A Decade of European Pharma E-Business Less Hype, More Realism, but Good Reasons to be Optimistic Len Starnes Head of European E-Business Schering Germany

Hype and expectations 1996 The organizational roller coaster Execution and KPIs Where the future is brightest Agenda

Hype and expectations 1996

The organizational roller coaster

Execution and KPIs

Where the future is brightest

Happy birthday European pharma e-business is 10 years old this month

1996 2006 Hype Raising expectations Early adopters Disillusionment Trough of despair Enlightenment Productivity Realistic expectations Pharma e-business hype cycle Then

The 24 x 7 rep A branded website will be more effective than a rep visit Sales forces will be cut Revenues will soar Doctors will flock to our sites A one-size fits all branded website will suffice

Prime motivator to visit a pharma website will be quality content Credibility and trust will be crucial The health information seeker Internet will become the most preferred source of medical Information Internet will become a powerful medium for patient acquisition

Connected & empowered customers Metcalfe’s Law Value of a network equals approximately the square of the number of users

The internet is enabling conversations among human beings that were simply not possible in the era of mass communication These networked conversations are enabling new forms of social organization and knowledge exchange to emerge ‘ The end of business as usual’ The Cluetrain Manifesto The Cluetrain Manifesto R Levine, C Locke, D Searle, D Weinberger 2000

The internet is enabling conversations among human beings that were simply not possible in the era of mass communication

These networked conversations are enabling new forms of social organization and knowledge exchange to emerge

1996 2006 Hype Raising expectations Early adopters Disillusionment Trough of despair Enlightenment Productivity Realistic expectations Now Pharma e-business hype cycle

The organizational roller coaster

Large centralized e-business departments Disappeared

Smaller centralized e-business groups Emerging BU or brand team e-business function BU or brand team e-business function BU or brand team e-business function BU or brand team e-business function

Country e-business LA e-business Asia e-business USA e-business EMEA e-business E-business infrastructure & processes group Country e-business Country e-business Country e-business Country e-business Country e-business Country e-business Country e-business Country e-business BU or BT e-business BU or BT e-business BU or BT e-business Or?

E-business must be closely aligned with integrated relationship marketing teams E-business Skill sets evolution Integrated relationship marketing specialist E-business specialist CRM/SFE PRM

Execution and KPIs

‘ The difference between good e-business and poor e-business is how well the initiative is executed’ European managing director, Schering AG

Mundane things matter Initiating SEM Addressing credibility, trust & privacy Providing high-quality content Ensuring design is simple and intuitive

The tyranny of the ROI metric - Why do senior managers not demand the same rigour with other channels? Defining the business model - Relationship building, disease or treatment awareness, conversion, retention? Tracking appropriate KPIs - Matching KPIs with expected outcomes KPI issues

The tyranny of the ROI metric - Why do senior managers not demand the same rigour with other channels?

Defining the business model - Relationship building, disease or treatment awareness, conversion, retention?

Tracking appropriate KPIs - Matching KPIs with expected outcomes

23% Consumer, patient & HCP relationship building 40% Disease awareness & treatment awareness 18% Brand conversion 1% Brand retention Disease awareness dominates % business models of all European initiatives 2% Brand conversion & retention 16% Corporate relationship building

Yes, but difficult Yes Yes Yes Yes Yes Retention on brand (Compliance) Yes, but difficult Yes Yes Yes Most Yes Conversion to brand No Yes Yes Yes Most Yes Disease awareness & treatment awareness No Yes Yes Yes Most Yes Consumer/patient relationship building No Yes Yes Yes Yes Yes HCP relationship building (R-C)/C Cost/customer Cost/visit Cost/min visit Satisfaction surveys Email feedback Email requests Hotline enquiries Referrals Print-offs Find a doctor Most accessed Most accessed by segment Frequency Duration Attrition/churn % total acquired % total online acquired KPIs ROI Cost Customer satisfaction Outcomes proxies Engagement Target audience KPI category

Where the future is brightest

E-business Patient relationship marketing Closed-loop marketing Integrated relationship marketing CRM/SFE E-business E-business E-business

