with Martin Grubinger, General Manager Switzerland and Austria, Cegedim
Let’s start by introducing our readers to the Austrian affiliate of Cegedim. Can you summarize Cegedim scope of activities and operations in Austria, as well as the structure of this particular affiliate?
Cegedim Austria was founded in 2001 after obtaining our initial client, and the affiliate has been growing consistently since then. In 2004 the company obtained several large customers in Austria, and the Austrian branch was merged into the Swiss office to let the clients in both countries benefit from the combined structure and know-how of the two markets. In 2007 the Austrian affiliate was re-instated underlining the commitment of Cegedim to the Austrian market and its clients.. Today there are twelve employees for Cegedim in Vienna. Within this group, we have everything that is linked to client contact. This means sales, account management for our clients, and dedicated resources to the OneKey database; to the core of all of Cegedim’s products. The rest of the operational team is in Zurich, where there are 40 employees. In terms of the services Cegedim provides for both markets, there is no difference. The primary goal for the Austrian market is to establish the OneKey database strategically as communication platform in a way that gives Cegedim a strong market share with which to work. Since 2011, we now have a market share that gives us opportunities to partner with companies like Medizin Medien. This means that Cegedim currently has 40 percent market share (roughly a thousand single users) with OneKey in Austria. These users are usually field representatives plus in-house users at pharmaceutical companies. Today, 45 contracted clients are working with this database.
In parallel, Cegedim is developing the market with classic products like CRM using OneKey. Austria is in a weaker position in terms of decision makers on the client side compared to Switzerland. Austria has been hoping that many international decision makers would be moved here. While this may be true for research, in terms of sales and marketing decision makers, Austria has been depleted and these individuals have been moved elsewhere, especially in top 20 pharmaceutical companies. Many competencies, and many portfolio or product decisions for our clients have been completely moved outside of Austria. For big companies today, some decision levels for our clients involve €5000 deals. This is dramatic. The answer for Cegedim is that local services will be the primary focus. Big software, data and market research deals are no longer decided in the market; they are primarily regional or global decisions. Simultaneously, Cegedim’s strength is to have complete access to data, to build new innovative, intelligent services around this data, and deliver on top technical devices that are becoming more of a commodity in Austria as a surrounding product.
Where have people been moving away from Austria and why?
Some of them have been given the chance to search for career opportunities in their own company headquarters, as they have realized that if they stay here they will lose influence. The most quick-thinking individuals have been positioning themselves somewhere else in the market and taking positions as general managers of smaller companies where there is still more decision power for a market like Austria. This influenced Cegedim greatly, and the company needs to face and deal with this challenge. Cegedim ultimately needs to sell something different locally and I think every Cegedim affiliate is searching for employees with past careers in the pharmaceutical industry, and the organization will therefore be able to provide more consulting services for products. This is the strength of Cegedim.
Many of our interviewees have spoken of the difficulty of obtaining and retaining talent despite the large number of research institutes and universities in Vienna. How do you attract talent from the pharmaceutical industry?
Cegedim deals with the same topics that our clients are encountering on a daily basis. Cegedim, provides much more of an insider view of many different clients. People from the pharmaceutical industry that work with Cegedim have the opportunity to visit a number of pharmaceutical companies and learn of their strategies and approach for the next five years. When Cegedim wants to attract a potential employee, we must demonstrate that he or she would be in the center of action, since the company obtains interesting and very useful information about companies’ strategies at an early stage. Employees here really learn more than the employees of Cegedim’s competitors. Former Cegedim employees add more value back into the industry because they have been witness to many different approaches. For example, a big US Pharmaceutical Company in Switzerland informed me that thanks to ex-Cegedim employees they are getting a much better return on their investments.
It is often said that Cegedim is the number one CRM business in the world; what is it about the information that you have that competitors do not have?
