authored by Beverly Herczegh, RPh, BScPhm, Director, the Pangaea Group

Both Ontario and Québec are “catching up” to the rest of Canada with respect to the expanded scope of pharmacy practice. Work is underway in Ontario with the new registrar, Marshall Moleschi from British Columbia, and in Québec with new legislation on pharmacy practice just adopted. It is clear that the pace of change in pharmacy will persist through 2012.

Who is leading this change, and how will pharmacy practice/business look? Dispensing could be fully commoditized: a technical function with razor thin margins performed by regulated technicians and/or automation in community settings and central fill locations. Or traditional community pharmacy may survive supported by regulated technicians/automation for a more robust community-based primary care with the pharmacist at the right end of the counter (i.e., – not at the cash register). Perhaps a hybrid will emerge where some pharmacists assume strictly clinical roles, others are both clinicians and dispensers, and still others oversee dispensing centres. Those most comfortable in dispensing roles will be easily replaced. Some are nervous. Others are forging ahead into innovative clinical roles.

Significant obstacles to practice change remain an issue. These include:

• the established dispensing role of the pharmacist
• lack of standardization in professional process
• lack of perceived value of expanded pharmacist services
• lack of supporting technology
• the need to operationalize cognitive work in community pharmacies
• economics

As long as enough money is to be made dispensing pills, the shift to patient-centric practice is hindered, in other words “put on the back burner.”

In provinces where the business of pharmacy is still relatively healthy (i.e., Québec with 30 day filling and those where professional allowances (PAs) are unregulated) focus on expanded scope is not quite as sharp as in Ontario where the revenue from dispensing requires supplementation by funding for cognitive services. Does the business of pharmacy need to get out of the way of the profession?

While the economics of the business of pharmacy can hinder practice change, the economics of health care in Canada is a major driving force behind it. This is less about pharmacists working to their professional capacity and more about the financial need to provide health care to more patients more affordably. Inadequate revenue for dispensing is a fundamental driver to cognitive work where funding is implemented. The Blueprint for Pharmacy is a strong agent for change in this challenging journey. Professional collaboration is underway, albeit with some challenges, and ever so cautiously funding for cognitive functions is supporting change.

Is industry aware of the significance of these new pharmacy services? How should industry engage?

Should pharmacy seek a “fee for a service” model when other health care sectors are trying to escape that very model?

Should pharmacy seek fees for extending, prescribing, and therapeutic substitution, or should the profession pursue a fee strictly for patient assessment?

So many questions. A few things are certain: the role of the physician as prescriber is being diluted, not only by pharmacy but by nursing, midwifery, optometry, patients, and, most significantly, payers. Pharmacists remain the most accessible and most trusted of health care providers. So far, they are still the last touch point with the patient before they initiate a prescription. Are you engaged with this stakeholder?

Get in touch with us for more information on this topic.

Originally published in Canadian Pharmaceutical Marketing (CPM)/ February 2012

Authored by Peggy Cleary, Associate Managing Director, The Pangaea Group and Helen Kalra, Associate Managing Director, The Pangaea Group

Key Components of Strategic Plans

The components of a robust strategic plan are:

1. A detailed analysis of the internal and external environment (situation analysis)
2. A clear picture of the desired future including, vision, strategies, goals/measures and tactics to get there, and
3. How the organization and management team will work together (higher performance teams, leadership, culture, values) to achieve the desired future (see Figure 1).

Figure 1: Three Spheres of Focus

Best Practices

• Ensure strategy is in keeping with culture: culture eats strategy for lunch (or breakfast or dinner depending on how strongly you feel about it). The best strategies will fail if the culture does not support them. If not aligned, one or the other will have to change * Base decisions on accurate, sufficient facts vs. hard won beliefs or assumptions. Conduct a thorough situation analysis of both the internal and external environment for changes or trends that could impact your business or brands. Encourage the development of opportunities based on detailed market segments and novel data and insights not available to competitors
• Get the right people in the room: encourage insights from people with different expertise, capabilities and skills. Assess what is good or bad about an idea before getting to anyone’s bottom line. Encourage expressions of doubt and rigorous debate about alternatives. * Set an atmosphere that says reasonable people may disagree
• Ensure that underlying assumptions about all aspects of the plan are surfaced and discussed – if people are at odds, it probably means they are operating from different assumptions. Assumptions need to be made explicit and taken into account in planning
• Decide what you are not going to do to make room for what you are going to do; trade offs are fundamental to strategy
• Strategic planning is iterative: Leave flexibility to make future choices and understand that plan A may fail. Be open to input down the line, as the plan is developed. Uncover what keeps your team members awake at night and identify alternate scenarios and strategies for each. Continually monitor the environment and allow for evolution to plan B

Biases to Avoid

Include opportunities in planning to discuss which of these biases your team may fall into. Proper process helps avoid these traps:

• Over optimism – tendency to hope for the best and believe too much in our own forecasts and abilities
• Anchoring – tying our valuation of something to an arbitrary reference point
• Loss aversion – putting too much emphasis on avoiding downsides and not taking risks worth taking
• Confirmation bias – overweight- ing information that validates our opinion
• Herding – taking comfort in following the crowd
• Champion bias – assigning merit to an idea that is based on the person proposing it

A winning process that includes the right people engaged in vigorous debate, avoiding biases, and making tough choices together with on-going monitoring of the environment to course correct, if necessary, will keep you focused on a winning strategic path.

Get in touch with us for more information on this topic.

