The document discusses strategies for pharmaceutical companies in emerging markets like Indonesia. It notes that emerging markets have great potential but also diversity in healthcare infrastructure development. Within emerging markets, there are three clusters of markets with differing levels of readiness: BRICMT countries, second-tier countries like Indonesia, Vietnam and Thailand, and African countries. The global pharmaceutical market is expected to be worth $1.6 trillion by 2020, with emerging markets playing an important role in industry growth. Pharmaceutical companies must adapt to new realities in emerging markets like price pressures, demand for low-cost generics, and healthcare reforms.

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Moch Kurniawan
Advanced Sales Force Remodeling
Strategies in a Multi-Channel
Environment Indonesia Prospective
Potential of Emerging Markets
• Emerging markets have potential for companies
but they have wide diversity in different stages of
development of healthcare infrastructure
• There are basically three clusters of markets with
potential ready to be tapped.
– Brazil, Russia, India, China, Mexico and Turkey- the
BRICMT economies
– Second tier countries such as those of South Asia e.g.
Vietnam, Thailand, Indonesia etc
– African countries- South Africa, Egypt, Algeria and
Nigeria

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The global pharmaceutical market could
be worth nearly $1.6 trillion by 2020
www.pwc.com/pharma2020
Importance of emerging markets in global
scenario
Source: IMS Market Prognosis, September 2011; IMS Pharmerging Overview, 2011
Pharma market development 2006-16, in US$ billions

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Pharmaceutical market potential of emerging
markets and mature markets
Source: IMS Health Market Prognosis; Global Insight; Strategy& analysis
Worldwide Prescription Drug Sales (2006-20)

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Global and Asia Pacific Trends
IMS Health Asia Pacific
Pharma has understood the need for radical
change
• Share of voice driven
• Blockbuster model
• Economies of scale to
maximize margins
• Patent lifetime as key
indicator for profitability
• Making companies ever
more focused
Pharma in
1990
•Cost-cutting across value chain
•Leverage nichebuster at best
•Leave GP segment
•Fill pipeline by M&A
•Diversify to OTC, devices, animal
health, etc.
•Desperate fight to overcome R&D
underperformance
Pharma in
2000 • instead of “renovation”
• Develop outcome instead of
products
• Personalize offerings
Pharma
beyond 2020
Dr. Michael C. Müller, Handelsblatt “Pharma2012”

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The biggest mistakes in emerging markets
published by Booz & Company in 2013
Source: Strategy& analysis
Manufacturers have a chance to move to the center of
the healthcare system, acting as a health solution
provider
Dr. Michael C. Müller, Handelsblatt “Pharma2012”

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The provision of healthcare is moving
closer to the patient
Source: PricewaterhouseCoopers, Pharma Vision 2020
In Asian emerging markets, the sheer size of the task of
improving healthcare has expedited the rise in price pressures
The market partner issue 55 September 2012

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Fragmented & Heterogeneous Markets in Asia
Sanofi Aventis Emerging Markets IR Seminar July 2, 2009
Price cuts and reimbursement restrictions present in
both developed and emerging markets
Source: Datamonitor, IMAP

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Recently, with growing budget pressures, markets are
looking at new systemic approaches
The market partner issue 55 September 2012
Increasing consumer demand for more affordable drugs has
driven rapid growth of high-quality generics across Asia-Pacific
The market partner issue 55 September 2012

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Measures most used in ASEAN are the less complex
tools which are also easier to implement
The market partner issue 55 September 2012
What can we learn based on IMS survey in 2013
Over the next 12 months Over the next 3–5 years
©2013 IMS Health Incorporatedand its affiliates. All rights reserved.

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The key trends now emerging and their
implications for Pharma
Source: PricewaterhouseCoopers, Pharma Vision 2020
The fully diversified model
Ethical
Pharmaceuticals
• Mass-Market
• Primary-care
• products (including
patches, inhalants
and controlled-
release implants)
• Poly-pills
• Specialised-Market
• Biologicals
• Orphan drugs
• Vaccines
Diagnostics &
Devices
• Molecular testing
• Clinical biomarkers
• Medical devices
Generics
• Branded generics
• Commodity generics
• Super-generics
• Follow-on biologicals
Consumer Health
• Over-the-counter
medicines
• Consumer
diagnostics
• Nutraceuticals
Health
Management
• Patient education
• Delivery and drug
administration
services
• Monitoring and
counselling
• Physiotherapy
• Nutritional advice
• Wellness
management
Source: PricewaterhouseCoopers, Pharma 2020: Challenging business models

