New Physician Engagement Models -

Technology as Enabler
By David Lennon
Is this Good Customer Experience?
China Accounts for ~30% of Global Growth

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

36 100

25 15
60 57 39 37
0 7
17
# of cities
3
4
6 GDP growth contribution (%)
5
28

China1 South & Latin Middle East Eastern North Small cities & Global
SE Asia2 Americ & Africa Europe & America, Rural areas & growth
a Central Asia Western Others3
Europe, North
East Asia,
Australia &
Source: McKinsey Global Institute
New Zealand
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
Healthcare Growth has been Strong

China Hospital Sales, RMB billions, 2003-2013

400
350
300
250
200
150
100
50
0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: IMS
But Low Contribution from Launches
New launches1 2013 sales from New launches sales
since 2009 NRDL new launches contribution
# M RMB % 2013 IMS Sales

NOVARTIS 10 NOVARTIS 838.5 NOVARTIS 14.9%

PFIZER 9 ROCHE 395.2 ROCHE 5.2%

BAYER 7 BAYER 395.0 BAYER 6.0%

MSD 6 NOVO NORDISK 286.7 NOVO NORDISK 5.9%

GSK 6 PFIZER 190.4 PFIZER 1.6%

NOVO NORDISK 5 MSD 119.5 MSD 2.1%

ASTRAZENECA 3 GSK 44.9 GSK 0.9%

SANOFI 2 ASTRAZENECA 22.9 ASTRAZENECA 0.3%

1New launches = Products with first sales since 2009; different from
ROCHE 2 ELI LILLY 8.6 ELI LILLY 0.3% NDA approvals due to line extensions and delays in commercial launch

ELI LILLY 2 SANOFI 0.0 SANOFI 0.0%

Source: IMS China TOP 10 MNC CHPA data, exclude OTC brands
Increasing Price Pressure
Hospital Sector Average Price per Standard Unit
2.5 20.0

Historical/Forecast Growth (%)

2.0 15.0

1.5 10.0
RMB

1.1 5.0

0.5 0.0

0.0 -5.0
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Historical/Baseline Forecast Growth

Source: IMS 2013-2018 Market Prognosis

Medical Rep Investment Keeping Pace

-5% CAGR

-7% CAGR

+25% CAGR

Source: Cegedigm
Growth Under Pressure

GDP Growth
Healthcare access

Lack of innovation
Reform: Price/profitability
War of reps
Typical Responses: The Rise of...

Ethical Promotion Medical Patient Centricity

Key Account Alternate Channels

Current Approaches Incremental

Digital promotion

Call center/virtual medical representative

Broad market/portfolio representatives

Why Don’t these Approaches Work?

Emerging HCP Behaviors Requirements of

Intermediaries B2B Channels
 Shanghai

19.0
Bn RMB
Chongqing

14.2
Tianjin

9.1
Shenzhen
Beijing

7.7 7.5
Hong Kong
Guangzhou

7.2 7.1
Hangzhou

5.4
Ningbo

4.7
Chengdu
Tangshan
Harbin
Wuhan
Shijiazhuang
4.3 4.1 4.0 3.8 3.8

Zhengzhou
Changchun
Many Markets in One

Shenyang
Xuzhou
3.5 3.4 3.2 3.2

Wuxi
Nanning
Xi’an
3.1 2.8 2.8 2.7

Changsha
Nanjing
Changzhou
Xiamen
Foshan
Zibo
2.1 2.0 2.0 1.9 1.8 1.8

Dalian
Kunming
Taiyuan
Dongguan
Total city level healthcare spending (2011)

1.5 1.4 1.4 1.1

Jinan
Baotou
Qingdao
Urumqi
Suzhou
1.0 1.0 0.9 0.6 0.6

Hefei
Nantong
0.5 0.4

Fuzhou
Source: McKinsey Global Institute
Systems Adopting More Sophistication
Health-care industry, pubic-payer illustration
Interlinked
data inputs + Analytic
models + Decision
support tools =
Business
value

