PART ONE: Setting the scene
Introducing a new series of ‘Marketing Focus’ articles, helping modern marketeers to thrive in the changing healthcare environment.
In the first of the series, Dr Graham Leask and Stewart Adkins set the scene with the first of a two-part feature addressing the changes facing pharma professionals today.
From a global perspective, the key drivers of change within the pharma marketplace have existed for some years. The shift in product mix towards more expensive, low volume, speciality medicines continues apace. This situation meets increasing resistance from payers, as these drugs concentrate the pharmaceutical budget on fewer patients.
Pharmacoeconomic arguments rage on, but the reality is that governments seem unprepared to cancel out future cost savings from current costs in its societal calculus. As a consequence, the rise in Health Technology Assessment groups, for example the UK’s National Institute for Clinical Excellence (NICE), is a way for payers to contract out the difficult decisions of market access and effective rationing.
In the meantime, payers have forced prescribers to follow more restricted prescribing guidelines in an effort to control today’s budget. The concentration of decision-making in the hands of opinion-leaders and pharmacy committees changes the role of commercial organisations, encouraging more peer-to-peer medical liaison at the top of the ecosystem, and fewer ‘face-to-face’ calls with GPs at the bottom. This is a necessary change with specialty drugs, but means a big reduction in contact time between pharma corporations and primary care physicians.
Strategically the shift in product mix has encouraged pipeline realignment, with more emphasis on in-licensing of biotech drugs or straight acquisition of the license-holder. This has left traditional ‘white pill’ companies struggling to generate reasonable growth, whereas relative late-comers, such as Shire Pharmaceuticals or Celgene, have shown strong expansion. There is little expectation, however, that these newcomers will solve continuing problems in the world of primary care. For that, we may have to await a resurgence of chronic diseases that do not yield to today’s generics.
A marketing & sales model fit for the 21st century
The application of modern analytical methods to sales and marketing data should enable each company to develop a mix of promotional activities that form part of a feedback loop, each component of which can be optimised for best effect. Currently such processes are impeded by a reticence to use the new sophisticated statistical methods that are required to analyse pharmaceutical data accurately. Reliance on inadequate tools such as Excel and visualisation tools like ‘Tableau’, that incorporate an Excel-type analytics capability, is a major cause of this problem.
Accurate timely adjustment of activity and sales response, guided by these ‘appropriate sophisticated tools’, will allow campaigns to be finely tuned throughout each promotional cycle, thus minimising waste and boosting sales and margins. Figures 1 and 2 illustrate this point and show the considerable benefit of moving away from Victorian techniques and embracing modern methods.
The trialling of novel campaigns in mutually exclusive geographic areas and the rapid feedback that modern analytics can produce will allow more selective or targeted approaches. The result? More accurate targeting, and less wasteful campaigns tailored to the local environment.
The impact of digital
Currently, few companies are monitoring the true impact of digital. They simply throw it into the promotional mix and watch the ripples in the pool. A pick up in sales is regarded as positive whereas the true cause may be elsewhere. Only a true isolation of the impact of all the promotional puzzle pieces, including digital, can lead to strong conclusions about digital, one way or the other. Unsophisticated blanket use of digital is equivalent to a pollutant, as indiscriminate use is likely to blunt doctors’ responsiveness to contemporary channels rather than encourage new productive forms of interaction.
In contrast, clever use of digital to cover uneconomic surgeries, or move the call frequency achieved on a customer into an effective band, is likely to sharply improve productivity. Thoughtful blending of promotion with sophisticated analytics can produce tailored campaigns that are a win–win for company and healthcare professional alike.
About the authors
Stewart Adkins was a Pharmaceutical Analyst at Lehman Brothers for 23 years and now writes independently.
Dr Graham Leask worked in industry for over 20 years and now works with Warwick University as a writer and researcher on pharma strategy.
Next month, in part 2, Graham and Stewart look at the shift from treatment to prevention, and outline what the healthcare landscape of the future will look like.