Marketing and Sales Roles

in the Pharmaceutical Industry

MARKETING

The Marketing Concept - Key Principles

It is easier to change the products and services of the individual manufacturer to fit the needs of the market than it is to convince the entire market to use the products and services as the individual manufacturer prefers them
You can have any color car you want as long as its black
Henry Ford

All the resources of the firm should be organized into a total system aimed at meeting the needs of the consumer
The role of marketing is to influence or direct activities from the manufacturer to the patient:
The right products
In the right quantity
At the right place
For the right price
At the right time

Marketing as an Actualizing Process

Markets can be viewed as gaps that separate parties interested in an exchange

Marketing removes the gaps between the parties through various actualization processes

PRODUCERS
MARKET
SEPARATORS

EXCHANGE FLOWS

MARKETING ACTIVITIES

PRODUCT FLOW:
toward the consumer

Assembly, transportation storage,

packaging, grading

INFORMATION FLOW:
both ways

Advertising, personal selling, publicity,

labeling, sales promotions, marketing
research, consumer complaints, drug
education programs

PAYMENT FLOW:
toward the provider

Credit and cash payments

USE RIGHT:
toward the consumer

Purchasing and selling, pricing, post

transactional rights

TIME
SPACE
VALUE
OWNERSHIP
QUANTITY
ASSORTMENT

CONSUMERS
Source: McInnis; A Conceptual Approach to Marketing

ITs Role in the Actualizing Process

IT can assist marketing in closing the gaps that separate parties interested in an exchange
IT can make some of the gaps irrelevant (e.g., space and time)

MARKET
SEPARATORS
Connectivity across geographically dispersed
regions

TIME

24 x 7 Availability

SPACE
VALUE
OWNERSHIP

IT
IT

QUANTITY
ASSORTMENT

Enabling information access

Enhancing personalization
Right use
Right amount
Right need
Increasing the number of available options

Source: McInnis; A Conceptual Approach to Marketing

Unique Aspects of Pharmaceutical

Marketing and Sales

Influence of non-purchasers on the purchasing habits of the consumer

Veto/authorization power of physicians consumers need an authorized

document to purchase a prescription drug

Importance of the disease to identifying and classifying markets

Professional licensing required to stock and sell pharmaceutical products

Records of every transaction are kept that are specific to:

Patient
Physician
Product

Definitions
Market Research:
Determination and assessment of qualitative and quantitative
dimensions of a market

Marketing Research:
Analysis of the effects of various marketing activities of a
company or its competitors

Market Research

Environmental scanning:

Data gathering and analysis

Influence of unique aspects of the pharmaceutical market on market research:

Physicians
Pharmacists
Pharmacies
Hospitals

Known list of entities

Knowledge-based decisions
Similarities in education and thinking (professionalization)
Availability of records for transactional activity

Significant use of outside vendors for market research

Syndicated services
Custom services

Questions Answered by Market Research

Strategic Level:
What diseases or product areas should be considered for long-term
investment?
Short-term?
Market size or potential?
Availability and utilization of therapies?
Next logical steps in therapy?
Potential market segments to be exploited:
Disease conditions (e.g., migraine sufferers)
Dosing preferences (inhalants vs. injections vs. patches)

Prevalence of disorder?
Shared conditions?
Potential development partners?
Potential acquisitions?

Questions Answered by Market Research

Clinical trial Planning:

Seasonality
Regionality
Specialty

Premarketing Planning:

What physician specialties are important in a given therapy or diagnosis?

What patient characteristics are important?
Who are our competitors in this market?
How do our competitors promote their product?
Are there unsatisfied portions of the market?
How do physicians perceive a proposed product?

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Questions Answered by Market Research

Post-marketing Monitoring:
Adverse events
Product sales
Patient information (medical history)

This can be critical

in product defense
situations!
Example: Pfizers
defense of Viagra
when suits were
filed alleging an
increased risk of
stroke.

