a-connect addresses Pharma Stakeholders at the World Pharma Pricing & Market Access Congress 2016


a-connect attended the World Pharma Pricing and Market Access Congress 2016, held in London on 24–25th February. Representing a-connect were Claire Hempshall (P&MA Lead), Zornitsa Petrova (P&MA Director), Aunia Grogan (Global Head of Life Sciences) and Romjan Ali (Independent Professional). The conference was well attended by global industry stakeholders, including payers, pharmaceutical companies and pharmaceutical consultancies, many of whom visited the a-connect booth. On the first day of the conference, Aunia Grogan presented a paper entitled ‘Establishing and Maintaining Access in an Evolving Environment’.

Summary of Aunia Grogan’s paper

In order to achieve continued growth in a changing environment, the pharmaceutical industry must tackle a number of core questions and challenges.

What are the key challenges the pharma industry is facing?

Over the last decade, we have seen a number of important evolutions in the industry:

  • Market dynamics: increasing importance of emerging markets, increased use of stacked or combination therapies, increased use of generics and biosimilars, shift to personalised medicine.
  • Industry structure: greater regulatory hurdles, increased role of the payer, emergence of risk sharing/patient access schemes.
  • Product mix and provision of care: move from primary to secondary care, focus on orphan indications, focus on new technologies (e.g. gene therapies), standardisation of treatment pathways.
  • New science and technologies: increased capture of patient data, availability of the cloud, proliferation of social media, growth of mobile applications for smartphones.

How is the industry responding?

The end of the blockbuster era has created tremendous pressure on the industry to maximise value from its assets, and this requires a launch model which delivers both speed and quality of execution. The industry is exploring numerous avenues to achieving this: i) enhancing launch planning, ii) implementing launch academies, iii) introducing a project management office (PMO), iv) developing personalised healthcare capabilities, and v) expanding evidence generation (health economics and real-world evidence).

What does this mean for P&MA?

The evolving operating model has had a huge impact on the P&MA team. More is expected of the P&MA team—greater knowledge, increased technical expertise and enhanced business skills—despite there being fewer resources overall and a need to ‘do more for less’.

What do you mean by ‘knowledge’?

The P&MA team are now expected to know about a greater number of emerging markets, all lifecycle stages and funding routes that would not have been explored in the past.

What do you mean by ‘technical expertise’?

The P&MA team must understand complicated science and complex evidence, develop sophisticated argumentation and tools, and create and execute intricate agreements.

What do you mean by ‘business skills’?

The P&MA team needs strong problem-solving and time-management skills and the ability to work within multi-disciplinary teams in order to effectively support the business.

Are we ready to meet these challenges?

The following questions will help you determine whether your team is ready:

  • How well integrated is your P&MA team with other teams across the business?
  • Are you involved early enough in commercial decision making?
  • How effective is the team in influencing internal and external stakeholders? Are you able to ‘manage up’ and effect necessary changes in the organisation?
  • Do you have skills gaps around specific markets, technologies or services?
  • How well equipped are you to deal with spikes in demand?

Key learnings from the conference

There is no end in sight to the pressure on the pharmaceutical industry to justify prices in an environment of constrained public healthcare budgets and a patient- and media-driven backlash against perceived unjustifiably high prices. The industry must communicate value in terms that are understandable and relevant to all stakeholders, regardless of their role and drivers. The challenge is that there continues to be no common approach to assessing and determining the value of drugs. This is unlikely to change in the near future, despite ongoing efforts to develop a consistent approach by the European Network for Health Technology Assessment (EUnetHTA), among others.

Disruptive healthcare technologies (such as ‘cures’) create huge challenges for payers who are constrained by short-term budget pressures. Adaptive pathways and early access schemes mean there is limited evidence on which to assess value. Affordability is a big challenge because there is often a change in payment terms (i.e. costs previously spread over many years are now condensed into weeks or months). In addition, current P&MA systems limit the opportunity to move away from a ‘price per pill’ mind-set—a move that could help improve affordability for payers.


