Hitting the target

Certain tactics in pharmaceutical marketing have tarnished the industry’s reputation in recent times. Todd Evans of PwC looks at the new thinking that can help restore the public trust.

“Direct-to-consumer marketing has been the Achilles' heel for all those involved in the public face of pharma”
-Todd Evans of PwC

Pharmaceutical marketing methods have been under much scrutiny in recent times, particularly when it comes to such controversial methods as the direct-to-consumer marketing used in the US. What once was a rather stable environment in the 70s, 80s and 90s has turned into one in flux. There have been a number of shifting patterns with a diversification of the stakeholder pool, and the recognition that consumers are now empowered to select their preferred medicine. At one time the marketing world was rather one-dimensional with decisions placed exclusively in the hands of physicians. However, times have changed. Influence now comes from large government pay ors such as the Centers for Medicare and Medicaid Services (CMS) in the US, the private insurance carrier community, employers, advocacy groups and patient communities, although physicians still carry significant weight in product selection.

A dramatic change in the portfolio composition has affected the status quo. “Historically, we would expect to see fairly simple chemical compound products that employed a fairly standardised go-to-market model which earned tremendous volumes of revenue even as a product enjoyed patent protection,” acknowledges Todd Evans, Director of PricewaterhouseCoopers’ Health Industries Advisory, Pharmaceutical & Life Sciences practice. “In this decade, we’re experiencing a new product conversion from primary care products over to a specialty drug portfolio. With this, we’re seeing a lot more discovery upon the biologic molecule, which is significant due to its step-point increase in complexity and cost. This development offers a great deal of challenge not just to the patient, but to the physician and payor community as well. There’s a great deal of go-to-market change being driven just by the portfolio transition alone, and it’s being exacerbated by a need to supplement organic R&D with biologic acquisitions that are supplementing fairly weak pipelines.”

Evans highlights how such factors as rapid in-licensing deals, and acquisitions of biologic companies implies that the mission of the sales and marketing organ isation has to become terrifically diversified in an awfully big hurry. Despite this, more often than not, and particularly within the traditional ‘big pharma’ companies, there is highly efficient, homogen ised business model that was designed to address primary care products and is sometimes slow to adapt. “Organ isations need to differentiate quickly and differentiate well – in terms of who is addressed as influencers, what the message is, the types of people that are the face to the market and how products are branded so as to create a well defined and differentiated brand experience around the product,” he advises.

Concerns

A serious concern for many in the industry is that many patents expire over the next few years. Many of these patented primary care products have been the cash engines for the industry over the last 20 years. The imminence of the deadlines is creating a certain sense of crisis as Evans highlights: “Companies are worried about which future products will sustain a company’s growth and position it for growth in the marketplace. Secondly, there is the matter of downsizing sales forces for products moving to generic status while defining what capacity is needed to create specialty treatment brands, maintain a high-quality patient experience, and go to market in a way that is rational and appropriate for the stakeholder communities and on an affordable basis that the enterprise can sustain. Those costs need to be managed carefully and very differently across therapeutic areas. The market facing organ isation challenges certainly can’t be ignored as we see a tremendous volume of primary care revenues fall into generic status. This seismic, industry-wide revenue event demands a well managed industry response that deftly maxim ises the new product assets while downsizing forces that are facing obsolescence.

“You can see this in the tentative steps that are currently being taken to downsize pharma’s sales force populations. There’s some lip service being given to the fact that the model’s changing, when in fact we’re seeing a response driven by revenues falling off and generic conversions taking place. Up to now, it appears as a calibrated adjustment in what we spend in going to market the traditional way, versus an end-to-end redesign that is purpose-built for the specialty portfolio profiles that pharma is developing, in-licensing and/or acquiring.”

Often when people think of pharma companies the image conjured up by many is not overly flattering. In fact, the image of the industry has been harmed by a number of different factors. According to Evans, most of the effort to deal with reputation has been made in the context of delivering therapeutic health value and creating greater public awareness of healthcare conditions. However, he argues that this does not serve the needs of political demagogues, which tend to use the industry as the bad boys to get a philosophical or political message across. “Pharma companies tend to be the richest link in the healthcare value chain, so it’s easy to beat the guy with the most money up. What is lost is the full value of healthcare value that many pharmacological treatments deliver versus the hospital and acute care charges that a lack of pharma treatment may ultimately drive.”

There are two general images that a pharmaceutical company can convey. The first is of pharmaceutical companies as self-interested, growth focused, greedy corporate titans pushing products for the sake of selling products above all else. The other harkens back to an image the industry used to enjoy of delivering previously unmet medical benefit carrying societal benefits with improved healthcare to the life of an individual. “Those are very different images,” pinpoints Evans. “Unfortunately, during the 90’s and up to now, a number of factors have unwittingly created an image of greed, self-interest and cynicism. This image has been easily exploited by politicians and others that find these growth practices inimical to the public interest – that’s a big problem.”

According to Evans, in order to make an impact upon reputation a pharma company must first recogn ise what its reputation is, accept it, and design a program to correct it. “I believe the industry does recogn ise that there is a problem and that they need to do something about it,” he affirms.

As far as managing these things, Evans identifies some conflicting behavior. For instance, direct-to-consumer spending continues to be strong; however, the impact and results of it could, he continues, certainly be character ised as dubious. In his opinion, there are tradeoffs between perceived influence on product sales versus the certain influence on reputation and how that affects product sales and reputation. “There’s a conflict there,” he states. “The industry continues to focus on high cost specialty drug products and for these products to be accepted by the marketplace and the payors that must pay for them, pharmaceutical companies need to work on improving their healthcare reputation, drive trust in their message and reduce the barriers for acceptance for the outcomes they present.”