Originally published in Canadian Pharmaceutical Marketing (CPM)/ November / December 2011

Authored by Peggy Cleary, Associate Managing Director, The Pangaea Group

Globally, over 60% of pharmaceutical industry growth can be attributed to specialty care brands. These are high-priced, specialized, predominantly biopharmaceutical molecules that have limited patient and prescriber populations, high annual treatment costs, and restrictions on access and use, and reimbursement.  The industry pipeline includes more than 100 such products in Phase II or higher level of development, for about 165 indications. Pangaea recently interviewed a cross-range of executives in specialty and primary care pharmaceutical markets to understand:


• how this market differs from the traditional primary care market
• what it takes to be a success on this challenging frontier
• how the HR function can help ensure that success

Our interviewees included leaders in marketing, medical/scientific, finance, purchasing, distribution and human resources, and were drawn from various types of companies:


• Primary care driven organizations, with a number of specialty products
• Primary care driven organizations with a number of specialty products in the pipeline, but none on the market currently
• Biotechs with only specialty products
• A variety of service providers to specialty companies with specialty care brands

We’ll tell you up front what the bottom line is: everything you thought you needed for primary care markets, you need in spades for specialty markets.

1. Skills and Competencies for this Market

To state the obvious, the specialty market place is different than primary care markets and the implications for how you resource and manage specialty businesses are considerable.

The prescriber universe is much smaller and the Key Opinion Leader (KOL) is a much different customer than a GP. They have a higher expectation of the specialty care company employees when it comes to scientific knowledge and service level. This means that everyone who deals with them must have multiple sets of competencies:


• Stellar scientific and medical knowledge and personal confidence and credibility in presenting that knowledge
• Outstanding relationship building and customer service skills – one KOL relationship can make or break a specialty business and these “customers” require high level, extremely professional service
• Sophisticated political and organizational acumen to understand the world in which KOLs operate
  You need the right selection criteria, competency models and developmental focus to ensure marketers, scientific liaisons, sales people and others have all of these critical skills.

2. The Necessary Approach

The tight KOL universe, small patient numbers, and barriers to entry (high development cost, intensity of competition, threat of substitution) mean that a team approach is imperative. As is the need for value-added services that enable prescribers and patients to access and sustain treatment. These services are as vital to successfully commercializing the brand as the effectiveness of the drug itself.

Specialty businesses tend to operate as small, close knit, matrixed teams. If there is a whiff of functional silos, it doesn’t work. No function can take precedence. Marketers need to be able to function in a medical/scientific way; medical/scientific people need to have a commercial orientation. Everybody needs to be able to roll up their sleeves and dig into the data. Everyone needs to understand the complexities of reimbursement. Most functions need to be at the table and be paid attention to like never before:


• The sooner Market Access is at the table, the more likely successful pricing and reimbursement strategies are to be realized. With the high cost of many specialty products the stakes on market access are extremely high.
• Having Purchasing/Finance there early means that the best choices are made about crucial vendor services such as agencies, patient care programs, and reimbursement programs.
• With Distribution at the table, the special logistics and distribution requirements and shelf life considerations of specialty products are factored into brand plans and conversations occur early about things like “How can our supply chain be a competitive advantage?”

This style of operating means the ability to collaborate, understand the big picture, lead or be an effective team member are as important as the competencies cited above. Specialty teams must be high performance teams and team members need to be skilled at operating in a matrix. Some of our clients actually provide a “cheat sheet” of who does what in the matrix.

3. Leadership

Getting everybody on the same page is the key to success in all businesses, but arguably more so in specialty pharmaceutical businesses. The team approach described above requires enlightened leaders who know how to create environments with high employee engagement. Dr. Jack Wiley, a noted researcher on employee engagement, cites the four top global drivers of engagement as set out below. These resonate with what our interviewees told us about the important attributes of leaders in specialty.

• Leaders who inspire confidence in the future – having a vision based on the nuanced reality of specialty markets, together with excitement about how the products improve the lives of patients and furthers scientific understanding is crucial to the success of these businesses.

• Managers who respect and recognize employees – nothing less creates the team environment and integrated approach so crucial to these businesses.

• Exciting work that employees know how to do – specialty businesses offer this in spades. The focus for leaders is ensuring employee development and talent management strategies drive the business and that they develop a culture that values and fosters high performance.
• Organizations that demonstrate a genuine responsibility to employees and communities – nothing less generates the extra effort from employees, going the extra mile that’s needed in these businesses. This is what makes marketing strategy coherent, decisions on priorities supportable and day to day work worthwhile.

Leaders in this business understand the importance of alignment not only locally, but globally. Because specialty businesses are areas for growth for most organizations and potentially extremely profitable, Canadian businesses play their part in a global strategy. What happens with Canadian KOLs has a global impact. More than a few Canadian specialists are considered global thought leaders in their therapeutic areas.

Conversely, leaders in specialty aren’t remote or hierarchical, but quite hands on. They need to be able to pick up the phone and speak to a KOL about current issues, opportunities, such as possible future research investments in their centers, and what’s important to that specialist. With client intimacy so high, KOLs expect senior management to visit them on a regular basis.

4. Medical and Marketing – No Longer Strange Bedfellows

We’re not talking about holding hands and singing Kumbaya, but Medical and Marketing efforts must be tightly integrated. With the need to seed the market with Phase III trials and/or Special Access Programs, that integration needs to be present from the start. There must be a strong willingness and ability to collaborate. Medical needs to not only ensure that the science is credible, but that it advances commercial needs – it needs to be applied evidence-based science, not academic science. Of course, there is an ethical line between scientific activity and marketing activity and there can be conflict over just where that line falls. There needs to be explicit discussion about it and a clear and agreed understanding of the boundaries and opportunities for each function.

