Mick O’ Leary, Regional President – Commercial & Patient Solutions at Ashfield Commercial & Patient Solutions looks at the advantages, challenges possible futures of CSOs, and how they can optimise their role in better sales strategy development?
The pharmaceutical industry is in the midst of unprecedented change, driven mostly by the migration of product portfolios from mass market solutions to highly specialised and/or personalised therapies. In this environment, reimbursement is becoming more complex and successful commercialisation means targeting multiple, often self-educated, stakeholders before a prescription is even written.
In response, the pharma industry is exploring new sales and marketing models to meet these modern challenges. Traditionally, contract services organisations (CSOs) have provided a flexible, cost-effective way for the pharma industry to adjust the implementation of its strategy by providing sales representatives on-demand. However, given the current state of flux, just how relevant can CSOs be in helping pharma companies manage such major changes in the way they engage their audience?
“Increasingly, CSOs are playing a major role in helping pharmaceutical companies adapt to changes in incumbent markets or access new treatment demographics or geographies”
Addressing a changing market
Despite the singular challenges the pharmaceutical sector faces, it has sustained growth for decades while adjusting to increasingly stringent regulatory requirements, new customer dynamics and fluxing market pressures.
One area that has more recently seen major change has been pharmaceutical sales. In short, the number of field representatives has shrunk dramatically over recent years, coinciding with a drop in access to healthcare providers, in addition to the advent and subsequent proliferation of digital communication channels. These challenges have collectively been major drivers in a reliance on CSOs across most pharmaceutical businesses. There has been a huge increase in demand for sales representatives on more flexible contracts and more sophisticated, often digital-led, and integrated sales campaigns.
Providers like Ashfield have broadened their offering beyond the representative and have developed other channels such as medical science liaison (MSL) teams, remote services (including remote key account managers (KAMs) and MSLs) and sophisticated AI-driven patient support capabilities. All can be linked together and are underpinned by sophisticated data analytics, strong recruitment, compliance and an enhanced understanding of the market.
CSOs are playing a major role in helping pharmaceutical companies to adapt to changes in incumbent markets or access new treatment demographics or geographies. This has a number of inherent benefits (flexibility, scalability, access to expertise) but most importantly it enables pharma businesses to rapidly optimise levels of sales resources and mitigate the risks associated with building permanent in-house teams. As pressure on the pharmaceutical industry to operate ever more effectively and efficiently escalates, outsourcing of field sales is certain to increase.
However, CSOs can and should be playing a prominent role in strategic decision making when it comes to sales. In response to the pressures mentioned, pharmaceutical businesses will soon be making long-term commitments to addressing the commercialisation needs of the sector via trusted CSO partners.
To deliver on short-term projects, contracted commercial providers must get the basic, foundational elements right and establish trust by rapidly deploying and retaining representatives with the appropriate skill set for the engagement. But there is an unmet need for more fundamental change in go-to-market healthcare models, and the pharmaceutical industry is ready for CSOs to be more proactive and collaborative with their strategies. As a result, there is a growing focus on ‘strategic sourcing’ which involves developing partnerships instead of using contract services as a buffer at intermittent points of a campaign.
Strategic sourcing is the outsourcing of a substantial percentage of non-core services, with the aim of enabling a pharmaceutical company to focus internal efforts on business-critical objectives. In the sales department, this means the outsourcing of day-to-day sales activity while the pharmaceutical company pays attention to the development and marketing of its brands.
Moving from commoditised services to strategic partnerships can realise a greater mutual value, but it requires a long-term approach from both CSO and pharmaceutical businesses. Co-determination of marketing, pricing and access strategy would likely be central considerations of any such model, followed by everything from marketing communications to sales force sizing, candidate profiling, targeting methods, call lists, sales training and sales materials. Both parties would need to be involved in recruitment specifications, training, measurement and reward-system design. A successful roll-out and the ongoing partnership would require buy-in and constant engagement from senior stakeholders in both organisations with a focus on day-to-day operational quality.
There is also greater emphasis on CSOs to deliver more than just a commodified service. To be viewed as strategic partners, CSOs need to challenge businesses with new ideas. Drawing on the sector-wide information generated by their business analytic systems, they could position themselves as increasingly proactive by showcasing best practices, identifying new market opportunities or demonstrating added value. Given their focus on sales models, CSOs could also consider advising on new, integrated commercial models and helping their customers to implement them. There also needs to be some consideration of pricing models, as traditional flat rate arrangements will need to give way to models based on shared risk and reward.
Outsourcing by the pharmaceutical industry has been changing over the past three decades, becoming more strategic, with little sign that it will slow down any time soon. As contract providers grow, developing their reach and capabilities, and pharmaceutical businesses push for leaner operating costs, it is possible that integration will eventually be replaced by the outsourcing of all commercial and customer-facing functions for a particular brand or franchise.
Everything from clinical trials, research, manufacturing, back office processes and a large proportion of commercialisation activities are already being outsourced, while ideas about what capabilities should remain core are in flux. It is up for discussion as to what cannot be outsourced, with some believing that the purpose of a brand is the only thing that is truly ‘core’. This is already the case for many virtual businesses and there is no reason that this mindset could not be adopted by larger organisations. For contract commercial providers, this means going beyond offering services to becoming true partners – sharing risk and reward, guiding strategy, and forming decade-long relationships.
Mick O’ Leary is Regional President – Commercial & Patient Solutions at Ashfield Commercial & Patient Solutions. Go to www.ashfieldhealthcare.com