Big Pharma is slowly moving into the communications equivalent of the black hole: social media. While some companies are dabbling in blogs, others are posting videos to YouTube, and an intrepid few are writing text message–length posts on Twitter or Facebook.  Will this scattershot approach add up to a coherent strategy that delivers measurable results from both a commercial and reputational point of view? 

surveyed the field and found a range of modest programs that should eventually create big advantages for the companies that choose to engage in social media. 

But to really "socialize" means having a two-way conversation—something that pharma has generally been wary of. After all, companies face a high-risk regulatory conundrum in responding to customer inquiries regarding adverse reactions, off-label usage, or even general conversations in the blogosphere. The challenge is finding ways to engage customers without crossing the FDA. "It doesn't have to be as scary as companies think, because there are a lot of ways to control the message," says Google's Healthcare Marketing Manager Neha Patel. "As long as [pharma companies] are controlling the information they put out, they can play in that arena." 

So how can pharma make sense of it all? There are two schools of thought: throw everything against the wall and see what sticks, or wait and see what works and then create a "me too" version.  

Sounds like business as usual in pharma. 

The speed and scope of communication on today's Internet is truly amazing. For example, about a year ago, the keyboard player of a seminal folk-rock band The New Bohemians, was killed after he harassed a neighbor while taking Pfizer's smoking cessation drug Chantix—along with other, illegal drugs and alcohol, a mixture that is warned against on Chantix's label. The neighbor panicked and shot the keyboard player through the door.  

Within days, dozens of posts began springing up on blogs and discussion forums about Chantix causing depression and suicidal behavior.  Whether or not it was true, a few vocal citizens were changing public opinion. But Pfizer chose to not address the issues as they surfaced on the Internet, focusing instead on the traditional press.  In fact until recently, pharma has seemed at a loss about how to interact with consumers who communicate in real time through online social networks.  But finally, that's begun to change. 

"We looked at social media a year ago and noticed that the conversation was happening with or without us," says Ray Kerins, vice president, worldwide communications at Pfizer. "I don't think there's a question any more as to whether or not we have to get involved in this space. We have no choice." 

Kerins, who wasn't heading up Pfizer media relations during the Chantix crisis, says that the company is rolling out its social media in stages, and doesn't want to overstate its position. The first order of business is a new Twitter feed that's being used to push out corporate communications, including information about the pending Wyeth acquisition as well as its US discount drug program.  

However, Pfizer remains cautious about jumping on board with a new technology that might not even be around in a few months. In recent years, industry buffs have seen a number of major social media players whither and/or die. Friendster gave way to MySpace, which paved the way for the current giant Facebook. But who knows if Facebook will be around in a year or if it will be crushed under the weight of the "Next Big Thing?" 

"We need to be smart, and track technology as it goes. Instead of playing catch-up—which is where we are—it's important to figure out how we can be involved in a medium before it becomes a huge deal," Kerins says. "We want to have a real dialogue, and we want to do it in a way that is not us pushing, but listening and taking feedback and adjusting."  

The problem is that right now there is no structured two-way dialogue between pharma and its consumers. In truth, there is no real social media being done in the pharmaceutical industry. Almost every initiative, from YouTube to Facebook, is being done with the commenting component either turned off or heavily moderated. In an era where all forms of communication are seen as tools for pushing pills, there is a built in bias against experimenting with new technologies that are not specifically regulated – there is a high level of risk in the simple unknown.  

"One of the biggest challenges right now is changing the corporate mind set of Big Pharma," explains Ignite Health CEO Fabio Gratton. "Social media require a top-down shift in philosophy, as well as changes in the ground rules by which health and product information is disseminated. Individuals within these organizations are using new social media technologies with more frequency, but that doesn't mean the entire organization is ready to embrace these technologies and use them effectively. 

"Companies like J&J, with its blog and Facebook ADHD program, are slowly opening up the channel and doing the right thing by taking small learnings and turning them into company wide insights. This allows other brands to see new possibilities and adopt those types of processes into their own marketing plan," Gratton says. 

Some experts feel Johnson & Johnson has a natural knack for patient dialogue because of its massive consumer division. In the past few years, the pharma giant has launched a handful of popular blogs, as well as YouTube and Facebook networks that seem to be catching on better than most pharma social media initiatives. Its head of communications thinks the answer lies in the support of senior management. 

"We saw a growth in consumer-generated content, and we realized that we needed to get our heads around [social media]," explains Marc Monseau, director, corporate media relations at J&J.  

But J&J also started with baby steps. Its first blog was the Kilmer House History blog, put together by Margaret Gurowitz, a communications employee who was fascinated with the company's history. "Part of the reason we are able to do what we do today is because she managed to work very closely with our colleagues in the regulatory and legal departments to understand what the concerns were," Monseau says. 

As in most pharma companies, the major concerns of the J&J legal department were how to handle consumers making comments into an open-field text box, how to manage adverse event reports, and personal accounts concerning off-label use.  

"[Gurowitz] constructed a policy and process by which to manage [those issues]," Monseau says. "That sent us down a road where we could experiment with all the blogs we have today, as well as our YouTube, Facebook, and Twitter sites." 

In addition to legal concerns, there are still questions about how much value a pharmaceutical company can provide online. But at the end of the day, traditional advertising and marketing isn't going to draw a virtual crowd.  

"The initiatives that seem to provide value are where we are providing content that isn't branded, but is moving us toward giving people content they can use," Monseau says. 

For example, J&J has created a health network on YouTube to provide users with a bevy of unbranded health information. On Facebook, the company has created unbranded ADHD sites for adults to view information from experts, take self-assessment forms, and learn more about the disease.  

"The degree of uncertainty and lack of clarity prevents the prescription-based industry from doing a lot of things that a consumer product organization could do," Monseau says. "It causes a lot of apprehension in terms of how to create a campaign." 

That apprehension came to a head in April when FDA sent 14 warning letters to various pharma companies citing inappropriate online text/link advertisements. According to the complaints, pharma companies could not include a brand name in the same ad with a disease state without including risk/benefit information. The problem is that it's next-to-impossible to include a risk statement in an ad that's just three lines long. The assumption was that as long as the link led to a page with the risk info, the pharma company was in the clear. But FDA made it clear that pharma can't assume anything when it comes to social media. 