Having an effective and targeted medical/science liaison team is crucial for success, but there is the also thorny question of what to do with pre-market Science Liaison people after a product is launched. In the best of all possible worlds, there are additional indications or other products in the pipeline that Science Liaisons can support. Whatever happens, transition of KOLs from the aegis of Medical to that of Marketing/Sales needs to be carefully planned and executed. Typically, Science Liaisons remain on the brand team, and in contact with the KOL, but at less frequent intervals. Their role becomes one of support and knowledge resource to sales representatives. One organization has taken the interesting step of having only Science Liaison people in the field, and no sales representatives – that will be a space to watch.

One notable indicator of the cross-functional influence of Medical and Marketing is that Science Liaisons are now considered viable candidates for product management positions.

After launch and indeed for the lifecycle of the product, Medical may remain extensively involved with the products because of the need for direct involvement in treatment administration and education. Often such non-sales field forces report to Medical function but are integral to the success of the brand.


5. Marketing

The role of the marketing manager is significantly different in specialty businesses. The most significant difference is in the perspective the manager can take. With a customer audience of 100 to 150 physician influencers, it is possible to conceptualize the marketing of a product at an individual customer level. Each customer should have an individual marketing plan, and a tactical plan that is customized to the customer’s specific value drivers. To do this, marketing managers must have intimate relationships with the customers as well as with the sales representatives who have the primary relationship and knowledge of the customer. Coordinating cross-functional activity to make individual customer plans succeed is crucial.

To facilitate the level and kind of data collection and analysis that is required, companies need a different and fresh approach to research. Because of the small customer base, where each customer can have a significant effect on sales, traditional marketing research based on a small sample size of physicians is irrelevant to decision making. In specialty markets, each individual physician’s opinion is important in and of itself, but may not be relevant to the way other physicians are approached.

6. The Salesforce

Specialty sales representatives, most often called Area Business Managers, tend to be more highly educated often holding medical qualifications and having the capacity to master complex scientific and medical information. This is coupled with the ability to develop strong and mutually beneficial relationships with KOLs. You won’t find any rookies in specialty sales. In fact, KOLs expect a rep who can be viewed as a peer. They quickly determine if the rep is not knowledgeable enough to debate issues and advance the science of treatment.

Specialty representatives also have an orientation to high value service and a high level of business acumen. The later is where the level of success is really determined. As specialty markets become more competitive, representatives will need to become better analysts, decision makers, and negotiators. Because syndicated market and customer data is not readily available, representatives must be able to uncover and discover ways of estimating patient loads and product usage in order to determine both forecasts and investment levels. All of this needs to be done in close concert with the marketing managers who are preparing both strategy and tactics from a national perspective.

Specialty sales forces tend to be very small, not more than 10 to 12 representatives and sometimes as few as 6. If coming in from the primary care market, they would have a successful background in hospital or specialist driven brands, such as oncology. Even with that background, the estimate is 6 to 12 months to become productive in a specialty business.

Specialty companies struggle with how to measure the effectiveness of representatives. For instance, call averages are out the window. Measures tend to be more qualitatively driven, than quantitative, such as acquiring direct feedback from customers. The intimate nature of relationships with key specialists should enable a sales director or manager to pick up the phone or call on customers and ask, “How are we doing?” They may or may not tell you about problems if they aren’t asked, but they will be quite candid, and generally pleased that the company has shown that degree of interest. This will be a far more accurate performance measure than calls conducted ‘with managers’. Specialists have more time challenges and are less tolerant of sales training or management exercises.

In some cases there is a stronger relationship between customers and senior medical or clinical staff. In these cases, specialists might respond even more candidly to performance enquiries from a medical director who is willing to assist. In the requisite Team approach we’ve discussed previously, this type of measurement is not unusual. Regardless of the approach used, representatives should be aware that these types of performance ‘audits’ may be part of their overall assessment and are in the interest of overall team performance.

7. Structure

We asked interviewees about the best organizational structure for specialty businesses, and the answer: it depends. On the number of products in the portfolio, on product lifecycle, market potential for new products, on the level of development of the organization, on whether it’s a primary care organization with some specialty products, or a biotech with all specialty products.

Primary care driven organizations just getting into the specialty market run the risk of considering specialty businesses with their special handling and patient support requirements, complex market dynamics, higher knowledge based employees, as difficult businesses to manage because they need too many resources and attention. Education is needed on the strategic importance of these businesses and the potential and high profitability of these markets.

In organizations that have both primary care and specialty businesses, sometimes the latter can be insular. The leaders of these organizations need to use their well-developed team skills to draw in the larger organization and engage them in the excitement of their markets.

With therapeutic business unit structures, the issue is often whether dedicated Medical/Scientific/Clinical and Regulatory people report into the unit head or to the larger organizational functional unit. The advantage if they report to the business unit is a tighter team. However, there is a risk that technical people can be co-opted by the Marketing agenda and their priorities may not receive the same consideration, energy or focus. This is an issue that needs to be explicitly managed as indicated in Section 4 above.

Whatever the structure, it needs to be customer-centric in its design with particular attention to ensuring as much decision making authority as possible is vested with those closest to customers.

8. Human Resource Practices

Attraction

By now you are seeing that getting the right people on the bus, especially leaders, is imperative in specialty businesses. This means having impeccable recruitment profiles highly tailored to the business especially when it comes to scientific knowledge, together with sophisticated assessment methods and high selection standards. If you are considering candidates from mainstream pharma, you must be sure they understand the difference between primary care and specialty markets, and that they have a demonstrated track record of the competencies needed for success in specialty.

