitative impact of an
ineffectively designed plan is well recognized but companies fail to take into account the financial implications
(of increased attrition rate, lower morale, lost selling
opportunity due to higher shadow accounting and
dispute resolution time, higher administration cost) and
don’t put enough emphasis into balancing the inherent
counteracting pressures in the guiding principles. -AJ
With a chapter on “Managing Across Cultures” contributed by Anup Soans
Renie is on top of her game again and brings the A
Team to the world of Modern Sales Management.
With the explosion of social media and the immediacy
of shared experience for buyers and sellers, The
Art of Modern Sales Management is a practical
guide to navigating these changing realities, and the
action plans offered provide tools to ensure the best
opportunity for success. If you have a leadership role
within the sales organization, you need this book as a
guide and resource.
--Gary Summy, Director of Business Development Global
Accounts Operations, Xerox Corporation
The Art of Modern Sales Management is a must read
for any global sales leader. It's practical, relevant,
and grounded in the experience of seasoned sales
professionals who make a significant difference in
the organizations that they serve. This book includes
many useful tips and actionable ideas that any sales
leader can use.
A new book by Renie McClay published by
ASTD Press is apt for the global executive
with a local vision. “The Art of Modern
Sales Management” has 12 chapters, each
written by a leader in the field from around
the world.
Now available for readers in India
on Kindle and print on Amazon.
Download a free chapter of the
book here.
--Kimo Kippen, Chief Learning Officer, Hilton Worldwide
Renie has done a great job of selecting thought leaders
that speak to the challenges of selling in our new,
connected world. I absolutely love the framework of
the book and found myself skipping from one chapter
to another based on what I thought was most relevant
to the problems I am most interested in solving today.
This book is a must for anyone that understands that
front-sales management is tomorrow’s competitive
advantage.
--Pat Martin, VP of Sales, Estes Express
Renie McClay, MA, CPLP, has been a dynamic performance improvement professional for
20 years. She has been successful in sales, management, and learning and performance
roles at several Fortune 500 companies (Kraft, Pactiv, and Novartis). Founder of Inspired
Learning LLC, she continues to bring her passion and practical approach to all project work.
Inspired Learning LLC does design and delivery of energetic programs and projects around
the world.
E
Hanno Wolfram
Discounts Kill!
Lowering prices as a singular competitive
strategy will lead to a death spiral in the industry,
lowering profits and creating oligopolies.
“This isn’t just about saving money, most importantly, it is
about making sure that patients stay well and get the best
outcomes from their medicines.” This quote is attributed
to Lord Howe, when he was head of the National Health
Service in the UK.
The head of procurement from a hospital chain said:
“I say: “We need to improve our bottom line.” and they
hear: “I want a discount!”
Isn’t there anything better that the pharmaceutical
industry could deliver besides discounts?
There are plenty of requests from the so-called market and there are many competencies available in the
pharmaceutical industry to fulfill many requests. One
problem though, is that pharma does not seem to listen
to those with real solutions to their problems instead of
pill boxes.
It seems as if pharma knows only one game to play: “killing with discounts”. At first you might “kill” competitors
but this strategy can often end in suicide for the company. As long as pharma’s only strategy is to beat competitors’ prices, the number of pharma companies will get
smaller over time. There are a number of countries where
the drug business is already an oligopoly, with only very
few companies left.
The thrilling question is who will the survivors of the
discount battle be?
There are an increasing number of physicians, payers
and other stakeholders in healthcare, complaining about
pharma:
Many physicians complain about the time stolen by reps
visiting them, hardly delivering anything useful. Medical
reps appear trained to talk, rather than ask questions and
listen.
Hanno Wolfram, is the founder and owner
of www.Innov8.de, a Germany based
company offering consulting projects for
pharmaceutical companies.
20 | MedicinMan February 2015
Payers suffer from poor outcome of treatments, when
only half of all patients are compliant and fail to adhere
to the planned and prescribe therapy.
Depending on the country you will find, that governments and their health-ministers are struggling with
the role of pharma, when they sell drugs to hospitals at
almost nothing, and when prescribed for out-patients
demand high prices.
Hanno Wolfram | Discounts Kill!
The problem is that
there always is someone
granting a higher
discount and offering a
pill-box even cheaper.
This spiral is getting
lethal swiftly. Europe’s
largest drug market is
highly oligopolistic: seven
companies account for
almost 80% of the generic
market.
”
Patient associations are angry, because they see high-end
drugs costing a fortune for them, while in other countries
they pay only a fraction of the price.
Is pharma sensing the head-winds coming?
Pharma is the only industry that hires medical reps and
pays them to execute unsolicited calls in an attempt to
sell drugs to people who do not even buy.
Once the reps can no longer increase the pharma company’s revenue, their bosses change strategy and reduce
prices. Every percentage point of discount fully cuts
through profit and hits the bottom line. Everyone knows
this, since the second semester in Economics. One day
the margin will be reduced to a point where the currently
employed number of reps is too costly.
As a consequence the field forces is reduced in number.
CEOs and General Managers then all of a sudden find out
that the top line does not really suffer from the reduced
numbers in the field. On the other hand they see that the
bottom line rises sharply, after the so-called restructuring
costs are covered.
This is something contradictory to the second semester
in Economics/ Marketing. It goes against the principle of
differentiation. “Where is Pharma’s ‘Apple®’?
The problem is that there always is someone granting
a higher discount and offering a pill-box even cheaper.
This spiral is getting lethal swiftly. Europe’s largest drug
market is highly oligopolistic: seven companies account
for almost 80% of the generic market.
In a globalized world, GMP rules and FDA surveillance is
applied globally. With huge differences in production and
other costs, there is no chance for many companies to
escape the lethal spiral of a price war. There are a number
of countries and companies, with FDA-approved production, following GMP and any other regulatory detail that
can produce at much lower cost.
These pharma companies are profitably producing pills
at a cost and for a price that the poor and deprived and
many governments and payers can only dream of.
There is a cure to this single strategy of reducing prices
and granting discounts. If the pharmaceutical industry
would develop strategies to get actively involved and
contribute to healthcare by sharing all their knowledge
and expertise around specific diseases, this could add
huge value and considerably improve patient outcomes.
The business-model would change from selling pill boxes
to improving healthcare and the sales model would
change from “pushing drugs” to Key Account Management 3.0. -HW
21 | MedicinMan February 2015