Another driver for MA to build its business acumen muscle is the growing requirement for MA professionals to interact with C-suite executives from health systems and health plans as well as other decision-makers who are responsible for market access and formulary decisions. Effectively playing these roles will likely require different skills and competencies that have not traditionally been central to the MA function. “The circle of medicine development, licensing, reimbursement and commercialization requires the creation of value for all stakeholders and being focused on sustainable value generation is thus a must for Medical Affairs professionals who play a pivotal role in all aspects of this circle,” says Michael Zaiac, Head of Medical Affairs Oncology, Region Europe, Novartis.

Armed with business acumen, MA can operate a number of levers both internally and externally to drive value. “Internally, MA can deliver integrated insights efficiently and inform development programs accurately, allowing for optimized development plans yielding reimbursable medicines. People with business acumen are more aware of operational efficiencies, as they understand the way different contributions affect the different elements. Any imbalances here are inefficient. Externally, MA can support the development of novel business cases or beyond-the-pill services that greatly enhance the value of a medicine to all stakeholders, which often makes the difference to patients having or not having access to critical medicines. Business acumen is key to identifying the most sustainable and successful ways for value generation for patients through identifying the right stakeholders and addressing their needs,” says Zaiac.

For Cook, the time has come to re-examine the role and level of influence of Medical Affairs in a world focused on communicating the economic and health system value of a product, rather than “selling”. “Medical Affairs is often thought of as a cost center but there are a number of ways MA can really drive value. Communicating treatment value using scientific and medical information in a manner that supports the incentives and needs of the various stakeholder groups is one way, but it requires an appreciation of hospital and IDN (Integrated Delivery Network) incentives and the long-term strategic imperatives at play. The ability to link arm in arm to find mutual incentives that drive health outcomes can actually have a huge impact on a global basis.”

Operational efficiency isn’t a sexy concept, but it is the key to fully maximizing profit and boosting the bottom line. Senior leaders can’t afford to work in silos and behave as independent functional experts. In today’s dynamic environment, both cross-disciplinary collaboration and deep functional expertise are required skills. Medical Affairs must look at how it can cultivate the ability to anticipate needs among a much broader range of stakeholders to deliver value for both patients and the healthcare ecosystem through the delivery of superior medical outcomes, while simultaneously reining in costs and reducing excessive spending.

“There’s an old adage that says a dollar saved is a dollar earned, but that’s not the complete story. Imagine you’re able to save $100 (Option B), that $100 will drop straight to your bottom line less any additional expenses like taxes. If taxes are 20%, that would leave you with $80 in additional profit. Now let’s say that you’re able to increase revenues by $100 through selling additional products (Option A), a lot of that additional revenue will be eaten by the cost of creating and selling those products. If those costs are $80, that would leave you with $20 in additional profit. If you can be a little more attentive to Option B, you have four times the impact on the bottom line. This is a simple concept, but it’s one that most people don’t think about.”

For Cook, there’s a real opportunity to build credibility and free up resources to spend in other areas. “If Medical Affairs can understand these levers and appreciate both sides, they’re seeing the big picture. If you can develop your Option B mindset and use the language of Option B in your business cases, you’ll start to elevate your credibility especially with those who already have this mindset, like finance. That’s not to say that I’m favoring one lever over the other; we all know that if you push too hard on driving efficiencies, you can hamper growth, or negatively impact people. You have to be considerate of the five drivers of business: cash, profit, assets, growth, and people. When you’re able to balance these drivers, you’re helping the business run better, which enables the company to create more lifesaving products.”

Today’s industry also faces considerable headwinds. The outlook for pricing and volume expansion is becoming less attractive across all regions, given the sustained pressure on drug pricing in Europe, the growing size and bargaining power of payors in the United States, the looming biologics patent cliff, and the mounting competitive pressure in emerging markets. Meanwhile, advances in technology and analytics are opening up opportunities for powerful tech entrants to engage with patients and consumers in radically new ways, offering innovative healthcare solutions in conjunction with payors and providers. These entrants threaten to disintermediate pharma companies as the primary owners of patient data and take control of their value story. Should that happen, it would have drastic repercussions for pharma’s R&D and commercial models.1

In a challenging business environment, operational efficiency and cost control become increasingly important. Cook illustrated this point with a story from UPS: “By keeping left-hand turns to a minimum, UPS saves millions of dollars in fuel and reduces CO2 emissions by more than 100,000 metric tonnes a year. This seemingly simple idea has a $100 million impact to the bottom line each quarter. Now that’s impact! We need to start asking, ‘What right turns can we make in Medical Affairs to demonstrate our value?’”

Historically, companies have narrowly defined the role of Medical Affairs, but if you want to be more visible and valued, you need to demonstrate your business acumen and how MA fits into the big picture of the overall business. “As we think about growing our market share, we need also to think about the most efficient ways to get there and how to marshal the resources we already have to optimize our impact. Remember, you can be functionally brilliant, but unless you see that big picture and develop your business acumen, you’ll have very little influence with senior leader decision-makers. In other words, your ideas and proposals will have less of an impact.”

Sources:

1: Rethinking Pharma Productivity https://www.mckinsey.com/industries/pharmaceuticals-and-medical-products/our-insights/rethinking-pharma-productivity

1. MSL deployment – marshal resources at the right time to optimize resources and minimize cost.

2. Digital transformation – streamline costbase to improve internal or external customer experience.

3. Process engineering – look at every process that is less efficient than it needs to be and drive improvements in those processes.

4. Tight collaboration – while working with the other functions, collaborate tightly to ensure limited duplication of activities, limit rework due to miscommunication, and find clear agreement early on to the goals/outcomes for initiatives to accomplish well-defined roadmaps.

5. Organizational knowledge transfer – not only collaboration across functions and geographies, but also capture and make accessible key learnings at all levels with initiatives to ensure mistakes don’t proliferate and key learnings are institutionalized.

• Be process efficient and system minded.
• Be attentive to budget.
• Align recommendations to organizational strategies.
• Optimize your Return on Time (ROA).
• Enhance capability for speed & agility.
• Be ahead of the market and customer trends.
• Expand your knowledge on company direction and financial language.