Novo Nordisk Pharmaceuticals, a world leader in insulin products, already had 20 percent of the U.S. diabetes care market when it decided to expand its product line. The U.S. division of the Swedish pharmaceutical giant Novo Nordisk A/G had traditionally served those suffering from Type 1 diabetes-a condition in which the body makes no insulin-with insulin and injection devices.
With the introduction of its new oral glucose-lowering drug Prandin, the Princeton, N.J.-based company hopes to expand its market share by serving those with Type II diabetes, a condition in which the body produces some, but not enough, insulin. It is believed that about 50 percent of the Type II population are currently undiagnosed, leading industry analysts to describe it as "an epidemic for the next millennium" and to predict that the global market will be worth $20 billion in 2006.
To conquer the highly competitive, yet potentially lucrative Type II diabetes care market, the company devised an aggressive, two-part strategy that included the development of a co-marketing alliance and the implementation of new customer relationship management technology that allows its sales force to zero in on doctors and benchmark progress.
"The introduction of Prandin really threw us right in the midst of this huge, competitive field, where we needed the very best tools to make our sales team as effective as possible," says Shay Weisbrich, vice president of sales and marketing at Novo Nordisk. "The more they can call on the right physicians with the right message and measure their effect, the better our sales will be, and, bottom line, that's what we're after."
"The more they can call on the right physicians with the right message and measure their effect, the better our sales will be, and, bottom line, that's what we're after."
A Shot In The Dark
For a truly global company like Novo Nordisk, the U.S. market offers the highest potential, both for the new drug and existing products. Its pen injection devices, for example, currently have only a 2 percent market penetration, representing a huge growth opportunity. But in attempting to meet this potential, Novo Nordisk encountered several challenges. Its U.S. pharmaceutical sales force had primarily focused on endocrinologists. But because many Type II diabetics are initially diagnosed by general practitioners, primary care physicians also needed to be targeted. In addition, because insulin is not a true prescription drug, the sales force needed to be retrained and refocused to deal with the new product and increased competition.
Part of the company's solution came in the form of a co-marketing agreement. In early 1998, Novo Nordisk entered into an alliance with Schering-Plough for the U.S. marketing of Prandin and its current insulin products. The Schering-Plough sales force covers general practitioners and managed care providers, while Novo Nordisk's sales force continues to target endocrinologists.
The other part of the solution involved giving the sales force the tools they needed to get the job done. Though the company had previously used SFA software, it had not been specifically geared to the pharmaceutical industry. With the launch of its prescription product, the company decided to start from scratch with a system customized to the company and its products.
Earlier this year, Novo Nordisk Pharmaceuticals signed a three-year licensing agreement with Dendrite International's SalesPlusCorNet division of stroudsburg, Penn., to supply its U.S. sales reps with Catalyst software, a suite of process-oriented technology-enabled selling solutions. The vertical-market sales force automation product offered Novo Nordisk key functionality to deal with the unusual demands of the industry.
The Pharmaceutical Biz
These industry demands make for unique sales models, which require industry-specific SFA functionality. Unlike other industries, where the majority of a rep's time is spent selling, pharmaceutical sales reps share information and product knowledge in hopes of influencing doctors' prescribing habits. Consequently, multiple products must be detailed in a certain priority that's often dictated by marketing departments. With prescription drugs, pharmaceutical companies are subject to FDA audit, making it critical to keep absolutely accurate records of what samples and what quantities are dispensed to which physicians.
What's more, with increased competition, the time reps have with doctors becomes more precious. Effective pre- and post-call system functionality is crucial to helping reps know physicians' interests, what they're currently prescribing and why. With the right information, they're able to get more time, which greatly increases their effectiveness. "In my over 20 years in the industry, I have seen every year that you get less and less time," says Weisbrich. "You get hallway detail, stand-up detail and 30-second detail."
However, Weisbrich is quick to point out that good representatives with good information are able to get more time. "You've already been warned he can only sign for the samples, and don't take any of his time. But with the right question, all of a sudden the doctor puts the pen down and says, `Oh really, can you tell me about that?' That's the usefulness of a sales force automation system," she says.
Right On Target
To target the right doctors with the right information, the Catalyst system offers capabilities for examining territories and planning routes. Any account attribute that is captured in the system, such as location, prescriber specialty, prescribing volume and so on, can be used by individual reps on laptops to generate call lists. The system also allows the corporate office to tag physicians for particular promotions. "The targeting capability was key for us," says Jeff Cantor, associate director of field systems at Novo Nordisk. "We wanted to move from a relationship business to a knowledge-based business. It's really the difference between contact management and CRM, where rather than just knowing who's on the other side of the table and where they went to school, you have some idea of their prescribing habits and where they've been as far as education programs."
Cantor says that's what the company's previous automation solutions hadn't provided. "I can tell you six addresses where I can find the doctor, but not really any kind of a lead-in on knowing how we can best address our message with that particular doctor," he says. Once they're at an appointment, the system offers a pre-call view by account. A single screen combines virtually everything the rep needs to know before a call. Within 30 seconds, the rep can find out the receptionist's name, the nurse he made first contact with, affiliations with managed care organizations, last call objectives and notes from the last meeting. Novo Nordisk customized this pre-call functionality by adding graphing of third-party sales data. Reps get a graphical interpretation that provides a snapshot of sales data trends for that particular prescriber before they walk into the office.