Universal lDs Predict hospitalization Patient-risk-score Reduced spending






Patient demographics risk for individual calculator; patient- on patients with
Physician ID patients workflow manager chronic diseases
Hospital ID
Measure cost and quality Contract-evaluation






of treatment, adjusted More cost-efficient
Treatment data tool; pay-for-
for patient morbidity performance models care
Diagnoses
Procedures
Drugs and dosages
Monitor treatment of
Medical aids Patient-treatment Reduced spending 
patients with chronic






monitor; physician- eg, on unnecessary
diseases and compare
Cost data alert tool hospital stays
with medical guidelines
Hospital care
Primary care Compare hospital
Specialty care productivity with others, Outside-in productivity-






benchmarking tool for Reduced hospital
Prescriptions accounting for patients’
hospital staff budgets
health and demographics

Source: McKinsey & Company, Big Data: What’s Your Plan, March 2013
Engagement Opportunities at Multiple Levels
Simplified Drug Reimbursement Process Local official open to collaboration
“We are in great need for know-how support”
Central government SFDA approval NRDL Director, Shanghai Healthcare Reform

“Need support on effective cost containment and ways to

Pricing utilize united system across 9 provinces”
Province PRDL
Deputy Head, Shaanxi Province Medical Insurance

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

City Reimbursement ratio the 17 we have today. To achieve this, we will require
support from all parties”
Deputy Head, Chongqing Municipal Price Bureau
Hospital Listing and usage

Source: Interviews
Marketing Needs to Meet Customer
Expectations

Expectations... From... To...

• “Personalized to me”
• Mass approach • Right customer

• “For my need”
• Core messages • Right solution

• “When I need it”

• In call or events • Right time
Requires More Customer Involvement
Shifting Focus: Organizational Openness

Operational control 28% 52% Organizational openness

Neutral
Where CxOs want to include customers Collaboration with customers drives
superior financial performances
New Product and service definition 82%  90%

71% 
Product/service testing 75%
39%
Customer policies and procedures
59%  Underperformers
54%
72%
development

Business strategy development 43%  60%

more
Pricing structure development 48%  56%
60%
Outperformers
Environmental and social policies
development
33%  50%

 Today 3-5 Years

Source: IBM Global C-Suite Survey, 2013
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

Requirements
SMS

Integrated content
Virtual meeting management

1:1 Detailing High-end CRM

Powerful CLM analytics

Real-time
medical Info

MSL Skype call

Weixin peer
group
Creating Value at Alternate Points of “Sale”

Point of Point of Point of

Access Diagnosis Dispensing
Presidents, Nurse; other Pharmacists

Vice-Chairman HCPs – Piggy-back on

– Technology dispensing systems
– Value
interventions to to improve
demonstration
improve treatment choices
projects
stratification at and adherence
E.g.: EHR-driven
diagnosis
Health Economics
and Outcomes
Research
Big Data: Are You Ready?
Technology Data Culture
Understanding of organizational data
Scalable and performant availability Data driven approach to insights
Scale with business demands What data exists, state and its availability? What data exists, state and its availability?

Data requirements First Class citizen in Business

Open standards Processes Design Fail Fast
Enable adoption within existing IT landscape & skillsets Ability to collect data intra/inter business processes. Use of Agile approaches to analysis and hypothesis validation?

Promote Experimentation
Support mixed workloads Availability and inventory of proxy data Experiment, Experiment, Experiment to validate and learn, do you
Real-time/Batch, HPC, Interactive etc. Use of proxy data when required data is not available have infrastructure and process support?

Accessibility to Data across organization

Accessible across organization (Minimal) policies and procedures for data access and availability across
Ease and simplicity access across all locations organization

Enabler for data driven behavior

Focus on consumption, not on administration

Cost Effective
Support healthy ROI with experimentation
Source: Google Cloud Analytics
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

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