Every company needs in the end a technical instrument to visualize data, let us call it in the end a CRM system. Some companies might suddenly appear and reproduce something very similar within a short period of time. Cegedim has always taught its clients that a CRM or other system is like a car without an engine. You will never be able to start off correctly with your sales force and in-house users. The critical part of a good CRM system is good data. The biggest problem for all of Cegedim’s new clients is that they all have really low data quality and do not focus in a first priority to increase their data quality. Clients look at buying this or that CRM system, which does not matter to Cegedim from a technical point of view because in the end you are able to plug in data anywhere you want. Of course we would like to have many different deals and implement our CRM solution. The only interesting part of value delivery for clients is the data. Compared to a big company that has been working with their own data for years, Cegedim has the best data because we know our clients market and customers the best. Our 1000 client sales-representatives have been visiting our target groups for the last ten years. Effectively, Cegedim is worldwide number one in CRM. I think CRM should be taken for what it really is: the combination of perfect data dedicated to the industry with all its elements and the entire structure behind it, plus technical solutions that help you to visualize and analyze the data. All of Cegedim’s satellite affiliates have been creating this mantra over the years, but the true center of Cegedim’s success truly is the OneKey database.
Cegedim is a world leader in marketing strategies and solutions, but what is your own personal strategy for developing your name within the Austrian pharmaceutical market?
That is very much linked to information and to the fact that the whole industry is in a changing phase. It is strongly linked to the reform of the Austrian health system itself that is now proceeding against the will of the Medical Association of Austria, and the data storing “e-card”. This does not influence the pharmaceutical industry but rather the behavior of the doctor and the dedication of sales forces to small European markets. By reducing the sales forces dramatically in the last few years, a lack of information has been created throughout Austria. Outside Vienna, in the country side a doctor that may have received ten visits a day in the past now receives zero or at least much less than in the past. Cegedim aims to deliver data solutions to this industry, to explain what needs to be done in the coming years to deal with clients, who are ultimately the doctors. It is fundamental to educate doctors of contact possibilities of our clients in the future. This is of course done with respect for the compliance aspects, which are difficult to understand. I want doctors to move forward with our clients but getting at the same time valuable information back from them is important for Cegedim’s strategic positioning. This is one of the reasons why we have a partnership with Medizin Medien Austria.
Cegedim wants to stand out as a “real partner”, a company that adds value to the product that they are selling. Do you have anything tailored to the Austrian market in that sense in terms of customers?
I think that is one of the biggest advantages of Cegedim; every affiliate has local teams and thus you will find really tailored solutions for the market in each location. In regard to market access data, which is part of OneKey’s data, Cegedim is putting together very special information in terms of payer and decision making information for every single country. The market access database is part of the OneKey database, but does not contain prescriber information for doctors, pharmacists, or nurses but rather the payer, which means health system information. From the Minister of Health to someone in the sick fund you will find many different kinds of individuals working there. This is fitting to the industry changes, where our clients are working with key account managers and market access managers to promote their products at a very early stage of the life cycle of the product.. This solution is tailor-made to Austria, as it is with every other country. Dynamic targeting is another strategy of Cegedim. We have a product that is today unique in the Cegedim world. Essentially, doctors today have many new information channels, and the industry is trying to figure out how to become a part of these channels. I am talking about social media, classic email information, online education for doctors, and so on. None of our clients would have the chance as a single company to get this information from the market. Specifically for Austria, Cegedim has combined information from its Austrian partner Medizin Medien Austria with the OneKey database to create a product that allows us to determine if a doctor receives an email, reads it, and follows up with the information provided. All this information is gathered in a very structured way and Cegedim is able to deliver a very specific targeting and profiling of doctor information to the client, which inevitably relates back to added value. Cegedim supports the client in delivering this message since legal and compliance restrictions will prevent you, as a single company, from sending that information to an individual. We have been creating an environment to support clients delivering messages via email, for example. This is something very specific for Austria because it is a combination of the classical media house and the database plus CRM provider like Cegedim. That is something very new for Cegedim, and Austria is the first country to do this. This method demonstrates where the journey for the industry is going.
Ewald Kried of BCG noted that many databases in Austria are there but no one has access to them because of data protection laws and Austrian tradition of conservatism.
