Push or Pull: Is Pharma Missing the Selling Point?

A recent article in Forbes argued that the drug industry has abandoned science for salesmanship, spending a fortune to create and sell remedies for sometimes “trivial maladies” as “research pipelines run dry, patents on old drugs expire and critical areas of medicine go underserved”. But has pharma really sold out to the so-called “pill pushers” or is there just misunderstanding over sales and marketing’s vital role in the drug chain? In which case, should companies rethink their strategies to develop better doctor and patient relationships and prove their worth? NGP asked the experts…

Jay Bigelow is President of MicroMass Communications, Inc. With more than 20 years experience in strategic and brand marketing, he has earned a reputation for devising innovative marketing solutions to address a variety of healthcare brand challenges. During his tenure as senior vice president, Bigelow led the strategic development of the full spectrum of relationship marketing programs for the world's top pharmaceutical companies. Bigelow has worked with leading brands including Viagra, Claritin, Serevent and Miacalcin.

Kathy Magnuson is Managing Director of Brand Pharm and is responsible for all client services, operations, and financials. She has 24 years experience in medical communications and her broad therapeutic experience includes oncology, anti-VEGF therapy, anti-inflammatory therapy, anti-viral therapy, cardiology, diabetes, female health, CNS; weight loss; dermatologics. She also managed the branding and launch of BrandPharm.

Charlene Prounis is Flashpoint Medica’s President and Managing Partner, co-founding the healthcare advertising agency on a differentiating platform of identifying the brand’s “flashpoint” – the critical moment for a brand. She already had a successful track record launching Accel Healthcare in 1999 with other partners. The agency climbed from zero to US$135 million in billings and ranked in the top 20 of healthcare agencies before being merged into Corbett Accel in 2004.

Susan Miller is a partner at The CementWorks. Previously, she spent 12 years at Cline, Davis and Mann (CDM) helping to grow the agency from a 20-person, single-client (Pfizer) boutique to a 200+ person, multidivisional, US$40+ million agency. Over the years, Miller has supervised the launch or relaunch of seven of today's top 50 brands, each achieving sales in excess of US$1 billion.

Rico Viray is also a partner at The CementWorks. Previously the Associate Director of AIDS Clinical Research and Information, he moved to the agency side joining FCB HealthCare to head up the Glaxo Wellcome HIV portfolio and the launch of Combivir. At Lowe McAdams, he strategically coordinated all Glaxo partner efforts, a key endeavor in developing The CementWorks business model.

NGP. Every year, pharma companies are ploughing more millions into promotional activities but are still seeing relatively small revenues. Where do you think they are going wrong?

SM&RV. I think what we are seeing are repeated examples of “too much of a good thing.” First, look at the consolidation that has taken place in the pharmaceutical industry. The various players rationalized these mergers and acquisitions as a way to increase R&D budgets and productivity in an effort to bring more products to market more quickly. The combined companies would also have increased marketing clout to more rapidly achieve a steep sales trajectory. Since new products are the lifeblood of the industry, few argued with the logic of focusing additional expenditures in these areas while streamlining redundancies across the combined organizations. However, a report by McKinsey in 2001 showed little long-term correlation between size and return to shareholders. More recent data show that margins in the top 10 companies actually declined by 25 percent between 2002 and 2004.

Historically, a highly trained field force was shown to have the most positive impact on physician prescribing behavior. Once again, the logic seemed to be that if 1000 reps are good, 2000 reps must be twice as good. Today, over 90,000 sales reps are vying for the attention of the same US physician universe. Customers are overwhelmed. Almost half of all physicians say they are limiting the numbers of reps they will see and are reducing the average time spent on each call. Every rep’s share of voice has been dramatically diluted. The oft-quoted statistic, again by McKinsey, is that for every 100 reps who call on a physician, only eight will actually deliver an effective detail.

KM. It’s not a lack of dollars; it’s a lack of focus. Whether it’s choosing an advertising idea, a brand positioning, or a tactic, too broad a team gets to impact the decision. Imagine spending millions on building a house, then letting everyone who will visit it design it. The result is promotional materials that lack decisiveness and creativity. There’s too much information crammed into the work, and too much compromise. What makes matters worse is the plethora of voices making decisions also causes the process to take more time and more money.