This was not an issue about social media, but actual marketing. However, if FDA is going to get testy over simple link ads, imagine how it will react to conversations about adverse reactions on Facebook. 

When approached about participating in a social media forum, FDA declined to reply. Rather, the agency issued 

 a vague e-mail about how it monitors the Internet for improper promotions. This suggests that FDA may not be ready with a strategy to address overlaps within the regulatory space and create a pathway for oversight of social media initiatives by the prescription industry.   

"Regarding whether specific proposed pieces comply with the regulations, we have a process in place that allows companies to submit their draft proposals for our advisory comments," FDA spokesperson Karen Mahoney states. "This allows them to receive our advisory opinion on the piece, and correct any regulatory issues with the piece before public dissemination." 

Alexandra von Plato, chief creative officer at Digitas Health, suggests that FDA should tackle the uncertainty head-on by creating a public forum or developing guidelines for social media. By allowing the public to interact with pharma and FDA, the agency could help foster understanding of the kinds of information pharma should be providing in the social media space.  

"Companies are experimenting with [social media], but it's like wading into unfamiliar waters," von Plato says. "You take a risk-averse, conservative industry and put them into a situation like that, and you're not going to get a lot of really meaningful conversations. The demand is there, but there is a barrier." 

The question is: How can pharma engage in social media in a meaningful way that conforms to the regulatory confines set forth by the FDA?  

"People need to have cooler heads," Kerins says. "Instead of complaining that FDA isn't giving [industry] guidance, there must be a level conversation. I've talked to the communications folks at FDA who say they are very interested in looking at this issue to create more certainty around what is legally appropriate and what is not. I can imagine that FDA is in a similar spot as us." In short, all parties stand to benefit from establishing some basic ground rules.   

Google has had discussions with FDA to create pharma-specific ad formats that will satisfy the concerns about fair balance and ensuring that the public is not misled. "Search advertisements drive the bulk of traffic across different search engines to company Web sites so they are still incentivized to working with us," Patel says. "If you build a site and you don't drive traffic there, then it's just going to sit there, and no one is going to find it." 

Rather than bury their heads in the sand or stick to only the safest forms of social media, a few companies are actually evolving their communications strategies to better employ these new tools. While everyone is playing the Facebook game, three pharma companies in particular are taking social media to the next level—and they're doing it through some pretty interesting methods. 

While pharma might not be able to reach out to consumers directly, it can use the Web to listen to patient conversations in order to gain insight into how people are dealing with diagnoses, and identify the support they need. Companies can then enhance existing programs or build new solutions based on what they discover.  

"We used to mostly talk about the drug, and now we help our clients talk about what people need to know about their diseases or how to find more information," von Plato says.  

Digitas is trying to make its clients stop thinking of the Internet as a promotional tool to sell products and messages, and to start using it as an opportunity to engage patients and use the technology for customer service strategies. The company told 

 that it has created a tool that automates the information gathering process. In layman's terms, Digitas uses manpower to find out where particular groups are residing online, and then uses a series of algorithms to automatically feed pertinent data into its own database.  

This might sound a little Orwellian, but Digitas insists it's a great way for pharma companies to sort through all the conversations and find information pertaining to adverse reactions, questions about treatment, or a particular disease state. "We've pulled out a good number of insights from these listening exercises, and the information filters back into RM programs and helps refine the language in email campaigns," says Sarah Larcker, senior manager of strategy analysis at Digitas. "For example, moms with children with asthma refer to inhalers as puffers. We want to talk to moms in their language, such that our messaging and the support we provide resonate with them." 

Novo Nordisk found an ingenious way to engage its audience on the social network site Twitter without having to rely on internal staff to constantly update the messages (or tweets). The company used its existing spokesperson, race car driver Charlie Kimball to send branded and unbranded messages about its diabetes drug Levemir (insulin detemir) along with his usual chattering about racing.  

"Not having any guidance to work from, we just wanted to make sure we did it in a way that was acceptable to the FDA," explains Ambre Morley, associate director of product communications at Novo Nordisk. 

Kimball was trained to never blend tweet with the brand name and the disease state, and all posts include a link to the brief summary. "Even though it's a stand-alone brand name in the tweet, we have to be compliant because it's associated with a page about diabetes," Morley says. "When Charlie tweets about a branded drug, it's because he just took his treatment—not because we are directing him to mention the brands." 

Morley says she would love to be able to design the user page to track statistics and gauge return on investment. But Kimball's Twitter is a one-way communication; followers can't respond to his posts or send any sort of information back to Novo Nordisk. Morley explains that this is not because of regulations, but more because Kimball is a celebrity and just can't respond back to all his fans. 

The biggest hurdle, according to Morely, was getting approval from Novo Nordisk's legal division to launch the site. "I asked everybody, 'Do you see any flaws or gaps in the program?' We definitely tried to do it right. Is it perfect? No. But as time passes, there will be more guidance from FDA." 

Articles

Features

Big Pharma navigates a regulatory minefield to reach social media consumers. It's anything but 'business as usual.'

An Open Conversation

I'm sure you've heard by now about the successful late-stage clinical trial of Benlysta for the treatment of lupus—a life-altering autoimmune disease that affects about 5 million people around the world and 1.5 million in the US. Benlysta is the first new lupus treatment in 40 years, and its novel mechanism has the potential to treat the disease more effectively than anything on the market.  

You also know that Benlysta's success did not occur overnight; nor did it come out of a single lab. Many pharmaceutical companies spent millions of dollars to find a new treatment for lupus. Benlysta is the result of a long process and a collegial but competitive race fostered by the publication of experimental data and driven by the free market. It is the work not of one company, but of one industry. 

Today, that industry is in trouble. Without support from people like you, and the opportunity to compete fairly and openly, the pharmaceutical industry will be forced to scale back its efforts to formulate new treatments. If stifled, companies will divert their limited resources to drugs that sustain them, not the health of their countrymen. And millions of Americans will suffer as a result. 

It doesn't have to be this way. The pharmaceutical industry can overcome incredible obstacles—but only if it is allowed the resources to do so. Regrettably, you have been instrumental in limiting those resources. 

