While the internet has altered the landscape in the retail sector and revolutionized the airline industry, pharmaceutical companies have been slow to take advantage of the marketing opportunities offered by the medium. With existing sales and marketing strategies widely considered unsustainable, the industry needs to evolve and engage with its customers online, or it risks being left behind.
As highlighted in a new Datamonitor report, the current initiatives that the healthcare industry is undertaking are largely ineffective. Customers are increasingly using the web to source information, but healthcare companies are still, on the whole, reliant on more traditional methods of communication with potential purchasers. The exploration of other channels is necessary if companies are to keep in touch with their customer base and maximize the return on their marketing spend.
Pharmaceutical companies have not had the easiest of times recently. There are a number of challenges currently facing traditional sales and marketing media, including tightening pricing and reimbursement controls, increasing pressure on physician time, and public skepticism of the pharmaceuticals industry, all compounded by tightening regulatory frameworks. However, this is no reason for industry players to cut back on marketing outlay, or to shy away from making changes to the way that they reach consumers. In fact, the opposite is true; customers are already using the web extensively to meet their information needs, and this places the onus on producers to catch up with existing and emerging technologies for their marketing needs.
In the past, sales and marketing strategies consisted of large-scale sales forces, direct to consumer (DTC) advertising, targeting disease awareness, and setting up patient advocacy groups to establish brand awareness. The strategy most prominently and heavily invested in was that of building strong relationships between sales representatives and physicians. Companies employed large sales force teams to visit institutions and practices, in order to establish a share of voice. In return, doctors received perks, ranging from free pens to four-star meals and vacation-style trips.
However, the increasing numbers of representatives visiting the same physicians meant that meetings were taking up too much of physicians' time. In some cases, more than one salesperson from a single company would visit a practitioner daily. This over-saturation, along with increasingly aggressive sales tactics, brought about a change in attitude toward this direct sales approach, and representatives now find it difficult to gain access to primary care physicians and GPs.
Therefore, sales teams need to evolve and vary their approach in order to accommodate the changes taking place in physicians' practices. The problem is no longer simply the cost of maintaining large sales forces, but the simple fact that, even the largest sales division, operated along these lines, is no longer as effective. Sales representatives must become much more specialized in specific therapeutic areas if they are to provide genuine value to physicians, who are under increasing pressure to prescribe generic drugs, and also have less time to deal with sellers than in the past. Companies must begin to engage with their customers online, exploring other avenues beyond their corporate websites, which are often met with a certain degree of mistrust and skepticism.
To create effective online strategies, marketers must understand the needs of physicians. For instance, websites geared towards physicians should be much more clinical in content and appearance, with less marketing language than a traditional sales platform may contain. The main target customer for pharmaceutical companies has always been the primary care physician or GP, but that is now changing. It is now necessary for marketing to reach out to new and increasingly influential customers, such as patients, pharmacists and payers. This is especially true in the US, where pharmacists in certain states have the power to prescribe. Also, empowered patients, who turn up at their doctors armed with a wealth of knowledge gleaned from the internet, can challenge a physician's decisions, so communicating information regarding products to individuals can also be effective.
In the EU it is more difficult to communicate with patients, due to the ban on DTC advertising. However, a proposal published in February 2008 by the European Commission could potentially allow companies to disseminate non-promotional information, including price, for prescription-only medications to patients via television and radio. If this proposal goes ahead it will create an opportunity to communicate drug information to patients who presently feel that a lack of communication infers that the industry has something to hide. Addressing consumers directly does not only provide a marketing opportunity, it is also an ideal way to improve public image, by providing online health-related information that is tailored to the educational needs of patients.
Safety fears and high-profile lawsuits have damaged the industry's image; therefore, striking the right balance when engaging with the public online is vital. This is not easy for pharmaceutical companies; the industry is of a conservative nature, and, given the tight legal restraints that it must abide by, interacting with customers online is a daunting prospect. However, companies cannot ignore the obvious benefits of engaging with customers online, particularly the improvement of public perception.
While the industry is beginning to explore new media, it is both slow and hesitant to do so. However, initiatives do exist, such as e-detailing, which has become an important tool in matching marketing messages to specific physicians in a timely fashion. Using this method, an initial contact is made electronically, providing brief details of a proposition to a physician and allowing him/her to seek out a sales representative if further questions remain. This approach means that the actual interaction period between the doctor and representative is much more valuable to both parties.
Media features, such as podcasts, are also used extensively on the web. They are simple to incorporate and inexpensive compared to traditional marketing efforts, yet the pharmaceutical industry underutilizes even these methods. Datamonitor senior pharmaceutical analyst Dr Sandra Reynolds argues: "The ever-growing popularity of social media could also be better utilized by pharma, including live video detailing and social network sites like Second Life." Now that the legal limitations that restricted companies from engaging with their customers are being lifted, they must act to restructure their internal processes, so that campaign approvals can happen faster. Moreover, if it is to reach as wide an audience as possible, with an effective message, the industry must move away from marketing conservatism and embrace the potential of the new media.