About a-connect, the human resourcefulness enterprise

At a-connect, we help leading global businesses confront the future by increasing the pace and impact of their critical projects. With our unrivalled global network of experienced independent professionals, we create winning teams with the perfect combination of skills, experiences and qualities, to supplement your internal team and to provide you with a consulting service that is more thoughtful, individual, imaginative and enterprising. This is what we call human resourcefulness.

For more information on how our team of Life Sciences and P&MA experts can help you prepare to confront key industry challenges, please email us at info@a-connect.com or visit www.a-connect.com.

Go-to-market strategy: Addressing and engaging your customers effectively

Within a rapidly changing and ever-more digital and competitive business environment, a clear and up-to-date go-to-market (GTM) strategy is key for success. In this short article, we’d like to provide you with the key elements of a GTM strategy review, so that you and your company can achieve top- and bottom-line growth by addressing and engaging your customers more effectively.

A GTM strategy is the plan of an organization to effectively and efficiently deliver its unique value proposition to customers. This can be achieved by leveraging internal (marketing and sales) and external (distributors and influencers) resources.

The goal of a GTM strategy review is to:

  1. segment customers according to potential and behavior;
  2. define a customer engagement strategy for each of these segments; and
  3. align the organization’s capabilities and resources accordingly.

So, let’s look at each of these elements in more detail.


1. Customer segmentation

Customer segmentation is best done in two dimensions, to serve two different purposes.

    • Segmentation according to potential. Customers should be divided into segments in terms of their potential – e.g. small, medium and large – and the total gross margin that can be realized by each segment needs to be understood. If needed, a more granular segmentation of one or more segments can be made. If, for example, the small segment is not interesting enough to invest in, and the large segment is already well served by competition, you may want to focus your time and resources on the medium segment.

Why do you need this? To decide which level of resources to invest in a customer, you first need to understand your potential with that customer.


  • Segmentation according to behavior. Market research on a large enough sample of customers, potentially in different geographical regions, will allow you to have a second grouping (orthogonal to the one described above) based on customer behavior. You will identify clusters – for example:
      • conservative customers: reluctant to innovation, risk averse;
      • innovative customers: looking for higher profitability via new products; and
      • price-sensitive customers: looking for the best return on investment (ROI).


    The answers to a set of key questions (the ‘Golden Questions’) will allow us (1) to define the clusters specific to the market and economic cycle, and (2) to determine the patterns that associate customers to clusters via a stochastic methodology. You will also be able to get additional information on areas such as customers’:

    • attitudes towards company products (price sensitivity, innovation, switch to generic propensity);
    • plans to grow their businesses and invest; and
    • needs (e.g. peace of mind, stability, good prices). 

Why do you need this? To decide which level of resources to invest in a customer, you first need to understand your potential with that customer.


2. Customer engagement strategy (CES)

A CES defines how a company plans to engage with its customers. The main elements you need to work out are:

  • Needs. What are the customers’ needs and what is your objective for each cluster? (E.g. the objectives could be to upsell, to propose new products or to cross-sell.)
  • Products. What products should be promoted to each cluster? (E.g. don’t propose innovative solutions to conservative customers.)
  • Services. What services should be proposed to each customer? (E.g. innovative customers will appreciate innovative services, such as financial solutions or technical trials to assess the ROI of your new products.)
  • Your engagement strategy:
    • Touchpoints. Depending on the ‘potential segment’ and ‘behavioral cluster’, you can define the optimal touchpoints by analyzing the ROI and the efficacy of your customer engagement.
    • Influencers. Each cluster is sensitive to specific influencers (in the form of key opinion leaders, sales reps of distributors, university speakers, or even neighbors or colleagues).
    • Channel. In some situations, distributors can be more adequate to serve specific clusters due to a better cultural/mindset affinity and also due to the means available to serve such segments (assets, know-how, people).


