With the Supreme Court’s decision in June to uphold the Patient Protection and Affordable Care Act (ACA), life science companies gained access to 32 million potential new customers. While that’s worth celebrating, the party may have ended before it began. For pharmaceutical companies to realize the benefits of new healthcare consumers, and to keep the ones they currently have, they’ll have to make some substantial changes. And change is never easy.
Until 15 years ago, the model for marketing pharmaceuticals was akin to marketing pet or baby products, in that products were purchased by one person (the physician) and consumed by someone else (the patient).
With the emergence of DTC advertising in the late ’90s, this model changed. Suddenly, the patient was thrust into the spotlight as another key decision-maker, and manufacturers had to formulate ways to speak to them. But even then, most DTC advertising led back to the physician, echoed by a chorus of “Ask your doctor if brand X is right for you.”
Under the ACA, the target market has become more convoluted. The customer cannot be so clearly defined, and the criteria to satisfy these various stakeholders are disparate at best and conflicting at worst. The physician, patient, and payer audiences remain critical, but a platoon of other stakeholders has been added to the marketing mix. These include administrators, support staff, decision coaches, and purchasing groups, all of whom will be incentivized to achieve better outcomes at a lower cost.
To address these diverse groups successfully, pharmaceutical marketers will be forced to find ways to reach all of these audiences throughout their commercialization process.
Positioning and messaging
A solid positioning and messaging platform sits atop every successful commercial strategy. Prior to the ACA, pharma built its positioning platforms almost entirely on two dimensions—efficacy and safety. With the approval of the healthcare law, the conversation has moved beyond efficacy and safety to one of overall “value,” which reflects the ACA’s stated mission to deliver more effective care at a lower cost. Efficacy and safety are in no way diminished in importance, but they’re also not enough to carry a product’s positioning platform.
Pharmaceutical marketers must now create a value story around their products based on both clinical and economic outcomes. For example, the ability to connect the dots between fewer adverse events and fewer readmissions, resulting in lower total resource utilization with an attached dollar value will create a far more powerful story to stakeholder groups than data alone. Commercialization executives are realizing this and starting to incorporate health economics and outcomes research (HEOR) in their positioning and messaging matrix. Internal HEOR experts are now becoming integral members of the brand team.
Reform legislation calls for pilot projects exploring shared decision making (SDM), which creates a formal process that lets patients participate in making “informed choices” about elective procedures. Both the Mayo Clinic and Dartmouth Hitchcock Medical Center have already embraced the concept and have launched shared decision making centers where doctors and decision-making coaches use aids to help patients weigh options on intervention and testing.
To patients and physicians, “outcomes” mean more than economics and analytics. There’s a privilege and responsibility that comes with working in an industry that can advance human health and improve lives. Expressing outcomes through emotional drivers like quality of life will reach both caregivers and patients on a more visceral level.
There are relatively few industries where you can launch a product and know with virtual certainty how large your target market is, who the best customers should be, how and where you can reach them and what competitive products they’re currently using. Pharmaceutical marketers have operated under these favorable conditions for decades.
But the ACA creates scenarios that will force manufacturers to rethink their approach. Specifically, the move to tie financial incentives to a performance model rather than the standard “fee for service” model will necessitate a change in the marketing strategy and tactical approach for pharma manufacturers.
Guidelines for accountable care organizations are designed to integrate hospitals, doctors, and caregivers into a seamless entity to deliver cost-effective care. Providers will be rewarded for achieving clinical standards and performance benchmarks rather than procedures.
Adapt or die
Without question, the ACA will significantly impact how healthcare will be packaged, sold, delivered, and consumed. It also provides unprecedented opportunities for pharmaceutical manufacturers to access an enormous pool of new consumers. To capitalize on these new opportunities and to protect the franchises they’ve already built, pharmaceutical companies will be required to transform their thinking around long-held beliefs and basic assumptions, starting with identifying their customers and understanding their needs.
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Gregg DiPietro is Senior Principal at Back Bay Life Science Advisors. He can be reached at [email protected]