Pharmaceutical Marketing (overview)
Pharmaceutical marketing
sometimes called medico-marketing, is the business of advertising or otherwise promoting the sale of pharmaceuticals or drugs. Evidences show that marketing practices can negatively affect both patients and the health care profession.[1] Many countries have measures in place to limit advertising by pharmaceutical companies.
Pharmaceutical company spending on marketing far exceeds that spent on research.[2][3] In Canada, $1.7 billion was spent in 2004 to market drugs to physicians; in the United States, $21 billion was spent in 2002.[4] In 2005 money spent on pharmaceutical marketing in the US was estimated at $29.9 billion with one estimate as high as $57 billion.[3] When the US number are broken down 56% was free samples, 25% was detailing of physicians, 12.5% was direct to consumer advertising, 4% on hospital detailing, and 2% on journal ads.[4]
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History
The marketing of medication has a long history. The sale of miracle cures, many with little real potency, has always been common. Marketing of legitimate non-prescription medications, such as pain relievers or allergy medicine, has also long been practiced, although, until recently, mass marketing of prescription medications has been rare. It was long believed that since doctors made the selection of drugs, mass marketing was a waste of resources; specific ads targeting the medical profession were thought to be cheaper and just as effective.[citation needed] This would involve ads in professional journals and visits by sales staff to doctor’s offices and hospitals. An important part of these efforts was marketing to medical students.[citation needed]
To health care providers
Marketing to health care providers takes four main forms: gifting, detailing, drug samples, and sponsoring continuing medical education (CME).[3] In Britain, Canada, New Zealand, and the United States 80-90% of physicians see pharmaceutical representatives.[4] Of statements made by pharmaceutical representatives 11% are false and of the false statements all are in favour of the representatives’ drugs.[5] While very few physicians consider themselves susceptible to detailing, 84% of them believed that their colleagues are.[3]
The Partners Healthcare, Massachusetts’ largest hospital and physician network, has adopted new guidelines prohibiting physicians and researchers from accepting gifts from pharmaceutical manufacturers. This will include meals or individual drug samples, and drug samples left by companies will be distributed through a centralized system, while educational programs and fellowships will be required to be centrally reviewed and approved.[6]
Free samples
Free samples have been shown to affect physician prescribing behavior. Physicians with access to free samples are more likely to prescribe brand name medication over equivalent OTC medications.[3] Other studies found that free samples decreased the likelihood that physicians would follow standard of care practices.[3]
Continuing medical education
Hours spent by physicians in industry-supported CME is greater than that from either medical schools or professional societies.[3]
Pharmaceutical representatives
Currently, there are approximately 90,000 pharmaceutical sales reps in the United States[7] pursuing some 830,000 pharmaceutical prescribers. A pharmaceutical representative will often try to see a given physician every few weeks. Representatives often have a call list of about 200 physicians with 120 targets that should be visited in 1-2 week cycles.
Because of the large size of the pharmaceutical sales force, the organization, management, and measurement of effectiveness of the sales force are significant business challenges. Management tasks are usually broken down into the areas of physician targeting, sales force size and structure, sales force optimization, call planning, and sales forces effectiveness. A few pharmaceutical companies have realized that training sales representatives on high science alone is not enough, especially when most products are similar in quality. Thus, training sales representatives on relationship selling techniques in addition to medical science and product knowledge, can make a difference in sales force effectiveness. Specialist physicians are relying more and more on specialty sales reps for product information, because they are more knowledgeable than primary care reps.
The United States has 90,000 pharmaceutical representatives or 1 for every 6.3 physicians.[3] The number and persistence of pharmaceutical representatives has placed a burden on the time of physicians[8]. “As the number of reps went up, the amount of time an average rep spent with doctors went down—so far down, that tactical scaling has spawned a strategic crisis. Physicians no longer spend much time with sales reps, nor do they see this as a serious problem.”