JB. First of all, I am not sure I agree with your basic premise. Many pharmaceutical brands are generating very large revenues. That said, I think it is important to recognize the challenges pharmas face today. In addition to the changing marketing landscape due to advertising restrictions, we are seeing increased competition (e.g. more brands) in therapeutic categories and more channels in which to reach healthcare providers and consumers. Consumerism (that is the growing sophistication of consumers in relation to their health care) is increasing, not to mention the decrease in access to and time with physicians. Furthermore, increased scrutiny from the court of public opinion and the FDA as well as increased pressure from managed care pose additional challenges to pharma companies.

Rather than simply focusing on spend, I think attention should be paid to the impact that the promotional activities have on the market in relation to the existing challenges. For example, the number of disease awareness and patient support programs is increasing, which means that the activities are engaging consumers and getting them to talk to their doctors. Reminder ads are diminishing. Pharmas are finding that alternative strategies such as patient support programs can have an impact as well. It’s about finding the right mix of promotional activities.

CP. One major misstep is that we keep spending on the same products, such as reprint carriers, medical education meetings, and sales aids, to deliver educational and promotional messages. While it’s certainly true that we are using some new media approaches such as podcasting from a communications perspective, our approach hasn’t changed. It’s fair to say that sometimes the medium we use is more up-to-date than our general approach to communication.

We need to focus on forging a stronger therapeutic alliance between doctors and patients. Dialogue in the office is critical, especially during that critical juncture when doctors and patients interact – the doctor-patient encounter or DPE. For marketing professionals, the DPE represents an opportunity to enhance and guide communication towards better clinical outcomes, increased brand loyalty, and greatly improved levels of compliance.

NGP. How is the effectiveness of sales and marketing strategies currently assessed and to what degree of success?

KM. Many companies think assessment means making sure that their customers nod their heads and recognize the strategies as familiar and non-controversial. As a result, qualitative research is frequently designed to keep strategies imprisoned in the comfort zone of their target audience.

We believe strategic assessment should to the opposite. To get a true sense of how well a strategy is working, therefore requires innovative research techniques that liberate new insights, fresh ideas. If one looks for the familiar, they’ll end up with the familiar. But an alternative approach that looks for the new and the different will have a much greater chance of finding just that.

JB. At the end of the day the measures that really count are sales, share of market and return on investment. These are hard measures – fairly easy to measure and very much in tune with financial measures of any business. While these measures may need some updating and the source of some of the inputs could be more sophisticated and robust, these are the appropriate business metrics and the ones marketers (and their agencies) should be measured by. However, I would recommend that firms also look at some of the softer measurements. Too often these are overlooked because they are hard to get. As marketing pharmaceuticals gets more sophisticated, I think we will see an emergence of more refined business analytics that will be used to make faster and more timely “course corrections.”

SM&RV. Doctors have only recently gotten a clue as to the level of data that each US rep is armed with when he or she enters the office. Indeed, they have a pretty good picture of how many prescriptions are being written by each doctor for their drug vs their competitors – and for what dosages, whether or not the physician is known to be an early or late adopter of new products and, sometimes, which KOL has the most influence over that physician’s prescribing.

It will be interesting to watch the recent developments that will allow physicians to essentially block this kind of information from getting back to the pharmaceutical companies. This level of data has not been readily available outside of the United States, so many US marketers may be turning to their global counterparts for tips on how to set up an effective sales call when the rep is ‘going in blind’.

NGP. Is there too much reliance on technology rather than “people power”?

CP. In my opinion, we do not rely enough on technology. We are, in fact, still focused on “people power” – mainly in the form of representatives detailing physicians. The world is changing and it has become obvious that we need to become more tech-savvy to enhance how we communicate with doctors and how well those efforts are received. Physicians are getting their information from various e-powered outlets, including not only websites, but also from messages being delivered directly to their PDAs and cell phones. A perfect example of this phenomenon is that the publishers of the Medical Letter, a well-respected 50-year old newsletter received by 120,000 physicians, have made it available online and for PDAs as well.

There is one dimension of “people power” that we need to explore more intensively and that is understanding how people really behave. We gain those insights through ethnographic market research, which allows us to observe people’s behavior in their home, and ultimately helps us fine tune our communications strategies.

SM&RV. The goal of most sales and marketing organizations is to deliver the right message to the right physician the right number of times. Doing this successfully actually requires both advanced technology and people power.