In the last 34 years, your systematic bashing of the pharmaceutical industry has accomplished much. In 1984, the passage of the Hatch-Waxman Act laid the groundwork for the generic drug industry, a sector whose noble goals have been corrupted by an environment that ultimately suppresses development of new drugs. Later, by turning public opinion against one of the world's most important sources of medical breakthroughs, you helped inhibit research and innovation. Because of your negative rhetoric and subsequent legislation, Big Pharma has been forced away from projects that might benefit the greatest number of people, and pushed instead toward higher margin markets that ensure their own financial survival. As a result, the American people have not seen a new compound for lowering cholesterol in the last five years. They have seen only one new anti-hypertension drug and no new antibiotics. It's tragic that industry has not produced a single breakthrough in these categories for years. And it's tragic that Congress doesn't consider that a problem. 

If your committee held a hearing on the matter, you might discover that you, Senator Grassley, and the insurance companies have severely limited the funds for research and development in these key therapeutic areas. By pressuring doctors to prescribe generics, whether or not they are the best choice for the patient, you have created an artificial market force that places irrational limits on demand and stunts growth in the industry.  

In addition, your demand that pharma companies trim $63 billion from their collective budgets—so that you may reverse the 2006 shift of a subset of patients from Medicaid to Medicare—is not in the best interests of public health. Not only will the move slash industry resources for research and development during an  economic downturn, it will also drive up the cost of small-market drugs. 

Your plan to open the biologics market to generics competition is equally flawed. Research and development in cancer treatment is at a critical stage. Scientists are moving forward, but they need more resources—not fewer. Cutting off an industry revenue stream because you feel that the treatments for heart disease and cholesterol are somehow "good enough," is one thing, but stranding hundreds of thousands of cancer patients who are not responding to current treatments is quite another. We owe it to those patients to keep trying. But we can't do it without your help. 

I implore you, Mr. Waxman, to rethink these issues. Despite the fact that you've turned pharma into Public Bogeyman Number One, prescription drugs account for only about 11 percent of US healthcare spending. And most of that—about 7 percent of  the total—represents sales of generic drugs. In other words, the branded drug industry, the engine for innovation in life saving technology, now represents only about 4 percent of healthcare costs. I encourage you to ask your friends, family, and constituents if they believe that is too much. 

We have an opportunity to help restore American pharmaceutical innovation, and as the chair of the House Energy and Commerce Committee, you are in a position to play a critical leadership role. By encouraging innovation that will help patients and drive the economy, you can bolster your political legacy and help save millions of lives. 

 is managing partner of Flaum Partners and chairman, Fordham Graduate School of Business, Leadership Forum. He can be reached at 

Column

An open letter to Rep. Henry Waxman (D-CA)

Lemonade 101

Something is lurking in the depths of cyberspace that could impact the credentials of your brand. If you think it can't happen, think again. Last year a client approached us with an alarming issue that involved YouTube and a woman referred to as the "Cat Lady." 

Here's what happened (or, more appropriately, how the cat was let out of the bag): The client uncovered a YouTube video from a user who was making derogatory statements about their product. The "Cat Lady," labeled for her collection of cats that often made cameo appearances in her daily rants, was no ordinary user. She was passionate and angry, and drove our clients to a state of panic—so much so, in fact, that the situation became the focus of the marketing department. Neutralizing the Cat Lady's impact was of paramount importance.     

This situation raised a whole range of questions and issues that the client was unprepared to answer: How do we assess the impact of this user's statements? Who and what else is out there eroding our brand and sales? How can we assess global online sentiment toward our brand? What steps can we take to counteract negative brand sentiment that exists online? What steps can we take to leverage positive sentiments? 

With the emergence of user-generated content produced by any Joe or Josephine who happens to blog, Twitter, or participate in online forums, these questions are on the minds of companies in and outside of pharma. The universe of competing brands was crowded before, now it's populated with individuals who fight with companies for mindshare. But there's something you can do.   

The first step toward influencing Web consumers is keeping your finger on the pulse of online attitudes. In other words, find out the buzz around your brand and category so that you can answer questions like: How does a particular group consume media? Are there unmet needs? How do consumer attitudes about your product compare with your competitors? 

While controlled studies can provide answers to these questions, an online buzz assessment will be cheaper, faster, and more accurate. Here's a two-pronged approach to help get you started. 

Online conversations and user-generated content have made it easier than ever for marketers to tap into consumer attitudes. To dip into this rich pool of insights, here are some do-it-yourself techniques for assessing the buzz from your desktop. 

Take a few minutes to sign up for popular health Web sites and join discussion groups specific to your brand and therapeutic category. Keep in mind that blogs create conversations in the form of comments. Search for relevant posts and notice the discussions that sometimes emerge. 

 Remain vigilant of video activity related to your brand. 

More than 100 million Facebook users log onto the site at least once per day. Join groups and pages related to your brand and monitor their activities. 

 One of the most interesting monitoring tools out there, Twitter captures thoughts from a consumer's day-to-day activities (sometimes even while they are engaged with your product!). 

, a popular blog search engine, captured 133 million blog records through the end of 2008. Use Technorati to tap into a universe of opinions related to your brand/category. 

 RSS offers an easy way to aggregate all the search results described above into one, scan-able feed. Subscribe to RSS by looking for the word "RSS," or a small orange icon, after performing your searches. Activate those feeds, and within minutes you will have a custom subscription to consumer feedback on your desktop or mobile device. 

 If the prospect of doing any of this is outside of your comfort zone, ask a net-savvy administrator, intern, or co-worker for assistance.  

While do-it-yourself assessments can serve as your daily spark for surface-level insights, third party assessments will cast a wider net. Third party assessments come in two flavors: private communities and brand monitoring.  

Companies like Communispace can build custom online communities to solicit consumer feedback. The most popular purveyors of third party assessment—vendors such as MotiveQuest, TNS/Cymfony, and Nielsen BuzzMetrics—use proprietary technologies to scour thousands of blogs, forums, and social networks to find mention of keywords related to your brand. They then pull all this text into a business intelligence system where analysis can be performed. This analysis measures the extent to which people are discussing your brand, whether or not the sentiment is positive or negative, and answers questions you may have about consumer attitudes, behavior, and demographics.  

The end result? A bound report of statistics, consumer quotes, and recommendations that can be turned around in a fraction of the time required for more traditional research. 

