May 11, 2010

CRM in the Life Sciences: Why the Veeva Announcement Matters

Bruce Maches

Managing the pharmaceutical sales process has always been an issue for many of the large drug companies. Nearly all of these companies sell medications used in multiple therapeutic areas such as CNS (Central Nervous System) gastro-intestinal, metabolic, and oncology (cancer). It is very difficult for any sales rep to be knowledgeable enough in more than one of these areas so most of them specialize in just one therapeutic class. This requires companies to maintain a large sales force many in the same territory calling on the same doctors or hospitals to sell their respective drugs. Add to that complexity the fact that many doctors have privileges at more than one hospital and/or clinic and many also maintain their own practices. This results in a very complex customer relationship management process with many representatives selling to the same buyers at multiple locations.

To support this process all large pharma companies were essentially required to implement complex and expensive CRM systems to manage all of the customer interactions. Add the complexities of dealing with tracking samples, supporting clinical trials, and providing product brochures and information and you get a very large and costly business problem to solve. This forced many companies to purchase and maintain CRM and sales tracking systems costing millions of dollars a year. They also had to provide the resources to administer and integrate their CRM solutions with other critical applications such as an Adverse Event reporting or ERP systems while maintaining regulatory compliance at the same time. All of this is a very expensive proposition for each company to support.

With all of the changes in health care, drug companies are continually looking to cut costs. Being able to offload the support and maintenance of these types of systems to an outside vendor will save a significant amount of money for those migrating to SaaS based solutions for the CRM needs. The Veeva solution announced today also provides a set of ready made ‘bolt on’ applications that are already proven to integrate with their core product. This will get drug companies out of the expensive and time consuming application integration business and is a part of a continuing trend in the life sciences to outsource, where practical, non-core functions.

With the recent FDA rulings impacting the how a sales force can interact with the doctors, the importance of a CRM system that can track the complex customer interactions that are a part of this business has never been more critical. The Veeva announcement gives large life science firms additional options to explore when looking at CRM solutions. Those firms that can provide full function applications that can support business goals and objectives are well positioned to thrive in this market.

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