New Physician Engagement Models -

Technology as Enabler

By David Lennon

Is this Good Customer Experience?

1 Includes cities in China (incl. Hong Kong and Macau) and Taiwan

2 Includes Afghanistan, Bangladesh, India, Pakistan, Sri Lanka, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Papua New Guinea, Philippines, Singapore, Thailand and Vietnam

3 Includes 2,497 other large cities not included in City 600 that account for 19% of global growth

GDP growth contribution 2014-2018 (predicted real exchange rate)

China Accounts for ~30% of Global Growth

Source: McKinsey Global Institute

28

6

17

100

South &

SE Asia2

36

5

Middle East

& Africa

3

Eastern

Europe &

Central Asia

China1 Small cities &

Rural areas &

Others3

Latin

Americ

a

North

America,

Western

Europe, North

East Asia,

Australia &

New Zealand

4

Global

growth

25

0 60 57 39 37

15

7

GDP growth contribution (%)

# of cities

Healthcare Growth has been Strong

0

50

100

150

200

250

300

350

400

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

China Hospital Sales, RMB billions, 2003-2013

Source: IMS

But Low Contribution from Launches

Source: IMS China TOP 10 MNC CHPA data, exclude OTC brands

ASTRAZENECA

ROCHE

NOVARTIS

0.0

8.6

BAYER

PFIZER

MSD

GSK

ELI LILLY

SANOFI

22.9

44.9

119.5

190.4

286.7

395.0

395.2

838.5

New launches1

since 2009 NRDL

#

2013 sales from

new launches

M RMB

MSD

PFIZER

NOVO NORDISK

BAYER

ROCHE

NOVARTIS

SANOFI

ELI LILLY

ASTRAZENECA

GSK

0.0%

0.3%

0.3%

0.9%

2.1%

1.6%

5.9%

6.0%

5.2%

14.9%

New launches sales

contribution

% 2013 IMS Sales

1 New launches = Products with first sales since 2009; different from

NDA approvals due to line extensions and delays in commercial launch

NOVO NORDISK

9

7

6

6

5

3

2

2

2

SANOFI

ASTRAZENECA

NOVO NORDISK

GSK

MSD

BAYER

PFIZER

NOVARTIS

ELI LILLY

ROCHE

10

Increasing Price Pressure

Source: IMS 2013-2018 Market Prognosis

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

2.5

2.0

1.5

1.1

0.5

0.0

20.0

15.0

10.0

5.0

0.0

-5.0

RM

B

His

tori

cal/

Fo

recast

Gro

wth

(%

)

Historical/Baseline Forecast Growth

Hospital Sector Average Price per Standard Unit

Medical Rep Investment Keeping Pace

Source: Cegedigm

+25% CAGR

-5% CAGR

-7% CAGR

Growth Under Pressure

GDP Growth

Healthcare access

Lack of innovation

Reform: Price/profitability

War of reps

Typical Responses: The Rise of...

Key Account

Alternate Channels

Patient Centricity

Medical

Ethical Promotion

Current Approaches Incremental

Digital promotion

Call center/virtual medical representative

Broad market/portfolio representatives

Why Don’t these Approaches Work?

Emerging

Intermediaries

Requirements of

B2B Channels

HCP Behaviors

19.0

14.2

9.1

7.7 7.5 7.2 7.1

5.4 4.7

4.3 4.1 4.0 3.8 3.8 3.5 3.4 3.2 3.2 3.1 2.8 2.8 2.7 2.1 2.0 2.0 1.9 1.8 1.8 1.5 1.4 1.4 1.1 1.0 1.0 0.9 0.6 0.6 0.5 0.4

