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Pharmaceutical Marketing in the 21st Century
Perri Cebedo & AssociatesSanta Clara, California U.S.A.
Pharmaceutical Marketing in the 21st Century
• The Growth of DTC• The Shift in Marketing Mix• More Reps, Less Doctors Calls• Opportunities in the Internet• The Growth of Chain Stores• Changing Aspects of Training
The Growth of DTC
• DTC: Direct to Consumer Advertising
• Phenomenal growth in the last 5 years
• Journals: 200m vs. $3.7B on DTC!• More patients ask Physicians what
they want• So, More samples
Effects of DTC
• More patients telling their Doctor what medicines they need
• Products with DTC: highest sales increases
• Increase of samples• More informed patients• Better patient compliance• More satisfied patients
E Marketing
• Training via the Internet• CME in the Internet• Internet Portals for the MD• Using the Internet to Support
Marketing Effectiveness• Patient Groups in the Internet
Pharma Consolidation
• Slowdown in mergers, but they will continue
• Previous M&As driven by fear and pain• Now by conviction that bigger is better• Makes financial sense, redundant costs • Strategic sense
Do Pharma M&As make Strategic sense?
• Combined field forces could call on more MDs• Savings on support Staff• Modest savings, but with new RD & Marketing
muscle• More products in the pipeline less risky• Bottom 33% of top 50 Companies: RD=21% of Sales• Middle 33% of Top 50 Companies: RD=18% of Sales• Top 33% of Top 50 Companies: RD= 15% of Sales• Conclusion? Additional 6% of Profits compared to
bottom 33%!
Growth in Promotional SpendLast 5 years
• Total Promo Expenditure= $9.2 to $19.1B• Promotion Office Based MDs= $2.4 to $4.8 B• Samples @ retail value= $4.9B to $10.5B• DTC= $791m to $3.7 B
• Most significant growth product: Lipitor 2001
Use of Online Detailing• E Detailing: another component of the
marketing mix• MDs are invited to participate• With a promise of a coupon for a book• 71% of e Details done evenings or early
mornings or weekends• E Detailing lasts 8-10 minutes• Increased use of attention mechanics• MD selects the time. So attention
The Changing World ofMedical Education
• PhRMA Voluntary Code• Growth of Online CME• More electronic Media will support live
Meetings, eg CDrom or Online educational support
• Small low budget events can have bigger impact if supported with CDrom, with slides, speaker bios, transcripts, abstracts and interviews
• Case studies can come alive with electronic media
• More CME, more professional Reps!
Increasing Field Forces
• Increasing Sales and Marketing Staff• Increased Pay and Reward!• Only slowdown in the use of Contract
Sales• Slower turnover except in Specialty
Reps• Pharma salaries now ahead by 20%
compared with other industries
Growth in Pharma Salaries
• Primary Care Rep $45,800--$47,000• Top PC Rep $81,000--$82,300• Oncology Reps plus 30%• DMS plus 13% more than their top reps• Highest salary increase: Senior
DMs=11%• Incentive Pay is 25-30% of base pay
Changes in Incentive Schemes
• Incentive pay =25-30% of salary• Performance vs goals; Quantitative: 83%• Qualitative: 17%• 82% Individual Performance• Top Ten PCRep in 2001=59% of base salary• Top Ten PCRep in 2002=76% of base salary
Drug Discount Programs
• Senior Poor struggle to pay for medicines
• No drug insurance coverage• GSK: Orange Card
Successful Use of the Internet
• Marketing to Physicians who regularly go online
• For latest information on disease management, research
• Latest clinical papers• Networking with others
The Drive for New Types of MD Contacts
Background (INCOMM Survey of 500 Reps):• 26% =less than 1 minute• 63% =1 minute• 11% = 3-5 minutes• In Conventions, MD contacts =5-
10 minutes• Many Hard-to-See MDs or No-See
MDs (84%)!• So, expect more participation at
MD conventions!!!
Dinner Meetings
• Pure CME Activity• Group Selling• Focus Group Discussions• MAPs or Marketing Advisory Panels• Social Activity to Celebrate
Something• Peer Selling
As MDs get harder to see...
Peer Selling over Meals
• Evolvement over Focus Groups in the 80´s
• MAPs: Marketing Advisory Panels• PIGs: Peer Influence Groups• Based on the more the MD knows,
the more convinced he is, the more likely to share experiences
• The Key: The Facilitator!
Group Selling at Conventions
The Rationale:• For each MD contacted at the Booth, 6 walk by• 4-6 MDs for 10-15 minute interaction• The Key: Training in Group selling Techniques• Special Training in Questioning Techniques• Eliminate give-aways in the Counter and eliminate the
Counter• Benefits: More MD contacts, better interaction, more
time!
Growth of E-Sales Training
• Cuts costs of bringing Reps to the Office
• Brings Training to the Reps• Information transfer can be efficient &
consistent• Learning curve is 60% faster• Average content retention of
Instructor-led course: 58%• E-Learning adds additional 25%
retention
Other Benefits of E-Training• More fun, less fear and apprehension• More errors, the deeper the knowledge
as consequence of errors are explained• Allows courses to be broken up in shorter
sessions• Will grow faster with high speed DSL and
cable connections• PDA and JIT: Just-in-time Training• Savings of 50%-70%• Used best in conjunction with
conventional training
Differences inTraining Practices
• USA Specialized Field Forces: Preceptorships• Use of Multimedia in Training• Training the Trainer Programs• Cost to train a Rep: $100,000• Amount: Training per Rep: 5% of Salary• Professional Development Programs• Continuing Training and Education
Situation Outside the USA• Training=Product Training• No Sales Training System• Product Launches provide
information overload• Reps are not given enough
opportunity to practice and role-play
• No training Videos on basic skills• Trainers and PMs: are not given
training!
New Techniques in Training
• Elimination of the Classic Role Play
• Replaced by the Happy Griller• The Use of Video Models• Focused on Selling Skills• Each Rep role-plays 40 times!• Reinforcing his/her own
confidence and enthusiasm
Problems are Opportunities!In disguise
• The only thing permanent is change• How quickly & how well we adapt, will
determine our success.• Time to change the conservatism of
our Industry. • Time to invest in training!• Our capacity to learn faster is only
sustainable advantage we have against competition!