Remember the Cat Lady? Well, after assessing our client's online scare, we immediately conducted a third party assessment on their behalf. We were relieved to find that neither the Cat Lady (nor her pets) had caused havoc for their brand. We did, however, identify several actionable ideas that could help their brand, or any brand for that matter, fit into a world where everyday people control the conversation. 

 If your buzz assessment was done correctly, you'll be able to measure the amplitude of influence across sites, identify those in need of your most immediate attention, and formulate the appropriate strategy. 

 Inevitably, you will find misinformation about your brand or category. Take the time to develop a "myths and facts" page on your branded site. Drive traffic to this new page by purchasing media on targeted pages, discussion areas, and keyword searches within your high priority sites. This is especially useful if your company is not ready to directly contribute to the discussions themselves. 

 Pharma companies are reluctant to join the latest online party. So while you watch and wait, channels like Twitter grow at rates of 1,500 users per month. In fact, Joe Twitter may have registered an account with your brand's name. Stay abreast of trending sites and register accounts under the name "mybrand," rather than being stuck communicating under an account called "the_real_mybrand" when you decide to dive in.   

 Many will advise you to "join the conversation" to describe engaging in the world of user-generated and social media. We advise clients that "joining the conversation" is not enough; the end goal in social marketing is to become known as a valuable contributor to the community. How to achieve this is another matter. But only by providing genuine value through blogging, commenting, Facebook, Twitter, and the like can you really influence the dialogue. 

Designate an in-house representative to serve as an online community outreach rep. They can not only monitor and participate in public communities, but also educate management to ensure that "the conversation" doesn't go on without you.  

 Every time a blogger clicks "submit" on a new post, they put the modern press into motion. Acknowledge influential bloggers as you would traditional media. Think of ways you can help them meet their goals, short of sending an envelope of cash. 

 An effective strategy for communicating with consumers is through other consumers. Recruit and train credible, passionate ambassadors who can get your message out in high priority groups. Create a community by conducting annual meetings, tapping into experiences, and asking for feedback. 

 Bloggers and online community members use a casual, style in their dialogues. It is important to match their tone. This is their discussion, and you can easily become the unwanted guest if you sound like a corporate sound bite. 

Social relationship marketing represents a return to a simpler time, when people who sold stuff belonged to the same communities as the people who bought that stuff. Back then, it was face-to-face conversations in close-knit communities that supported the markets for goods and services. And by all accounts, we're returning to that dynamic, where conversations make or break sales, and marketers care about Cat Ladies.  

For a moment, forget about Facebook, Twitter, and all technologies. Simply think about social marketing as human-to-human relationship building. After that you'll be ready to take the plunge into the user-generated information pool. 

 is chief technology officer at DKI. He can be reached at 

Columns

With the emergence of user-generated content, marketers have to keep up on the buzz around their brands and categories on the Web.

The Power of Joe

What’s the best managed pharma company?

Listen to the Industry Audit and Company of the Year Podcast

 Cast against a backdrop of global recession and pressure on the business model that is blurring the traditional strategic divide between generic and originator products, St. Joseph's University Professor Bill Trombetta presents our Eighth Annual Pharma Industry Audit, which this year digs deeper into current business trends by adding 11 new companies to the survey. 

The highlights: "Stealth Pharma" takes the Company of the Year honors, with newcomer Gilead Sciences posting a convincing win based on an impressive profit-to-sales ratio reinforced by strong management of its asset portfolio. In second place is Genentech, with an exclusive product franchise in oncology that continues to deliver premium prices. Meanwhile, the 2007 Company of the Year, Biogen-Idec, falls to third on the heels of a steep drop in one key metric:  shareholder value.    

The lesson from this year's Audit is that it's how you grow that counts. And the organic growth that drives long term profitability is in scarce supply among the industry's standard bearers, with four of the top 10 companies in terms of sales—Pfizer, Sanofi-Aventis, GSK, and Merck—offering negative growth to shareholders. Still, with its enormous cash hoard, Big Pharma has the capacity to buy what it cannot build, and the current capital crunch in biotech has opened the door to acquisition of products, pipelines, and expertise at bargain prices—suggesting that the major players in the industry are slowly repositioning for better days ahead.  

's Eighth Annual Industry Audit analyzes the 2007–2008 performance of 27 publicly traded companies that file 10-K or 20-F reports on an annual basis with the US Securities and Exchange Commission. As in past years, the audit includes a wider array of performance metrics than found in the standard financial and accounting statements. Drawing on this larger set of sources allows for a more meaningful picture of performance, analyzing such key metrics as enterprise value in proportion to sales—a mission-critical driver of future prospects that focuses on profitability growth through product and process innovation.  In addition to the 10-K and 20-F reports, the audit relies on proprietary and non-proprietary databases, as well as a broad array of secondary sources ranging from the business press to investor reports. 

The key difference in this year's audit is an expansion in the number of companies examined, including those listed in 

's separate survey of the 10 "stealth pharma" firms, last profiled in our June issue ("Stealth Pharma," June 2009). These include most of the emerging players in the biotech, orphan drugs and generics sectors, which were chosen for their high profile in the investment and scientific communities. Many are future leaders in the industry, with the scale, flexibility, and sophistication to fill the gaps exposed by the bureaucratization of Big Pharma brought on by two decades of consolidation.   

The Pharma Industry Audit is also uniquely positioned to demonstrate whether a company's business strategy is actually enhancing shareholder value.  If there's one metric that is the equivalent to food and water on a desert island, it's Enterprise Value. The market tempest of the past 18 months does carry a silver lining in that it forces investors to refocus on fundamentals. In the case of management, the measurement for success is simple: Do you create shareholder value or destroy it? For this reason, the audit gives highest priority to "Change in Enterprise Value" and "Enterprise Value to Sales." These numbers reflect a firm's market capitalization plus liabilities minus cash, or about what it would take to buy the firm on the open market. "Return on Assets" is another worthy exemplar of a commitment to long term profitability, and thus is given a significant weighting in the audit.  

 To accommodate the expanded sector profile, we've done some streamlining in the number of performance metrics, eliminating the earnings per share, price to earnings multiple, and R&D spend to sales indices. This allows a more focused examination of the indicators that matter most to investors.   