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Emerging stakeholders in market access
Patients Pharmacies
Physicians and
KOLs
Government
bodies and
regulatory agencies
Journal of Market Access & Health Policy 2014, 2: 25302 - http://dx.doi.org/10.3402/jmahp.v2.25302
Sales force restructuring and innovation: State of the industry
Wait and watch players:
•Big Pharma companies with expanding
portfolios, like Novartis and Roche, are mostly
taking a watch-and wait approach and collecting
information on reps’ value and productivity in
doctors’ offices.
Slow movers:
•Companies with stable
portfolios, like Glaxo
Smith Kline and Abbott
Labs, are going a step
further, tweaking their
field forces to increase
productivity.
Change setters:
•Several mid-size companies are also making
critical sales force change using their small size
to target specific physician groups, assigning
more responsibility per rep through account
management and also making changes in their
first line management system
Change setters:
•Companies with
declining portfolios, like
Pfizer and Merck are
seeking change and
have the greatest
willingness to pilot and
experiment new
approaches. And it is
this group where the
action is, in terms of
sales model variation.
The progression of the pharmaceuticalmarketing and sales model, Deloitte

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Possible initiatives across pharmaceutical
value chain
The progression of the pharmaceuticalmarketing and sales model, Deloitte
Pharmaceutical company go-to-market model
The progression of the pharmaceuticalmarketing and sales model, Deloitte

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Key Challenges in Emerging Markets: Shortage
of Talent
Source: Sharpstream Life Sciences emerging markets talent survey 2008
FACT
• As a result, sales performance is suffering, with an estimated
67% of sales reps not meeting their quotas.
The customer is increasingly difficult to reach, leading to sales
productivity metrics dropping off a cliff.
When sales reps finally speak with their target, they are viewed by
the customer as under-prepared, primarily because today’s
customer is privy to endless amounts of information and
perspective prior to ever engaging with sales.
Customers who are underwhelmed by the initial sales outreach,
aren’t inviting sales reps back to take the process forward, which
means the money and effort invested in reaching those customers
has been wasted.
The highest performing sales teams are using new channels, such as
social and digital – to reach, engage and convert customers.
www.market-bridge.com

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Results of Interview on the Pharma Industry
http://repository.upenn.edu/od_theses_msod/33
The Challenges Facing Sales Teams Today
www.market-bridge.com

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Decline in U.S. Pharmaceutical Reps
Source: Medical Marketing & Media, 2008.
Source: Tracy Staton, “Sales Reps Earn More With Less,” Fierce Pharma, www.FiercePharma.com (August 14, 2008)
Selected differences in buyer-seller relationship styles
Adapted from Lewin, Jeffrey E.; Johnston, Wesley J. (1997); “International salesforce management: A relationshipperspective”, Journal
of Business & Industrial Marketing,Vol. 12, No. 3/4, pp. 236-252.

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Selected differences in buyer-seller relationship styles
Adapted from Lewin, Jeffrey E.; Johnston, Wesley J. (1997); “International salesforce management: A relationshipperspective”, Journal
of Business & Industrial Marketing,Vol. 12, No. 3/4, pp. 236-252.

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Understanding what Physicians value
Behaves in a professional manner
Know the BRAND market
Follows up as requested
Dresses professionally
Is able to answer my questions
Understands condition management
Asked you to prescribe/recommend
(BRAND)
Presents information in a fair & unbiased
manner
Understands the needs of my practice
Make good use of my time
0%
2%
2%
2%
3%
3%
18%
20%
25%
25%
http://blog.medismotech.com/pharma-sfe-sales-force-effectiveness/
Pharmaceutical companies focus
Source: PricewaterhouseCoopers, Pharma Vision 2020

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Pharma 3.0 From drugs to healthy outcomes
Ernst & Young – Global Life Sciences Center, Pharma 3.0 Life Sciences Network Basel, 20 May 2010

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Volume Growth and Populations income
Indonesia FC 2016
Source: Institute for Healthcare Informatics, IMS Market Prognosis, May 2012; Economist Intelligence Unit, Jan 2012
Indonesia Overview

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Indonesia real GDP
@ The Economist IntelligenceUnit Limited 2012
Indonesia’s Social Economic Class Pyramid
Source: MarkPlus Insight Research