Most representatives on major brands complain that they are overwhelmed by the materials they receive from the home office already. Customized or customizable materials would only increase the volume of materials produced. Today’s sales forces are so large that the level of training required to effectively customize each detail may be unattainable. We can’t continue to throw more reps (or resources) at the problem, rather “people power” can be deployed more effectively. We know, for example, that while Schering and Wyeth reps were successful in seeing physicians only 65-70 percent of the time, Lilly and Forest reps “got through the front desk” approximately 80 percent of the time, according to Rx Insights.

JB. Rather than focusing strategies around channels, such as interactive versus sales force, pharma brands should aim for a more integrated approach to communicating with consumers and healthcare professionals. The approach should include strategies that carry a consistent message via a variety of channels with technology as a seamless element. The approach should understand and speak directly to the attitudes and needs of these groups and the individuals within. When a message like this is provided, a relationship is formed and the door is opened for continued dialogue about the condition and your brand.

Regarding specific strategies, pharma brands should consider strategies that are proven to have an impact on our current market. These include strategies that take into account how customers approach the condition and what it takes for these individuals to change their behavior; and strategies that create compelling value exchanges with consumers and healthcare providers; strategies that use appropriate channels to maximize impact and ROI. One strategy that has shown to be effective is patient support programs. These provide valuable information to the patient, support the healthcare provider in helping to educate patients, create a differentiator for the brand in sales visits and ultimately help the patients remain adherent to their prescribed treatment.

NGP. From a customer standpoint, how have their attitudes/expectations changed?

KM. Customers today are activists. They increasingly expect pharma companies to be more engaged in the healthcare communities in which their brands play a part. Disease awareness and prevention, patient education and empowerment, professional education and practice support, better ways to manage disease, an expectation for a cure rather than chronic care; these are the ingredients that will help the medicine go down more easily.

The best advertising for our industry is to prove that we are warm, caring, and involved human beings and not cold-hearted, profit-first corporate monoliths that neither care nor understand the big picture.

SM&RV. Today’s physicians are overwhelmed by HMO red tape and the complexities of practice management. They would probably never admit it, but often they take the path of least resistance. They base their prescribing habits on their most restrictive HMO formulary, avoiding drugs that require prior authorization unless they are absolutely critical to a patient’s condition. They prescribe certain drugs if a patient specifically requests them because it takes more time to talk the patient out of it than would be worth—plus, if a patient asked for it, he/she might be more compliant in the long run. They write prescriptions based on what’s in their sample closet so they can provide extra value to their patients. Their adoption of guidelines usually lags far behind the evidence because there are just too many guidelines to stay current on.

That said, physicians want and need quality education and interactions with pharmaceutical companies. Again, they might not admit this too openly, but pharmaceutical companies can and do drive innovation in the medical field.

CP. The DPE is a critical point that ultimately influences clinical outcomes, as well as short- and long-term brand adoption and compliance. Physicians should be able to build relationships with patients, open discussions, gather and share information, understand patients’ perspectives, and reach mutually satisfying arrangements. In a similar vein, patients should be honest when disclosing their medical history and be prepared with questions. All of these activities and approaches are teachable, though unfortunately none of these behaviors is automatic or intuitive. That’s where well-developed communications materials come into play.

Unfortunately, physicians have lost some trust in the industry in response to negative experiences, such as the Celebrex Vioxx situation. As a result, there is a demand for greater transparency in marketing communications. Physicians are now more likely to step back and judge whether a message is balanced, objective, and educational. Fulfilling those criteria is important.

NGP. So what skill set should sales and marketing staff be armed with to be successful?

SM&RV. Most industry insiders and observers agree that the level of training and the skilled talent pool have been diluted in both sales and marketing. The growth has just been too explosive to keep pace. Managers are stretched, stress levels continue to rise, and compensation has been constrained. Add to this the external pressures on the industry overall and the crisis management that often comes with the territory. The tools that employees are given to help productivity such as the ubiquitous ‘crack berry’ are creating constant distractions and cutting into personal time and quality of life.

Morale is lower in bigger pharma today than I’ve ever seen it in 20 years. Top managers are leaving big pharma to join small biotech start-ups where bureaucracy is gone and empowerment and entrepreneurialism are alive and well. There, marketers and sales representatives regain the team spirit they once knew and feel they are making real contributions again. They also believe that their efforts are more readily acknowledged and rewarded. It is time for big pharma to figure out how to act small again.