With only eight metrics, the weighting formula of the audit has also been changed, with three of the metrics (covering value recognition and asset performance) weighted at 3 and the remaining five metrics weighted at 2. (The prior division of weights was set at 3, 5, and 7.)  The audit retains the non-metric macro indicators on a scale and size that allow for viewing company performance in the context of overall industry trends.   

Thus, determination of the final standing for each company relies entirely on the metrics—but not all metrics are equal. For instance, if a company places 10th out of 27 on a metric weighted at three, it receives (10 x 3) 30 points. Each company's points across all of the metrics are then totaled for a final score, with the company receiving the highest number of points overall designated as the Company of the Year.  

Macro Benchmarks: Recession Spins Record Low Sales Growth 

No performance audit is complete without an overall picture of the macroeconomic environment that all pharma competitors must confront. Medicines have been a key casualty of the worsening global economy, particularly as public budgets face the strain of higher unemployment and the increasing costs of benefits in aging societies.  

In contrast to previous downturns, the pharma industry has proved not to be a "safe haven" against recession. The IMS forecast for 2009 indicates the global recession will push growth in pharmaceutical sales to less than 3 percent (topping $750 billion), down from nearly 5 percent in 2008.  

A significant pullback has been underway for several years in the US market, with sales growth for this year pegged at around one percent, or approximately $300 billion, down from 3.8 percent. The steep shortfall in demand has been accompanied by stiffer resistance to price increases among US payers, with prescription unit growth forecast to rise by only 0.9 percent over 2008.  

Three key conclusions can be drawn from analysis of the macroeconomic environment. First, the industry is no longer immune to broader structural pressures confronting the global economy and can be expected to be a target for cost-cutting as the size of the health sector increases in proportion to the overall economy. Second, the US is no longer the growth driver for the industry worldwide, a trend that could be accentuated if comprehensive health reform legislation is enacted later this year. Third, the capacity of the industry to exert pricing power against a consolidating payer base is shrinking fast, suggesting that future growth is going to depend on a much more robust value proposition for products competing in crowded therapeutic fields.  

With this as the essential context, let's review the details driving results for the 27 surveyed companies.   

Figure 1 ranks our "Heaven 27" from highest dollar sales to lowest dollar sales in 2008.  The gap is significant, from Johnson & Johnson, the poster child for decentralized diversification, at $63.8 billion; to Endo, a specialty drugmaker focused on pain management, at $1.3 billion. This metric illustrates how the industry's current "Big Five" are in fact a statistical anomaly, considering the more modest size of most of the companies in the audit. Of the "Stealth 10" now added to the survey, only one—Teva, at $11.8 billion—has revenues of more than $10 billion.   

Much more important than total sales is the capacity to grow revenues, particularly in the current ravaged economy, with its fiscal deficits and steep budget cuts for reimbursed medicines.  Figure 2 illustrates the maxim "grow or die." In a hostile demand environment, achieving real growth based on customer acceptance of value is no easy feat. Mylan Labs, a leader in generic and specialty drugs, snared the number one spot in revenue growth for 2008—and by a large margin, outpointing runner-up Celgene nearly two to one.   

Mylan's success highlights the importance of 

 you grow. The company has a global strategy for generics, and is building a strong presence in 13 of the largest emerging markets to leverage its number two position in US scrips.         

By contrast, the industry's historic, high profile symbols of global innovation—Pfizer, Merck, GSK, and Sanofi-Aventis—each scored negative growth in 2008. Schering-Plough was the notable exception among Big Pharmas, ranking number three with a 45.7 percent surge in revenue due to a strong international market presence and new product introductions. This ranking indicates how important the planned combination with Schering-Plough is to Merck in expanding its therapeutic portfolio and geographic footprint outside the US. 

Metrics and Weights for Evaluating Company Performance   

Nevertheless, Big Pharma's reliance on mergers and acquisitions provides little evidence that it will serve as a sustainable alternative to organic growth. The attraction is capturing a viable product portfolio and lower expenses, but the flip side is the deadly bureaucratic confusion that diverts attention and effort from what really counts.  This is the focus on the customer rather than your fellow combatants in the struggle to create a new internal hierarchy.  You can count the mergers that are truly a strategic fit, and hence worth risking the disruption in an intensely human business, on just one hand—and you won't need all your fingers.  Pfizer's big move in bidding for Wyeth is not (in the opinion of many analysts) one of them.  

Enterprise value and change in enterprise value

 As noted, this is the Holy Grail of metrics: Companies either create shareholder value or destroy it. Similar to absolute level of sales, the absolute value of an enterprise is a function of the sales level. We would expect a firm like Johnson & Johnson, at $64 billion in sales, to have a much higher enterprise value than a firm like Cephalon, with only $2 billion.  Figure 3  shows the enterprise value ranking of our firms. 

Change in Enterprise Value from 2007 to 2008 

provides a snapshot of which of our 27 companies have their best days ahead. (See Figure 4 For this reason, Change in Enterprise Value is weighted at 3, as over time the Industry Audit has shown that it is a nearly foolproof indicator that shareholders are getting what they expect from the stock.  

King and Mylan sport the highest shareholder value creation, at 140 percent and 137 percent, respectively, with Genentech and Teva next in line. Again, Schering-Plough is the only Big Pharma that did not destroy value for shareholders from 2007 to 2008. Among the biotechs, Cephalon and Amgen did relatively well for shareholders as well.  The rest of the 27 companies contributed to the erosion of shareholder wealth found throughout the equity markets in 2008. Forest Labs came in last in this metric, with a 52.3 percent reduction in shareholder value for the year due to an increasingly fragile position for its in-patent portfolio.  

The second metric weighted at level 3 is 

. This metric normalizes the differences in scale due to absolute dollar revenue. Figure 5  places each of the 27 surveyed companies, and indicates which direction the ratio went from 2007 to 2008. Success in this metric is harder to achieve in a climate marked by intensive pricing pressures, economic disarray, and significant regulatory concerns about safety and risk. Only Amgen, Genentech, Teva, and King were able to wrest an EV to Sales increase in 2007–2008. 

 is shown in Figure 6 and makes for our second 3-weight metric. Celgene is the clear winner in this metric due to the fact that its shares have been heavily discounted despite its strong therapeutic franchise in multiple myeloma, where it enjoys an unusual amount of pricing freedom due to a state-of-the-art treatment.   