Brand practice

A strong brand can influence the choices that customers, employees and investors make. However, pharma companies only seem to have dabbled with short-term corporate ad campaigns, which are rarely sustained long-term. What are some of the reasons behind this? Evans highlights how a number of companies have taken significant ‘black eyes’ as a result of a combination of mistakes and believes the demagoguery of their motives and intentions have done real damage. This has forced pharma to begin to defend themselves. “I believe that what you’re seeing in the marketplace around corporate branding and campaigns to resuscitate corporate image has an awful lot to do with the fact that we have a far more safety conscious FDA regulator,” outlines Evans. “There is a higher hurdle to meet in terms of trust. We have less tolerance for safety risks with products, whether they are already in market or are new products that are just trying to come to market. There’s anecdotal evidence that things are getting tougher. Therefore, your ability to communicate to the public, the physician community and payors is critical towards establishing your motives, objectives and the kind of events that take place on the path to a clinical trial or marketplace result.”

Branding is often fleeting in pharma and is focused on the product rather than building the public trust through corporate branding. Evans highlights how the most important aspect to remember when talking about branding is that brand is an experience, not a name. He highlights how a corporate brand experience is something we associate with a company such as Coca-Cola or Kodak. However, with pharma companies things are different, “A pharma company plays in lots of different disease states and therapeutic areas; they may be involved in preventions, cures and/or chronic treatments. Branding all of those things homogenously under a single brand name tends to be not as effective. If you accept the premise that brand is an experience and that you have a diversified stakeholder pool across the value chain, it forces you to differentiate both within and across a brand. This enables messages to be tailored to discreet targets in such a way that they drive value and that value resonates in a response, a feeling, a perception and hopefully, a premium on the price.”

Evans believes that the pharmaceutical industry is learning quickly to take on the challenge of recogn ising the need for differentiation and tailoring an effective brand response to it. He states, "The landscape has changed with specialty products and we are now seeing the envelopment of a patient through a service experience that’s being branded."

Building experience

With this in mind, how does a pharma company manage and build this kind of corporate experience? Firstly, when referring to corporate branding it is often about the intangibles such as messages of trust, integrity, and credibility that need to be conveyed. “These are big messages,” explains Evans. “They’re about humanity. They’re about a value system and about the morality of how we conduct our business. The destruction of trust, integrity and credibility are things that certain segments of society have chosen to destroy by broadly demon ising the pharma industry for when an occasional bad actor in the pharma community commits a wrong. I’m not sure it oftentimes results in a net benefit to society to do that. If everyone runs around believing that the pharma industry is an evil community bent on greed and only greed, then we have a societal problem in the making. A cynical public shaped by hyperbolic political demagoguery is not one that is going to promote participative involvement in clinical trials, may actively suppress deserved pricing premiums and ultimately inhibit an increase in the healthcare outcomes that we all seek in new products.”

Evans’s advice is for pharma to ensure they communicate to society that the company is ethical and delivering societal healthcare benefits – sometimes even if this means taking a bullet in terms of the bottom line. “You need to recognise that you can take advantage of such messages from a branding point of view by communicating that your head and your heart are in the right place and that you’re doing the right thing. It may not necessarily always make you money, but because you have money you’re in a position to do it and shape the conditions for a future where new treatments can be developed to deliver societal benefits. These are wise things for pharma companies to consider, and there are some characters in the community that are actually acting upon this story.”

A further challenge for the pharmaceutical industry is the seemingly inconsistent way that they brand and promote their products, often characterised by frequent changes. As a result, consistency is lost which can send out confusing messages. There are both good and bad reasons for brand strategy changes. One of the reasons for such a change could be due to a Phase 4 study that results in unexpected results whereby the law of unintended consequence forces a change.

As Evans highlights it could be that “a grant that was made and a study was conducted beyond the control of the pharma company, resulting in some bad press for a particular product. There have been several high profile cases of this over the last few years resulting in better controls over studies that could affect a product's image, as well as a dramatic retooling of how we go to market as a brand.”

Trial and error is generally not a good way to go to market warns Evans, which is why getting things right from the start is absolutely essential. “Brand is experience,” he reinforces. “…the challenge for the industry is in embracing that message as opposed to brand being name recognition and pretty much leaving it there. It’s really about what the patient, care giver and physician experiences and what the payor organ isations and employers experience relative to that therapy’s value benefits.”

As treatments become increasingly more personal ised, with individual genetic assessment and recommendations for biomarket driven treatments commonplace, success will depend on how well a pharma company is able to connect brands to the people using their treatments. “One could argue that the evolution of a brand is synchronous with the increasing benefits that such a product may deliver to society,” he acknowledges. “We need to look back to the whole development process, and to introduce the aspect of external stakeholder communities to the product. The experience a product starts to reveal and deliver back in Phase 2 and throughout Phase 3 clinical trials is critical for getting the branding right as you are coming to market. If you wait until too late in the development process to identify critical services, patient experiences and data points that connect patient benefit to treatment practices, then the identification of a branding program may be rushed, insularly defined, and likely to miss the bulls-eye. In an era of billion dollar new product development costs, the possibility of making a mistake that leaves money on the table through an inaccurate patient service model and a misplaced branding experience is intolerable. In the end, getting it right by accurately communicating healthcare expectations and benefits to patients, physicians and payors alike will go a long way to regaining the public trust.”