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Case Study

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A global biotech firm has lost significant market share after its patent on a childhood illness treatment expires.

Context

A biotech company had developed a drug for the treatment of a childhood disorder. It is a condition that is diagnosed in about 1,000 children each year, and the annual cost of treatment with this drug is approximately $40,000. On average, it took an insurance company 9 to 12 months to qualify a new patient for reimbursement, and during this period, the cost of the drug was borne largely by the treating physician with some support from the patient’s parents.

The company’s patent on the drug had expired and by the time of this study its market share had fallen to 43 percent as two new competitors had entered the market. In the face of this trend management issued an ultimatum—improve market share or exit the market and redeploy assets to more productive uses.
 

Study Approach and Key Findings

Our survey focused on the physicians who prescribe the treatment. We surveyed 200 of them in an effort to determine the key drivers that would make a company the respondent’s primary supplier for the drug. Understandably, given what was stated above, the ability of a company to work with the doctor to expedite the insurance reimbursement process became the critical driver of ongoing loyalty.

More specifically, we found that physicians and the members of their staff wanted to see their sales representative at least 8 hours a month. They wanted this time split up in the following manner:

  • Two hours discussing issues related to insurance reimbursement

  • Two hours sharing developments in the regulatory and payor environment as well as best practices

  • One hour monitoring individual patient results

  • One hour discussing general business results of the practice

 

Key Success Factors

The product manager for this division, our main sponsor for this study, was 100 percent committed to its success. He worked to get us in front of the sales force to share our ideas on several occasions. More importantly, he insisted that the research be part of a larger consulting assignment focused on effectively implementing the findings from our survey. As such, we were retained for both the development of initial recommendations based on our loyalty methodology as well as the ongoing implementation of these recommendations.
 

Actions Taken

Prior to this study many sales representatives at the company were responsible for selling additional product lines besides the treatment in question. Given the amount of time that these representatives would now be required to spend with their physician accounts, we recommended the company transferred sales responsibility for these additional product lines to other account managers. Sales representatives for this treatment now sold it exclusively. In addition, in selected geographies the sales force was expanded to ensure proper coverage.

Concurrent with this, the marketing department took responsibility for arming the sales force with new information to share with physicians and their staffs each month, realizing that without “something new to say” many sales representatives would be reluctant to spend the 8 hours a month at physician’s offices that our analysis indicated created ongoing loyalty.
 

Results

In one year Physician Satisfaction scores rose by 16 percentage points. More importantly, after 8 straight years of decline, market share for the treatment rose by 13 percentage points over the same time period.


Lessons Learned

The primary lesson we learned on this study was that the likelihood of success from a Loyalty initiative is significantly increased if the client realizes at the start that major organizational change is likely to be required for successful implementation of the recommendations that result from the research and makes provisions for this at the beginning (not at the end or half way through) of the assignment.

This study also reinforced the need for an aggressive champion within the organization who “owns” the entire study from research through implementation. This “owner” does not have to be the senior executive or even a member of the senior team. The product manager who sponsored the study was a not a vice president or a member of the senior team. He was someone who felt that he “owned” the initiative and staked his reputation on its success.

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