Managed Markets Account Management Report Summary

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Managed Markets Account Management Assessing the Performance of Account Executives

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Project Overview 2Participants and Experience 4-5Participant Overview 6Key Insights 10Detailed Study Findings 14Organizational Fit/Structure/Reporting Relationships 15Acct Management Changes Trends Next 3 Years 23Staffing Benchmarks & Program Trends, 25Time Allocations 33Activities & Measurements 35Pitfalls and Challenges 45Appendix 46

Additional QuotesAbout Best Practices 51

Table of ContentsPage

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Project Methodology and Study Objectives

Research was conducted through survey and interviewsKey study objectives

Identify common practices in measuring Managed Markets

account executive performance

Gain insight into the principles of effective measurement of this

function

Determine what specific measures are used to drive successful

activity in Managed Markets account management

Thirty-two participants made up the Total Benchmark Class (TBC), sixteen of which represented companies in the Large Pharma Segment (LPS).

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List of Participating Companies

Abbott LaboratoriesAllerganAstraZenecaBayer AGBoehringer IngelheimEli Lilly and Co.GenentechJohnson & JohnsonMerck & Co.Novo NordiskPfizerRocheSanofi-AventisSchering-PloughWyeth

AbraxisApria HealthcareBausch and LombCelgeneEMD SeronoHoneywellIDSKing PharmaceuticalsLaboratorios Deramtologicos DarierLundbeckQ-Med Scandinavia Sciele PharmaSkilaSmith & NephewTher-Rx CorporationValeant

Large Pharma Other Participants

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Participants’ Experience with Managed Markets Accounts

Total Benchmark Class

22%

38%

41%

Large Pharma Segment

25%

38%

38%0-5 Years6-10 YearsOver 10 Years

Q. How many years of experience do you have in dealing directly with managed markets accounts?

n=32 n=16

More than 75 percent of participants reported having more than six years of experience dealing directly with Managed Markets accounts.

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Products with which Managed Markets Account Executives Are Involved

Number in the Market- Total Benchmark Class

35%

39%

26%

1-5 Products

6-10 Products

More than 10Products

Number in the Pipeline- Large Pharma Segment

38%

56%

6%Number in the Market- Large Pharma Segment

19%

38%

44%

Number in the Pipeline- Total Benchmark Class

47%

47%

7%

1-2 Products

3-4 Products

More than 4Products

Q. How many products, in the market or in the pipeline, are your Managed Markets account executives involved with?

n=30n=31

n=16 n=16

Most respondents reported having six or more products in the market, plus three or more in the pipeline, with which Managed Markets account executives are currently involved. LPS companies tended to have slightly more of these products, especially in the market.

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Structure and Organizational Alignment

Separating Managed Markets from Sales provides a clearer focus on objectives and easier measurement of results

Coordination and cooperation between these separate groups can be harder

The rationale for having national and regional account executives report to the same individual (in either organization) is similar: coordination

“When groups have separate reporting structures for national and regional accounts, they don't get the level of collaboration, and our customer base is more intertwined than ever before in terms of the relationships between customer segments.” – Executive Vice President, Top 50 Pharma

Maintaining separate groups with responsibility for Managed Markets strategy and/or marketing often brings to bear the perspectives of the brands and therapeutic areas

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Optimal Methods and Measures for Assessing the Value of Managed Markets Account Management

Formulary status, sales, and share (50%):Share movementPenetration of productsFormulary accessFormulary penetrationSales pull-throughUnit demand

Profitability and financial results (55%):Profit goalsProfitable growthProfitable accessFinancial performanceContract performance and profitabilityROI of contracts achieved

Performance against objectives (27%):Clear MBOsBusiness plan executionAppraisal every quarter for agreed parametersStrategic objective accomplishments

Other (32%):Competency measures# of effective quality/health initiatives ledCustomer input Markets comparisons

Open-ended data revealed four main categories of optimal methods/measures for assessing Managed Markets account management (some respondents made multiple comments).

32%

27%

55%

50%

0% 20% 40% 60%

Other

Performanceagainst objectives

Profitability andfinancial results

Formulary status,sales, and share

Q. What do you think are the optimal methods and measures for assessing the value of Managed Markets account management?

n=22

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Managed Markets Account Management Organizational Alignment

Total Benchmark Class

34%

56%

9%

Large Pharma Segment

38%

63%

0%

Part of anintegrated salesdepartment

Centralized inanotherdepartment orfunctionAll Other

Q. Which of the following statements best describes how Managed Markets account management is organized in your company?

n=32 n=16

[All Other = “distributed among various product/brand managers” and “central function for all customer segments”]

The majority of respondents reported that Managed Markets account management is centralized in another department or function rather than integrated into a sales department.

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Challenges and Pitfalls in Measuring and Managing Managed Markets Account Executive Performance

Measurement and compensation (46%):Aligning comp to attainment and salesDecreased profits not always measuredEnsuring that IC plan is seen as fairNo direct control of sales force activityIndirect impact on product performanceLag time/long time frame for resultsMeasuring access without understanding impactAbility to get quality data

Organization and alignment (31%):Activity takes precedence over resultsCertain geographies more conduciveLack of ownership of accountabilityIntegration with global marketing plansInteraction between sales and MM

Other (27%):State mandates/restrictionsEconomic environment volatilityCalling beyond pharmacy/focusing on qualityTraining and convincing sales channels

Open-ended data revealed three main categories of challenges and pitfalls in managing Managed Markets account executive performance (some respondents made multiple comments).

27%

31%

46%

0% 20% 40%

Other

Organization andalignment

Measurement andcompensation

Q. What are the biggest challenges and pitfalls in measuring and motivating Managed Markets account executive performance?

n=26

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Best Practices, LLC is a research and consulting firm that conducts work based on the simple yet profound principle that organizations can chart a course to superior economic performance by studying the best business

practices, operating tactics and winning strategies of world-class companies.

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