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Population in Indonesia, income
demographics 2012 vs 2020
Source: Statistics Indonesia
The expansion of the Middle Class
Source: Goldman Sachs, in PwC, From Vision to Decision 2020, 2012

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Indonesia Pharmaceutical Overview
From 2007 to 2013 grew by 85 %
7% in 2014 with valued $6 billion
Growth is forecasted to rise to 12% in 2015 and to continue through
2018
200 pharmaceutical manufacturers, of which 70 % are domestic
companies and 30 % are multinational companies
95 % of Indonesia’s drug volume comes from domestic companies
75 % of the industry’s value comes from domestic companies and 25 %
comes from multinationals
A Global Business Reports Publication, Indonesia Pharmaceutical Report 2015

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Prescription vs Over-the-Counter drugs
61.50%
38.50%
Prescription CAGR 11.23% Over-the-Counter CAGR 6.23%
A Global Business Reports Publication, Indonesia Pharmaceutical Report 2015

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Healthcare spending
© The Economist IntelligenceUnit Limited 2012
Indonesia Social Security and Healthcare
Programs
The goal of JKN is to merge Indonesia’s from 122 million people in 2014
become 257.5 million in 2019
19 % of total healthcare expenditure will be attributed to
pharmaceuticals
92 % of drugs on the Essential Drugs List will be low-cost generics
A Global Business Reports Publication, Indonesia Pharmaceutical Report 2015

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Contribution details for private employers
and employees
KPMG Advisory Indonesia, BPJS Kesehatan: A new medicaresystem ?
Source: MarkPlus Insight 2015 WOW Brand Report - Health Insurance; n=402

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Indonesia Social Security and Healthcare
Programs Up Date
Member
• 142.711.701 (24/4/15)
Healthy Facilities
• Central of Healthy
People 9798
• Army Clinic 750
• Police Clinic 570
• Basic Clinic 2712
• Hospital D Class 1675
• Primary Clinic 79
• Pharmacy 1679
• Optic 870
Doctor
• Dentist 1050
• Private Practice 4222
•Demand for low-cost drugs to increase with the
continuing expansion of the healthcare sector and rising
cost awareness.
•Trade liberalisationwithin the Associationof South East
Asian Nations (ASEAN)regional group to potentially
speed up growth, as could government subsidies of
healthcare costs.
•Ability to increase its role in the global market for halal
drug manufacturing.
•Exports likely to increase as more producers meet GMP
standards.
•The proposed privatisationof the local manufacturing
industry holds considerable benefitsfor the industry
from private control and funding.
•Rising attractivenessof Indonesia as a clinical trials
base.
•Taxes on raw materials lowered as part of free trade
agreements.
•Inadequatehealthcare coverage and lack of disease
monitoring leading to epidemics.
•Potentialremoval of the pharmaceuticalindustry from
the 'negative investment' list
•Significant market growth potential,with a
large and fast-growingpopulation.
•Well-established local industry, with
domestic players prominent in
manufacturing.
•Sizeable and strong generic drug market,
largely owing to the low-income
population.
•Introductionof good manufacturing
practice (GMP) standards.
•The market is among the least developed in
Asia.
•Lack of formal price controls leading to
delays or rejections of marketing
applicationsif the proposed price is deemed
too high.
•Low purchasing power of large section of the
population.
•Regulatory system biased in favour of local
drug producers.
•Reliance on imports, in value terms, placing
considerable pressure on already strained
government healthcare finances.
•No comprehensive reimbursement coverage,
nor private insurance schemes.
•Pharmaceuticalsales through illegal
channels.
•Reliance on imported active pharmaceutical
ingredients,which makes the industry
sensitive to currency fluctuations
•Poor efficacyof counterfeitdrugs leading
to a distrust of pharmaceuticals.
•Recent expansion of compulsory licensing
for ARVs.
•Uncertainty regarding the speed and the
exact details of the rollout of the new
health insurance scheme, with companies
fearful that it would cost them more.
•Escalatingraw material cost and local
currency weakness resulting in rising
prices of pharmaceuticalproducts.
•Widespread corruption continuing to
deter foreign investment.
•Reduction of tariffs on drugs under ASEAN
harmonisation programme posing threat
to local industry.
Strengths Threats
WeaknessesOpportunities
Indonesia Pharmaceuticals& Healthcare Report, Published by: Business MonitorInternational

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Battle strategies for consumer healthcare

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Customer Value Proposition from the
Customer’s Point of View
The Executive Issue No. 38 | 2012

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Companies need to weigh decisions on the
building blocks for business models
Copyright © 2015 McKinsey & Company. All rights reserved.