3. Alignment of capabilities and resources

As a last step, you need to align your organization’s capabilities and resources with your customer segments and CES.

  • Coverage: salesforce resource allocation
    • Based on segmentation according to potential, you can define how your direct sales and demand creators should be employed:
      • What is the coverage ratio of each segment and cluster?
      • How much time should be spent with each customer? (Low-potential customers are still worth a visit, but the time that you allocate should be less. This is key, as it will free up resources to better serve your high-potential customers.)
      • Note: You can also consider scenarios based on an increase of your salesforce to serve more customers, but this is an add-on and not the main objective of a GTM strategy assessment.
    • Based on historic data, you can also calculate the correlation between the increase of share of wallet you have with your customer versus the number of visits and time spent with them. You can also estimate the increase in average spend of your target group (direct versus indirect). These two analyses allow the defining of a rough indication of the financial returns and investment needed.
    • Lastly, an important aspect is related to the services and touchpoints you provide to the customer. An analytical approach can help fine-tune this aspect. What is the real cost of each service you provide? What is the touchpoint cost? Not surprisingly, you will find that you want to reach your low-potential customers via low-cost means (e.g. indirect marketing), while you may want to provide value-added services at no or very little cost to your most valuable customers.
  • Customer marketing optimization
    • You need to run a quick review of the activities in which customer marketing is involved and how much time is spent on which activity. What portion of it is allocated to value-generating activities?
    • Campaign managers need to be trained on the CES of the clusters, to define KPIs and track progress, and embed the required data (company details, tracking of response rate of different campaigns, etc.) in your CRM system.
    • There is also a need to train the team on touchpoint design (e.g. by campaign during 12 months). The training requirements should be assessed by studying the gap between cluster needs and team capabilities.
    • A plan has to be defined for each of the touchpoints and influencers.


4. Summary

Conducting a GTM strategy review can be a small or big exercise depending on the specificities of your business and the scope of the review, but the goal is always the same: to address and engage your customers more effectively.

If you wish to learn more about a-connect’s experience in this area, just give us a call or drop us an e-mail.

Distribution Strategy

Why should we invest time into improving our distribution channels?

Well-managed distribution channels not only improve the short-term financial performance of a business by reducing costs and increasing sales, but also play a crucial role in shaping a dynamic and well-functioning ecosystem. They lead to an enhanced competitive position, effective execution of the go-to-market plan, efficient allocation and use of resources, and more enlightened and engaged teams. For instance, by selecting a few reliable partners, we can launch new products more effectively, promote them to retailers without investing in a sales force, and command superior pricing via more efficient structural offers. At the same time, a wise partnership with other wholesalers allows us to extend our reach and improve our margins by reducing overall spending. A common mistake is to underestimate the importance of tier-3 partners, as in A, B and C. We need to have a clear strategy for each segment. For instance, A-distributors bring volumes, stability and predictability to our business and deserve a special treatment for this. B-distributors can often play a key role in counterbalancing the threat of an oligopoly of the largest channel partners and can create the conditions for a Nash equilibrium. Finally, C-distributors can contribute very significantly to our bottom line by absorbing lower incentives per each dollar of product sold and hence improve the overall business profitability.

Why did you write a book on distribution strategy?

The idea for this book came from a simple observation. It is well known that effective sales channels inevitably translate into superior performance but there is not much literature providing a concrete answer to managers’ needs. In recent years, commercial excellence initiatives gained currency in areas such as sales force effectiveness, pricing, go-to-market and performance management but little has been done to improve the performance of distribution channels. A second consideration is purely financial: the incentives budgets of global corporations have been growing due to increased consolidations and mounting competitive pressure. In many instances, gross-to-net spending is, nowadays, a multiple of the company sales force cost and is much higher than its earnings. My direct experience convinced me that much still had to be done in such a crucial area; most of the time, CFOs and general managers knew the total discounts budget but very seldom were able to tell how, for what and with whom this money was spent. I rarely saw a clear plan on how to optimize what often represent a business biggest expenditure. These considerations started to plant in my mind the idea of structuring the learnings of multiple projects in a written format.