This metric is also an indicator of market perceptions that firms are on the upswing—or, alternatively, that their best days are behind them. The higher the ratio, the greater the likelihood that a firm's growth will outpace its peers in both sales and profit.    

 Figure 7 shows gross margin for each firm, along with an indication of increase or decrease in 2007–2008. Gross margin reflects a firm's pricing power, in terms of the ability to get price increases or at least maintain prices. The lesson behind these numbers is: the higher the gross margin, the better.  

Eight of the 27 audited companies show a decrease in gross margin from 2007, a trend reflective of the capacity of payers to dictate terms on pricing. Biogen-Idec displayed the most aggressive pricing prowess in the critical US market, allowing it to reach a gross margin of over 90 percent—highest of the group. This is largely due to its therapeutic dominance in areas of high medical need, like MS.  

Figure 8  ranks companies on the basis of gross margins for 2008. As noted, this ranges from Biogen-Idec's 90.2 percent down to the "stealth generic" off-patent companies with limited protection on prices. Endo, with an impressive markup ratio of 78.8 per cent, is the notable exception here—a consequence of the company's position in generics that are difficult to manufacture. Allowance of a regulatory pathway for biosimilars in the US may even out this trend somewhat.  

High profit margins are a function of good management, with particular attention paid to cost control. This in turn drives the larger financial performance measure of EBITDA: earnings before interest, taxes, depreciation, and amortization. In essence, EBITDA determines the level of profit against sales. The higher this ratio, the more impressive a firm looks to shareholders and the investment community. Figure 9 shows Gilead Sciences at a very impressive P/S ratio of 52.6 percent. 

More important, the ranking indicates that generics companies can build an alternative future from that of commodity producers condemned to a life of pumping volume sales to accommodate razor-thin margins. Producers are staking out a role in higher end specialty medicines and aggressively engaging around biosimilars, which if approved by regulators can command higher price points. Three key generics companies—Endo, King, and Teva—are doing better than half of the 27 in terms of profitability. Endo itself posts a profitability performance superior to Big Pharma players like Wyeth, Merck, Lilly, Johnson & Johnson, Abbott, and BMS.  

Figure 10 sets the benchmark for company productivity in managing assets. It shows how a firm's productivity changed from 2007 to 2008 in terms of sales revenue divided by the assets held on its books. The higher the ratio, the more productive a firm is over the course of the year. Roughly half of the 27 companies in this year's audit posted modest improvements in 2008 over 2007. This metric is unique in that the company can produce results from actions it can initiate and execute under its own control. This should be a key management priority now that it's harder to wrest profits by unilaterally raising prices.  

Ranking of overall productivity is highlighted in Figure 11 with Novo Nordisk in the top spot. Its .900 ratio means that for every dollar Novo Nordisk invests in assets, it generates 90 cents in revenue. Hence, there is another way to generate profit: by not only focusing on margins, but also on how well assets are managed. 

 When we combine Profit to Sales with Sales to Assets, we get a very important metric: Return on Assets. The higher this ratio is, the more impressive a firm's performance.  Figure 12 shows Gilead and GSK at the top of the ranking, reflecting stellar management of assets to maximize profit margins. But it's profits, of course, that drive the returns to shareholders, which is why Gilead Sciences, paced by its emergence as the industry leader in advanced HIV therapies, has been an attractive purchase for institutional investors for some time.  

 How productive is the company's work force? Figure 13  highlights this increasingly important metric. GSK, Abbott, Genentech, Teva, Novo Nordisk, and Cephalon were the laggards, posting lower sales per employee in 2008 against 2007. 

Figure 14 shows firm employee productivity against sales for 2008. Gilead once again is on top with an impressive $1.53 million in sales per employee—roughly three times the ratio for industry giants like Pfizer and Johnson & Johnson. A key question for Pfizer is whether more cost-cutting from job reductions will yield increased productivity per worker employed. The record from past mergers suggests that payoff will take years to accomplish.  

Selling, general, and administrative expenses

 This is a metric much in vogue in the current era of declining demand.  With industry revenues more or less flat, management needs to scrutinize its overhead in terms of selling, general, and administrative expenses. Figure 15 compares the extent that a firm either increases or decreases its SG&A compared to whether its sales revenue increased or decreased. In general, it is better for a firm to increase its sales more than its overhead even if the latter is necessary to help establish a new medicine for success in the market.  SG&A increases higher than sales increases are not good for a company, particularly over the long term. 

Bill Trombetta expands his annual guide to stellar performance with the "Heavenly 27."

Industry Audit 2009

As budgets tighten and promotional decisions require more scrutiny, now is the time to ensure that marketing programs deliver significant value for your brand. Vouchers and samples need to do much more than just encourage a patient's first use of a product, and consumer relationship marketing (CRM) programs have to expand beyond a one-way dialogue between the pharmaceutical manufacturer and the patient via segmented messaging. 

One of the core challenges to patients' understanding of and adherence to medication regimens is lack of time for dialogue with physicians during office visits. A 2007 study conducted by Tai-Seale showed that as a result of the high volume of patient visits per physician, the average length of a doctor's office visit is just 15.7 minutes, with only 5.3 minutes spent on a primary complaint. A 1999 AMA study revealed the average patients seen per week per family physician to be 122.9, which works out to at least three patients per hour for a 40-hour work week (not including the hours spent on the administrative tasks needed to run a practice). And that number has probably gone up in the last 10 years. 

Patient feedback programs help to supplement patient–physician dialogue by providing a tool to facilitate communications between office visits. Patients complete surveys about their experiences with treatment regimens at set intervals (timing dependent on the condition being treated); the resulting reports give physicians a view of their patients' treatment challenges, including identifying any barriers to medication adherence. The physician and patient can then work together to meet those challenges and strive toward more successful treatment outcomes. By continually checking motivation and confidence levels through surveys, as well as verifying patient understanding about a medication, potential barriers can be  circumvented.  

These programs can also help develop positive relationships between the pharmaceutical industry and physicians. Physicians appreciate getting new information about their patients, and will typically incorporate reports into their patients' medical records. In addition, the content of the patient feedback reports can rapidly accelerate physician understanding of a product, thereby increasing confidence in that product and leading to subsequent prescribing. 

