PDI, Inc. launched in 1988 as a contract sales organization (CSO), but has evolved into a number of commercialization services. In January 2014, the company launched a new network called PD One™, intended to transform the way physicians and sales representatives communicate. Several months earlier, PDI launched an initiative to help commercialize molecular diagnostics. I spoke with PDI’s chief executive officer, Nancy Lurker, about these moves and how the CSO industry has changed since the company’s formation.

—Gil Y. Roth

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Contract Pharma: Tell me about the new PD One™ initiative.
Nancy Lurker: PD One™ is a patent-pending closed network that allows physicians and sales representatives to communicate in a compliant way without having to go through the hassle of e-mail or other types of open-platform communication.

CP: Is it modeled on an existing platform?
NL: Ultimately we see this maturing into the preferred professional network for Physicians and Sales Reps, similar to a “LinkedIn” but keeping in mind pharma compliance. PD One is a way for reps to extend their calls and give information to physicians. Let’s say a doctor wants to see a graph from a study that a rep showed him or her that week. It can then be sent over. It could be patient literature, clinical studies and vouchers for patient visits or co-pay cards: all approved content that representatives can communicate with physicians about in this ecosystem.

It’s no different than when you go on LinkedIn and it says, “Joe wants to connect with you.” You get a notification about that, click on it, and it takes you to Joe’s message on LinkedIn. It’s the same principle here. The physicians enter the system from the side that we call The Medical Bag, which contains lots of information for doctors.

CP: What’s in The Medical Bag?
NL: The Medical Bag is an innovative way of delivering great content to physicians. They can get standard content, like CME, drug lookups and e-samples and blogs by other doctors. Then there’s a lot of unique content that’s very eye-catching.
While they’re in The Medical Bag, which they can enter via an app or a web-page, they can click on the “you’ve got mail” icon and see the message from a rep who’s sent them information.

CP: How has PD One been received?
NL: We just launched PD One in January, and have already sold it in to a top-five pharma company, and we have more companies interested in it. It’s a real breakthrough. It’s highly innovative and, frankly, the industry has been waiting for something like this.
Doctors, like anyone else, don’t have time to search out a hundred different sources of information. The reason sites like LinkedIn are successful is because they aggregate everybody in one place. Pharma doesn’t have that right now. Physicians don’t want to have to go to each pharma company’s website. It’s time consuming and inefficient. Our goal is to become the aggregator, so that when doctors want drug information, or need to get hold of their rep, or want to get up-to-date medical information, they go to PD One.

CP: How did PD One originate?
NL: I will give credit where credit is due: the idea came from Ron Scalici, our chief innovation officer.

CP: He’s got the right title!
NL: This was his brainchild. I saw it and realized he was on to something. We spent the last two years developing it and spent a lot of money building it and getting patents around it.

One of the things that makes PD One and The Medical Bag unique is that is keeps physicians engaged. They’re not going to use it solely for communication from sales representatives. They’ll keep coming back if you have interesting content. I view The Medical Bag as the Rolling Stone magazine of the medical sites. It’s updated several times a week and it’s been getting very good uptake curves in the year it’s been in in existence. We’re getting a large amount of unique visitors for it every month.

CP: How disruptive has technology been for what PDI does? Could you have envisioned a model like this five or 10 years ago?
NL: No. Facebook just celebrated its 10th anniversary; who could’ve imagined something like this back then? On top of that, the biopharmaceutical industry is slow to adopt things like this. There are huge compliance issues and this space is still somewhat murky. The FDA just came out with new guidance on communication in this area; it’s very different than the consumer space. The industry is always going to lag, and for good reason.

CP: What creates more crises and/or opportunities for a company like yours: compliance issues or market forces?
NL: I’d say the latter has a bigger impact on our business than, say, the Sunshine law. Staying in compliance requires an ongoing investment, but we’ve been around the industry so long that we have well-established, embedded systems for compliance.
Market forces — mergers and acquisitions, drug approval timelines, etc. — definitely impact us, as they do all service providers.

CP: How do you work to stay flexible, in the face of industry-wide change? I tend to think of the service provider continuum as a pyramid, when it comes to flexibility: CMOs have the most capital-intensive structure and the least ability to change on a dime, CROs can generally change more quickly, and CSOs have to be the most nimble. Would you agree with that assessment?
NL: I’d say that’s pretty accurate. It’s a challenge to maintain flexibility while also servicing clients who might have peaks in demand. There’s a core, fixed infrastructure in place, but sales reps represent a variable cost. A team comes up, a team rolls over and a team goes away. Unfortunately, the name of the game is that sales rep teams fluctuate based on the demands and needs of our clients. That’s the biggest swing factor.