Customer value High Medium Low Service bundles Channels offered Costs D Sales rep Phone Mail Internet A B C D B C D Phone Mail Internet Internet €€€ €€ € E-business in CRM context

E-detailing will be a viable alternative to the sales force arms race

55% Agree 25% Strongly agree 15% Neural 5% Disagree Marketing professionals agree Eyeforpharma Survey December 2005 Based on 722 responses from European marketing professionals E-detailing will become more popular in future

Low awareness by senior management Discussing out of CRM/SFE context Knowing how to scale up: brand, BU, regional or global? High costs, complex vendor business models, uncertain ROI Barriers to e-detailing

Low awareness by senior management

Discussing out of CRM/SFE context

Knowing how to scale up: brand, BU, regional or global?

High costs, complex vendor business models, uncertain ROI

14% Disagree 51% Neutral 26% Agree 9% Strongly agree Unproven ROI Eyeforpharma Survey December 2005 Based on 722 responses from European marketing professionals E-detailing has a proven ROI in key therapeutic areas

Live detail E-detail Multi-channel CRM application Closed-loop sales & marketing Electronic details Interactive details, tracked and fed back to CRM application Enter the digitally-enabled rep

HCPs’ relationship portals will deliver significant business value

Integral to CRM/SFE strategy Crucial for delivering personalized and customized service bundles Online needs and preferences of doctors better understood Portals in CRM context High Medium Low

Integral to CRM/SFE strategy

Crucial for delivering personalized and customized service bundles

Online needs and preferences of doctors better understood

Portals delivering value Key value drivers Initiative specifics KPIs Country A Country C Country B Access to KOLs 20% of speciality enrolled Customized & personalized newsletter First mover SF promotion Segmentation 50% of speciality enrolled Streaming video CME CME credits First mover SF promotion CRM integration SF promotion Alliance with leading teaching hospital 80% of speciality enrolled 60% active

More online patient support programmes will emerge - and regulations will be revised to enable

Marketing efforts switching from acquisition to retention Compliance is win-win for all stakeholders European countries not leveraging the potential of online patient support programmes Compliance in context

Marketing efforts switching from acquisition to retention

Compliance is win-win for all stakeholders

European countries not leveraging the potential of online patient support programmes

DTP is not DTC DTC An offence to issue an advertisement likely to lead to NRx DTP Restricted provision of information and support services to patients already on drug. Will not result in NRx, but RRx

1 = Low 5 = High Adapted from: Improving Patient Compliance Datamonitor July 2003 Efficacy of e-channel compliance 5 5 4 3 2 1 1 Personalized interventions 4 4 3 4 1 4 1 Patient information 4 4 4 4 3 1 1 Tracking health indicators 4 4 4 4 4 3 2 Refill reminders 4 4 3 3 3 1 1 Appointment reminders 3 3 3 2 4 1 5 Medication reminders Contact centre Nurse support Voice automation technology Internet & email SMS messaging Direct mail Pack & devices

Germany Netherlands UK Pan-European online support for Betaferon patients Denmark Norway Sweden International Finland

Web Nurse Direct mail CC or VAT Pack or device Patient Database and patient relationship management application Next generation

More two-way dialogue and more community building will significantly increase the value of consumer & patient-directed initiatives - and help engender trust in pharma

Manage online relationships professionally with the right tools and skill sets Listen to and learn from consumers/patients It’s better to participate than to be excluded Actions and learnings

Manage online relationships professionally with the right tools and skill sets

Listen to and learn from consumers/patients

It’s better to participate than to be excluded

First movers GSK France Corporate blog Abbott Global customer inquiry/response system

The end of business as usual Boundaries between e-business, marketing and sales are disappearing Think integrated relationship marketing

Head of European E-Business Schering Germany E: [email_address] T: + 49 30 4681 4877 M: + 49 175 438 4521 I: www.schering.com Len Starnes

Head of European E-Business Schering Germany

E: [email_address] T: + 49 30 4681 4877 M: + 49 175 438 4521 I: www.schering.com