A sales representative of a pharmaceutical company visits doctors with various options for prescribing a drug to their patients. The television advertisement covers a region where few people need the advertised drug. A hospital specializing in scarce cancer treatments wants to consider a newly approved therapeutic product, but has not yet been contacted by a life sciences company. Wasted commercial spend and missed opportunities prevent life sciences companies from reaching their full business potential. How does this irregular spending continue to occur and how can companies deal with it?
Research your commercial spending habits
For decades, life sciences companies have invested their sales, marketing and advertising budgets equally across all U.S. regions and geographic channels. They struggle to optimally reach healthcare providers and patients. They overspend to maintain the status quo, missing out on dozens of unseen opportunities. Instead, companies must target and invest strategically in geographies and channels with the highest potential return.
For example, many pharmaceutical companies continue to invest a high percentage of their overall budget on sales and marketing initiatives in geographic regions where their brands do not have a significant market access position. Additionally, significant investments are being made in regions dominated by integrated delivery networks (IDNs) such as Intermountain Health, Kaiser Permanente and Advocate. These organizations have a decision-making structure guided by their internal pharmacy and therapeutics (P&T) committee, rather than individual health care providers (HCPs), that determines whether a brand can be managed. Therefore, it is imperative that marketing, sales and market access coordinate with center of excellence (CoE) support teams such as commercial operations and analytics, forecasting, finance and contracting to leverage promotional resources most effectively.
Differences in profitability observed across geographic locations in the United States. Each bubble represents a blinded geographic location whose size depends on revenue.
Employ data and artificial intelligence to optimize your expenses
Life sciences companies have a significant amount of data at their disposal, enough to ensure optimal commercial investments. However, data is convoluted, messy and decentralized, and comes in many shapes and sizes. Here are some examples of this data:
- Third party data: IQVIA (Xponent Plantrak, DDD, HCOS), PRA, Nielsen advertising and media data, social determinants of health (SDOH), Fingertip Formulary, co-payment, claims data
- Government data: TRICARE, CMOP, TMOP, FSS, VA
- Internal promotional data: details, samples, speaker program, omnichannel promotions
To ensure that all this data is useful, companies need data scientists to design and develop the data, business rules and assumptions.
By properly combining integrated data, understanding historical performance, and implementing artificial intelligence to gain a forward-looking view, the life sciences industry can make much better decisions about securing contracts with key payers and determining which promotional channels are most effective in each geographic region. Diverse utilize of promotional channels such as peer-to-peer, sales representative visits, teledetailing and digital libraries will ultimately lead to optimal commercial spend across channels and locations.
The idea is straightforward to understand: utilize data to understand how to best distribute investments and resources, such as brand marketing and sales reach. However, because the data is so diverse, its value is not always immediately clear. Effectively cleaning, categorizing, and combining this data requires focused effort and knowledge.
Managing and using this data becomes much easier thanks to the data structure. Instead of laboriously collecting all data in a centralized location, life sciences companies can connect disparate pieces together, leveraging that data regardless of where it resides in the customer’s ecosystem. In particular, the utilize of a hybrid cloud data structure will enable companies to connect convoluted and diverse commercial data sets. Once the elements are connected, companies can analyze and compare data by geography, promotional spend and discounts to gain historical insight into performance and cause and effect.
By leveraging AI and machine learning-driven insights and pathways into revenue and profitability across channels, we can best predict optimal commercial growth. Brand leaders can then prioritize investments across promotional, payment and supplier channels for each geographic region, ensuring their therapies and medicines reach the patient markets that need them most. AI technology can optimize for differences in patient socioeconomic needs, enabling life sciences companies to target areas with geographic-specific pricing.
Optimizing commercial spend by geography impacts brand, therapy and company strategy
What if…
…can you check which geography and brand provides the most profitable growth?
…do you have multi-channel insight into which promotions are most effective in a given geographic region?
…do you have a framework that helps align all key commercial stakeholders in your organization with brand, portfolio and strategic execution to grow your business?
Do you want to know how to combine such possibilities? Contact us today. We can assist you create commercial insights that learn and adapt, helping you optimize your commercial spend and maximize profitability.
Gautham Nagabhushana, Partner, Data and Technology Transformation – Healthcare, Public Markets
Ric Cavieres, Partner, IBM Consulting – Life Sciences Commercial Practice, Head of Quantum Computing
Learn more about IBM Consulting Life Sciences solutions