Marketers must decide on the appropriate size of a sales force needed to sell a particular portfolio of drugs to the target market. Factors influencing this decision are the optimal reach (how many physicians to see) and frequency (how often to see them) for each individual physician, how many sales representatives to devote to office and group practice and how many to devote to hospital accounts. To aid this decision, customers are broken down into different classes according to their prescription behavior and of course, their business potential.
Marketers attempt to identify the set of physicians most likely to prescribe a given drug. Historically, this was done by measuring the number of total prescriptions (TRx) and new prescriptions (NRx) per week that each physician writes. This information is collected by commercial vendors. The physicians are then divided into ten groups based on their writing patterns. Higher deciles are more aggressively targeted. Some pharmaceutical companies use additional information such as:
- profitability of a prescription (script),
- accessibility of the physician,
- tendency of the physician to use the pharmaceutical company’s drugs,
- effect of managed care formularies on the ability of the physician to prescribe a drug,
- the adoption sequence of the physician (that is, how readily the physician adopts new drugs in place of older, established treatments), and
- the tendency of the physician to use a wide palette of drugs
- influence that physicians have on their colleagues.
Data for drugs prescribed in a hospital are not usually available at the physician level. Advanced analytic techniques are used to value physicians in a hospital setting.[citation needed]
Physicians are perhaps the most important component in sales. They write the prescriptions that determine which drugs will be used by people. Influencing the physician is the key to pharmaceutical sales. Historically, this was done by a large pharmaceutical sales force. A medium-sized pharmaceutical company might have a sales force of 1000 representatives.[citation needed] The largest companies have tens of thousands of representatives around the world. Sales representatives called upon physicians regularly, providing advertising and free drug samples. This is still the approach today; however, economic pressures on the industry are causing pharmaceutical companies to rethink the traditional sales process to physicians.
Peer influence
Key opinion leaders
Key opinion leaders (KOL), or “thought leaders”, are respected individuals, such as prominent medical school faculty, who influence physicians through their professional status. Pharmaceutical companies generally engage key opinion leaders early in the drug development process to provide advocacy and key marketing feedback.[9] Some pharmaceutical companies identify key opinion leaders through direct inquiry of physicians (primary research). Recently, pharmaceutical companies have begun to use social network analysis to uncover thought leaders; because it does not introduce respondent biasness, which is commonly found in primary research; it can identify and map out the entire scientific community for a disease state; and it has greater compliance with state and federal regulations; because physician prescribing patterns are not used to create the social network.[10]
Alternatives to segmenting physicians purely on the basis of prescribing do exist, and marketers can call upon strategic partners who specialize in delineating which characteristics of true opinion leadership, a physician does or does not possess. Such analyses can help guide marketers in how to optimize KOL engagements as bona fide advisors to a brand, and can help shape clinical development and clinical data publication plans for instance, ultimately advancing patient care.
Colleagues
Physicians acquire information through informal contacts with their colleagues, including social events, professional affiliations, common hospital affiliations, and common medical school affiliations. Some pharmaceutical companies identify influential colleagues through commercially available prescription writing and patient level data[11]. Doctor dinner meetings are an effective way for physicians to acquire educational information from respected peers. These meetings are sponsored by some pharmaceutical companies.
Journal articles
Recent legal cases and US congressional hearings have provided access to pharmaceutical industry documents revealing new marketing strategies for drugs.[12] Activities once considered independent of promotional intent, including continuing medical education and medical research, are used, including paying to publish articles about promoted drugs for the medical literature, and alleged suppression of unfavorable study results.[13]
Private and public insurers
Public and private insurers affect the writing of prescriptions by physicians through formularies that restrict the number and types of drugs that the insurer will cover. Not only can the insurer affect drug sales by including or excluding a particular drug from a formulary, they can affect sales by tiering, or placing bureaucratic hurdles to prescribing certain drugs. In January 2006, the U.S. instituted a new public prescription drug plan through its Medicare program. Known as Medicare Part D, this program engages private insurers to negotiate with pharmaceutical companies for the placement of drugs on tiered formularies.
