Spend Trends 2007: Hang 10 - Pharmaceutical Executive


Spend Trends 2007: Hang 10
DTC Hits Its First Decade

Pharmaceutical Executive

Digital Detailing

Big Spenders: New brands, more dollars for DTC
It used to be that pharmaceutical marketers thought doctors anxious to embrace the Internet or any form of electronic communication. But physicians' practices have truly changed. Not only are more doctors showing up online, but they're also taking handheld personal digital assistants (PDAs) into their office exam rooms right along with their stethoscopes and thermometers.

"The Internet used to be perceived as a consumer vehicle," says Peter Nalen, president and CEO of Compass Healthcare Communications. "But in the last two years, we've found 85 percent of healthcare professionals have broadband access and 62 percent of them use handheld devices." Nalen and others attribute this change to specific factors: Older doctors are finally following their patients' cue to go online for information, while newly minted healthcare professionals have grown up with the Web in medical school and now depend on it for information.

Until recently, pharmaceutical sales reps have outnumbered patients in many doctors' waiting rooms, but now pharma's "contact" dollars—in other words, detailing—declined for the second year in a row. (See "The Detail Drop.")

"We're seeing big cuts in professional sales-force spending because of a cutback in the 'arms race,'" says IMS's Kelly. "Pharmaceutical companies found they weren't getting their reps in front of doctors as frequently, and the quality of their message was coming down. You're starting to see an older, more knowledgeable, more clinically educated sales rep calling on doctors now."

David Coman
Most industry experts stop short of saying digital detailing has filled the space created by the slow-down. But all agree sales force reps are expected to work faster and smarter.

"The overall trend of pharmaceutical companies is to try to gain more efficiencies in their current sales force," says David Coman, vice president of global marketing for Dendrite International, a provider of sales, marketing, and clinical solutions. "There is a clear desire to get more out of the sales reps that are out there."

Certainly, digital tactics will help, but it is still too early to accurately predict how online detailing could impact the traditional feet-on-the-street pharma sales-force model. "We see e-detailing as being completely complementary," Coman says. "What we've seen and heard is that doctors are becoming a lot more sophisticated in seeking drug information in an alternative manner. Therefore, the more channels you can combine, the more you create a holistic marketing approach and a perfect supplement to the field sales-force representative."

Compass Health Care's Nalen says the decline in sales force spending doesn't just come from layoffs. "Companies are looking more toward outsmarting the competition as opposed to outspending them," says Nalen. "Some doctors like to work with reps, others don't. Some would rather attend an online 'dinner' meeting with a key opinion leader than visit a restaurant—and industry regulations say you can't spend more than a certain amount on dinner for a doctor anymore, anyway."


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