Compensation

As with performance management systems (below), salary increases, bonuses and incentives all need to be tied to overall strategy and achievement of organizational goals. The base salaries in specialty are generally higher than primary care because of the advanced scientific, medical or therapeutic knowledge base typically required.

While the principles behind bonus and incentive portions of compensation are the same as any other business, there is a heavier emphasis on qualitative vs. quantitative measures than you see in primary care, particularly with field forces. There are also strong components for team results in an effort to drive desired team behaviors described in Section 2. Where the business is just moving into the market and wants to establish itself as a key, long term player there is more emphasis on strategic activity in both the short and long term incentive structure.

Performance Management

For years a static process, Performance Management systems are now used as one of the principle tools to achieve collective goals by linking performance goals to organizational strategy and cascading strategic and operational goals down to ensure every person knows and executes their part of the plan. Annual appraisals are being replaced by full time performance management involving more frequent but less onerous informal meetings, with dialogue and coaching about tracking to plan and achieving goals. In the war for talent, employees want to be appreciated and developed. More frequent reviews achieve both those ends. Specialty businesses with their high knowledge workers are particularly suited to benefit from this kind of performance management system that reduces turnover and pointedly drives outcomes for the business.

Employee and Leadership Development/Talent Management

The cold reality about the pharmaceutical business in Canada is that the products are not invented here, pricing and market access is not under our control, and to some extent strategy and financial objectives come down from on high. Often, the only variable in market success of local organizations is the people, and it is imperative that they be a strategic asset and competitive advantage. Specialty businesses need a people strategy to match their business strategy in order to ensure:


• Employees have the talent needed to not only meet current business challenges but also the challenges of the future
• Training and Development has a direct business impact
• High performing employees achieve potential and are retained
• Decisions about people are made with the same rigor, logic and confidence as decisions about money, customers, products and technology
• Strategy and goals are achieved

High Performance Culture

Corporate culture at its most basic level is the sum of an organization’s behaviours and practices. It is there whether you have deliberately shaped it or not. It reveals itself in big and small decisions as well as daily practices (“how we do things around here”) that tend to perpetuate themselves. Culture often goes unnoticed by employees, like the air you breathe, yet a healthy culture like clean air is essential to a healthy organization. It’s potentially the most powerful engagement tool at your disposal. If you get culture right, it provides a foundation for high engagement that can sustain your organization through good times and bad.

Much has been written about high performance cultures and how you get them. The most important thing to know is that you can get the culture you want and need but it takes a thoughtful, deliberate and managed effort. HR can provide the support you need to shape that effort and ensure it is successful.

Retention

The per capita productivity in these businesses is very high, as is the cost of employee development and training. This makes retention doubly important. The loss of even one representative or Science Liaison can have a huge impact on results. The entire suite of people practices is key in attracting and retaining employees. These include the right compensation, strategic performance management, a relevant and meaningful employee development program, and a high performance culture where employees feel valued, empowered and able to reach their potential. A significant part of success in the specialty marketplace depends on getting the right movement of each of these levers.

Conclusion

If you haven’t got all of this in place, it may be because you haven’t paid enough attention to your people practices and we suspect that HR is not at the strategy table. Our research has led us to the conclusion that specialty businesses are, well, special. Your HR practices must be as well.

Get in touch with us to find out how Pangaea can help you with your organization and leadership development initiatives.

Originally published as a 3 part series in The Chronicle of Healthcare Marketing, Part 1 HR Practices key is specialty markets Aug. 31, 2009, Part 2 _ Developing marketing and sales for specialty markets_ Oct. 31, 2009, Part 3 Organizational structure for specialty markets Dec 31, 2009

Authored by Marc Lafoley, Director, The Pangaea Group

Spending on biologics in Canada surpassed $2 billion in 2010, and, with drug spending expected to continue rising for the foreseeable future, payers see the advent of Subsequent Entry Biologics (SEBs) as another tool to help control burgeoning health costs.

In their simplest form, SEBs are biologics — drugs created by bio- logical processes — with a demonstrated similarity to a previously approved biologic drug. SEBs are not exact versions of a referenced product and require different development and regulatory processes to receive a Health Canada notice of compliance. In essence, if the process is the product, they will be biobetters.

The Canadian regulatory environment for the approval of SEBs continues to evolve. Health Canada issued SEB guidelines in March 2010. Unlike the generic approval process, the guidelines for SEBs are administrative documents that do not have force of law but provide Health Canada with flexibility in its approach to approving SEBs. Thus far, Health Canada approved one SEB in April 2009. Other SEBs are anticipated; however, the current environment does not provide the same transparency as other jurisdictions, which leaves competitors and approval dates open to speculation.

Are SEBs Interchangeable with the Reference Biologic?

Since 1995, Health Canada has made a Declaration of Equivalence (DOE) for generic drugs. The DOE essentially states that two products are functionally and therapeutically equivalent. Health Canada’s current stance is that SEBs will not be declared equivalent to the reference biologic. Each SEB will have its own distinct name to ensure the development and implementation of risk management and pharmacovigilance plans, adverse event reporting, and Periodic Safety Update Reports (PSURs). When it comes
to “swithching” products, Health Canada recommends that any change in therapy (brand to SEB, SEB to SEB, or SEB to brand) requires the intervention and agreement of the prescriber.

Despite the Health Canada guide- lines, pharmacy is regulated at the provincial level, and the regulations surrounding interchangeability and therapeutic substitution will differ by province. Each province has its own rules and declares the liability borne by the dispensing pharmacist. Quebec is the only province to pronounce its position surrounding interchangeability and SEBs. In June 2010 Québec declared that SEBs will be considered as distinct biologics. As the interchangeability regulations are currently written, the same policy is expected to be adopted by all other provinces.

