Alison Little, Bill Shew

is one of those phrases that has different meanings to different people. It reflects more than a set of independent, strategic initiatives aimed at creating leaner, more customer-focused organizations. True commercial transformation requires that pharmaceutical companies take steps to become high-performance organizations that successfully navigate the evolving interrelationships between healthcare stakeholders.

		To achieve this, there are 10 imperatives companies should consider, which are designed to be implemented as part of an integrated and well-orchestrated change program. To achieve true commercial transformation in the evolving healthcare environment, companies should:

1. Use commercial tactics, not clinical data, to differentiate new products

		The reality is that, on a clinical data basis, a particular drug may not be very different from others in the same class in the eyes of health plans and providers. The length of time even first-in-class drugs can be considered clinically differentiated is often only a matter of months, as fast followers quickly enter the market. Instead, differentiation must focus more on commercial factors, including evolving treatment paradigms; the characteristics of patient subsegments; and, most important, physician and patient behaviors.

2. Elevate pricing and contracting within the organization

		Innovative pricing has been an underexploited strategic lever at most pharmaceutical companies, especially when compared to other industries. Future approaches could include product bundling, outcomes-based contracts, or annuity-like payments.

		In a post-release survey of the KPMG study, respondents identified “pricing and market access” as the most likely area of shifting of commercial focus. They also tagged “outcomes-based contracts” and “integrated product/services” as the newer types of contracts to take hold in the next five years.

3. Take a more holistic approach to stakeholder mapping and prioritization

		Outreach needs to extend beyond health plans and physicians to include the broad and complex network of additional stakeholders who can directly or indirectly influence care decisions. Particular attention should be paid to how stakeholder influence varies geographically. In the United States, stakeholder influence maps reflect considerable differences among major metropolitan areas. In Europe, pricing and reimbursement decisions can vary dramatically across regional health authorities in countries like Spain and Italy.

4. Base sales models on a collaborative approach to improving outcomes

		Big Pharma and the provider community share a commitment to improving quality and outcomes in the healthcare ecosystem. Therefore, conversations around drug attributes and prescribing preferences should shift in both tone and substance to reflect this common concern. The ideal would be for commercial organizations to embrace the philosophy of “helping their customers’ customer.”

5. Play a larger role in the industry transformation from “volume to value”

		An increasing number of pharmaceutical companies are pursuing collaborations with health plans and providers on disease research, data sharing to improve outcomes and reduce the cost of care, and patient education and engagement programs. In these ways, pharmaceutical companies can play as large a role as providers and health plans do in moving the industry toward enhanced patient outcomes at lower costs.

6. Support providers in improving quality and patient satisfaction

		Pharmaceutical commercial organizations, particularly those developing and commercializing products in hotly contested disease areas, are well positioned to assume a larger role in delivering not only improved outcomes, but enhanced patient satisfaction. This can take many forms, but most impactful are enhanced “beyond-the-pill” solutions, such as support for medication adherence, patient engagement activities, and wellness counseling.

7. Leverage data and analytics to enhance commercial strategies

		The pharmaceutical industry has long been a data-rich environment, and its commercial organizations are highly skilled at using analytics to target high-prescribing physicians, identify and respond to rapidly changing competitive dynamics, and customize brand messages. Commercial organizations that can take the lead in harnessing data to inform commercial strategy, improve commercial effectiveness, and enhance efficiency will have significant advantages in the competitive environment.

8. Allocate commercial resources optimally

		Although the industry certainly recognizes that the role of the individual prescribing physician is diminishing in many disease areas and geographies, a disproportionate amount of commercial investment is still focused there. It is critical that pharmaceutical commercial organizations develop more robust frameworks for commercial resource allocation that take into account brand maturity, competitive intensity, health plan scrutiny, and regulatory developments, while optimizing return on commercial investment.

9. Evolve performance metrics and incentives

		Most commercial organizations, including both the sales force and brand teams, are still measured and incented on share and volume growth. Limited attention is paid to profitability, regardless of a drug’s degree of differentiation, competition, or maturity. As commercial organizations transform from the class transactional model to more strategic, collaborative approaches, performance metrics and incentives need to evolve in turn.

10. Drive the transformation agenda throughout the enterprise

		Finally, it is not only the commercial organization’s inner workings that need to transform, but also the manner in which the group interacts and collaborates with the rest of the organization. It is surprising how siloed many pharmaceutical organizations remain, with insufficient—and too often counterproductive&mdash;interactions between the commercial organization and other functions, and between global and local teams.

		Taken individually, most pharmaceutical companies show some level of activity against each of these imperatives, including pilots to test new and innovative ideas. Few, if any, pharmaceutical companies have made the holistic and integrated changes to their commercial models that will be required to win in tomorrow’s healthcare landscape. With the right frameworks, processes, resources, and committed leadership, commercial transformation is achievable.

		Excerpted from “Change in pharma? Not optional; 10 Integrated imperatives for pharmaceutical commercial transformation,” a report available from KPMG at 

http://www.kpmg-institutes.com/content/dam/kpmg/healthcarelifesciencesinstitute/pdf/2015/10-integrated-imperatives-for-pharma.pdf

		Alison Little is Life Sciences Segment Leader, KPMG Advisory. Bill Shew and Peter Gilmore are Principals in KPMG Advisory. KPMG LLP is the audit, tax and advisory firm in the US of KPMG International Cooperative (

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