Written by Mark Osterman, Senior Vice President, Kineticos
My colleague, Dr. Soo Kim, recently wrote a piece about the evolution of the virtual pharma model from an R&D perspective. In his article, he stressed the importance of virtual pharma companies having the scientific core competencies needed to discover and develop new therapies, while also being able to identify and outsource functions where they may have weaknesses, such as in manufacturing or business development. In my view, the outsourced model may also be applicable to the commercial function as well. While it may take some time to develop and fully incorporate such a model into the commercial end of the pharmaceutical industry, I think it would serve the industry well.
Firstly, commercial plays a crucial yet fluctuating role in the launching of a new therapy. The amount of resources required is extremely significant during the first ~5 years after launch while the product is being introduced to the market, but the resource requirement is dramatically reduced afterwards, depending on market uptake. Thus, the allocation of resources can vary dramatically in subsequent years following product launch; outsourcing at least some sales and marketing capabilities should be considered as it provides the ability to quickly transition resources, improving the overall commercial structure.
Secondly, the need for large commercial sales organizations is decreasing as restrictions on access continue to rise. The sales forces of the past had a clear and sizeable ROI due to their near-unfettered access to key decision makers which gave them a great deal of influence. However, that is no longer the case, and with restricted formulary access, prior authorizations, and other barriers present, the role of the traditional sales rep is less clear – and perhaps less important. Having access to partners who are able to provide support depending on market dynamics would allow companies to be more efficient with their commercial resources.
Finally, communication channels that have traditionally been utilized to reach customers continue to evolve. The role of social media is still being reviewed by regulatory agencies, and as this channel becomes increasingly utilized, the traditional sales model may become less relevant and impactful. New modes of communications will present the industry with novel needs and the rapid pace of change along with the need for unique skill sets will allow, if not require, outside vendors to pitch new ideas and solutions for customer acquisition.
The virtual pharma model is already working well for R&D purposes, and the commercial side of the pharmaceutical industry may well follow suit in its next major shift.
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Mark Osterman, Senior Vice President of Kineticos’ Biopharmaceutical Practice, brings 25 years of experience in the biopharmaceutical industry to the team. His team is focused on helping growth-oriented biopharma companies realize their commercial potential at the corporate, portfolio and product levels. Mark’s therapeutic expertise includes cardiovascular, pulmonary, metabolics and cell/gene therapy.