The four executives at Merck Capital Ventures (MCV) aren't surprised by the promising data about physicians' initial adoption rates of, and preferences for, e-detailing. Gary Lubin and Jeffrey Tarlowe say they're waiting to see how large that group of early adopters really is and how sustainable those adoption rates are over the long term. But their confidence in e-detailing's potential to have a positive impact on pharma's daily business has inspired them to closely monitor and interact with vendor companies they believe may one day warrant investment.
Since its founding by former Merck-Medco chairman Per Lofberg in November 2000, MCV has invested in four companies: Acurian and PHT, both in clinical trial management; Aegis, a developer of decision-support tools for manufacturing, and a marketing/sales force effectiveness business. The companies have two things in common: None focus on the pure science, and all, MCV believes, offer technologies beneficial to pharma.
"When you look across the life sciences and pharmaceutical industries, we are interested in many different areas," says Lubin. "Our scope is not in the pure science side. We don't expect, at least in the near term, to invest in genomics, genetics, or biotech. But pretty much everything else is fair game." To prevent any confusion in the marketplace, MCV is the vehicle by which Merck makes investments in everything except mergers, acquisitions, and pure science.Lubin and Tarlowe say that although they collaborate with other venture capitalists and do their own comprehensive research, they prefer to learn about a company through Merck's business units, which have exposure to various vendors in the field. Says Tarlowe, "If Merck or MCV is not aware of a vendor, then it probably hasn't gained significant traction in the marketplace. Some may have held back from going to Merck to get their ducks in a row, but, for the most part, Merck will have a very good sense for the vendors that are in a particular space whether it's R&D, manufacturing, or marketing."
In that wide-open playing field, they find e-detailing of interest, because, as Lubin points out, the potential benefits include sales force streamlining and augmentation. That is vendors' top argument for engaging their services, and it looks like Merck has given it some credibility.
"E-detailing represents part of a larger focus which includes direct-to-physician communications and contact, e-CME, and e-symposia," says Tarlowe. "To us, e-detailing is on a continuum. On one side, it's web-enabling professional literature, videos, brochures, handouts, and the information a sales representative would give to a physician during a detail. On the other side, there's a much more interactive relationship."
Why the focus on marketing and sales effectiveness? Lubin and Tarlowe identify the "arms race" as the impetus behind their interest in e-detailing, characterizing the industry's attitude as one of "who can have the bigger force and be more effective with it." They warn that, as the point of diminishing returns approaches, companies must consider all options that help maximize sales instead of simply "putting more feet on the street."