A successful incentive compensation (IC) program requires a robust sales crediting process. The timely availability of data in a suitable structured format is essential for critical computing metrics in sales crediting, ensuring a solid foundation for incentivizing pharmaceutical sales representatives.
Sales crediting refers to the process of allocating sales credit to pharmaceutical sales representatives. For example, after a healthcare professional prescribes a drug, the corresponding sales rep gets credit for the drug’s sale.
A few critical elements in the rare disease market complicates the sales crediting process, including:
- A longer diagnosis process.
- The patient journey involves multiple stakeholders, including healthcare professionals, caregivers, treatment labs, and payers for drug reimbursements (due to high treatments costs).
Therefore, the patient journey and associated sales metrics need to be tracked appropriately so that the pharmaceutical sales representatives can use them to increase drug awareness and promote the orphan drug amongst their customers.
This blog covers the top five challenges rare disease pharmaceutical companies face in the end-to-end commercialization process, from sales crediting to incentivizing field sales personnel. It also explores the benefits of using an integrated sales planning and operations cloud product suite to mitigate these challenges.
- Longer cycle time to capture sales data: Sales realization is complex and time-consuming for orphan drugs. It typically starts with patient forms that capture patient demographics and insurance details. It may take a few weeks to months to convert these forms into drug shipments and reflect on sales data in specialty pharmacy datasets maintained by patient services teams. This delay often leads to limited visibility of incentive-eligible patient additions/discontinuations to the field personnel. During the time lag, it becomes crucial to capture different stages of the patient journey and shipment statuses to report incremental changes on patient additions/discontinuations.
- Data anomalies in patient datasets: At times, patient data captured by specialty pharmacies are not in sync with field knowledge. This may happen in scenarios such as:
- Patient death.
- Territory re-alignment triggered by ZIP updates (due to a change in the care site of the healthcare professional or patient migration from one geography to another).
Many times, these information changes are not updated in patient datasets. This further impacts the initial goals at the start of the quarter (as monthly baseline data gets changed), leading to a re-run for sales goals during incentive processing. Even a single re-alignment case can lead to goals being refreshed since the percentage change is more significant even from small shipments. These outlier cases may also be pushed to the next quarter due to time constraints of meeting quarterly IC payroll dates.
- Inconsistent business rules and metrics across reporting systems: Lack of consistent business rules leads to discrepancies in key performance indicators (KPI) across different systems used for incentive sales reporting. This happens due to insufficient and inconsistent documentation of complex use cases across reporting systems to define patient metrics such as patient additions, net patient-adds (excluding discontinued patients), patient restarts, and IC eligible patients. Hence, maintaining a single-version-of-truth through a “one-stop-shop” for all reporting needs becomes essential to avoid confusion and trust issues in the mind of field personnel and the patient services team.
- Off-label usage and patient assistance program exclusions: Off-label use is quite challenging for orphan drugs as this involves additional checks on patient disposition data. Such cases need to be excluded from the sales crediting and IC processes. This step is critical considering that off-label usage1 of prescription drugs needs to be compliant as per the Food and Drug Administration (FDA) regulations and approvals. Off-label usage can include:
- Prescribing for non-approved indications. For example, prescribing drugs meant for adults to infants.
- Non-labeled dosage administration, including drugs prescribed in unapproved forms. For example, prescribing a capsule drug as an oral solution.
Beyond this, patients enrolled in patient assistance programs and drug shipments related to such patients need to be excluded from the sales crediting and IC processes. These programs2 provide medication, financial assistance, and diagnostic testing assistance. Organizations like the National Organization for Rare Disorders (NORD) and patient advocacy groups support patients in obtaining life-sustaining medications they couldn’t afford otherwise.
After finalizing rules with the business and patient services team, it becomes essential to identify and track such cases in the sales crediting process. This is more relevant for rare disease sales teams as every non-eligible shipment can significantly affect goal attainment and incorrect incentive payouts.
- Multi-stakeholder collaboration for data reconciliation: Operationalizing standardized quarter-end IC processing becomes challenging due to unreconciled data, outliers, restatements, and data input delays. The other multi-touchpoint process adds more complexity, requiring collaboration with field members (region and area directors) and the patient services team to finalize shipments and patient metrics for IC processing. This has implications on the agreed IC production calendar, which includes dates of delivering reports such as IC summary and scorecards.
The unique challenges for the sales crediting process of rare disease sales teams require a customized solution approach to meet business objectives. Integrated cloud-based product suites can streamline the sales crediting process in the following ways.
- Frequent sales and patient metrics reporting: Sales crediting reports and patient summaries can be published weekly or fortnightly instead of monthly. This helps pharmaceutical sales reps and managers track their progress toward their incentive plans and sales goals.
- Sales/patient crediting rules alignment with business and patient services stakeholders: To give a single-source-of-truth for KPIs across reporting platforms, thereby avoiding field queries. KPI calculations should remain consistent for reporting, payout calculations, and contests.
- Tracking manual sales adjustments suggested by field and business: This step is crucial as such cases might not be correctly reflected in inpatient data sources. These cases should be consolidated and tracked quarterly to avoid missed payout calculations.
- IC plan design considerations to address sales crediting data challenges:
- Baseline months for the goal-setting process can be decided considering data lag and stability of data. For instance, the baseline period of September to November may not work for the IC period of January to March as data with one month lag may not be stable enough and may lead to restatements and ultimately requires a refresh of goals.
- Hybrid incentive plans comprising goal and commission-based components work best for teams who want to motivate pharma reps on sales and new patient additions. Businesses would like to identify new patient leads and encourage pharma sales reps. However, it may be very challenging for many reps to add even a single new patient considering the limited patient pool for the identified disease. In such cases, the sales component ensures non-zero earnings if no new patients were added in a quarter. Hence, both elements help keep the right balance in terms of motivation and achieve business objectives.
- Semester-based versus quarterly IC payout processing can be considered, especially for teams with a longer sales realization cycle to close any patient or shipment exceptions before the payout processing. However, some sales teams may still prefer to do goal refresh activities in the second half of the semester.
- Robust field reconciliation: As part of the IC operational calendar, field reconciliation can cover milestones and cut-off dates to reconcile sales/patient metrics. Doing so with field leadership and business surrounding restatements and outliers can avoid last-minute changes and adjustments impacting payroll dates.
In unique challenges, pharmaceutical companies must focus on capturing accurate patient data, ensuring collaboration among stakeholders for sales crediting KPIs definition, and building systems and processes for effective sales reporting. Since incentive payout is highly visible for sales teams, errors in sales crediting are discovered quickly. It becomes necessary for tracking outliers as even a single shipment can make a big difference for some territories.
In conclusion, the need for a customized approach and adoption of best practices becomes paramount to address the unique challenges of sales crediting and IC for orphan drugs. This will motivate pharmaceutical sales reps for better performance, which will benefit the company and patients.
- FDAgov, Understanding Unapproved Use of Approved Drugs "Off Label," published online 2018 Feb 05, available at https://www.fda.gov/patients/learn-about-expanded-access-and-other-treatment-options/understanding-unapproved-use-approved-drugs-label
- NORD - National Organization for Rare Disorders, Inc., available at https://rarediseases.org/for-patients-and-families/help-access-medications/patient-assistance-programs-2/