The SEB Commercial Model

Globally, the penetration of SEBs has been modest at best. SEBs represent less than 0.25% of the global biologics market, and Europe has the bulk of these sales. Without a Health Canada declaration of equivalence and the ability for pharmacists to automatically substitute a product when dispensing, SEB manufacturers are required to generate their own new prescriptions and patients for their products. The competitive dynamics for SEBs will more closely resemble a competitive entry to the originator — a brand versus brand dynamic instead of a brand versus generic dynamic.

In Europe, the discount for SEBs relative to the brand price ranges from 20 to 30%. Despite the lower discount relative to small molecule generics, the higher price of biologics can make the savings for payers substantial. Without automatic substitution at their disposal, third party payers may use other mechanisms to favour dispensing SEBs over reference products, such as fully-managed plans, prior authorizations, and tiered formularies.

The requirement of a novel business model for the commercial success of SEBs may create a new breed of competitors. Generic players, such as Teva and Hospira, may integrate SEBs within their current innovative divisions, while commercial heavyweights, such as Merck and Pfizer, may integrate SEBs within their therapeutic portfolios.

Impact on the Biologics Market

The question is not if, but when and what kind of SEB competitors will enter the Canadian market. The continuous changes in the healthcare landscape require constant monitoring of the environment for changes that may modify current assumptions. Innovative companies with biologics must institute measures to successfully prepare and compete in this new market paradigm.

Get in touch with us for more information on this topic.

Originally published in Canadian Pharmaceutical Marketing, September 2011

Authored by Beverly Herczegh, R.PH., B.Sc. Director, The Pangaea Group

There has been a great deal of publicity on the new and expanded role of Pharmacists in the selection of pharmaceuticals across Canada. This article will clarify exactly what has changed and what the Pharmacist is empowered to do.

Pharmacy: The Facts

There are approximately 9,000 retail Pharmacies and 1100 hospital Pharmacies in Canada. There are over 28,000 practising Pharmacists dispensing over 500 million prescriptions annually.

What Can Pharmacists Do?

Adaptations: Formulation and Duration of Therapy

Generally defined as adapting or altering the dosage, regimen or formulation, prescription adaptation allows pharmacists to complete incomplete prescriptions or adjust the order to allow formulary cover- age or better dosing regimens for the patient. Extending the duration of a prescription for a limited time period in the best interest of patient care has long been a professional function of the pharmacist. This legislation now “legitimizes” this cognitive function and better serves the patient while avoiding the inconvenience and cost of a physician visit.

Prescribing: Product Selection and Initiation

BC, Alberta and New Brunswick permit independent prescribing but only Alberta regulations allow full independent prescribing (initiation and management of ongoing therapy) following training. To date, just over 100 of Alberta’s 3900 pharmacists have the qualifications for additional prescribing authority. One might speculate that lack of compensation for expanded scope is limiting uptake. Alberta, BC and New Brunswick also permit therapeutic substitution. After four years of delays, Manitoba has just approved the regulations and will now set to work on Standards of Practice. Ontario’s bill 179 touted remote dispensing, pharmacist pre- scribing and product selection. In the end, it looks like remote dispensing (PharmaTrust) will be viable in Hospitals only. After all the fanfare, smoking cessation will be the only therapeutic category authorized for independent prescribing by Ontario Pharmacists. Obstacles to expanded scope of practice include: lack of time, lack of compensation, lack of confidence, lack of opportunity to build clinical skills, lack of collaborative opportunities and lack of information highway.

Injecting

While pharmacists are injecting in BC, Alberta and New Brunswick, those in BC are currently limited to vaccines only. Authority to inject in NS is expected in 2011 with Ontario’s Bill 179 permitting “injection for the purposes of education and demonstration only.” We’ll need to wait for the Standards of Practice to learn what that means. For specialty products, vaccines and categories such as diabetes care, the Pharmacist and indeed, Pharmacy Chains may be an audience for the partnership of Brand Pharma.

Head Office Versus Front Line Pharmacists

CPhA studies have demonstrated that pharmacists in the frontline are in fact adhering to professional ethics, that is, putting patient care first. Understandably, Corporate Pharmacy must keep a keen eye on the bottom line so the two, while inextricably teamed, are also vastly apart when it comes to objectives. This should be kept in mind when brand plans are being prepared for this audience.

Interaction With Physicians

Physicians are now accustomed to patients arriving with articles from the net on both disease state as well as treatment options. This encourages collaborative interaction between pharmacists and physicians. In fact, surveys demonstrate that physician acceptance of pharmacist recommendations range from about 75% in community settings to 95% in collaborative care settings.

Implications for Brand Pharma

At the very least, brand pharma should keep a close eye on the changes in scope of practice for pharmacists as this accessible professional is the last touch point to the patient before a medication is taken. As pharmacy navigates these changes, such as, undertaking initiation of therapy and product selection, there are opportunities for
new alliances between pharmacy and industry. No one knows how these might look. Is industry ready to take the lead?

Get in touch with us to find out more information on this topic or to find out how Pangaea can help you with your Trade Relations initiatives.

Originally published in Canadian Pharmaceutical Marketing, February, 2011

Authored by Ghislain Gauthier & Marc Lafoley, Directors, The Pangaea Group

Quebec is undergoing its own transformation. This article highlights the changes and the implications for pharmaceuticals.

