What’s the best way to improve commercial performance? For biopharma companies, according to a report from Accenture, the answer is investment and innovation.
In a five-year study of 15 drugmakers, Accenture found in its report, “Reinventing Commercialization: Shaping a More Modern & Sustainable Model,” that those who relied on traditional methods of marketing their products underperformed. Meanwhile, those who had focused on advancing their core commercial capabilities had overperformed.
To begin its study, Accenture measured commercial performance by comparing sales of key products to analyst projections and creating the Biopharma Commercial Performance Analysis. While the consultants recognized that other dynamics can affect sales performance, outliers at the top end had commercial attributes that differentiated them from companies at the low end.
“If you can see it inside of a company pretty consistently across a lot of products, then the company is doing something right,” Ray Pressburger, the author of the report and the managing director for Accenture strategy, commercial, sales and marketing, life sciences, said in an interview with Fierce Pharma. “It’s most useful to look at people on the extremes, because there’s a couple that really stand out in each direction.”
How much can successful commercial execution mean to the bottom line? Accenture’s analysis indicates that the top eight performing companies in the study realized, on average, an extra $1 billion in annual revenue, comparing actual sales to forecast sales for products from 2018 to 2022.
To fully understand the drivers of differing performance, Accenture collected more data from senior industry leaders of the 15 companies on their commercial models.
While Pressburger isn’t free to identify specific companies that he analyzed, he can point, anecdotally, to strategies the companies used that were differentiators.
One of the companies that had commercial success did so by putting general managers in charge of products instead of the traditional method of placing products under the marketing chief. For each of the products under the general managers, there were leaders for each of the core commercial functions—including marketing, pricing and patient services.
“It simply recognizes that the rest of the commercial levers (aside from marketing) are on equal footing,” Pressburger said.
At the other end of the spectrum, one company that was not successful—based on the Accenture performance index—failed because it became too focused on digitizing its customer model.
“They actually lost market share in some key brands because they were too focused on the wrong question, which was: What’s my proportion of digital engagement?” Pressburger said. “They were not focused enough on showing up and asking: How do we create the most impact with our customers?”
The most important takeaway from the report, according to its author, is that companies must be willing to change their commercial models. While admitting he doesn’t like the old adage, Pressburger said it applies now more than ever: What got you here won’t get you there.
“What commercial leaders have been doing has been too singularly focused around the customer model and omnichannel,” Pressburger said. “This course has been outdated and now we need to be talking about that—and about sustainability and about societal equity and about access to pricing. What we need to have is a more holistic view of what’s next for commercial than just the customer model.”