One of the side effects of COVID-19 is the acceleration of a shift in health care delivery that is changing how drug and device companies market their products to doctors.
There’s no going back to the commercial model where having a sales rep call on a doctor was the way to market a product, Rita Numerof, CEO and co-founder of Numerof & Associates (N&A), said during a Jan. 21 webinar on the impact the pandemic has had on drug and device detailing.
Going forward, manufacturers will need to develop alternative models and compelling stories about the economic and clinical value of their products for their health care customers, she added.
Health care delivery has been in flux for a while now, given consolidation, regulatory changes and technology advances, Numerof said. The face time sales reps get with doctors has been decreasing, even as the number of doctors available for sales calls has declined. Consolidation of health care providers has reduced the number of organizations to call on, and decisions about which drugs, devices or diagnostics to use are often made by committees rather than an individual doctor.
Even though those changes were making it more challenging for sales reps to meet with doctors, most drug and device manufacturers were still reliant on that sales model before the pandemic.
According to a N&A report, 90% of 60 sales executives and decisionmakers interviewed from 36 biopharma and device companies indicated that, prior to COVID-19, they recognized they needed to evolve their commercial model to reflect the changing market dynamic, but their companies hesitated to make changes and risk near-term sales for potential long-term benefits. One executive said changes to the commercial model were at least 10 years away.
With that thinking being the norm, only 17% of the companies participating in the survey had begun evolving their commercial model before COVID-19 spread across the globe, N&A Vice President Kim White said. Those companies had developed a framework to make long-term changes to their sales model, and some of them were beginning to implement it by restructuring sales functions, modifying their approach to segmentation and targeting, relying more heavily on digital engagement with customers, or changing the structure and market approach of their field force.
Another 50% had recognized the long-term benefit of rethinking their sales model, but they weren’t actively planning changes prior to the pandemic, White said. Now most of those companies are planning on institutionalizing some of the changes they’ve had to make in response to COVID-19.
While 22% of the companies included in the survey have made tactical sales changes during the pandemic, they’re still taking a wait-and-see approach before investing in long-term changes, White said.
The report quoted an executive from one of those companies as saying, “It’s not too early to commit to virtual detailing for the rest of the year, but it is too early to commit to the long-term without knowing how the market will react.”
Executives from the remaining 11% of the companies represented in the survey said they believed that when the pandemic is over, their companies will return to business as usual, with sales reps once again doing most of their detailing through face-to-face meetings, White said. Some of them attributed that belief to company leadership being “extremely traditional and not likely to shift too far away from the way things have been done in the past.”
White noted that the differing attitudes toward the need for a new way of conducting sales were not dependent on the size of the company, therapeutic area or the stage of development of their products.
Move beyond the old norm
Clinging to the “idea of ‘this is how we’ve done it’ is not a recipe for success,” Numerof warned during the webinar as she cited the “fundamental changes” taking place in health care delivery. She described COVID-19 as a catalyst that’s accelerating the pace of those changes and increasing the pressure to demonstrate that a drug or device provides economic and clinical value.
For instance, economic value has become a bigger issue for many providers during the pandemic, as the cancellation of high-revenue elective procedures has put them in a financial bind, she noted.
So what will a new commercial model look like? There’s no one-size-fits-all solution, Numerof said, but manufacturers must understand the need to adapt to a new reality that will include continuing consolidation of health care providers and more centralization of product decisions that will be more objective and value-based rather than relational. While manufacturers still will need doctors to have confidence in their products, they must recognize that clinicians won’t be the only voice at the decision-making table.
Given that virtual detailing will outlast the pandemic, White said many companies are looking at a hybrid model that reserves in-person interaction for high-value customers. Such a model, along with the emphasis on value, will demand new skills.
In addition to being able to engage with clients virtually, the executives interviewed for the report said sales reps will have to detail a portfolio of products rather than just one drug or device. They also will need skills similar to those of a medical science liaison, as the types of questions clinicians are most interested in are the science and clinical data supporting a product.
Companies also may expand their commercial use of medical teams, especially in answering questions about complex products used in areas such as oncology. In the past, in-person visits with medical science liaisons were restricted, but virtual communication during the pandemic has made the liaisons more available to answer doctors’ questions. That has had a favorable response from doctors, according to the report.
But key to any change in a company’s commercial model will be its culture and vision. Companies must continuously scan the environment for discontinuities so they can envision a different tomorrow, Numerof said, adding, “You can’t get to a place that you can’t imagine.” Company executives must have clarity about what an alternative future may look like and then think about how to get there, she explained.