Pharmaceutical companies spend well over $1 billion per year for direct-to-consumer advertising. Is it worth it? How do you know?
As consumers become more involved in healthcare decisions and as lifestyle drugs become more prevalent, these questions are increasingly critical. Many pharmaceutical companies seek to engage consumers in direct-to-patient relationship marketing programs. Unfortunately, these programs frequently measure success based on the number of participants or the response rate to rebates or coupons. But participation or response may not correspond to usage.
Whether the goal is to ensure medication compliance for serious medical conditions or gain customer loyalty for a lifestyle drug, actual consumer fills must be the foundation to gauge success.
The complexity of the healthcare decision process invalidates traditional response rate measurements. Compare direct response marketing in pharmaceuticals to financial services. Banks have it easy. If a bank promotes a home equity loan, the impact on new accounts can be seen in its transaction database. It can then compare new loans in the promoted group to an unpromoted control group to identify the impact of the promotion. The consumer is the decision maker, the payer and the consumer. The bank has all the transaction data and can directly interact with the consumer based on their activity.
For pharmaceutical companies, this process is a quagmire. Consumers can receive communication of interest, but as Scott-Levin research has pointed out, fewer than half believe DTC advertising is reliable. Those motivated to visit their doctor are confronted with physicians who, according to a recent IMS Health study, often don’t believe consumers have the ability to understand DTC advertising. Health plans also are developing formularies to exclude heavily promoted drugs. If all this weren’t enough, patient noncompliance after getting a prescription ranges from one-third to one-half. All these hurdles make response to a promotion only distantly related to the amount of product consumed.
Traditional approaches to tracking consumer usage of pharmaceutical products derive from market research projections, typical treatment patterns and inaccurate surveys. Privacy imperatives prohibit linking transaction data to marketing activities for specific consumers. However, opportunity lies between the vagueness of market research and inaccessible transaction data. Pharmacy transactions can be anonymously consolidated by demographic criteria such as region, age and household income. Adding data about promotional activity yields insights into the incremental impact of promotional efforts on targeted customer segments.
All phases of DTC marketing can be enhanced using consumer fill data. Before a campaign, demographic information combined with fill data confirms media choices and promotion targeting by answering whether the right customer segments will be reached. After a campaign, prescription results provide a solid measurement of return on investment and enable predictive models to guide future marketing efforts. Ultimately, a marketing organization needs to target those segments with the greatest likelihood of prescription fills, not simply promotion response.
This tracking of marketing impact must be implemented without sacrificing patient confidentiality. At no time are specific patients singled out by their prescription activity. Rather, the market is analyzed as a whole and key factors driving customer behavior are identified. This approach provides the additional benefits of highlighting strategic marketing opportunities as well as tactical advice on targeting, messaging, and optimal offers.
With the high up-front costs of initiating a customer relationship within a therapeutic category, pharmaceutical companies cannot risk being uninformed about the usage level of their customers. Such information is vital in insuring compliance with the appropriate treatment plan, and it’s also necessary to justify DTC marketing expenditures.
Paul Buta is vice president of sales and marketing at Optas, Winchester, MA, a provider of browser data and tools. His e-mail address is [email protected]