JB. The pharmaceutical sales and marketing professional of tomorrow must be more like a portfolio manager at a big investment fund. That is, have a basic core philosophy and ground rules, but then find the right mix of tactics within that to maximize the spend vis-à-vis the return and brand objectives.

Historically, the marketing staff was a part of a promotion path at pharmas and not always staffed by professional marketers. Increasingly we are seeing more and more professional marketing people – people classically trained in the art and science of marketing, and not necessarily from within pharma only – being the ones driving the marketing strategy. We applaud this and expect the trend to continue.

CP. Sales and marketing professionals should be armed with the ability and the materials to facilitate productive relationships between physicians and patients. When physicians feel that their clinical efforts are being bolstered by pharma companies, they become more receptive to the brand-related messaging that ties in with their main clinical goal: to help their patients. Not only should marketing professionals provide guidance and coaching to physicians through great educational content, but they should be able to give patients complementary materials to empower them to ask questions and get the answers they need.

KM. The staff of tomorrow will be marketing targeted therapies, ones that meet very specific disease mechanisms in new and novel approaches. They will, therefore, need to develop an alternative way to promote their brands. Such an approach will blur the lines between disease education, scientific theory, brand promotion, and even professional-patient communication. This future marketing paradigm relegates the brand to a team player – one component of a larger, interrelated solution to healthcare challenges and disease management.

NGP. Costs are always a big factor in the pharma industry. How much should companies be looking to invest in the sales and marketing, and what kind of cost-effective ROI can they expect?

CP. We need to be clear about our goals up front. The goal is to maintain at least 30 percent share of voice. Therefore, we need to continue to invest in sales and marketing, with a greater focus on marketing versus sales. We realize that it takes on average US$60-125 million to launch a new product from a marketing perspective, but that is what it takes to be and to stay competitive. Of course, as we continue to invest in marketing and sales, we need to have precise goals in the broad categories of gaining more brand equity, fostering greater brand loyalty, and igniting a lasting emotional attachment to the brand in the targeted physician and patient populations.

JB. I don’t think there is a magic formula that pharma should look to in relation to spend. Cumulative spend is only part of the picture. We’ve seen in marketing in general that some brands have been very successful without large-scale spends. It’s about the quality of your marketing and sales mix, the effectiveness of its integration among all channels and how the approach supports the overreaching business objectives.

The great thing about relationship marketing is that by nature it is measurable. We had better know what works and to what degree it works. Relationship marketing also lends itself well to marketing to discrete markets which allow for more targeting, more calculation of allowable spend, more modeling, etc.

KM. Looking at ROI becomes an art as well as a science. As we take a greater surround sound approach to our communications with our target customers, we need to adapt ROI tools to measure the program in its entirety, rather than looking at each individual tactic with its associated tactical costs. If ROI and costs become the primary driver for a decision about what marketing programs are conducted, we will increasingly see innovation and experimentation decrease. How often have we heard: “I want something different and break-through,” only to have it followed by “Does it work, and who has done this already?”

What’s most important is that corporations and their partner companies identify and agree upon realistic, relevant measurement criteria. While it may be quantitative based on a direct impact on sales, it could, and perhaps should, often be qualititative, reflecting an overall impression of the brand and the company.

SM&RV. Companies always invest most heavily in new products. They are a company’s lifeblood, and the effective patent life averages only 11.5 years. Over the last several years, however, more attention is also being paid to lifecycle management to ensure that companies reap maximum return on each molecule. Now we’re even seeing some major manufacturers entering into the generic business—or cutting the cost of their products that have lost exclusivity to prevent generic erosion. OTC conversions are another strategy to continue a revenue stream postpatent.

PhRMA statistics show that it costs US$800 million to develop one new medicine but only three out of 10 approved medicines generate sales in excess of development costs. The industry is much maligned lately regarding pricing and promotional practices. But we need a strong pharmaceutical industry to continue to drive innovation and reduce the burden of disease. Huge investments in R&D will remain, of course, but I believe the promotional and educational investment is critical also, to encourage physicians to break old, comfortable habits and to learn about – and actually use – new medications.