PHARMA: More on big pharma’s marketing and sales strategies

And in continuing rumblings from the pharma marketing corruption story THCB reported on a week or so back — Schering was mailing physicians checks to get them to prescribe their drug — a couple more missives have crossed my desk. They concern how pharma companies market both in terms of how they deal with physicians, and in terms of how they choose their sales force and marketing strategies. It appears that there is room for major change in the latter. And as I mentioned in passing in a previous article about margins in the drug business, this whole sales and marketing arena is ripe for cost reduction and efficiency enhancement.

The first piece was sent to THCB is from Random Contributor who writes in a somewhat scurrilous vein:

    In short, pharma companies bribe physicians because it works, physicians expect it, and it doesn’t take much imagination. In a world in which there are many clinically similar drugs packed into each of a few high-return clinical categories – and a bunch of drug companies whose future rests on their performance in those clinical categories – docs can safely make prescribing decisions on things other than clinical performance. Prescribing Zocor instead of Lipitor won’t kill a patient,but it could enrich the doctor prescribing it…

    It’s hard to argue that drugs aren’t "overpriced" if payoffs are built into their pricing schema. So how much would this drug cost if you didn’t pay docs millions to prescribe it?

    As a quick aside, I was talking to my uncle (72 years old) who lives in Florida. His doc (internal med) recently gave up hospital privileges and malpractice insurance, but continues to practice primary care. He told me that his doc "plans to make up the difference through seeing more patients and prescribing more drugs." Don (my uncle) listed several of the drugs that he is taking (Plavix, Provachol, etc.) and I noticed that they were primarily from BMS… I wonder if there is a connection (or if his BMS rep is just really hot)?

While the Contributor is probably overstating the case–after all physicians don’t actually make money from prescribing drugs (unless they’re oncologists or in Japan), but it’s no secret that some doctors and some reps have particularly close relationships and that much pharma detailing is made very effective by leaning on those personal relationships. Meanwhile, the whole concept that pharma does it one way because it always has is also probably true. That’s partly why detailing and professional marketing only works effectively on less than half of physicians. The rest of all the reps in the sharp suits/push-up bras hanging out in the waiting room to get 30 seconds with the doctor is mostly waste motion.

But that might all be changing. Pfizer, which won the pharma arms race of the 1990s by building up its sales force when others were cutting back and trying to ingratiate themselves with managed care companies, or buying PBMs, is now looking to cut its global sales force, use CRM software to more accurately support its physician "customers" and eliminate the "significant number of calls where product market messages are not delivered and where there’s little to no value to the physician." In other words the Bludgeon needs to be replaced by the Rapier.

This new way of thinking might even extend to advertising and PR-type promotions. I am on a list-serv from Pharmaceutical Marketing Network, and recently this somewhat bitter screed about the sloth in thinking and consequent incompetence of pharma marketing was posted by Brian Towell from Doghouse, an online marketing agency. I repost it here because although I don’t agree with it all, it certainly puts the marketing strategies of pharma into sharp focus:

    The operational procedures of the large drug companies never cease to amaze me, particularly at the level of procurement of medical communications (which includes vanity publishing aka MedEd, Advertising, Branding, Congress & Scientific Meeting Event management, Professional Relations and Public Relations, along with some other City/Stockholder targeted communications that none of us ever see or hear about.) All of these served by agencies with global and/or local expertise, and often with ridiculous levels of duplication, isolation and total lack of connection with the brand.

    The procurement process is flawed for all, however you look at it. In America, ‘Global’ means everywhere else, whereas in Europe, ‘Global’ means everywhere, so US sited businesses are strangely infatuated by their own agencies, who are collectively useless at almost everything, but manage to hoodwink their clients into accepting dull and sub-standard creative work because that’s what everyone does in the US. In Europe, despite the rise and rise of the European community, the cultural and regulatory differences that exist on a country to country basis make it impossible to engage at head office level with a Novartis or a Roche on a ‘Global’ basis without some kind of network that allows differing cultures and medical legal systems to be managed profitably, and with due diligence.

    Unfortunately, the problems of both major markets (US & Euro) conspire to produce an industry of communications service providers inadequate in creativity and strategic bravado (largely serving tactical briefs) who somehow manage to continue to exist and grow alongside a healthcare industry that is rotten with stagnant process, and trapped by its own strategic immobility.

    The world is leaving Big Pharma behind. Agencies need to become smaller, more responsive, and more strategically driven, to help the industries that support them to make more responsive, dynamic choices and decisions, and to to open a portfolio of strategies that provide a meaningful escape route from the conventional, stagnant practice that all involved seek comfort in.

    The idea that these companies set up rosters of ‘preferred providers’ is obscene, and simply appalling business. Even the Schering Plough reverse auction idea was only open to their cute list of favorites, who they get along with really well, who never surprise or challenge them, and allow the same stuff to keep rolling along like an endless roll of Magnolia tinted wallpaper. Sameness is a real issue for the industry that needs to be challenged, instead of propagated ad nauseam.

    Thought innovators within the industry are now pointing to the reality of a ‘here and now’ strategic inflection point for big Pharma, where yesterday’s choices (strategic traps) and ‘already thought’ behaviors become not just redundant but unsustainable. Whatever the Big Companies continue to do in that vein are simply expressions of improved effectiveness at inefficiency.

    It is a self-propagating world of publications and activities that is, under the sharpest magnifying glass, difficult to justify and difficult to benchmark in terms of any contribution to the business. Its poor quality, and it costs. But no-one measures that cost.

    Novartis ask questions of providers that they must answer in a 10 slide powerpoint presentation, to get to 2nd base. But they don’t ask the right questions. What can you meaningfully contribute to our business? Show us. 2 questions. Tough call. That’s how it should be. Not a 45 minute display of last year’s work that fits our neat idea of how we have always done things here.

    That’s all it should be. Then maybe the people who work in Healthcare Communications Services would wake up to some home truths about what they’re actually doing for their clients, instead of churning out the same ‘already thought’, safe, and largely generic tripe that no other industry would tolerate.

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