It's About Time: First Word Pharma Outlook 2013


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Big Pharma is rapidly expanding the use of digital marketing channels. What
is driving this trend and what are the implications for traditional promotion?
Several factors combined help understand the current innovative environment.
This article will focus on market forces, technology and industry culture.

Published in: Business, Technology
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It's About Time: First Word Pharma Outlook 2013

  1. 1. Its about timeBy Christopher Wooden, VP, CegedimExcerpted from FirstWord Pharma Outlook, Q1 2013 (access the full report here)
  2. 2. 40 All Contents Copyright © 2013Doctor’s Guide Publishing Limited. All Rights ReservedPharma Outlook Q1 2013It’s about timeBig Pharma is rapidly expanding the use of digital marketing channels. Whatis driving this trend and what are the implications for traditional promotion?Several factors combined help understand the current innovative environment.This article will focus on market forces, technology and industry culture.Between 2011 and 2016, the globalpharmaceutical industry is at risk oflosing as much as $250 billion in salesfrom patent expirations. As if the threatof looming revenue reductions were notenough, the storm is made perfect asregulators and payers alike take a nearzero tolerance stance towards the healthoutcomes and economic benefits of newmolecular entities. Investors beware.The era of blockbuster drugs is beingwritten about as history, and with it bigspending on sales force expansionand lavish marketing budgets. Datafrom market research agency CegedimStrategic Data (CSD) show dramaticdrops in sales force size in the majormarkets: Since 2010, sales rep levelsare down by 16 percent in the USand 13 percent in the EU 5 countries(Italy, France, Germany, Spain and theUK). Despite this, pharma marketingappears to be entering a new periodof development and creativity with anemphasis on multichannel marketingand digital promotion. This isn’tmerely an assumption based on techindustry hype and over eager Twitter“evangelists” willing it to happen. Rather,the evidence is in the numbers: CSDaudits of industry promotional channelsreveal a dramatic increase in digitalchannel spending, with the US seeinginvestment jump nearly 150 percentsince 2010. The EU 5 was up morethan 90 percent over the same period.Source: Cegedim Strategic DataTotal FTEs% ChangeTotal FTEs% Change79 402 73 764- 7.1 %66 713- 9.6 %86 327 84 658- 1.9 %74 779- 11.7 %MAT Q42010MAT Q42011MAT Q42012USA Europe Top 5MAT Q42010MAT Q42011MAT Q42012Figure 1: Sales force rep equivalents (FTE) MAT Q4 2010 - MAT Q4 2012Christopher Wooden( President,Global PromotionAudits,Cegedim Strategic Data(
  3. 3. 41 All Contents Copyright © 2013Doctor’s Guide Publishing Limited. All Rights ReservedPharma Outlook Q1 2013Market forces: Death of the salesforce – greatly exaggerated.For good or ill, blockbuster drugs havedefined much of the conversation aroundpharma marketing. And early on, muchof the talk was about sales reps. Bythe late 90’s, the industry had entereda “rep race” as multi-billion dollar saleswere at stake with each new drugapproval. Mergers and acquisitionshelped to consolidate portfolios, butimproved sales force efficiencies wereelusive and an exception. In the contextof high sales growth and profits, therewas little incentive to truly innovatemarketing and there were few visionarieswilling to challenge the status quo. Thesituation was clearly not sustainable,but change was going to be painful.More doctors were becoming “no see”as the marketing of “me too” drugsappeared to waste their valuable time.And yet, only when product pipelinesbegan to falter did initiatives to redefinethe “share of voice” marketing modelbegin in earnest. Inevitably, cuts insales forces started as the edge of thepatent cliff came into view. Contraryto expectations, this period did notlead to the quick adoption of online,self-directed detailing or other costefficient “multichannel” innovations.Furthermore, the sales force –albeitsmaller – and the share of voice modelremained intact, but now with a heavieremphasis on call value than ever before.Nevertheless, the present and rapidshift to digital marketing does not meanreplacing sales reps with “robots.”Instead it is a question of augmentingthe traditional sales force with a richer,integrated “customer experience” Source: Cegedim Strategic Data% of TotalSpending% Change0.2 %TotalSpending($m)0.3 %+ 37.6 %e-Meetings + 32.1%e-Mailing + 43.1%e-Detailing + 38.8%% Change2012/20110.5 %+ 38.9 %MAT Q42010MAT Q42011MAT Q42012$47 m $65 m $90 m781411205842733Source: Cegedim Strategic Data% of TotalSpending% Change1.2 %TotalSpending($m)1.8 %+ 51.4 %e-Meetings + 14.0%e-Mailing + 67.5%e-Detailing + 73.9%% Change2012/20113.2 %+ 64.8 %MAT Q42010MAT Q42011MAT Q42012$353 m $534 m $879 m368452592122705214015657Figure 3: E-Promotion –Europe top 5 total spending & trends on 3 yearsFigure 2: E-Promotion –USA total spending & trends on 3 years
  4. 4. 42 All Contents Copyright © 2013Doctor’s Guide Publishing Limited. All Rights ReservedPharma Outlook Q1 2013where a cohesive multichannel strategyassures that healthcare providers(HCPs) can easily obtain the informationthey need. But to accomplish this,the industry has had to wait for……Technology (and its users) tocatch upIn the early 2000s as broadbandbecame more widely available andHCPs – like everyone else – startedusing the Internet to find information,there were predictions that onlinebased platforms would inevitably allowfor significant rationalisation of salesforces. Expectations were high asmarketing teams offered “content rich”websites with attractive “multimedia”offerings. Some pharma companiesmade progress and new, improvedvalue was found in this area for CME,corporate PR and investor relations.However, until recently, advances indeveloping a true multichannel offeringcould not be fully exploited due to severalcrucial and related factors: So called“Web 2.0,” or the non-static web hasdeveloped sporadically. Mobile devices,with enough speed and power couldonly leverage these advances in thepast few years. The generation of HCPs(and pharma marketing professionals)that are entirely comfortable andconversant with these new tools andpossibilities are only now in a positionto adopt innovative ways of interacting.Culture: Is it “about time?”Few would argue that thepharmaceutical industry has built areputation for the innovative use of theinternet in communicating its strengths,let alone as a PR or marketing tool.Rather, a conservative approach wasthe norm as communication continued tofocus on HCPs who relied on sales repsas their main point of contact with theindustry. As technology has opened upa conversation with all consumers, BigPharma has in large part shied away inan attempt to avoid false steps, potentialbad press and regulatory scrutiny.As the data reveal however, a shifthas occurred and communicationis no longer a one way “pitch” - butrather HCPs are being invited to notonly access the information theyneed anywhere, anyhow, anytime,but also to share their day-to-dayexperience among many stakeholders.Online physician communities, blogs,mobile apps and even general socialmedia are now part of the userexperience for many, if not all HCPs.Truly innovative companies are nowusing multichannel strategies to leveragethis on-going conversation and betterposition the value of their products andservices. This is all the more essential asthe “blockbuster” mentality gives way to“personalised medicine” and real-worlddata becomes as important - if not moreso - than clinical data. Far from replacingreps, the industry is now enablingsales reps to offer much more thanever before. Indeed, the convergenceof challenging market forces, evolvingtechnology and a change in attitudesand culture has only reinforced thefact that building a strong value-basedrelationship with HCPs remains thekey to success. It’s about time.