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Types of Market Research

Hospital
Hospital
Purchases
Purchases
Retail
RetailPharmacy
Pharmacy
Purchases
Purchases

Warehouse
Warehouse
Withdrawals
Withdrawals

Periodic
Surveys

Promotional
Promotional
Media
Media

Retail
RetailPharmacy
Pharmacy
Sales
Sales

Retail
RetailPharmacy
Pharmacy
Prescriptions
Prescriptions

Physician
Physician
Panels
Panels

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Types of Market Research

Retail
RetailPharmacy
Pharmacy
Purchases
Purchases

Periodic
Surveys

Measures the
inflow of products
from the
manufacturer to the
pharmacy
OTC
Prescription drugs
Indirect (through
wholesalers)
Direct purchases
from manufacturers

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Types of Market Research

Hospital
Hospital
Purchases
Purchases

Periodic
Surveys

Growth of pharmaceutical purchases by

hospitals has greatly exceeded purchases
from pharmacies on a proportional basis

Measures the
inflow of products
from the
manufacturer to the
hospital
OTC
Prescription drugs
Indirect (through
wholesalers)
Direct purchases
from manufacturers

In many communities, the hospital has

become more important in routine care
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Types of Market Research

Measures the outflow of

products from the
warehouse to all
purchasers

Warehouse
Warehouse
Withdrawals
Withdrawals

OTC
Prescription drugs)

Does not reflect direct

purchases from
manufacturers
Provides ability to analyze
small segments of the
marketplace such as zip
code or territories

Periodic
Surveys

Can be valuable in dealing with questions

of individual territory performance and
potential or different selling techniques

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Types of Market Research

Measures the outflow of

prescription drugs from
the pharmacy to consumers
Most sensitive indicator of
prescription product
performance (factual)
Reflects mindset of
prescribers and consumer
demand
Best indicator of marketing
or promotional effort
effectiveness
Data available at national
and sub-national levels

Periodic
Surveys

Retail
RetailPharmacy
Pharmacy
Prescriptions
Prescriptions

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Types of Market Research

Specialized research
services to identify patient
product usage along
specific variables:

Diagnosis
Patient characteristics
Location of visit
Drugs used
Action desired from
drugs used

Tracking of new
prescriptions over time and
monitors changes in doctor
prescribing habits

Periodic
Surveys

Physician
Physician
Panels
Panels

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Types of Market Research

Periodic
Surveys

Retail
RetailPharmacy
Pharmacy
Sales
Sales

Historically used for nonprescription

pharmaceuticals
Data typically collected for
products of interest
Collect unit and dollar
information at the package
size level
Main use is to obtain
prescription counts by
product
Used for pricing analysis
and cross-tabulation
analysis using data
warehouses
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Types of Market Research

Promotional
Promotional
Media
Media

Periodic
Surveys

Monitoring of detailing
visits to physicians by
sales representatives
Monitoring of journal
advertising
Monitoring of direct mail
advertising
Physician sampling

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Market Research Organizations

IMS Health
Datamonitor Healthcare Consulting
Frost.com
Reuters
Also check out:

Eyeforpharma.com
FDA.gov
Journal of the American Hospital Association
AMA Drug Evaluations

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Market Research Industry Associations

EphMRA European Pharmaceutical Research
Association (www.ephmra.org)
BHBIA British Healthcare Business Intelligence
Association (www.bhbia.org.uk)
PhRMA Pharmaceutical Research and Manufacturers
Association (www.phrma.org)

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SALES

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Sales Roles
Detailing
Face-to-face visits to physicians or purchasing
managers (e.g., hospitals, HMOs) to present new
prescription drugs
Influence prescribing habit
Increase current prescription usage
Deliver samples
Build relationships with doctors
Get drug into a formulary; pull through

Sample Management
Track delivery of prescription drug samples to
physicians or other purchasers

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Effective Detailing
Influences on Physician Prescribing Habits
Side
SideEffects
Effects

Efficacy
Efficacy

Potential
Potentialdrugdrugdrug
drug
interactions
interactions

Drug
Drugdelivery
delivery
method
method

Dosage
Dosage

Cost
Costof
ofdrug
drug

Payor
Payor
formulary
formulary
status
status

Personal
Personal
preference
preference

Patient
Patientrequest
request

Source: IBM Analysis

Brand
Brand

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Detailings Value to the Physician

Value of Relationship with
PharmaCos to Physicians
Learn new drug information
Get drug samples
Connect with peers or physician
thought leaders
Receive the perks
Establish personal contact with
the drug company
Provide stress release

Source: IBM Analysis

Comments From Physician

Interviews
I like the good, tangible
information about a new drug
The samples determine what I
prescribe for the long term
Samples are extremely valuable
I value the relationships with
them. Overall, I am satisfied with
their service
I rely on them to keep me aware of
whats happening in the drug
industry
I like their presence to break up
my stressed schedule
Everybody likes perks

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Detailing - Physician Concerns

What are your top complaints about detailers?