Most of our infrastructure is already embedded and built. We need to keep it up to date, but the biggest cost factor on our side is people. If we have a huge bolus of contracts, we tap into a network of people that we either hire directly or contract with. Because our biggest asset is people, we’re pretty flexible.

CP: How has the industry changed since you got involved in it?
NL: By far the biggest change has been the sheer number of reps who have been let go. Depending on which database you use, the industry went from 110,000 reps in 2007 to around 55,000 to 60,000. It’s been cut in half.

CP: Are you able to use that trend to your advantage?
NL: To some extent. Because of the volume of reps who were let go, some companies don’t need to engage with a CSO. On the other hand, there are more companies that are saying they won’t hire reps and will only work with a CSO. Net-net, it’s probably been a bit of a wash.

CP: How many companies use a CSO for 100% of their sales rep needs?
NL: No large pharma is at 100%, but they have divisions that are 100%. Maybe 30% of small specialty or biotech companies — particularly if they’re privately held — are going 100% CSO. It gives them enormous flexibility. If their drug doesn’t get approved, or it doesn’t launch as well as they projected, or it launches better than expected and they need to ramp up quickly, they don’t have the internal capabilities to handle it. Also, if their investors want to sell the company, rather than go IPO, it’s an advantage to have a CSO.

CP: Since that downsizing in 2007, what area did PDI need to bulk up in the most?
NL: Our non-personal promotion space, which is why we bought Group DCA in 2010. You can’t get by in this market by purely making personal calls; you have to have other ways of engaging and reaching physicians.

CP: PDI also has an initiative going in the area of molecular diagnostics. Can you fill me in on what that entails?
NL: It’s a long-term focus for us. Personalized medicine is here, and it’s going to be a tremendous growth opportunity. We engage molecular diagnostics companies on our CSO side, on a fee-for-service basis, but we also will partner with them through our Interface Diagnostics unit, and in select cases, we’ll in-license and do all the commercialization, at risk. In this model, we invest in companies and work on a long-term relationship.

CP: How have you handled that element of risk? And have you had to look outside your comfort zone, your own area of expertise, to do this?
NL: We’ve launched a number of molecular diagnostics on the CSO side of the company, so we’re familiar with the market. Now we’ve taken this division and made it into a molecular diagnostics company. We’re taking modest amounts of capital and deploying it into our partners. It involves more risk, but it also promises greater reward.

CP: How involved are you in the development of these diagnostics?
NL: We’ve only done two of these deals so far. In the first one, they did all the development and we handled commercialization. In the second one, we’re involved in the development. It’s quite a different process than for pharmaceuticals. These are Laboratory-Developed Tests (LDTs), which don’t require FDA approval. That means the time to market and the cost to market is substantially less than developing a drug.

CP: Where do you see PDI in five years?
NL: We will continue to be a top CSO. PD One will be a very viable and important part in the pharmaceutical-healthcare provider ecosystem. It’ll be the leader in the digital information flow between physicians and sales representatives. I think molecular diagnostics will play an increasingly important role in our business as well. It’ll be successful and contribute to a substantial part of PDI’s profits. It’s a much higher-margin business than the CSO side, so even lesser revenues can lead to stronger profits there. CP

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Nancy Lurker, a veteran in the biopharmaceutical industry, joined PDI in November 2008 as chief executive officer and a member of the company’s board of directors. Ms. Lurker has more than 25 years of experience in pharma sales, marketing, and commercial operations. Prior to joining PDI, she was senior vice president and chief marketing officer for Novartis Pharmaceuticals Corp., the U.S. subsidiary of Novartis AG, where she oversaw a product portfolio in multiple therapeutic areas representing multi-billion dollars in annual sales. Ms. Lurker was also president and chief executive officer of ImpactRx, group vice president–Global Primary Care Products for Pharmacia, and a member of Pharmacia’s U.S. Executive Management Committee. She began her career at Bristol-Myers Squibb, where she quickly rose from senior sales representative to senior director of Worldwide Cardiovascular Franchise Management during her 14-year tenure.