2011 Scrip 100: Making market access happen

New research done by the Open University Business School reveals that many typical management practices actually hinder the implementation of market access strategies. Visiting OUBS research fellow and founder of consultancy PragMedic Dr Brian D Smith identifies the practical lessons that emerge from this work in an interview with IBI principal analyst Ashley Yeo.

Market access lies at the core of pharmaceutical marketing strategy. It has consequently become a focus of both big and speciality pharma. Dr Brian D Smith, an academic specialising in pharmaceutical market strategy, describes new research he has conducted on this theme for the Open University Business School.

"Market access is unusual in two important respects," says Dr Smith. First is the degree to which its processes are cross-functional. They obviously involve medical affairs, health economics, marketing, key account sales teams and others but also payers and sometimes patient advocacy groups, he says. There's much more cross-discipline-working than in other parts of the value chain.

The second unusual characteristic is the way in which value is created. In most functional areas, value is created by very tangible actions – producing some data, making a target number of sales calls and/or achieving a brand recognition target, and so on.

But in "market access", value is created mostly by things that are hard to measure – sharing information with colleagues, spotting issues in the patient pathway, creating insight into where the cost/benefit ratio comes from. "These sorts of actions – discretionary actions – are near impossible to measure in the traditional way. They happen when employees are motivated to act on their own initiative, rather than as a result of a carrot or stick."

Firms managing implementation of a market access strategy may hit hurdles as a result of the intense cross-functionality and discretionary behaviour.

Infighting between departments ("intra-organisational conflict", to use the researcher's jargon) goes on in all companies, and no company has 100% motivated staff. This causes problems for all parts of the business process. But because market access is so cross-functional and relies on discretionary actions, it is especially susceptible. "When I research how things go awry in strategy implementation, the answer usually comes down to turf wars or to key people failing to carry out discretionary actions."

To adapt Tolstoy: "All successful market access strategies are successful in the same way whilst every implementation failure fails in its own way." In other words, the detail of failure tends to be case-specific, says Dr Smith. But he also observes some general common trends.

"Consider intra-organisational conflict, for instance. The most common thing I see is failure to share information proactively. While no one breaks the rules visibly, individuals may seek in some way to limit the success of colleague-rivals, by, say, waiting until they actually request information – not volunteering it proactively." Of course, if they don't ask and they fail, that's their problem not yours.

Another common turf war tactic is to undermine the credibility of colleagues/opponents very subtly, via tone of voice or an off-the record remark.

In the area of discretionary behaviour, non-motivated people play the rules game. They do everything asked of them and often show remarkable ingenuity at playing the system so that they appear to be doing their job, which, in the literal sense, they are. They may even pretend to being doing lots of discretionary work – working late or volunteering ideas, say. But if or when "post-mortem" implementation failures are conducted, the areas where staff could have made a difference – but chose not to – can usually be spotted.

So what things do pharmaceutical executives typically do that hinder the implementation of market access strategies?

Quite a lot is known about the management behaviour that pre-disposes organisations to intra-organisational conflict and individuals to playing the rules game. Over 50 years' research on this theme has told us that, for example, departments are almost pre-programmed to fight by evolutionary psychology. We also know that individuals almost always consider their own interests above those of the firm.

"These things can be managed," says Dr Smith. "But typical management practice often exacerbates this behaviour. We set different departments mutually-conflicting goals, for example, compliance and profit. We also set targets for individuals that they don't believe they can actually meet." There are numerous other common management practices that, well-intentioned they may be, actually amplify the sort of behaviour that hinders the implementation of market access strategy.

Most managers whose techniques serve to amplify implementation-hindering behaviour in the area of market access can reverse their behaviour for the benefit of the firm by following five recommendations. These involve:

• setting individual goals that can only be achieved by implementing the strategy and not by playing the rules game (see above);
• setting rewards that are not only attractive, but which the individual thinks they can achieve;
• avoiding over-strong departmental loyalties, since these displace commitment to company goals;
• avoiding conflicting departmental goals, since this is the single most important cause of turf wars; and
• avoiding perceived differences in status between departments, since this encourages lower status departments to undermine their perceived superiors.

Preventing strategy-hindering behaviour and encouraging the reverse is difficult, says Dr Smith. But like much else in the pharma industry, it begins by understanding the underlying research.

More information on this research is available from Dr Smith at [email protected].