The driving metrics for success in healthcare are new prescriptions and refills, the combination of which yields total prescriptions.
Traditionally, prescription generation has been driven largely by the activity of pharmaceutical sales representatives, who call on physicians and other health professionals to “detail” the features and benefits of major prescription medicines. This detailing is supplemented by other marketing tactics, such as professional journal advertising, direct mail, nontraditional media and exhibits at major medical meetings and symposia.
During the past three years, direct-to-consumer advertising has been commanding a significant share of promotional dollars, and DTC expenditures for 2000 are expected to reach $2 billion. The drug industry still spends more on sales representatives than it does on scientists. Its army of more than 70,000 salespeople (approximately one rep for every 10 doctors) costs $7 billion per year. And though they often deliver information that doctors need, they do so at a high cost. The average sales call lasts about seven minutes but costs companies $100 to $300.
Overall, the industry’s marketing and administration expenses are more than twice those of research and development. The average doctor sees 30 to 35 patients per day while also seeing sales reps, primarily to receive samples and current drug information. As a result, many sales rep interactions involve a brief detail and a visit to the sample closet to replenish drug supplies.
The number of drugs approved by the U.S. Food and Drug Administration peaked in 1996 at 53. There were just 35 in 1999, and 16 through the first half of this year. While those numbers remain higher than the 1980s average of 22 drugs launched annually, the industry is now much bigger, so it takes more new drugs to keep the same percentage growth in total prescriptions. The industry is pinning its growth hopes less on new products and more on persuading consumers to buy drugs.
Marketing is not the industry’s only answer to its research challenges. Mergers are being driven by the imbalance between the flow of new products and the attrition of current products going off patent. As soon as products go off patent, prescription volumes for the innovator products drop off precipitously. The current mergers and acquisitions in the industry also are creating larger sales forces competing for the physician’s time and attention.
In this quest for a few quality minutes of contact to get their respective messages across about new drugs, therapies and treatments, it is not hard to understand why so many companies are exploring the phenomenon known as “e-detailing.”
Electronic detailing seems poised to revolutionize the ways in which pharmaceutical companies transact information and build relationships with healthcare professionals. Electronic media obliterate time and space limitations while creating significant cost and operational efficiencies.
In theory, product and procedure information on the Internet can reach all professionals in all areas with virtually no incremental cost increases. The cost of a successful e-detail is estimated at $12 to $100 per delivery, compared with $100 to $300 for traditional detail delivery via a sales visit.
If that were not attractive enough, recent evidence indicates that e-detailing may be more effective than the office visit in several important ways. According to the Health Strategies Group, the average electronic detail lasts 10 minutes, compared with two minutes to seven minutes per office call. Visual aids, which are proven to nearly triple message recall, are used in only half of all office calls.
In e-detailing, the visual aid is usually the centerpiece of the presentation — translating to near 100 percent exposure. As the implementation of e-detailing evolves, we will see visual aids designed to exploit more fully the multimedia and interactive capabilities of the Web, affording greater personalization to what at first may seem to be a one-size-fits-all technology.
Will e-detailing replace or complement the traditional sales force? The answer will vary depending on the company and the product. For smaller companies, e-detailing is a way of neutralizing the large sales forces of bigger competitors. Those competitors, however, will not be easily convinced that e-detailing can approximate the personalized service provided by a flesh-and-bones sales team.
Electronic detailing also assumes a Web-savvy constituency. While healthcare professionals are increasingly receptive to everything from online disease management to electronic continuing medical education, we are still in a transitional era. Companies with an established sales force might tend to use e-detailing for smaller products or low-prescribing doctors, and focus their sales force efforts on the most critical opportunities.
These variables — the unique internal logistics and philosophies of individual companies, the preferences of doctors — necessitate the development of a variety of e-detailing models. Even at this early stage, e-detailing comes in several flavors — high-end, low-end and several hybrid forms.
First, high-end solutions have emerged. Touted as the next best thing to the sales call, videoconferencing delivers highly tailored e-detailing at what may be a prohibitive cost. A company called iPhysicianNet employs a business model where computers are loaned to doctors, who in turn agree to a minimum of one product detail per month using the loaned computer and a video conference call. This model combines the flexibility of electronic detailing with the relationship-building of the traditional approach, but what is gained in personalization may be lost in reduced reach and frequency of contact. iPhysicianNet hopes to have 50,000 doctors hooked up to its videoconferencing network by year’s end. Even if this is accomplished, it is still a small percentage of the 650,000 prescribing physicians in the United States.
At the opposite end of the spectrum, Web-only detailing offered by Healtheon/WebMD’s Cyber Detailing Channel contracts pre-screened doctors for a specified number of online details. The advantages of this model are its 24/7 availability and its cost, which can be as low as $12 per successful detail (with success defined as the complete presentation of a visual aid). However, there is difficulty in achieving product differentiation in this environment. With one portal serving all products, all companies and all doctors, Web-only e-detailing might quickly become a must-have that offers little competitive advantage.
In response to the limitations of single-medium e-detailing programs, we are witnessing the development of hybrid models that allow a choice of media. Allscripts’ Physicians Interactive offers physicians the options of Web detailing or interactive voice response. Early reports indicate that half of the physicians choose Web detailing. Also noteworthy is that half choose to use either option during off-peak hours. Choice is a plus, and the cost of this approach is fairly low, but the fundamental problem of impersonality is not addressed here.
Therein lies the inherent limitation of all visions and versions of e-detailing. No single model can address the unique circumstances of each company, each product and each healthcare professional’s concerns. The healthcare industry would be wise to note the experience of retail, in which both those who committed entirely to e-commerce and those who resisted entirely paid the price.
The question is how to integrate electronic media into a larger detailing strategy. Each healthcare company should develop its own custom solution based on its needs and preferences and, more importantly, on the preferences of its customers. Integrated detailing enables a level of vision and control that far surpasses any single approach. It might involve phone, mail, Web, fax, video and face-to-face elements.
More important than the media deployed are the intelligence and synchronization of the deployment. An integrated detailing initiative uses a centralized database to profile doctors, capture preferences, and steer the process with customized internal business rules, such as tiering doctors based on value and channel preference. The result is a detailing system that is personalized, targeted and timed to achieve optimal impact.
Needless to say, integrated detailing entails an ambitious choreography of database management, interactive design, marketing expertise and response management, and will most likely require the services of a company with a depth of technological resources and expertise in the byways of the pharmaceutical world. The control, precision and flexibility of the integrated detailing approach suggest that this is the way of the future.
• Jason Oliger is senior vice president, business development, interactive, and Julian Parreño is senior vice president of marketing, pharmaceuticals, at Harte-Hanks Inc., a worldwide direct and interactive services company. Reach Oliger at [email protected] and Parreño at [email protected]