In a healthcare landscape where value remains a major focus, market access has taken centre stage.
But market access as it has traditionally been pursued will not satisfy the needs of the current value-based landscape. By viewing market access and development as distinct functions, life sciences companies not only risk losing ground in pricing and contracts. They also risk leaving a potential source of competitive advantage on the table: a market access area aligned with customer needs.
In the wake of rising healthcare costs, the increasing power of payers and other players has created the challenge of providing a compelling value proposition to stakeholders across the healthcare system. Hay Group’s experience indicates that successful and profitable development in the life sciences industry will, henceforward, be driven by a clear understanding of what constitutes value for various stakeholders that make up the market.
Clearly, pharma sector has relied on a product-centric mindset for too long. Success today demands a customer-centric strategy. However, a customer-centric strategy requires a clear operating model, far different from the one used in the past, and a sound human capital plan to implement it. As a result, ‘market access’ efforts need to evolve from their traditional reliance on pricing, contracting, sales, and account management activities.
This transformation requires a three-step change agenda:
- A mindset shift to a value culture
- The capacity to scan, build solutions, and adapt
- A sound human capital strategy to support new market access capabilities
Committing to a value culture
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Ian Wilcox
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Top science will always be indispensable, but science alone is no longer sufficient. Companies need a stronger customer focus. To borrow a concept from the consumer goods industry, companies must become adept at ‘design thinking,’ a mindset that has proven successful in other industries in the past decade or so. For instance, when P&G was losing market share in the early 2000s, the company called on employees to build products around the customer’s experience of them. P&G dubbed this ability ‘design thinking’, and it is credited with reviving a number of flagging brands.
The transformation of market access will require a similar shift from a product focus to a customer focus. It means seeing that innovation does not come from science alone; it lies primarily in the extent to which science enters and influences the value chains of customers.
To view a product in this ‘outside in’ manner, companies need to understand ‘customerness’. In their book MBA Fundamentals: Strategy, Thomas P Ference and Paul W Thurman developed the idea of ‘customerness’: a concept that does justice to the complex question, ‘Who is the customer?’ The concept of customerness is useful in distinguishing between the multiple parties to a healthcare purchase – including those who use a therapy (patients), those who decide to use it (physicians), those who pay for it (public and private payers), and those who benefit from it, both medically and economically (patients, but also a host of other parties). Importantly, understanding who benefits from a therapy affects how, and for whom, pharma companies construct value propositions.
Preparing for transformation
Scanning: In the quest to transform ‘market access’, scanning becomes the first step, a strategic activity to gauge and anticipate stakeholder needs in the different markets in which a company operates. Scanning involves searching for potential areas of mutually beneficial collaboration, such as collaborations with payers to examine claims data. It also involves seeking new ways to deliver benefits to healthcare stakeholders.
Building Solutions: The next step, building solutions, requires turning the opportunities generated by effective scanning into reality. From a human capital standpoint, it requires leaders to develop winning partnerships, such as customer advisory boards, and to overcome organisational inertia and persuade colleagues who may resist new opportunities for collaboration at the senior level. It entails finding pragmatic ways to partner with the customer, and requires implementing a customer-oriented value focus in R&D.
One implication of this new focus is that research should be driven by stakeholder needs as well as by science. According to Dr Tehseen Salimi, TA Vice President in Global Medical Affairs, AstraZeneca, producing the kinds of evidence most meaningful to each stakeholder is vital, as is generating the data necessary not only to win approval but also to demonstrate measurable cost and efficiency benefits as science travels ‘from the bench to the bedside.’
Adapting: Finally, adapting, the ability to realign company resources as the market evolves, implies that top management must remain in close contact not only with the science, but also with healthcare stakeholders and the market. Remaining agile is therefore key. Leaders must be able to manage the tension between efficiency and adaptability as well as between adherence to processes and the flexibility to amend processes in response to opportunities. Collaboration is a much-needed ingredient of adaptability. Leaders should amplify the strengths of their colleagues, work through others, create strong teams, mentor subordinates, and work with the good of the organisation in mind.
These always are good ideas for most businesses. But for pharma in its coming transformational era, they may make the difference between success and failure.
Finding – and keeping – the right people
This journey requires hiring and rewarding employees who demonstrate adaptability, resilience, tact, and flexibility. In addition, the value-based environment calls for new descriptions of roles (some of which have not been invented yet), a new understanding of what success means, and new rewards for leaders.
Market access teams will need to work across more functions than ever before, and this will call for a new set of behavioural skills: the ability to think cross-functionally, to see the business from the outside in, and to act within a dynamic environment. Talent will be required to develop the ability to perceive complexity, to understand products from the vantage points of different stakeholders, and to notice opportunities to drive value for customers and for the company at the same time. This means that key traits of employees for today and in the future will differ from those previously associated with market access roles—and be less static than they have been in the past decades.
Importantly, it is investment in talent and organisational capabilities that will yield significant competitive advantage—more so than improvements in areas such as sales, payer marketing, contracting, and relationship management. While these areas remain indispensable, in most companies they are streamlined activities where improvements will be incremental. Roles that will become pivotal are those that link the organization to outside stakeholders, such as evidence-based medicine leaders or cross-functional product or brand leaders.
Rewarding leaders who can align the organisation with stakeholder needs means rethinking compensation at all levels. While there still may be a place for classic measures based on financial performance, hiring, performance management, development, and promotion processes will also need to support the goal of showing value.
Looking ahead
Transformed through this three-pronged approach, market access will become a strategic capability. In a previous, less dynamic climate, it made business sense to treat market access as a path to a predictable revenue stream. But as pharma companies worldwide are experiencing, this is no longer a viable strategy.
The worldwide drive to make healthcare costs sustainable demands that companies shift their market access strategy from one centered on products to one centered on showing value. Focusing on the uniqueness of product attributes is necessary but not sufficient, and a scientifically superior product alone is not enough. It must be supported by a strong health economics case for the value that such superiority can deliver to constituents.
Again, in the context we have described and the future we envision, the bottom line is that life sciences companies will ultimately rely on the strength of human capital initiatives to support the goal of showing value. A sound business strategy, even one supported by well-designed structures and processes, will underperform unless the human capital and cultural component of change is a top priority.
Done well, this realignment of human capital will prepare an organisation for a climate of permanent dynamism—essential in the new landscape where change seems to be in order for years to come.