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Companies have significant room to improve
Customer Buying Cycle
Awareness Loyalty
www.mce-ama.com

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4C directed selling perspectives
Sales
Orientation/C
ustomer
Orientation
(SOCO)
Adaptive
Selling
Sales Service
Behaviors
Selling Skills
J. of the Acad. Mark. Sci. (2009) 37:422–439
Patient Access to Health—The “6A’s” Model
www.accenture.com/LifeSciencesBlog

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Distribution of Sales Process
Copyright © 2010 Vantage Point Performance, Inc

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Non-physician calls as a percentage of total calls
http://www.rmcionline.com/
Typical frequency performance A targets
http://www.rmcionline.com/

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Typical frequency performance B targets
http://www.rmcionline.com/
Perfecting Sales Execution
Source: Consumer Product executive survey—July/August 2011, n = 120
Salesforce effectiveness is ranked among the top five priorities for about 90 percent of all respondents, but less
than half feel their salesforce is operating at full potential

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Main areas in which pharmaceutical marketing
departments spent funds in 2012
Source: Pewtrusts.org, nature biotechnology volume 32 NUMBER 10 OCTOBER 2014

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© COPYRIGHT 2014 CUTTING EDGE INFORMATION, INC. ALL RIGHTS RESERVED

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Marketing and Sales: How They Work Together
http://www.saylor.org/books
Selling Is a Process, Not an Event
Non-Selling Time for Reps
How much of your sales reps' time is spent in
non-selling activities? (n=199)
Copyright © 2008 CustomerThink Corp.

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Adaptive selling behaviors
Salespeople have many customers with different needs;
Sales position have high importance and value;
The company provides required resources and support.
The salespeople are highly skilled and capable to adapt
International Journal of Research in Management, Issue 4, Vol. 3 (May 2014)

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Understand what really defines sales performance
The four Performance Profile quadrants acquired when considering a salesperson’s
current performance and performance trajectory
Below AboveCurrent Performance vs Target
Improving
Declining
PerformanceTrajectory
Current Performance vs. Performance Trajectory
www.theblackdot.com.au
What do high performers do differently?
Scatterplot of Territory OTP and CAGR for Benchmarked Primary and Specialty
Care Pharma representatives (2012 data)
www.theblackdot.com.au

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Pharma client example illustrating misalignment between the stated Call Coverage Plan and actually
executed Call Coverage Model. Percentages allude to the percentage of total sales calls made throughout
the quarter
www.theblackdot.com.au
The five tribes of segmentation and targeting process
adherence within all sales teams
www.theblackdot.com.au

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Evidence 2014 : Patients becoming more like
consumer
Healthcare and Life Sciences Predictions 2020 A Bold Future ?
Improving Sales Process Effectiveness
Opportunities To Improve Sales Process
Which of these activities do you think offers the top three opportunities to
improve sales productivity at your company? (n=226)
Copyright © 2008 CustomerThink Corp.

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Optimize the Call Coverage Model
The three stages required to execute a Call Coverage Model that reflects the company’s defined HCP
segmentation & targeting process
www.theblackdot.com.au
SMART Practices for Increasing Sales Productivity
Copyright © 2008 CustomerThink Corp.

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Adoption Curve
Customers want
Innovation and performance
Customers want Solution and Convenience
Sources: Modificationfrom E.M. Rogers, G. Moore

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The cheapest and most effective is TOPS
Target offerings
Optimized
automation, tools
and procedures
Performance
Management
Sales Force
deployment
Sales Incentive Plan Effectiveness Checklist
(1=Best, 4=Worst)
Trend + issue s, Effective Sales Incentive Plans QUARTER 2, 2004

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Efficiency or Effectiveness? Yes!

