Medical information:

new ways, new strategies

Contract Sales Organization

Salvatore RuggieroNaples, 10 December 2009

Speech at the Faculty of Pharmacy at the University of Naples

Who is Salvatore Ruggiero?

Mr Salvatore Ruggiero is:• manager, father , aikidoka, yachtsman, a fan of

philosophy and cinema;• CEO of Gruppo Merqurio;• Pharmaceutical businessman;

Why Am I Here?

• I have a story to tell you: – I'm involved in business management, especially

new communication channels; I have a blog, I am on linkedin, where I coordinate a group; my purpose is to analyze web 2.0 applications and their impact on e-detailing.

– I work as CEO in a pharma company that takes on medical detailers

• I’m here to talk about :– New pharmaceutical jobs– New career opportunities in medical information – New ways/strategies of medical information

Is It Time to Cut the Sales Force?

Beyond global crisis, medical information is facing a radical business restructuring that is shaping a new industry and new communication processes.

• Many products are becoming generic, thus increasing competition even outside the medical environment. • Blockbuster pipelines are being reduced and profits are lowering too.• National and regional laws and rules are restricting pharma companies activities. •Etc.

What about medical information?

15,000 sale reps have lost their job over the last three years, and just a few have been employed:

• Many people declare that the age of medical information is over and that managers have destroyed the market;

• The optimists say that the golden age is over and will not come back;

• The pessimists think that future is worse than the present.

Will medical information disappear?

Sales rep, the job is changing...

Do companies need to communicate with their actual and potential customers today?

Yes, of course

Company must learn to create new and effective forms of communication.

Let’s have a look at our approach to pharmaceutical sales

This crisis implies a transition to a new and better time …

The current crisis, some figures: 15,000 sales rep layoffs over the last years. What has happened?

• - 30,000,000 visits to physicians per year• Do pharmaceutical companies want to communicate with

their customers today? • Do pharmaceutical companies actually communicate with

their customers ? • Aren’t there any new clinical studies?• Do pharmaceutical companies explain to physicians what is

going on in scientific communities? • Do products still need promotion? • How will every company make a difference in

pharmaceutical market?• How can companies meet physicians’ needs and

expectations?

Merqurio’s solution: Phone reps

In contact with “new media”: the function of phone callsCan telephone increase the relationship between

physicians and sale reps?• Several people think that it’s impossible;• Some don’t consider telephone as a “new media”;• It’s very important that sale reps are specialized and

competent;• The most important elements are: competence-

knowledge -infrastructures-technology-operational ways-qualified staff-efficient relationship-feedback management-communication planning.

Merqurio’s network is made up of 25 phone reps that will become 35 in the next six months

Disease awareness and e-detailing

People often connect brand with diseases, and physicians, as well, regard specific drugs as “brand leaders” for specific diseases:

• scientific e-detailing is efficient if a drug is considered a leader;

• e-detailing involves the interaction of phone, web, e-CME and face to face communication;

• e-detailing increases the relationship between physician and sale reps and consolidates brand value.

The relationship between sale reps and e-detailing

Merqurio’s approach has a successful case history.Most physicians declare that Merqurio’s products are

important to treat the diseases of their patients; so they use them with confidence and skill.

Merqurio promotes its products:• In a soft and non-invasive way;• Through cheap contact modalities;• Thanks to a simple and efficient communication

approach.

The importance of sale reps

Some points to bear in mind: Both e-detailing and phone-detailing require sale reps.

E-detailing and web marketing require coordinators, medical writers, medical direction, production: you need a team of drug professionals.

Phone detailing requires remote sale reps, project leader, coordinators: you need a team of drug professionals.

Merqurio’s CSO: the new reality

• Wikipedia: A Contract Sales Organization (CSO) is a firm or company that assists companies in the sales and marketing of their products and/or services. The term CSO is especially prevalent in the life sciences, medical device, and medical product launch sectors. A CSO can provide many services ranging from sales/territory alignment, incentive compensation plans, call centers, hiring/training of reps, managing reps, etc. It is a very broad term with extremely broad meanings as well. CSO services are popular because they allow companies to focus on their core competencies, improve profitability and ultimately lower costs for the clients they serve.

• Contract sales organizations are also under the wider umbrella of outsourced sales or sales outsourcing organizations.

Why is CSO successful?

CSO is a service on behalf of third parties: a company provides territorial services of sale,

support and medical information for another company.

It is necessary to have many drug professionals.

The third party buys medical information service, not sale reps.

…IF we take on gardeners, we sell gardening services…

Merqurio’s CSO

• The first fundamental step is the knowledge of the ‘map’: Italian legislation, pharmacovigilance, medical direction, information structures, laws to abide by.

• The second fundamental step is territorial knowledge, which means to adapt actions and projects to the Italian professional/business context

Merqurio’s CSO

• Merqurio’s CSO is able to meet the need for flexibility required by great pharmaceutical companies.

• Merqurio has a multimodal vision of its services, which includes online and frontal activities, phone rep, e-CME etc.

Merqurio’s CSO: how does it operate?

The structure:- It is flexible, in order to meet pharma companies’ need for

flexibility;- Reps have a long-term contract and career opportunities.

The products:- Merqurio’s products;- Under license products;- Co-promotional products.

Merqurio’s CSO: contract solutions Merqurio pharma’s CSO offers the following contract

solutions:

• Licensing is a contract solution that involves a fixed cost for each sold unit set by Merqurio Pharma and the commissioning company.

• Fostering is a contract solution where costs are based on commissions and basic management costs agreed with the commissioning company and related to its specific promotional needs.

• Purchasing part of meeting is a contract solution where a street rep has a flexible contract which allows every rep to propose, during a visit split into four fractions, different kind of drugs or services provided by different pharmaceutical companies.

Merqurio’s CSO: 200,000 visits per year

• Target:– GPs, pediatricians, gynaecologists, dentists

• Numbers:– 73 Sale reps – they will become 93 in the next two

months– 3 area managers – they will become 4.– 1 national coordinator

• Activity:– Training, coaching– Street coaching– Information, action, branding– 200 working days per year / about 10 visits a day

What about CSO?

1. CSO is not business information; a sale rep is not a vendor.

- Information and sale are two different activities, with two different backgrounds, terms of payment, and control systems.

2. CSO is not an agency network. - Sale reps have a fixed salary, with benefits

and bonuses achieved thanks to their activity.

What about Merqurio?

Merqurio provides pharma companies and national health system with new ways of interacting with doctors and pharmacists through their own media and publishing experience in marketing pharmaceutical products.

Marketing and sales operations are facing new challenges from the pharmaceutical market.

The goal is to optimize contacts and relationships and create value by reducing

costs.

Today we talked about…

• The crisis of scientific information• Merqurio’s suggestions: e-detailing

and phone reps• Merqurio’ approach: CSO• Why CSO works successfully • Needs of pharma industry and CSO• Merqurio’s CSO: a different

approach

Let’s talk on Linkedin

Ita est: non accipimus brevem vitam, sed fecimus nec inopes eius sed prodigi sumus. (Seneca)

Thanks for your attention