Like many other industries today, the pharmaceutical industry is undergoing a miniature revolution. New regulations, budget constraints and marketing models, and the availability of new technological tools, are pushing pharma companies to change almost every aspect of their traditional selling strategies — including CRM. ?
A May 11 report from Frost & Sullivan, Global Pharmaceutical CRM Markets, notes “The turbulent pharmaceutical industry is demanding cheaper and innovative CRM solutions that will enable [more] flexibility.”?
One major factor that makes this billion-dollar industry so “turbulent” for CRM providers is the changing sales force structure. Matt Wallach, EVP and GM of pharma CRM provider VeevaSystems, explains that, from 1990 to 2005, the pharma industry was in an “arms race” to get as many sales reps in the field as possible. However, now that big blockbuster drugs are coming off patent and a parade of lookalikes has invaded the market, covering more ground doesn’t guarantee more sales. The new generation of niche drugs “doesn’t require the same type of investment in your sales force and CRM system to be successful,” Wallach says. ?
Additional scrutiny on pharma sales practices — which once included a heavy dose of entertainment and perks for doctors — also has changed strategies and created the need for new, smarter, more flexible tools.?
Flexible CRM systems, such as those run as software-as-a-service (SaaS), will be in higher demand going forward, as pharma companies continue their rapid evolutions. Infrastructures that have been in place for five or 10 years simply cannot change as quickly as the market demands.?
“It’s great for pharma companies in terms of flexibility and usability and pricing, but more importantly, to have a choice of the model that you need or want,” explains Thibaut de Lataillade, VP of global marketing for France-based Cegedim Dendrite, which boasts 35% of the market share in pharma CRM. “Some companies, small and big, will need a SaaS model for specific reasons, and within those companies there may be specific divisions that want a model that is different, with more customized things.”?
Pharma companies also are demanding CRM tools that work across, and help to integrate, multiple channels. Physicians get their information online now more than ever, and it is essential to be able to continue an online rapport during an in-person meeting or over the phone. ?
“Companies are really looking to being in other channels and giving sales reps more to do, like sending an e-mail to a doctor for a Web meeting or providing feedback in person to a question that a doctor called in to the call center yesterday,” notes Mike Madden, solution partner at EMC Consulting. ?
Even with all of these extras, CRM products may command lower prices than the old infrastructures. The global economic downturn, loss of patents and fears of forthcoming legislation will make pharma companies more wary of how they spend their dollars, even on a strategic tool like CRM.?
“The larger CRM platforms cost a lot of money to implement and operate, and pharma companies not only have to engage customers differently to sell, but cut costs,” says Madden. “The former bloated model definitely drives folks to look at their major investments again.”?
Cost-cutting or no, de Lataillade predicts that the pharma CRM space will continue to see growth, particularly in value-added data management services.?
“If you put bad data into your CRM system, you will get very bad results,” he points out. “So, the key development we see is in services to merge, clean, format and qualify the data.”?
“Pharma companies will strategically move ahead to be productive and efficient within their limited resources,” concludes Sujith Eramangalath, team leader and senior analyst, European Healthcare IT, Frost & Sullivan. l?