To consumers
Only two countries as of 2008 allow direct to consumer advertising (DTCA): the United States and New Zealand.[3] Since the late 1970s, DTCA of prescription drugs has become important in the United States. It takes two main form: the promotion or creation of a disease out of a non-pathologic physical condition or the promotion of a medication.[3] Many people will inquire about, or even demand a medication they have seen advertised on television.[who?] In the United States, recent years have seen an increase in mass media advertisements for pharmaceuticals. Expenditures on direct-to-consumer advertising have more than quintupled in the seven years between 1997 and 2005 since the FDA changed the guidelines, from $700 million in 1997 to more than $4.2 billion in 2005, according to the United States GAO (Government Accountability Office, 2006).[3]
The mass marketing to consumers of pharmaceuticals is banned in over 30 industrialized nations, but not in the US and New Zealand, which is considering a ban.[14] Some feel it is better to leave the decision wholly in the hands of medical professionals; others feel that consumer education and participation in health is useful, but consumers need independent, comparative information about drugs (not promotional information)[14]. For these reasons, most countries impose limits on pharmaceutical mass marketing that are not placed on the marketing of other products. In some areas it is required that ads for drugs include a list of possible side effects, so that consumers are informed of both facets of a medicine. Canada’s limitations on pharmaceutical advertising ensure that commercials that mention the name of a product cannot in any way describe what it does. Commercials that mention a medical problem cannot also mention the name of the product for sale; at most, they can direct the viewer to a website or telephone number operated by the pharmaceutical company.
Economics
Pharmaceutical company spending on marketing far exceeds that spend on research.[15][3] In 2004 in Canada $1.7 billion a year was spent marketing drugs to physicians and in the United States $21 billion were spent in 2002.[4] In 2005 money spent on pharmaceutical marketing in the US was estimated at $29.9 billion with one estimate as high as $57 billion.[3] When the US number are broken down 56% was free samples, 25% was detailing of physicians, 12.5% was direct to consumer advertising, 4% on hospital detailing, and 2% on journal ads.[4] In the United States approximately $20 billion could be saved if generics were used instead of equivalent brand name products.[3]
Regulation
In the United States, marketing and distribution of pharmaceuticals is regulated by the federal Prescription Drug Marketing Act of 1987. In general, pharmaceutical companies adhere to FDA regulatory guidelines which call for all DTC advertising and information to be accurate, to provide substantial evidence for any claims that are made, to provide a balance between the risks and benefits of the promoted drug, and to maintain consistency with labeling approved by the FDA.
Evolution of marketing
The emergence of new media and technologies in recent years is quickly changing the pharmaceutical marketing landscape in the United States. Both physicians and consumers are increasing their reliance on the Internet as a source of health and medical information, prompting pharmaceutical marketers to look at digital channels for opportunities to reach their target audiences.
In 2008, eighty-four percent of U.S. physicians used the Internet and other technologies to access pharmaceutical, biotech or medical device information – a twenty percent increase from 2004. At the same time, sales reps are finding it more difficult to get time with doctor’s for in-person details. Pharmaceutical companies are exploring online marketing as an alternative way to reach physicians. Emerging e-promotional activities include live video detailing, online events, electronic sampling, and physician customer service portals such as MDLinx and Physicians Interactive.
Direct-to-consumer marketers are also recognizing the need to shift to digital channels as audiences become more fragmented and the number of access points for news, entertainment and information multiplies. Standard television, radio and print direct-to-consumer (DTC) advertisements are less relevant than in the past, and companies are beginning to focus more on digital marketing efforts like product websites, online display advertising, search engine marketing, social media campaigns, and mobile advertising to reach the over 145 million U.S. adults online for health information.
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Mahmoud Bahgat