How do you create a successful distribution channel strategy?

An optimal commercial strategy should motivate and give legs to the go-to-market plan, serving more of the customers’ needs faster and better. To this end, the commercial policy should be effective in shaping the distributors’ behavior, crafting efficient terms and conditions (each dollar should work towards a defined objective), calibrating targets not only to improve the top line and product mix but also to steer the channel development. At the same time, it should minimize the gross-to-net operational expenses and the financial risks by wisely merging the credit policy with the commercial priorities. There is a fundamental pricing component in all this: rebates and discounts should be well-balanced, and price waterfalls should include (when possible) value-based pricing and grant congruous margins to distributors and retailers. After all, if distributors and retailers are not happy, they will just sell our competitors’ products. Each decision also has to be tailored to the product’s strategic segmentation and profitability, leading to an ideal pull–push balance. We should link the value perceived by the end-user with the need to have a distributor negotiating shelf space with the retailer and the salesperson promoting the virtues of our great offer to their customer. All this has a price – can we give it a tag?

How can your book help decision-makers and teams?

Each page is written with pragmatic goals in mind: growth, profitability and sustainability. Theory and methodology are just a means to an end; therefore, the focus is on execution and, ultimately, impact. Each chapter illustrates the trade-offs and explains how to create, evaluate and choose among the options. The methodology focuses on the design of an effective commercial policy (list pricing, discounts, rebates, terms and conditions, targets, etc.) and the optimization of gross-to-net expenditure (resource allocation, segmentation, exception management, leakages, etc.). For instance, you will learn how to set the optimal incentives budget, identify the right channel partners, define the discounts and rebates and the required investment to ‘push’ a product sale. Specific sections are dedicated to value pricing, business intelligence and corporate strategy. Being mindful of the fact that a distribution strategy can only be effective if coherently integrated into the commercial excellence journey, ample reference is also made to SFE, CRM systems, brand planning, portfolio strategy and performance management.

In a nutshell, you will learn how to:

  • structure an effective commercial offer and allocate resources efficiently across the commercial terms while minimizing expenditure (i.e. spending efficiency)
  • shape an effective and future-proof distribution channel that is able to flawlessly execute our go-to-market plan (i.e. sustainability) in a timely manner
  • define and take into account value-based pricing strategies while defining the distribution plan (i.e. pricing strategy)
  • achieve a competitive advantage and increase sales by leveraging distribution partners to better serve customer needs (i.e. go-to-market execution)

How did you find the process of writing a book?

I started by bringing together all the learnings from my various hands-on experiences in different sectors and condensing them into a simple and practical methodology. I then complemented this with bibliographic and academic research and expert interviews (including with leading consultancies’ pricing specialists, business intelligence advisors, general managers and heads of marketing). Two interviews even became specific sections written by the experts themselves. I then selected over 70 frameworks, along with tables and real-life examples, to accelerate implementation and enable the reader to enter into execution mode from day one. To steepen the learning curve, I decided to add a specific chapter on the most common pricing pitfalls and myths, and an annex chapter with a case study issued by the pharmaceutical industry. A few highly regarded scholars and C-Suite executives (to whom I owe the deepest gratitude) validated the write-up and the concepts I exposed; some even provided an endorsement. By this stage, the hardest part was done; however, the journey ahead was still very long. Along the way, I discovered how time-consuming the polishing and proofreading process is. In fact, the bulk of the work came after the first draft was completed! It has been a really intense task but also extremely gratifying. It has given me the opportunity to get to know and work with inspiring people along the way.

The book is available in different formats on Springer here.