More than a year ago, a large pharmaceutical client approached a major mental health category brand launch with a determination to deliver intelligent, timely messages to consumers, patients, and physicians. Using a Web-like communications platform for patient starter kits, a CRM program, vouchers, and an integrated patient feedback program throughout, the campaign was designed to create a more significant and meaningful dialogue between patients and physicians. The resulting integrated, cross-channel program paid off with measurable benefits for the marketing team, and more importantly, for the patient and the physician. Some of the program's benefits included: 

» More than 20,000 healthcare providers have received feedback reports on their own patients

» On average, about 30 percent of patients enrolled in the CRM program chose to also join the feedback program 

» One of the largest patient feedback databases in the US, leading to numerous publications 

» Positive ROI, with latest results projecting more than 17:1 annual ROI 

» Significant increase in new prescriptions, ranging from 13 to almost 40 percent when matched against a control group			

In order to make the integrated promotional machine work, the program needed participants. Thus, it was critical for the marketing team to develop in-office promotional pieces (such as a patient starter kit) that offered clear messaging coupled with an invitation for patients to join the communications program. It was especially important that the program offered patients key information about the disease state, and what their treatment expectations should be. 

A trial coupon in every patient starter kit required activation and served as an invitation to the CRM programs. However, the marketing team decided early on that they wanted to go one step beyond the typical CRM approach by allowing patients the ability to communicate with their prescribing physician between office visits. Their reasoning? The integrated coupon program supported brand messaging and accelerated the trial and adoption of the medication. By providing patient starter kits that included a "free trial offer" coupon and an opportunity to participate in an integrated CRM/patient feedback program, the impact of a traditional marketing program was significantly amplified. 

In this case, patients were given the opportunity to enroll in a patient feedback program when joining the brand's CRM programs. These provided ongoing support, patient education, and refill reminders, as well as the opportunity for patients to participate in surveys about their medication treatment experience. 

Patient surveys close the loop of communications between the patient and physician. Upon completing each survey, a patient's survey response is mailed back to their prescribing physician (in the form of a graphical clinical report), providing the physician with a richer understanding of his or her individual patient's overall treatment experience. In the particular campaign we launched, targeted education and individualized feedback improved patient understanding. It also provided physicians with information that their treatment decision resulted in a positive treatment outcome for their patients.   

Based on a 2006 survey of physicians participating in InfoMedics patient feedback programs, as well as anecdotal evidence over the past decade, we have found that physicians typically file these reports in their patients' charts (more than 90 percent of the time in some cases) for future discussion with them during the next office visit. In this particular program, a similar version of the report was configured for patients and mailed at the end of the program, along with additional savings coupons for medication refills. The consumer version of the report served as a discussion guide and supported communications with their physician during their next office visit.  

In today's pharmaceutical marketing environment, it's more important than ever to think "out of the box" and consider options that provide opportunities to achieve growth targets for our brands. The example of this brand's launch and continued success provides a positive illustration of how the power of one brand can initiate a connection with new patients and their physicians by offering free trial coupons in a patient starter kit. By integrating this with comprehensive CRM activity and a patient feedback program, it's possible to deliver improved results at both the patient and physician levels. Furthermore, it's possible to deliver ROI that every brand team wants to share with their senior management team. 

 For the client, this means even better news: The cross-channel communication platform is now poised to deliver the brand's message as it evolves throughout its life cycle. As the product matures, new competitors emerge, or physician strategies change, the integrated delivery platform can be effectively deployed to reach patients and physicians, reinforce brand messages, monitor satisfaction, and stimulate the ongoing flow of communications. Survey questions can be modified to solicit patient experiences and challenges throughout the product life cycle. Additionally, the brand is building a credible database of aggregate, blinded patient experience data, which not only provides them with an ongoing source for real-world insights but can also be published in appropriate journals for general professional awareness. 

So what are you waiting for? Rev your marketing performance with a little help from the double whammy of CRM and patient feedback programs.  

is an account director for InfoMedics, Inc. He can be reached at 

Close the loop between the pros and the consumers by integrating patient-physician communications into pharma brand planning.

Maximize Your Marketing Spend

By now it's common knowledge that the future of pharma sales is the global marketplace. As a result, industry is running hard to develop new vaccines and therapies to combat infectious diseases that plague millions of people around the world. Public and private funding has increased over the last decade, bolstering healthcare systems in less developed countries and improving treatments for malaria, tuberculosis, and neglected tropical diseases.  

Pharmaceutical companies are now supporting public–private partnerships (PPPs) to combine resources for medical product development. However, the international financial crisis has squeezed resources available for these efforts. US-based initiatives have suffered from delays in appointing a permanent director for the Agency for International Development (AID), and have been hampered by the specter of cuts in foreign aid. While there's a growing list of promising drug and vaccine candidates for neglected diseases, stiff competition among donor agencies and multiple PPPs might actually hinder success.  

The slowdown in pharma sales growth in the industrialized world is encouraging manufacturers to expand their presence in emerging markets and adjacent developing nations. When announcing his company's quarterly earnings in July, GlaxoSmithKline chief executive Andrew Witty highlighted GSK's reduced reliance on "white pill/western market" sales, and pointed to rising investment in high growth regions. In addition, Pfizer has established an emerging markets business unit to build sales in Brazil, China, India, Mexico, Russia, and Turkey, and Sanofi-Aventis has made a series of acquisitions to expand its drug and vaccine portfolios in emerging markets. Other firms are taking similar tacks. 

Companies also are contributing unused patents and expertise to combat obscure but lethal conditions. In June, Merck announced a collaboration with the Drugs for Neglected Diseases Initiative to provide propriety information on drug candidates for Chagas and leishmaniasis. Roche is working with the Institute for OneWorld Health to develop new treatments for diarrheal disease; the treatments are based on leads arising from Roche's cystic fibrosis research.  

FDA is also doing its part to facilitate development of new therapies for these conditions—initiatives that may expand under commissioner Margaret Hamburg, who has a strong background in public health and gained experience with TB control as head of New York City's public health department in the 1990s. The agency has been encouraging research on new TB treatments to counter a resurgence in multi-drug resistant (MDR) and extensively drug resistant (XDR) TB strains. Current therapies are decades old, involve lengthy treatment courses, and result in poor compliance that generates resistant TB strains.  

