How the pharmaceutical and biotech industry can best assess consulting firms for commercialization support.
Introduction
At KMK we focus on results, not just ideas. We work together with our clients to develop solutions that work in the real world.
Make smarter business decisions with our enterprise-level data enrichment solution tools and applications.
Best thinking and results to guide you
At KMK we focus on results, not just ideas. We work together with our clients to develop solutions that work in the real world.
Make smarter business decisions with our enterprise-level data enrichment solution tools and applications.
Best thinking and results to guide you
Getting it right every time is what makes us stand out.
Why KMK?
Careers
Newsroom
Leadership
View All Events
Life @ KMK US
Life @ KMK India
How the pharmaceutical and biotech industry can best assess consulting firms for commercialization support.
Introduction
Pharmaceutical and biotech companies are facing pervasive and impactful challenges to their commercialization business model. The Inflation Reduction Act in the USA, regulatory changes such as Conditional Market Authorization (CMA) in Europe, and rebates in the UK are some examples of external pressures occurring while gene therapy is creating a revolution within by changing the treatment paradigm from ongoing to one-off treatments that can last for decades or a lifetime. This combination of external and internal changes is putting immense pressure on the industry to rethink development and how to approach reimbursement and real-world data to create a win-win for them and healthcare systems. They also need to develop the agility to respond rapidly to change. The search to secure market advantage continues, and the need for those organizations serving the pharmaceutical and biotech industry to respond to this new world is equally challenging.
This white paper defines how pharmaceutical and biotech companies can identify and select the right consulting firm partner to aid in its commercialization efforts based on meeting a modern set of criteria defining how to best face the challenges of the future.
The impacts of the evolving healthcare landscape
The rising pressures on the pharmaceutical and biotech commercialization business model, in some ways exacerbated by the COVID pandemic, are pushing the model to a breaking point. The challenges confronting patients are further adding to these pressures. The American middle-class and Medicare/Medicaid customers, patients utilizing state-run healthcare in Europe, and patients in Japan are all struggling with debt, stagnant incomes, and other priorities. The resulting compulsory rebates and price cuts by the industry and a reduced willingness by patients to pay high premiums, or pay more in any way, result in challenges to pharma and biotech achieving a reasonable ROI and funding future development. Gene and cancer therapies, which are significantly extending life but are hitting new cost highs, are also increasing the challenges faced. Although, often the treatment advances made are life-changing, and often lifesaving, the ability to pay is struggling to match the innovation.
Pharma and biotech companies are adapting their commercial models in response. They are using new approaches such as “payment on results” for gene therapies, reduced prices for broad access, and even not launching when a floor price cannot be achieved. They are responding to new data requirements for Conditional Marketing Authorizations in Europe and responding to the growing challenge of ICER thinking in the USA. At the same time, the modern realities of increased competition, additional regulatory burdens and costs, and even the growing costs of raw materials and manufacturing continue to add pressure. Such increased costs may lead to reduced margins and sometimes may delay patient access and resulting revenue for the pharma or biotech company.
Consulting firms serving the industry are also being impacted by these challenges. Budget reductions and freezes, the need to do more with less, the need for rapid development of data and to make the most of the data that is already available to answer new questions, and the need to be flexible to changing needs are now common requirements in an engagement.
Certainly, consulting firms are used to diagnosing issues and developing solutions and have a clear understanding of what is happening in the industry. They have already established the narrative of service integration, speed, and agility and are addressing such industry needs as:
Despite this forward-thinking, consulting firms are not always responding in a way to best serve their clients. It is not sufficient for a consulting firm to tell an industry client that “We understand your problems” or even “We know what you need to do” with presentations about sharing data. The consulting firms need to go beyond just demonstrating the need for shared data and ORGANIZE INTERNALLY to respond to the client’s challenges EVEN IF the client itself is not the best organized.
Consulting firms need to reimagine and redefine their internal structures and culture to deliver on the industry’s challenges. This means removing the internal structures that drive competition, the incentive schemes that encourage silo thinking and the protection of information, and the outdated management structures. In their place, they should create cultures that reward sharing, and encourage broad approaches across functions to challenges, and flexible structures that deliver a client-focused and issues-focused team.
