Pharmaceutical brand promotion is undergoing a dramatic shift, with the biggest customers—healthcare practitioners and patients—moving away from mass media to more focused forms of promotion. The fastest growing professional channel is the Web, up 20 percent in 2007. Spending to reach these consumers accounted for 40 percent of the industry's promotion budget last year, according to IMS Consulting.

Yet despite access to growing amounts of information, drugmakers and their field sales forces are struggling to make meaningful connections with their customers. Only one out of three sales calls is rated as "helpful" by physicians, and fewer than 10 percent of US reps have access to robust information about healthcare practitioners, such as patient-level behavior and adherence trends.

Innovation is pharma's first line response to diminishing return on investment (ROI) in sales and marketing. But innovation takes time, and the outcomes are unpredictable. New strategies for improving commercial productivity must harness emerging sources of information to deliver a better understanding of the influences acting on prescribers and deeper insight into prescriber responses. They can also recommend where to implement change within the organization to take best advantage of commercial opportunities.

While these enhancements do not radically transform the pharmaceutical commercial process, they do advance it to the point of higher value through knowledge gained from other industries facing similar fundamental shifts in their business models.

The challenge for pharma is to recognize and respond to the opportunity currently available for gaining new efficiencies. Although operating improvements offer value, the most significant value comes from better commercial strategies.

The Process Blueprint

Competitive advantage is increasingly determined by how well a company identifies and leverages the decision-making power of different customer groups. Innovations that deepen understanding of customer interests, preferences for information, and their decision influences are driving value for leading pharma sales organizations, according to IMS's New-to-Brand Rx (NBRx) data, which measures brand performance. New techniques that size, structure, and deploy sales forces for more productive customer relationships can increase the impact of selling efforts without major re-engineering. Improved metrics can now assess the true value of field efforts to increase NBRx, and companies using these metrics are seeing sales force productivity gains between 5 and 15 percent (based on an IMS review of results).

Understanding how a company can implement these drivers of ROI growth may require a systematic diagnostic of current commercial processes, indicating areas where advanced information, technology, and analytics can be leveraged. Untapped value is likely to be revealed in new opportunities for a stronger customer strategy and more effective use of resources, or some combination of the two.

To develop a systematic approach to the type of commercial change necessary to maximize return on portfolios, strategies should incorporate four improvement priorities and an implementation approach for each:
1. Differentiating customers to enable deeper understanding of how to increase market share and product preference
2. Optimizing investment at the customer-segment level to improve brand promotion effectiveness and increase ROI across the portfolio
3. Lockstep execution of channel promotion with brand strategy
4. Opportunity responsiveness to increase agility by monitoring key market-driver metrics

Following is a closer look at each of these four improvement priorities.