Yesterday I had a long post which touched on the malevolence of some pharma marketing, the alleged incompetence (or at least unoriginality) of other pharma marketing, and the possibility that efficiency in sales will be improved by better user of CRM and business intelligence. In theory that greater efficiency will in turn lead to sales force manpower reductions, cost-cutting and improved margins even as the overall pricing strategy of big pharma comes under more pressure. Needless to say The Industry Veteran is not swayed by the arguments presented….
I don’t believe that substantial reductions to salesforce sizes will appreciably reduce the unconscionable prices of drugs. Several sources are prompting greater scrutiny of promotions to physicians and the federal government is set to play a somewhat larger role in prescription drug benefits. Both trends mean that Big Pharma is begrudgingly accepting a wee bit of pricing constraint in return for more customers and the resulting cost-benefit of ever more sales people has approached its limit. Remember, the arms race in salesforce sizes really started in earnest during the mid-1990s. That’s when Pfizer showed the industry that two or three babes in short skirts, bending into the trunks of their cars to retrieve samples, can outsell one Health Science Associate or Medical Science Liaison with a Pharm.D. Prior to that time, when the salesforces were considerably smaller, Big Pharma had the highest ratios of earnings-to-equity, earnings-to-sales and earnings-to-assets of any industry in existence. Once again, deciding on what is to be done involves fundamentally changing the system.I understand and sympathize with the frustrations Brian Towell expresses as a marketing communications supplier. Big Pharma’s state of the art in marketing and marketing-support services remains decades behind consumer packaged goods and many other industries. Memo to Brian: get over it, understand that it’s intentionally that way, then either accept it or get into something else.Contrary to what some people believe (including my friend who teaches marketing and sends me daily missives of Big Pharma’s outrages that include the subject line, "new stupidity"), the Hank McKinnell’s and his malevolent cohorts are not dumb. Their economic model of patent protection, a gatekeeper system, long product development durations and the rest work for them. They don’t have to be nimble because they can’t sweeten the cola on Saturday and get it onto store shelves the following Thursday. They don’t have to target ever changing, ever more complex consumer segments (left-handed, unmarried women with small breasts who disdain mass merchandisers and prefer vegetables in aspic) because the universe of their US market consists of a share of 600,000 doc-whores. Big Pharma doesn’t need to spend $2 million for 30-second Superbowl ads in outmoded media such as network television to reach the lower-middle class. (TCHB editors note: But they do!) Nor do they need to send people into bars or use communication techniques that Brian may consider innovative to reach Gen Y’ers. Frankly, I’m happy that Big Pharma is stodgy in this area and I’d prefer to see a rollback of the 1997 legislation that expanded DTC promotions so that Pharma promotions become even stodgier. Brian, go peddle your promotions for discretionary bullshit to other industries. Healthcare is too important for asshole ad men.