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Pharma dollars shifting to digital

The relationship between sales representative and physician has been the cornerstone of pharma­ceutical companies’ marketing to the healthcare community for years. However, as economic factors force pharmaceutical companies to cut back sales reps in increasing numbers, pharma marketing efforts are increasingly shifting toward digital. This shift hasn’t been lost on the direct mar­keting agencies serving the phar­maceutical sector, as they put their muscle behind pharmaceutical practices that are growing even in the midst of the recession.

Columbia, MD-based database agency Merkle last week said it is formally establishing a healthcare practice in response to shifts in the pharmaceutical marketplace. And Rosetta reports that it experienced strong growth last year, driven in part by acquiring new business from AstraZeneca Symbicort, Bris­tol-Myers Squibb and J&J Janssen, among others.

Heading up Merkle’s new healthcare practice as VP and cli­ent team leader is Jeff Wiltrout, who joins Merkle from Glaxo­SmithKline, where he served as director, integrated marketing and media services.

“A lot of different factors have put pressures on the business model of the pharmaceutical indus­try” resulting in the reduction of those companies’ sales forces, said Wiltrout. Besides the economy, these factors have included the influence of managed care and a lack of new products.

The shift has been picking up speed over the past 12 months, so as a result, “pharmaceutical com­panies are looking for new ways to go to market,” he added.

For many pharmaceutical com­panies, this has meant turning to relationship marketing to help make up for the lack of personal contact that had been provided by a sales rep.

“Pharmaceutical companies are looking for ways to understand physicians better, to find out what kind of information they are inter­ested in and in creating ways to reach them through e-mail, direct mail and mobile marketing,” said Wiltrout. The goal of these efforts is not simply to reach physicians, but to figure out how they are con­suming information so that these companies can create a continuous marketing loop that will enable them to refine and optimize the next message going out.

The direct-to-consumer mar­keting efforts of pharmaceutical companies are more mature, with most firms actively engaged in this arena since the late 1990s, when the US Food and Drug Administra­tion changed the rules as to how pharmaceutical companies could communicate about their products. Internet marketing has played a big role all along, and is expected to take on more importance in the future. How­ever, there are regulatory concerns that make it difficult for pharmaceutical companies to jump into the social media space.

The FDA has very strict guidelines for reporting adverse events, and the cost of monitoring all the content that comes across a site can be very expensive, said Dr. Michael Golub, chief medical officer at Philadelphia-based Digitas Health. There are exceptions, of course, including Johnson & Johnson, which has a YouTube channel, and UCB, which created EpilepsyAdvocate.com in 2006, where epilepsy patients can share experiences.

Pharmaceutical companies typically have between 5% and 10% of their overall budget in digital, Golub said, but this is growing as sales representative forces shrink.

While social media is a tough sell on the direct-to-consumer side, within the more confined community of physicians, it is an increasingly popular method for gathering and exchanging information.

Approximately 60% of physicians are already using or are interested in using physician online communities such as Serno and Ozmosis, according to a recent report from Manhattan Research. These physicians write an average of 24 more prescriptions per week than physicians with no interest in online communities.

“A move to social networking and cell phones as the main communication devices in healthcare is where I see things heading,” said Jamie Peck, managing partner at Princ­eton-based Rosetta. Several pharmaceutical companies are already sponsoring content on some of these sites. Rosetta even has one client looking at how to incorporate Twitter and mobile technology into its marketing outreach to physicians.

Rosetta also works with pharmaceutical companies to segment doctors based on needs, attitudes and behaviors.

“Clients are becoming more sophisticated about how to work new media channels into the regulatory review process, but a lot of the lag in their adoption of these strategies is driven by regulatory concerns,” said Peck.

“We don’t know yet if this is a veritable marketing channel,” Golub added. “Some of these social networking sites for physicians have chosen to work with pharmaceutical companies while… differentiating between promotion and content so as to not alienate while trying to generate revenue.

“There hasn’t been a seismic shift yet in pharmaceutical companies’ marketing tactics to physicians, but it’s approaching seismic,” he continued. “Every major pharmaceutical company is actively working on innovative ways to reach physicians on the Internet and other channels as sales reps have increas­ingly less access to doctors’ offices.”

Search engine marketing is another method pharmaceutical companies are exploring for reaching physicians. “Doctors can use Google faster than searching volumes of information in medical journals,” said Golub.

Pharmaceutical companies are capitaliz­ing on this by advertising on or sponsoring branded and unbranded Web resources.

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