Beijin

g

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Han

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Sh

an

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ai

Ch

on

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Tia

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n

Ch

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Nan

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g

Ch

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ou

Xia

men

Fo

shan

Zib

o

Dalian

Ku

nm

ing

Taiy

uan

Do

ng

gu

an

Jin

an

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zhen

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gd

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ton

g

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zho

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gb

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en

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Harb

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Wu

han

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ijia

zhu

an

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en

gzh

ou

Ch

an

gch

un

Sh

en

yan

g

Xu

zho

u

Wu

xi

Nan

nin

g

Bao

tou

Total city level healthcare spending (2011) Bn RMB

Source: McKinsey Global Institute

Many Markets in One

Systems Adopting More Sophistication

Health-care industry, pubic-payer illustration

Source: McKinsey & Company, Big Data: What’s Your Plan, March 2013

Interlinked

data inputs

Analytic

models

Decision

support tools

Business

value + + = Universal lDs Patient demographics

Physician ID

Hospital ID

Treatment data Diagnoses

Procedures

Drugs and dosages

Medical aids

Cost data Hospital care

Primary care

Specialty care

Prescriptions

Predict hospitalization

risk for individual

patients

Patient-risk-score

calculator; patient-

workflow manager

Reduced spending

on patients with

chronic diseases

Measure cost and quality

of treatment, adjusted

for patient morbidity

Contract-evaluation

tool; pay-for-

performance models

More cost-efficient

care

Monitor treatment of

patients with chronic

diseases and compare

with medical guidelines

Patient-treatment

monitor; physician-

alert tool

Reduced spending

eg, on unnecessary

hospital stays

Compare hospital

productivity with others,

accounting for patients’

health and demographics

Outside-in productivity-

benchmarking tool for

hospital staff

Reduced hospital

budgets

Central government SFDA approval NRDL

Province Pricing

PRDL

City Brand listing,

Reimbursement ratio

Hospital Listing and usage

Simplified Drug Reimbursement Process

Engagement Opportunities at Multiple Levels

Source: Interviews

Local official open to collaboration

“We are in great need for know-how support”

Director, Shanghai Healthcare Reform

“Need support on effective cost containment and ways to

utilize united system across 9 provinces”

Deputy Head, Shaanxi Province Medical Insurance

“We are planning to build 13 more 3A hospitals beyond

the 17 we have today. To achieve this, we will require

support from all parties”

Deputy Head, Chongqing Municipal Price Bureau

Marketing Needs to Meet Customer

Expectations

From...

• Mass approach

• Core messages

• In call or events

Expectations...

• “Personalized to me”

• “For my need”

• “When I need it”

To...

• Right customer

• Right solution

• Right time

Requires More Customer Involvement

Source: IBM Global C-Suite Survey, 2013

54% more

39% Underperformers

60% Outperformers

Collaboration with customers drives

superior financial performances

Where CxOs want to include customers

50%

56%

60%

72%

75%

90%

Environmental and social policies

development

Pricing structure development

Business strategy development

Customer policies and procedures

development

Product/service testing

New Product and service definition

Shifting Focus: Organizational Openness

Operational control 28% 52% Organizational openness

Neutral

82%

71%

59%

43%

48%

33%

Today 3-5 Years

B2B Channels have even Higher Requirements

Beyond right customer, right solution, right time...

Stickiness Longevity Scalability

How will Technology Help Us?

Robo-REP

Low-cost interventions at alternate points of value chain

Big data applied to current approaches

$

Robo-rep: Integrated, Rep-led MCM

Email

SMS

Virtual meeting

1:1 Detailing

Real-time

medical Info

MSL Skype call

Weixin peer

group

Requirements

Integrated content

management

High-end CRM

Powerful CLM analytics

Creating Value at Alternate Points of “Sale”

Presidents,

Vice-Chairman

– Value

demonstration

projects

E.g.: EHR-driven

Health Economics

and Outcomes

Research

Point of Access

Nurse; other

HCPs

– Technology

interventions to

improve

stratification at

diagnosis

Point of Diagnosis

Pharmacists

– Piggy-back on

dispensing systems

to improve

treatment choices

and adherence

Point of Dispensing

Big Data: Are You Ready?

Source: Google Cloud Analytics

Technology Data Culture

Scalable and performant Scale with business demands

Understanding of organizational data

availability What data exists, state and its availability?

Data driven approach to insights What data exists, state and its availability?

Open standards Enable adoption within existing IT landscape & skillsets

Data requirements First Class citizen in Business

Processes Design Ability to collect data intra/inter business processes.

Fail Fast Use of Agile approaches to analysis and hypothesis validation?

Support mixed workloads

Real-time/Batch, HPC, Interactive etc.

Availability and inventory of proxy data Use of proxy data when required data is not available

Promote Experimentation Experiment, Experiment, Experiment to validate and learn, do you

have infrastructure and process support?

Accessible across organization Ease and simplicity access across all locations

Accessibility to Data across organization (Minimal) policies and procedures for data access and availability across

organization

Enabler for data driven behavior Focus on consumption, not on administration

Cost Effective Support healthy ROI with experimentation

Conclusions

Growth is likely to continue in China, but with increasing pressure on finding

cost-effective measures to engage customers

Current approaches have been incremental to the current model, and lack

aspects of stickiness, longevity, and scalability required for pharmaceutical

commercial effectiveness

Pursuing more integrated, technology-enabled solutions to a broader range of

customers will be needed

Thank You

23