As the end of the year rolls around, pharmaceutical and medical device sales managers alike are turning their attention to targets for 2016 – for the sales team individually and for the key accounts that they cover. The pharmaceutical and medical device industries are unusual in that they do not hold their own sales data. Because of this the process of sales planning, targeting and crediting can be a complex one. It’s therefore vital that these decisions are based on the best information available. Without accurate data, no matter how robust our analysis or planning processes we risk focusing on the wrong customers, misdirecting our sales activity and crediting sales incorrectly. Happily, the advent of Government’s Open Data initiative means we now know precisely what every community practice (including GPs, nurse prescribers and other non-medical prescribers) uses which can better inform our sales planning.
Pharmacy dispensing data versus practice prescribing data
Pharmaceutical companies have traditionally measured sales on the basis of how much of their products pharmacies dispense. This can be compared to ex-factory sales to the wholesalers who distribute their products to the pharmacies.
Traditional data sources collect sales data at the postcode level of the pharmacy location. This is based on a sizeable sample but since not all pharmacy chains or appliance contractors provide this information a gap inevitably results for some therapy sectors. The postcode-based information is then used to apportion sales to the practices within that area.
However, an overall comparison of NHS prescribing data with NHS dispensing data shows that 75% of prescriptions items were dispensed outside the postcode in which they were written (April 2014- August 2015). This is not surprising since people no longer collect their prescription from the same postcode as their doctor’s surgery: prescriptions may be collected from town centres, nearby to a work location or increasingly at an out-of-town supermarket chain.
If the location is expanded to the postcode district (defined as the first 4 digits of the postcode), there are still 25% of items dispensed outside the locality in which they were prescribed. This cannot be attributed to cross-border prescribing or home-delivery services since these account for <1% of items dispensed.
Furthermore, traditional pharmacy data are often apportioned back to the practices in that area based on the size of the practice. However, this approach is clearly not able to take into account variance in prescribing behaviours or patient populations between practices.
While pharmacy based sales data and GP prescribing data may appear comparable at a national level, variations become clear when drilling down to a CCG and practice level. It is important to understand how this can impact the organisation of sales teams, and the targeting and management of key accounts.
Sales team placement
Historically sales territories were also structured on the basis of which postcodes they covered. The landscape has of course changed since April 2013 and the introduction of Clinical Commissioning Group (CCGs). As CCGs are made up of individual practices which may not sit within the same postcode, using a postcode methodology to structure your team could result in a CCG being covered by more than one sales manager. Consequently, the majority of companies have now realigned their sales teams in line with their customers’ organisational and financial structure.
Importantly, where sales data based on the postcode is used as a basis for determining a CCG’s market potential rather than figures from its actual practice members, sales may be accredited incorrectly from both the CCG and the territory perspective. In this example, our client, a specialist pharmaceutical company, had analysed the performance of their territories based on traditional pharmacy based sales data. When they conducted a comparison using practice level prescribing data they found that their top territory was ranked only 3rd based on the dispensing data. Furthermore, out of 9 territories, only 4 were ranked the same in both data sources and these included the bottom three, as shown below.
|Sales Territory Rank||Prescription-data||Pharmacy-data|
Letters denote the different sales territories
This of course has a wide reaching impact both on territory management and the remuneration of the sales team.
By making the most of the practice level prescribing data which is now available we can ensure that we properly optimise sales territories for their market potential, and ultimately credit sales teams accurately for their efforts.
In our follow-up piece we illustrate how these different data sets affect sales figures at CCG level and explore the implications of this difference for key account planning.
Happy planning and here’s to success in 2016!