How can pharmaceutical and biotech firms best explore the internal capabilities of consulting firms?
To see beyond the glitzy façade of words and phrases often used by consultants in a client pitch, such as “integrated,” “client-focus,” and“one-stop-shop,” pharmaceutical and biotech organizations looking to work with a consulting firm can ask a few critical questions that will ascertain whether the firm is aligned with their needs, or merely talking about them. Many of the questions should uncover the cultural and structural organization of the consulting firm, rather than the intelligence or experience of its staff. Rarely can a company objectively prove that it has smarter people than others (or that any small difference has any value), or that its specialty knowledge is better than other specialists. Indeed, in today’s world, being a specialist can have disadvantages as it may make the consulting firm not consider the broader implications of data.
Below are some simple key questions with answer analysis, as well as general observations, to use when hiring a consulting firm. These will serve to ascertain how well a consulting firm will support the needs of the pharmaceutical or biotech organization.
Question 1. Who will be my daily contact person? How will they bring in other specialty functions when we need them? How will the team be structured?
Question 2. What are the parameters for the consulting firm’s incentive program?
Question 3. What authority does the project leader have?
Observation 1
If the consulting firm indicates that its differentiator is “Our people,” it is likely they don’t think enough about their client’s needs. Rarely are the people different. Distinguishing differences come from beyond the individuals assigned to the job, generally drawing from culture and organizational structure (clearly related). It is best to ask about the consulting firm’s culture and examples of it in action.
Observation 2
Ask about middle managers a lot! These are the people who deliver, organize, challenge, plan, and make a project successful. If there is a regular change in middle managers assigned by the consulting firm, this is a bad sign. They are the most valuable part of the organization for the client. Switching senior leadership can occur without too much negative impact, but if the great project leader leaves the assignment, there will be issues. It is critical to ensure that these project leaders have sufficient authority to deliver the project.
Observation 3
Ask about how the consulting fireworks internally. Ask about how it discusses the issues. If they take a cross-functional view and have several functions review the project data to look for broad implications and common themes, this is preferable to one silo within the firm reviewing data and “inviting” other silos to look at it if they deem it necessary. Clients should be assured that every opportunity to see links and implications is being taken.
These questions and observations will help ascertain whether the consulting firm is oriented to serve its own internal business needs, or whether it is organized to do the best job for the client in today’s healthcare landscape, while also looking after their own business.
What does this mean to managers and leaders in consulting firms?
Successful managers will demonstrate the courage to design the business around the client, to drive innovation in how they manage and share information, and to remove obstacles to serving the needs of the client. There should be recognition that the “so-called” middle manager is actually a crucial person in providing service to meet client needs. Retention, development and support of these middle managers have always been a hallmark of the best firms. They are now becoming even more important.
Managers who can drive both the process of running an efficient business, and that of delivering an agile, seamless and responsive service to the client, will win.
The demands on pharmaceutical and biotech firms are changing rapidly. To ensure they achieve their goals the industry must raise-the-bar and challenge consulting firms to improve and evolve their approaches. The ability of a consulting firm to demonstrate expertise is not enough to win, it must be combined with courageous and client-focused management, leadership that is willing to forego internal focus for flexibility for the client, and a relentless drive to retain the best people. It must develop modern and sophisticated structures that support its clients and operate with a recognition that information and insights must drive pace, not slow things down.
Chris Stevenson
About the Author
Chris Stevenson is KMK’s lead Principal of the Strategic Consulting practice based in Europe. For more than 15 years, he has been significantly involved in providing commercial strategy services to pharmaceutical and biotechnology clients facing challenges throughout the product life cycle. His strategic service experience covers the commercial landscape from market assessment through launch excellence to loss of exclusivity. He has worked across all major therapeutic areas and has dealt with some of the most complex markets in healthcare. Chris holds an honours degree in Chemistry and Colour Chemistry from the University of Bradford.
Looking for support along your commercialization journey? We'll help you make sense of your data.
Automated page speed optimizations for fast site performance