Sales and marketing strategies

Weak pipelines, patent expiries, the rise of generics and a lack of blockbusters… is it any surprise that sales and marketing strategies are more important to the pharma industry than ever before? Rebecca Goozee looks at the methods that matter.

In terms of prescription medicines, it was believed for a long time that, as doctors and physicians made the decision on the selection of drugs they prescribed, mass marketing was a waste of resources. Sales forces were employed to target the medical profession face-to-face. A medium sized pharmaceutical company could have a sales force of 1000 people; larger companies tens of thousands, and these reps try and see a physician every few weeks.

It was the most effective way to promote a drug, with the rep providing information and free samples in the hope of persuading a doctor to use his or her particular brand. The use of sales reps is still alive, but price pressures combined with doctors and physicians having less influence over which brands they use mean that pharmaceutical companies are being forced to rethink the approach economically.

Shifting focus

Olivier Delannoy, Vice President at Infertility Business Unit Ferring Pharmaceuticals, believes that there needs to be a shift from a product focus to a customer focus [1]: “If a physician feels from the get-go as though he’s our top priority, we’re certainly more likely to get an endorsement from him.”

Simon Roberts from Roche agrees. He talks on eyeforpharma.com about focusing on an entire portfolio and targeting key opinion leaders with it, “We’re still going to have people having those traditional therapeutic discussions, talking about products specific to a particular area of medicine, but we’re now going to focus more on talking about our entire portfolio. We’re looking at how we can better leverage our portfolio with our customers and how we can better link our investments to the strategic plans of our healthcare institutions.”

Roberts goes on to say that it is crucial for pharma companies to really understand what they want to achieve and how they going to achieve it by sitting down with their customers and driving value into relationships. “It’s about taking the institutional relationship to a new level and becoming very active partners with them, ensuring the focus moves from what we as pharmas want to do toward linking what we have to offer to what their strategic plan holds.”

Roberts goes on to say that it is incredibly important to get the sales team to recognise this approach and take it on as their new strategy. It is quite different to the previous approach, which was all about seeing as many reps as possible, and is now much more about focussing on relationships with the key people but not taking up unnecessary amounts of their time explaining the portfolio. Roberts believes that different mechanisms and meetings will have to be put in place to tie in the sales team approach and incentivise them to look at the overall profitability, not just their piece of the pie. “They’ll need to still sell individual products to be successful, but we’ll certainly need their buy-in so they also are committed to looking at the institutional customer as a whole,” he says.

Finding the right reps is crucial, believes Tracy Mellor, Head of Training and Development Europe North at Novo Nordisk [2]. At Novo Nordisk they encourage individual awareness and individual responsibility for performance and behaviour. “We use Cialdini’s Principles of Persuasion to make sure that when we try to influence people to do something the way we want them to that we do it in the most appropriate and persuasive way,” says Mellor. “It’s all about trying to get people to take more ownership and responsibility for their own behaviour.”

It is vital that companies decide the aims of their sales strategies before they implement them. Mellor points out that Novo Nordisk uses a new coaching development tool that allows for evaluation of sales force effectiveness to identify how to coach reps the in right way and make sure they are the right reps. “If we can measure what ‘good’ looks like and benchmark our sales force, then we’ll know if a new person is a really a good fit or not,” she says. “It would be really great to get some metrics into the recruitment process to be able to predict whether someone will do well with us.”

Joining forces

One way in which pharma has responded to its growing list of problems is by joining forces, forming research alliances and increasing outsourcing activities. There are lots of cost savings to be made through research and development infrastructure, joint manufacturing facilities and a general overlap in administration, sales and marketing functions. It also expands a company’s portfolio – and that means there are more ways to get a company’s name out into the consumer marketplace.

Forming research alliances can be very cost effective. According to one industry source, research alliances tripled between 1994 and 1999. Unfortunately in 2007, alliances are not proving quite so successful.

Increasing outsourcing activities is being used strategically as part of a company’s ongoing business strategy, maximising value in areas that are important such as research and development and marketing without making capital investments in a company’s own manufacturing facilities. It is estimated in the US that outsourcing manufacturing is growing at a rate of 10-12 percent annually.

Branding

Branding is another method being investigated by pharmaceutical companies as a way to increase sales figures. Branding is a holistic approach to the company’s position, interaction and operation with a consumer based on the company’s values. Although branding has been around for a long time in the fast moving consumer goods (FMCG) industry, the pharmaceutical industry is relatively new to this concept.

Every brand requires unique marketing circumstances. Not all drugs benefit from a strong clinical profile so product teams must work diligently to underline strong attributes of a specific drug. It is important to identify, early in the drug’s lifecycle, the industry landscape and pinpoint unmet needs and potential problem areas, one way of doing this is through market research.

Direct-to-consumer advertising

Mass marketing of pharmaceuticals to consumers is very controversial. It is banned in almost every western country, apart from the US and New Zealand (who are presently considering a ban).

Direct-to-consumer advertising (DTCA) was legalised in the US in the FDA’s Guidance for Industry on Consumer-Directed Broadcast Advertisements. Since then, patients have been enquiring about drugs they have seen promoted and, when getting a prescription. will ask for a particular medication rather than the one their doctor suggests. Patient groups and charity organisations are also allowed to promote particular products or advertise for drug companies as this is unregulated by the FDA.

In Europe’s largest drug market, Germany, the rules against direct-to-consumer advertising are very stringent. The Hilmittelwerbegesetz – The Law on Advertising in the Field of Healthcare – governs pharma advertising and in all advertising it is mandatory for the public to consult a doctor or pharmacist. Expert opinions, healthcare professional advice and product recommendations are not permitted. In other countries within Europe, like France for example, non-prescription medicines can only be advertised if purchasers are not reimbursed by the social security system.

With a number of pharma companies in Europe realising the benefits of DTCA, campaigns are becoming more frequent. Regulatory factors play a crucial role in designing these campaigns, and it is important to target the right audience by considering the age, location and consumer compliance factors. Another factor to consider is the choice of media to reach your identified consumer, whether print, broadcast or internet media.

The total European non-branding DTCA expenditure in 2004 was €75 million. This is estimated to reach €300 million by 2008.

Controversy

The marketing of pharmaceuticals has become controversial through accusations of sales reps influencing physicians by providing them with free gifts and biased information. A report on eyeforpharma.com in October 2006 revealed the results of a survey conducted by the American College of Obstetricians and Gynecologists. Of 217 US obstetricians and gynaecologists, 92 percent agreed that getting samples was ethically acceptable, with a third acknowledging that handouts may influence their drug choice. The college also reported that the value of free samples reached 63 percent of the €22.5 billion the industry spent in marketing their products.

Another controversy arose with the Consumers International Report, which claimed that drug companies use unscrupulous and unethical marketing tactics and that violations of industry regulations occur frequently. The 20 companies looked at by the Report were involved in 972 breaches of the ABPI’s rules on ethical drug practices in three years.

[1] medicalnewstoday.com, February 2007
[2] eyeforpharma.com, December 2006

Source: brandcoolmarketing.com