Alan Kidd, a member of the CHASE Business Development team, looks how these unpredictable times in pharma call for flexibility, and how the industry must adapt to survive.
By the time this article is published, the result of the 2019 UK General Election will be known and irrespective of the outcome, the ‘political football’ that is the four Nation NHS will again be centre stage. The issue of Brexit has further pushed the travails of the NHS to the front of the political agenda.
We shouldn’t really be surprised, because the NHS has been around for more than 70 years and is an integral part of British society. However, as the population gets larger and people live longer, and with treatments getting ever-more sophisticated and effective, it is no surprise that the money required to keep pace only increases. In fact, in 2019/20 the Department of Health and Social Care in England plan to spend £139.3 billion – of which 95% will go on salaries and medicines/devices. Add in what’s spent in the other four nations and the sums are so significant that it inevitably has a knock-on effect on the industries that service the NHS.
“The need for high quality, motivated and commercial individuals won’t change, but the demand for more flexibility may well”
The move towards merging NHS and social care budgets, with structural changes to match, will increase the need for industry to adapt if it is to survive, let alone thrive. Pharmaceutical and healthcare companies will again have to balance pleasing their shareholders with ensuring that the NHS gets value for money.
This is challenging, particularly for new products that offer incremental improvements on existing treatments. The argument being, why should the NHS spend more money on a new product that offers only a marginal improvement over products which may already be off-patent and therefore available in a cheaper generic form? This can mean that innovative new products coming to the UK market are delayed, which effectively reduces time between discovery and loss of patent protection.
To secure a licence, the product has to be proven to be safe to use, then clinical studies have historically focused on demonstrating significant improvements in efficacy compared to a placebo. However, with patent expired market-leading products that are both safe and effective, increasingly payors are demanding that clinical studies offer real world evidence, which demonstrates that the new product offers significant benefits over these current market leaders.
Even when the demands of NICE/SMC etc are met, and a licenced product is approved for use in the NHS, there is no guarantee that a new product will be adopted quickly and consistently. Gone are the days when a licence was granted and companies could rely on a UK-wide launch to grow market share. Increasingly, local decisions at Health Authority and Health Board level can result in a patchwork of uptake of new products. Local formulary decisions at CCG, hospital or even at GP practice level can add further highly significant delays.
Expect the unexpected
Irrespective of the 2019 election result, what can the UK pharmaceutical and healthcare industry look forward to in 2020 and beyond? In a word, unpredictability!
This ‘unpredictability’ means that companies are having to look at numerous ways to effectively and efficiently launch and grow their new brands, whilst maintaining appropriate resources behind mature brands. Not only do they need to decide on the correct mix of roles, but they are also wisely asking if having all of their commercial field-based resource on permanent headcount is absolutely necessary, or indeed financially prudent.
In the current climate, having all commercial field-staff on permanent contracts is a high-risk strategy. Should a product launch flounder due to slow market access, then the possibility of having to downsize teams becomes a reality, with all of the significant costs of redundancies, as well as the impact on corporate reputation, company motivation and the ability to attract talent in the future.
Against such a challenging backdrop, how can pharmaceutical and healthcare companies ensure success and manage risk?
Clearly, one area to consider is the benefit that comes from having increased flexibility across commercial teams. The size of sales forces is reducing, but in contrast the proportion of contractors is increasing for the following reasons:
In an NHS environment where unpredictability is a constant, the services offered by CSOs remain highly relevant – perhaps more so than ever. The leading providers of CSO services, including CHASE, continue to develop their offering to match the needs of clients – for example, meeting the demand to provide more specialist teams, deploying field resource in a more thoughtful way, and ensuring that top talent has a route into the industry. Therefore, one prediction for 2020 is that the need for high quality, motivated and commercial individuals won’t change, but the demand for more flexibility may well.
Alan Kidd is a member of the CHASE Business Development team. Go to www.chasepeople.com