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Types of Sales Metrics
Copyright © 2010 Vantage Point Performance, Inc
Using Processes to Achieve Sales
Objectives
Copyright © 2010 Vantage Point Performance, Inc

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Sales Response vs. Sales Force Effort
Source: Eye For Pharma
Evolving Representative Classifications

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Evolving Representative Classifications
How Performance Produces Business Results
Enablers
• Training
• Reference documents
• Expectations
• Feedback
• Incentives
• Ergonomics
• Tools
• Coaching
• Goal-setting
• Job Design
• Job Aids
Behavior
• Asking
• Introducing
• Inviting
• Explaining
• Deciding
• Writing
• Speaking
• Finding
• Information
Job Outputs
(milestones)
• Appointments
• Next meetings
• Proposals
• Customized Demos
• Buying Decisions
• Signed Contracts
• Satisfied
• Customers

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Projected Change in S&M Expenditure Allocation by
Marketing Target
Booz & Company and National Analysts Worldwide, Pharmaceutical Sales and Marketing Trends 2011
Why look at hospital channel today
The topline importance of
the hospital channel for
Pharmaceutical sales
continues to grow
Hospital influence
outpaces that of other
channels
Hospitals are core
components of
increasingly complex and
sophisticated healthcare
systems.
Healthcare reform will
exert additional pressure
on hospitals to deliver
cost efficiency and quality
care
The set of hospital
stakeholders that must be
engaged is expanding
along with the complexity
of these institutions
Copyright © April 2015 McKinsey & Company. All rights reserved.

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Why look at hospital channel today
Copyright © April 2015 McKinsey & Company. All rights reserved.
Projected Change in Expenditures for Communication
Vehicles
Booz & Company and National Analysts Worldwide, Pharmaceutical Sales and Marketing Trends 2011

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The evolution of the pharma sales force
Smaller Team Approach
Customer Service
Representatives
Clinical Nurse
Education
Embedded TeamsClosed-Loop Marketing
Non personal
Promotion
The Future : Leaner,
more vital Teams
www.pm360online.com
More Reps, or More Productivity
Harvard Business Review, September 2006

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What Does This Mean For Sales? And What Do I Need
To Do To Adapt?
• Segmentation must incorporate Customer Lifetime Value
• Micro-Segmentation and Verticalization
• Sales Coverage models evolving
Sales Strategy
• Customer Contact Continuum changes to reflect a shift in
buyers and processes
• Job Roles evolve to align with land and expand strategy
• Productivity expectations must change
Sales Structure
• Performance Metrics evolve to reflect recurring revenue
• Sales Compensation looks drastically different
Sales
Management
EVERYTHING CHANGES – NOTHING LOOKS THE SAME AS LEGACY TECHNOLOGY SALES!
INTELLIGENT AND TARGETED INVESTMENT IN SALES WILL DRIVE INCREASES IN YOUR SHARE OF WALLET
©2015 The Alexander Group, Inc.®
Adopting A New Sales Paradigm
©2015 The Alexander Group, Inc.®

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Key characteristics of salespeople desired by buyers
Expertise in their
company’s
products and the
market
Good
communication
skills
Ability to solve
problems
Ability to
understand and
satisfy the buyer’s
needs
Thoroughness
Ability to help in
ensuring the
reliable and fast
delivery of orders
Source: Based on Garver, M.S. and Mentzer, J. T. (2000) ‘ Salesperson logistics expertise: a proposed contingency framework’, Journal
of Business Logistics, 21 (2) pp. 113–32; and Williams, A.J. and Seminerio, J. (1985) ‘What buyers like from salesmen’, Industrial
Marketing Management, 14 (2), pp. 75–8.
Imperatives for Strategic Key Account Management
Strategy
Create a key
account strategy
driven by your
corporate strategy
Build a competitive
growth strategy
that defines
growth sources
and key account
added value
Organization
Install cross-
functional teams
with a multi-
disciplinary
approach
Re-define the role
of marketing and
sales
Management
Demonstrate
serious
management
involvement of
senior managers
Recognize key
account
management as a
strategic role
Measurement
Measure success
and progress
Define and monitor
value-adding KPIs
Strive for a full
costing
measurement
People
Define roles and
responsibilities
Foster knowledge
and create
understanding
Appoint high-level
key account
profiles
www.mce-ama.com

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To be successful internationally, Asian companies
must ask themselves the following questions
2. How will we serve customers and navigate overseas markets?
1. How will we compete?
The human touch behind Asia Inc.’s global push in the 2013, No. 2
To be successful internationally, Asian companies
must ask themselves the following questions
3. How will we execute our strategy?
4. How will we build talent, bridge culture gaps and develop global leaders?
The human touch behind Asia Inc.’s global push in the 2013, No. 2

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Guiding principles for Pharma 3.0
Ernst & Young – Global Life Sciences Center, Pharma 3.0 Life Sciences Network Basel, 20 May 2010

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Key levers of Roland Berger’s SFE model
Sales excellence in the pharma industry, www. rolandberger.com

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