The ability to incorporate third-party sales data is one of the system's most powerful features and something Novo Nordisk hadn't been able to accomplish with previous automation attempts. Because of the nature of the industry, use of prescriber-level sales data cannot be underestimated. "It's the only industry that I know of where there is no direct reporting of sales at the rep level," says Bill Henderson, director of new product marketing at IMS Health, Westport, Conn., which provides data to Novo Nordisk. "To be able to show cause and effect between a rep's call on a doctor and a doctor's prescribing activity is a challenge," he says.
Because of this unique sales model, pharmaceutical companies must rely on outside sales data to help reps target prospects, measure performance and benchmark success. While this information has been available for years, the industry has struggled with how to best deliver it to sales reps in a useable fashion. "The reps out in the field get tons of data that they're expected to analyze," says Henderson. "When you have several hundred doctors in your territory, you need guidance on who to call on first. Sending a rep a weekly report that's filled with pages and pages of doctors' names isn't a big help."
"It's really the difference between contact management and CRM, where rather than just knowing who's on the other side of the table, you have some idea of their prescribing habits."
However, Henderson says the data can be invaluable when presented early, and in an analytical way that can statistically determine who are the best people to call on, based on their prescribing patterns and how they've reacted to new product announcements. "Reps tell us that if they can identify a change in a doctors' prescribing pattern quickly, they might be able to change it back or at least find out why," he says. "Whereas, if you wait 60 or 90 days, it typically becomes a habit and then they're not likely to easily change back to your drug."
Because Catalyst delivers data within 19 days after the close of a reporting period, reps can get almost real-time ROI information on their efforts. Within days, they can find out whether a certain strategy is working or if doctors aren't responding. "It's that timeliness, the ability to take a snapshot literally to the minute, as opposed to the end-of-month reports that we were doing before, that makes the difference," says Cantor.
Something For Everybody
The company deploys another version of Catalyst for its regional managers. They can now view roll-up reports that contain performance information ranging from products detailed and samples disbursed, to sales data in their territory. The information allows them to better analyze their territories so they can monitor progress and disseminate call plan strategies back to the sales force to maximize sales. "It's giving management more useful information in terms of what each individual rep is doing, where they have more success in one territory versus another, and the ability to analyze the reason for that success or lack of success," says Weisbrich. "Then, they can benchmark and share that information with other representatives to really help bring everyone up to the standard that has proven successful."
Novo Nordisk also purchased Sales-PlusCorNet's home office tool called HQ Administration Center, which allows corporate management to generate home office queries of the national database and push down information to managers and reps. With the HQ system, the corporate office can also direct field priorities. For example, if a decision is made to stop detailing a product, they can effect that change almost immediately. They can also change the priority level in which reps need to detail a drug. If marketing, for competitive reasons, decides to change the priority at which a drug should be detailed to doctors, they can go into the system and make that change nationally, regionally or even down to the rep level.
Plugging It In
Novo Nordisk rolled out the Catalyst system in June of this year to 200 sales reps and managers. "We did this implementation in six months from the time we shot the gun off to the time we actually rolled the system out," says Cantor. "That was really the shortest length of time that we felt comfortable with. Since we were leaving one vendor and going with another, we wanted to get it turned around as fast as we possibly could and still have room for pilot and still take good business care."
A 45-day pilot included 31 sales reps. According to Cantor, they wanted to include an entire business unit so they could test the effectiveness of the management system. Then, they chose one rep from each of their other business units. "That not only gave us the feeling of what would work and what wouldn't work across the nation, but also gave us a super user to help us in the training process and ongoing support," he says.
Because the company had rolled out some new hardware a few months prior-the lightweight yet full-featured IBM 560Z-implementation involved some additional logistics to get laptops in from the field and have them ready for pilot and roll-out. That resulted in a one-week turnover period, where reps had to rely solely on paper. However, the company was able to turn that challenge into an advantage. The last half day of training was a go-live session, where reps turned off the training databases on their system and turned on the territory database which was resident on their laptop. Part of that time was spent entering the calls they had been collecting on paper. It not only allowed reps to get their database up-to-date, but also gave them a truer experience of how the system worked.
"It's giving management more useful information in terms of what each individual rep is doing."
Weisbrich says Novo Nordisk has not conducted a true return-on-investment analysis. "It's really hard to do an ROI in terms of an enabling system like that," she says. "Basically, we're interested in making our sales reps as effective as possible and increasing their capabilities because of this very competitive arena we're in. So it's like training or any other enabling function that you're utilizing to be as much on the cutting edge as possible."
Since July was the first full month on the system, the company hasn't been able to measure the effectiveness they think they've achieved. However, Weisbrich expects to see an eventual return in the form of increased sales. "Bottom-line, everything we do is designed to increase our capability of selling our products," says Weisbrich.
There are some benefits that don't appear on a balance sheet. "In our roll-out meeting in June, you could see our sales force just felt energized from being handed a tool with which they could work smarter, not harder," says Cantor. "They're getting more timely, accurate and usable information," adds Weisbrich, "even in terms of the ease of use and the quality of information. That has an effect on employee morale, loyalty and retention."
At a Glance
Number of employees: 15,000 worldwide; 1,300 in U.S.
Annual revenues: $17,911 million in 1998, including $9,818 million in sales of diabetes care products. Sales of insulin products in the U.S. account for 11% of Novo Nordisk's total insulin sales.
Point of pain: Launching a new product in a competitive market required a tool that would help reps call on the right physicians with the right message and measure their effect.
Solution: A software system attuned to the needs of the pharmaceutical industry that allowed for incorporation of third-party sales data to improve targeting and to benchmark success.