INESSS

As of January 19, INESSS (French acronym for National Institute in Excellence for Health and Social Services) replaces the Conseil du medicament and AET- MIS (Technology Assessment Bureau). Inspired by the National Institute of Health and Clinical Excellence (NICE) in the UK, this new government body is responsible for:

• Assessing clinical benefits of drugs, technology and social services
• Recommending to the health minister amendments to the drug formulary such as listing new drugs
• Developing and broadcasting clinical guidelines after or in consultation with healthcare professionals

The development of clinical guidelines adapted to the Quebec environment may lead to more restrictive listing in the future. Stay tuned.

BAP 15: Is it safe?

The Quebec government instituted a series of pro-BioPharma policies including the “Fifteen Year Rule” commonly referred to as BAP 15. With BAP 15, brand name products are reimbursed at the brand name price for 15 years after the product is first listed on the RAMQ formulary, even if a generic becomes available. In essence, the government and private payers will pay for either product.

In 2005, it was estimated that BAP 15 cost the Quebec government $31 million. The incremental tax revenues generated by the BioPharma sector and the multiplier effect on the Quebec economy more than compensated for the cost of this program. The patent cliff on brand name products and a progressive erosion of generic prices to a level of 25% of brand by April, 2012 will increase the cost of supporting BAP 15.

The Minister recently estimated that the cost of BAP 15 delta to Quebec was $169 million in 2009. Given the reduction in generic prices and value of patent cliff products, Pangaea estimates the delta to soar to over $500 million by 2013. We do not believe that BAP 15 is sustainable either politically or financially. You may want to check your 2013 strategic plan assumptions. However, with the CETA (Comprehensive Economic and Trade Agreement) negotiations continuing with Europe, the need for BAP 15 may be more of an academic discussion than a pragmatic one.

The CETA negotiations continue to progress and could be signed and ratified by the end of 2011. The net result for Brand Pharma may be an extension of data protection and an extension on patent terms. This may provide the case for the Quebec government to discontinue this “Fifteen Year Rule.”

Quebec Primary Care Reform

Last November, Health Minister Bolduc released a 5-year strategic plan. Among the priorities set by the Minister is greater access to primary care (the goal is to cover 70% of the population). The key objectives are:

• Establish a network of 300 GMF (Family Health Teams) with increased presence and collaboration of other healthcare professionals and deployment of Primary Care Nurse Practitioners
• Increase the basket of services and time spent for home care for the elderly
• Faster access to a specially trained nurse in oncology for newly diagnosed patients.

Get in touch with us to find out how Pangaea can help you kickstart your strategic planning initiatives.

Originally published in Canadian Pharmaceutical Marketing, April 2011

Authored by Wayne Childs, Director, The Pangaea Group

It is clear in the working lives of Canadian healthcare leaders, that change is inevitable. This has never been more true than in the post 9/11 and economic recession period, where the healthcare sector finds itself torn between significant and largely unmanageable forces that are shaping executive decisions. The emerging boomer generation has focused acute scrutiny on the health system and its treatment outcomes occurring at the same time that healthcare budgets are under intense government pressure. A number of provinces, especially Ontario, where the budget deficit is now in the region of 25 billion dollars, have forced leaders to re-examine all of their business decisions with an eye to reducing costs while improving performance.

This can create a difficult situation for the pharmaceutical industry, which must now deal with leaders who not only expect a better financial deal, but who also expect arrangements that provide higher value. In addition, the “client” has changed from a discrete hospital entity to a large regional organization and in many cases to a standalone buying group. In this atmosphere, it is important to know what senior health executives, who are now more involved in the buying decision, are looking for, in addition to good pricing.

Hospitals current demands from the pharmaceutical industry include:

• Long-term institutional alliances built on strong relationships and trust that offer value adds for their healthcare organizations—not just product sales. The challenge when dealing with buying consortiums will be to getting “value” ascribed to value-adds
• True and demonstrated innovations that can reduce cost and improve care
• Help in improving the overall performance of their facility pharmacy, material management system or other delivery mechanism
• More whole “problem “solutions, perhaps from a consortium of companies, rather than a selection of products for sale

Group Purchasing Organizations

To increase cost savings, most hospitals in Canada have been forced to join group purchasing organizations like Healthpro and Medbuy. These organization not only source products for Pharmacy, but also for other areas like clinical services, nutrition, and energy to name a few. In some parts of the country, this selection is being driven by the provincial ministry of health committed to driving efficiencies. The benefits for the institution includes:

• Purchasing power and competitive prices
• Comprehensive sourcing strategies
• In-house contracting/clinical expertise
• Advanced procurement technology

With the changing political and healthcare environment focusing on fiscal responsibility, some provinces are beginning to try and influence manufacturer prices by tendering their entire hospital drug portfolio’s for set periods. This will become an area to watch to see if their commitments are accurate and whether they dictate to institutions which products they should be using.

Industry Strategies

Most pharmaceutical manufacturers have not developed clear strategies for this specific channel despite the fact that it amounts to approximately 10% of the drug sales in Canada, and can influence other channels, especially retail dispensing. Traditionally, companies will consider deploying effort and resources into hospitals for the following reasons:

• Hospital products are within their portfolio
• The company is trying to increase community sales by providing to a hospital to get retail spill-over
• The launch of new products that may be influenced by a specialist in a hospital
• Maximizing usage as part of the Loss of Exclusivity activities that accompany their products
• Leveraging its’ overall portfolio of products to maximize profits

Moving forward, companies will need to continue to monitor and evaluate their portfolio and make important decisions on how they can provide hospital executives more value through partnerships and support to drive commercial opportunities in this continually changing channel. Those that can effectively develop and execute strategies may find significant return for their efforts.

Get in touch with us to find out how Pangaea can help you kickstart your channel marketing initiatives.