78%
Biased information

47%
Inconvenient timing

44%
Too many from the same company

40%
Take too much time

28%
Not enough medical expertise

20%
Not enough samples

Physician Comments
I view them as the liaison but I
dont take them at their word all
the time
I hate negative marketing. The
lack of objectivity is a big turnoff
for me
If they keep coming back with the
same information, its a waste of
both parties time
I appreciate the information, but
the reps can be pushy
The thing I dislike the most is
when the rep doesnt appreciate
that I am busy and still tries to
pitch the drug to me
I dont believe that someone with
a bachelors degree knows more
about how a drug works than I do

Source: The Forrester Report: Pharmas Detailing Overhaul, February 2001 (IMS Health, Scott-Levin, Forrester Research, Inc); (Ziment/WebSurveyMD.com); IBM Analysis

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Companies Are Experimenting

with e-Detailing
There have been promises made about the benefits of e-Detailing
Benefits to PharmaCos
Cost-effective: an online sales session costs
about $110 on average, compared with about
$200 for a field reps office visit
Cost effective: Increased contact time per visit
allows for higher information content
Better control of detailing content: as a result,
e-Detailing can be used as an efficient way to
train less-skilled sales reps
Capture relevant physician practice data: with
this information, Companies can identify
potential high prescribers that sales reps can
target later
Counter detailing and off-the-label discussion:
with e-Detailing, the companys medical
experts can speak with physicians about
competing drugs clinical trial flaws and offthe-label prescription, which is normally not
allowed in a sales reps visit
Increased sales of under-marketed drugs
Source: IMS Health, iPhysicianNet website, Aptilon.com website, IBM Analysis

Benefits to Physicians
Allows physicians to see sales reps,
gather information they deem important,
and to have the flexibility and control to
do it in their own schedule
Offers physicians a range of convenient
interactive channels
Provides timely updated drug
information
Provides simpler sample ordering and
delivery
Provides quality peer-to-peer
discussions on a topic that interests a
physician.

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Sample Management
The pharmaceutical industry in America distributed
$6.7 billion worth of samples to physicians in 1999 *
During a typical month, the average pharmaceutical
sales representative will visit 150 physicians,
distribute thousands of packages of drug samples,
obtain FDA required signatures on 150 sample
distribution forms and receive scores of new sample
cartons to their home-based office, and expend as
much as 25% of their time tediously managing a
paper-based process

* Source: IMS Health

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Sample Management and

Regulatory Requirements
PDMA (Prescription Drug Marketing Act)
Designed to minimize the threat to the public health
posed by prescription drug diversion and counterfeiting
Requires that samples distributed by pharmaceutical
representatives be signed for and tracked to create audit
trails
Helps to ensure that the correct physician receives the
correct samples. If a pharmaceutical company is found
to be non-compliant, they could face significant
penalties, fines, and possibly even prison terms

Source: FDA

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OTHER MARKETING
& SALES TECHNIQUES

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Key Opinion Leader Management

Expert physicians -- often called "opinion leaders" or "thought leaders"

-- play critical roles in driving pharmaceutical sales
Participate in ongoing R&D
Have privileged access to R&D information
Company-sponsored featured speaking engagements at prestigious
conferences

Exchange ideas with other physicians regarding new products or

indications or adverse events
Helps convince other doctors to prescribe new products and can make
the difference between a successful product launch and a major
disappointment
Program is actively integrated with marketing program:
Physician recruitment (specialty, name recognition, etc.)
Matching to appropriate R&D efforts
Matching to appropriate marketing programs

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Medical Science Liaisons (MSLs)

Scientific professionals

Pharmaceutical PhDs
Pharmacists
Physicians
Nurses

Generally have more scientific knowledge than sales representatives

Roles:
Support and expand sales representatives marketing of a product
Be able to speak to the purchaser on a more scientific (peer) level; not on a
marketing level
Will focus on clinical information

Focus on key opinion leaders

Typically will only see more knowledgeable sales reps
Organize symposia, conferences, focus groups, etc.
Training and continuing education programs

May be involved in setting up Phase IV trials (post launch)

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