I think that this is an issue that the pharmaceutical industry has been creating itself. For years Cegedim has been trying to create awareness among our clients that such databases exist and the industry needs to act very transparent concerning this topic. How could you approach a doctor and share or update information on your computer with him? It is impossible because you would have to inform him that you have been gathering information for more than ten years about him. These doctors need to know that this is very professional and will ultimately bring back added value to physicians, although this cannot be physically proven. Cegedim is presently discussing this idea with clients. It is very different compared to a doctor in a practice or a hospital, where you need different strategies and approaches. This is why Cegedim holds marketing conferences. Conservative doctors need to understand that in the near future they will be asked to communicate in a completely new way with the industry and to provide far more information back.
Three years ago, I challenged the industry by asking why OneKey is so secretive. Why are we not able to tell every Austrian doctor that they can work with such databases to be better served by their sales representatives or use the OneKey database as well for presenting themselves and their services? In Austria the life science industry today is not willing to tell doctors that databases like OneKey exist. In comparison to other industries this is very different. We all accept that we are working with databases on a daily basis for our own advantage and that our personal information is stored and maintained in such environments. I think this is a very special industry segment still, and we are now part of this discussion that we initiated in Austria and Switzerland.
Why is there this secretive mindset in Austria and Switzerland?
The social status of a doctor in Austria, in comparison to other European countries, was very different in the past. Being a doctor was seen as a real privilege. In the last five years, there have been many changes. There has been a dramatic change in the age of doctors. This means that our clients will be dealing with much younger doctors on their side. Decision makers in hospitals and local opinion leaders used to be around the age of 50-60, but now it is closer to 35-45. In Switzerland it is almost the same.
We have spoken to many biotech companies in Vienna. Emiliano Gummati said he was focusing on the domestic market, particularly biotech in Italy. Are you tailoring your business in this area of life science?
In terms of services, the unit here has a simple approach: we have limited resources in this market, so we are not really able to produce something upfront and then try to sell it afterwards. Therefore we are trying to learn from our discussions with biotech and medical device companies to tailor a new solution to collect information that is missing from the OneKey database within the next three to four months. We had a lot of meetings in the second half of 2012 with biotech and medical devices companies collecting valuable data for them.
Looking ahead to the future, what impact will the Health Ministry’s health reforms have on Cegedim in Austria?
In the last few years, our customers have been moving their sales forces away from doctors working in practices, and have been focusing more on hospitals and specialists. Specialist market access teams speak only with high-level decision makers and those influencing payers in the market. This is true everywhere. Now with the reform, the state is giving back influence to the single doctors in practices and the countryside mainly to cut cost in the hospital sector. The well-equipped doctor in practice will become very important for our clients again. I do not expect the number of employees and therefore our users to increase directly but resources at our clients will need to be re-allocated. This will change something for Cegedim. I think we have the chance to collect information upfront. Additionally, doctors will be forced to work much more in networks in Austria because those practices need to work together in a system that ensures they are able to deliver a service that the state requires of them, which is shifted from the hospital to the practice sector. I think this idea of collecting information at a very early stage is a real challenge but a special opportunity at the same time.
You have been in your current position as general manager for a number of years now. If we were to return to Austria in three to four years, what would you like to have achieved by that point?
I would like to have the OneKey database recognized in this country as a real communication standard and platform. I also want to implement this database in every single corner of this industry. By this I mean as a platform between the medical associations, the state itself, all the important players in the market, and the logistic companies that deliver the product. I want one standard that everyone will be able to use to save money and time. This may only be reached if Cegedim dramatically increases its market share further. This is the strategic goal for Cegedim. Surrounding this, the organization will be able to implement many other services in the market that are on top of such an idea. In Switzerland Cegedim is close to creating a standard platform with the biggest logistics partner in the market for the industry. The savings potential is €72 million (CHF 90 million) per year for the whole industry and its partners. In times when everyone wants to save money, with one reform after the other, if Cegedim is able to provide something that saves capital, then the true goal of the company has been achieved.