Originally published in Canadian Pharmaceutical Marketing, June 2011

Authored by Peggy Cleary, Associate Managing Director, The Pangaea Group and George Toner, Partner, Toronto Office, Western Management Consultants

We conducted research with 22 senior executives from 12 companies on the role of emotional intelligence (EI) in the Canadian research and development pharmaceutical industry, and the results were eye opening! We concluded there is a real risk that many companies are missing the boat on a genuine opportunity to gain a competitive edge.

Most Pharma executives understand what emotional intelligence is. Many agree that it is important to business success, and even to their bottom line. However, this is rarely translated into strategies that improve the emotional intelligence (EI) of leaders, or the engagement and alignment of employees. Too often, EI is dismissed as a “soft” skill, secondary to “hard’ skills like intellect, analytical or technical skills or business acumen. While these are imperative, we contend that without an equal, explicit and specific focus on EI, many Pharma companies and executives are ignoring a means to achieve a significant competitive edge.

The Reality of EI

We set out to substantiate the claims made by researchers in emotional intelligence that EI is more important for business success than IQ, and that high EI leaders positively impact the bottom line. For the most part, respondents can define emotional intelligence as having to do with being aware of your own emotions and others’, and using that awareness as a leadership skill.

Defining EI is one thing but dealing with emotions and focusing on it in the workplace is quite another. We sense that some executives believe it’s too personal and self-revealing and somehow not appropriate, especially in cultures that are hard driving and focused mainly on quantitative results. There’s an assumption that you can’t measure EI and its impact on the bottom line, so you should stay away from it. Others feel intuitively that emotional intelligence does impact the bottom line but aren’t quite sure how.

Our research also addressed the relative importance of IQ and EI. We learned that executives in the pharmaceutical industry see themselves, their managers and peers as being quite high in IQ and not as high in EI. We averaged the perceived IQ ratings of the interviewees’ peers and superiors by throwing out the lowest and the highest scores, and not surprisingly, came up with fairly high 8.2 out of 10. In EI using the same process, we came out with a 6.4 average.

It’s clear that a high IQ is an entry requirement into the pharmaceutical industry, and that those lacking it are quickly weeded out. However it is also clear that many executives have committed career suicide because of their lack of emotional intelligence, and their unwillingness or inability to do anything about it. We suggest the business case for EI could well be made just on the cost and impact of executive derailment. There are many stories about executives who were fired, sidelined or isolated because of lack of EI. We are struck by the almost universal acceptance that lack of EI derails executives, and the fact that a number of respondents have not made the leap to the corollary conclusion that having EI is a key factor to success. They may feel that emotional intelligence is like money, a university degree, or personal hygiene – it only matters if you don’t have it. This again ignores the opportunity. Yet we are heartened to have interviewed several highly cognitive executives, with very strong scientific backgrounds, who had also developed their emotional intelligence to become highly skilled, accomplished and well rounded leaders.

Very few organizations have explicitly identified emotional intelligence as a fundamental competency. EI may be implied in leadership competencies models, and may be evaluated indirectly through 360 feedback processes and employee attitude surveys. Coaching and training on some emotional competencies may be part of an overall leadership development. In our view, these measures are still not adequate.

The net effect of all of this is that emotional intelligence is trivialized and not seen as a true strategic opportunity. The easy reference to any competency that is not technical or functional as a “soft” skill is problematic because it diminishes its importance. Expressions like “all the soft skills”, “that’s a little too soft for us”, and “it’s hard to measure that soft stuff” relegate emotional intelligence to the nice to have, but not imperative. “Nice” is not a competitive tool for improving business. We assert that emotional intelligence is.

Why is EI so important?

Like it or not – we are emotional beings and emotions drive behaviour. We may believe that we should check our feelings at the door when we arrive at work, but we simply don’t. We work hard at expressing, controlling, analyzing, denying or repressing our feelings, and we may try to manipulate or orchestrate the feelings of others, especially at work. But the fact remains that the emotions and emotional capabilities of leaders create the cultural environment that either supports or diminishes success. Employees take their emotional cues from their leaders.

The role emotions play in decision-making is highly underestimated. We may believe that business decisions are based entirely on logic, and that is sometimes the case, but they are more often rooted entirely or in part in emotions. Daniel Kahneman, a Princeton psychology professor, earned the 2002 Nobel Prize for Economics. His studies prove that people make every decision first for emotional reasons, second for rational reasons – from what to buy or sell, what job to leave, how we treat customers, how collaborative we’re willing to be, and so on. Anyone who doesn’t understand that emotionally driven decisions impact our companies’ bottom lines will pay a price. And since emotions drive the decisions of our colleagues and customers, it is critical that we identify both our own emotions and those of others.

EI: The Case for Business

We all recognize that the pharmaceutical industry is a highly cognitive one dependent on great scientific minds for enhancing, positioning, and monitoring products properly. There’s no question that Canadian R & D pharmaceutical companies are sales and marketing driven by the need for immediate results. It is against these two dynamics that many participants expressed their interest in examples of how to make the business case for EI. Unfortunately, we found no examples in the Canadian pharmaceutical industry but we know that they exist in other business sectors. What we did find is a wealth of examples of specific executives turning around or enhancing performance through coaching and a focus on their own emotions and others.

How to do it better

If you are interested in using EI as a competitive tool or as a way to develop your own leadership skills, try the following:

• Step up to the importance of feelings in business and the workplace.
• Incorporate understanding of the need for EI in your team or corporate culture.
• Use EI assessment tools and questions for hiring.
• Make it clear that promotion into leadership requires emotional intelligence.
• Use 360-degree feedback to specifically assess emotional intelligence.
• Craft individual development plans that include the development of EI.
• Hire coaches to explicitly work on improving EI.
• Understand that learning EI is experiential, not cognitive. It takes longer.

In a global environment and competitive marketplace moving at the speed of light, organizations that can empathize with customers, collaborate with stakeholders, and create innovative solutions will take the spoils. But this requires leaders who recognize and capitalize on EI as a competitive strategic tool to build high performance cultures, ensure high employee engagement
and commitment, and provide inspiring leadership.


Get in touch with us to find out how Pangaea can help you kickstart your organization and leadership development initiatives.

Who: Amgen Canada Inc.
What We’ve Done: Trade relations over the long term to support Amgen’s business goals
Length of Relationship: Many years; ongoing

Assisting With Trade Relations

Amgen approached Pangaea 11 years ago and asked that we provide strategic council and tactical support in the areas of business development, new product launches and distributor & pharmacy chain relations.

Leveraging Relationships for Tangible Business Results

When we were initially approached by Amgen, they wanted to establish a strong presence with channel customers and make sure their investments led to a tangible ROI.

Our dedicated trade team of trade relations specialists assisted Amgen’s internal Supply Chain group to meet these goals.

“The Pangaea trade team for Amgen; Bev Herczegh, Tom Callon & led by Kristen Knott, has a broad and deep foundational understanding of the pharmaceutical industry and extensive relationships with key stakeholders. This knowledge base and network has served Amgen well in establishing a strong presence with our channel customers and targeting our investments in programs that have a tangible ROI” - Ralph Mueller, Director Supply Chain, Amgen Canada Inc.

“Specifically in the last 3 years we have worked with Pangaea to forge a stronger presence with retail chains – focusing on education and adherence. Pangaea has been essential in recommending program opportunities based on ROI, corralling Amgen internal resources and coordinating execution and importantly follow-ups with select chains. Our strengthened presence in this area has very much to do with Pangaea’s capabilities in trade relations.” - Ralph Mueller, Director Supply Chain, Amgen Canada Inc.

Partnering Over Time to Build the Business

Over the last 11 years, Pangaea has supported more than 8 major product launches for Amgen – providing important direction on channel strategy and carrying our all distributor communications, coordinating systems setup and POS announcements, and of course filling the channel.

“In all of these launches, without exception, the Pangaea team has over delivered (seriously).” -Ralph Mueller, Director Supply Chain, Amgen Canada Inc.

Keeping Up with External Environment Changes

Pangaea’s Trade team is constantly monitoring the external environment for changes and bringing them and their implications to our clients.

“At a macro level, the Canadian pharmaceutical market has never been more chaotic and unpredictable making Pangaea’s trade insights and guidance more valuable then ever in building awareness, establishing new distribution channels and maximizing our investments. Looking forward, I see Pangaea’s role continuing to grow as we pursue long term care opportunities and continue to build our retail position.”

“Given Pangaea’s industry knowledge, strong network, dedication and value oriented approach, I would strongly recommend Pangaea’s trade services to any organization, newly establishing or already established in the Canadian market.” - Ralph Mueller, Director Supply Chain, Amgen Canada Inc.

Who: Hoffmann-La Roche Limited (Canada)
What We’ve Done: Assist with development of strategic plans for LOE
Length of Relationship: Several years; ongoing

The generic landscape has been evolving quickly over the past year and a half and Hoffmann-LaRoche Limited (Roche) needed some in depth expertise to explain where government policies were trending and what it meant for their specialty brands that were soon coming off patent.

Leveraging Our Collective Intelligence

One of the issues that keeps our clients awake at night is keeping up with the ever changing Canadian health care landscape and what the implications are for their business. The Pangaea team worked collaboratively to review Roche’s business issues related to LOE in a speciality care market to ensure ‘no stone was left unturned’ as they developed their strategy.

“Pangaea has many experienced consultants at their disposal who have been involved in government policies and specifically generic companies who explained what the new guidelines meant and how the landscape is quickly changing in terms of pricing and listing agreements. We needed to understand this as we prepared to lay out our strategy approaching patent loss for a key brand in a very niche market place.” - Brett Hogan, Business Unit Director, Hoffmann-La Roche Limited

Monitoring of the Environment…for the “So What”

The Pangaea team has a robust process in place to monitor changes that are going on in Canadian healthcare and pharmaceuticals. On top of that we have many consultants with expertise on the team who know what changes are coming and how to prepare for new regulations and policies. In the Canadian market place, with all of the regional variations it is really more like 10 countries than 1! We look at what is happening today, as well as what the likely trends are for tomorrow and what the business implications are for our clients.

“Not only did they explain the current state but Pangaea also prepared us for the future as government policies were rapidly evolving across the country, province by province. We needed to have different scenarios built for various regions and Pangaea challenged us to make sure we were prepared for the future as we approached LOE.

Pangaea has many consultants and expertise within their group to know what changes were coming and how to prepare us for new generic regulations and pricing policies. They were able to quickly turn around new policy guidelines in to the ‘so what’ for our business, thus making it easy to put plans in place to address the changes. This prepared us well for the future and we were ahead of the game prior to LOE” _ – Brett Hogan, Business Unit Director, Hoffmann La-Roche Limited_

Collaborating as Strategic Thinking Partners

The Pangaea team has the people with the knowledge and expertise to challenge your thinking and ensure you have the most robust plans possible.

“Pangaea has many resources at their disposal with the expertise and knowledge to provide timely and strategic advice. We will always consider their services when faced with a challenging strategic question that requires another set of eyes to critique our thinking and direction” - Brett Hogan, Business Unit Director, Hoffmann-La Roche Limited