An FDA advisory committee meeting in June supported use of early end points (sputum bacterial counts) in studies on drugs to treat MRD TB, an approach that could accelerate development of compounds like the one being tested by Johnson & Johnson's Tibotec subsidiary with support from the Global Alliance for TB Drug Development (TB Alliance). An FDA workshop in July delved into noninferiority study designs, combination therapy regimens, and missing data problems for drug-susceptible TB. 			

Because there will never be enough donor money to fund all desired clinical research, the global health community is testing the stimulus power of market-based "pull" mechanisms, such as Advance Market Commitments (AMCs), which guarantee prices for new vaccines and drugs with low profit potential in the West. This approach is being used to fight malaria by subsidizing the purchase of artemisinin-based combination therapies (ACTs) that are effective, but too costly for most third world health systems. The Global Fund to Fight AIDS, Tuberculosis & Malaria recently launched the Affordable Medicines Facility–malaria (AMFm) to make ACTs available in Africa and Asia at nominal cost. The subsidies apply to fixed-dose combination ACTs, and aim to drive older, ineffective products out of the market.  

Another AMC project supports development of new pneumococcal vaccines that can protect against pneumonia and other diseases that claim millions of lives each year. A broad donor coalition has committed $1.5 billion to guarantee a $3.50 price for pneumococcal vaccines suitable for Third World use, encouraging pharma companies to invest in research and expand manufacturing capacity for more effective products. 

FDA's priority review voucher program offers another inducement for manufacturers to support R&D on neglected diseases. The program provides a voucher to sponsors seeking approval of a treatment for one of 16 neglected tropical diseases. The voucher is good for a priority six-month review (instead of the usual 10 months or more), which should be highly valuable to any company seeking market approval for a new medicine with large sales potential. The first review voucher was recently awarded to Novartis in conjunction with approval of its anti-malarial product Coartem. The move drew some criticism because the drug already was available in most of the world. But this decision gets the program going while FDA develops guidance and weighs whether to expand the list of topical diseases that qualify for review vouchers. Several manufacturers are poised to file applications they hope will produce priority vouchers they can use or sell. 

Vaccines to prevent infectious diseases are the holy grail in fighting Third World diseases—and there's been some good news on that front. The PATH Malaria Vaccine Initiative is launching Phase III trials on a promising malaria vaccine developed by Glaxo, and the Aeras Global TB Vaccine Foundation has several drug candidates in early clinical trials. Rotavirus vaccines recently received a strong push from a WHO recommendation to include the product in national childhood immunization programs.  

Vaccine development also is strong in the US, as new preventives for HPV, rotavirus, and shingles hit the market last year, and several important products are currently in the review queue. The agency anticipates a slew of license applications in coming months, which could be a problem if they coincide with filings for the new pandemic H1N1 (swine flu) vaccine that manufacturers are testing and producing as fast as possible. The US expects to spend some $8 billion for nearly 200 million doses from Glaxo, Novartis, Sanofi Pasteur, AstraZeneca's MedImmune, and Australia-based CSL Ltd. Other nations are mapping similar plans. (See "Speeding Flu Vaccine to Patients".)  

This escalation to meet demand for flu vaccines is a bonanza for vaccine makers. Sanofi, Glaxo, and others are opening new manufacturing facilities in the US and abroad while foreign manufacturers—such as Sinovac Biotech in China—are gearing up production, and a number of small biotech firms are developing new vaccine production and testing methods. Novel antigens are in the works, and vaccine makers are moving forward with long-discussed cell-based manufacturing technology.  

Yet despite significant increases in funding for global health over the past decade, international programs now face major budget cuts. A May 2009 Institute of Medicine report recommends nearly doubling US financial commitments to global health to reach $15 billion a year by 2012, but that's not likely to occur. The Obama administration has proposed a $63 billion, six-year global initiative to combat AIDS, as well as TB, malaria, and other Third World health problems. That's less per year than Bush's $48 billion, five-year funding plan for PEPFAR (the President's Emergency Plan for AIDS Relief), which has been praised for slowing the growth of AIDS in Africa and other poor nations.  

The funding decline is squeezing resources at public–private partnerships just as they are poised to harvest rewards from over a decade of research. A 2007 Dalberg study estimates that full testing and registration of those projects in PPP pipelines would require $8.3 billion in funding, but that less than $1 billion is available. One solution may be for newly industrialized nations, such as China and India, to invest more in infectious disease research that would benefit their populations directly.  

's Washington correspondent. She can be reached at 

Washington Report

Pharma steps up development of new vaccines and treatments to combat Third World diseases

Going Global

, the pharmaceutical industry's US sales forces has declined 10 percent from a peak of 102,000 representatives in 2005—and an additional 20 percent decline is predicted by 2015. Couple this with the fact that more physicians are restricting access to sales reps, and you've the makings of a disaster. 

In the near term, pharmaceutical companies can neither afford the same level of sales support, nor expect the same return on their sales force investment. The outcomes will be cost reductions 

 revenue reductions. The bottom line is that fewer sales reps equals fewer sales. 

To meet these challenges, the industry must leverage new approaches to building relationships with physicians, using non-personal promotions to offset the financial impact of changing industry dynamics. The good news is that physicians support this approach. In SDI's ePromotion Annual Study 2008, 67 percent of physicians surveyed have a positive attitude toward ePromotions, and 73 percent considered an ePromotion to be equal or superior to a face-to-face promotion.   

Pharmaceutical marketers have to understand the needs and behaviors of their key audiences in order to build services, messages, and non-personal promotion programs that are relevant and valuable to their physician customers. Physician relationship marketing (PRM) is about delivering the right message to the right customer at the right time.   

Until recently, identifying customers was relatively easy. Doctors were the decision makers that drove product demand. Yet pharma companies realized they were losing billions each year through patients' poor adherence to medication guidelines.   

In response, pharmaceutical marketers adopted consumer relationship marketing (CRM) strategies and tactics. Long practiced by retail, finance, and other industries, CRM was adopted by the pharma industry to advance its consumer marketing objectives. However, for pharmaceutical marketers, the overall impact of CRM has been small; they have not effectively leveraged CRM to change their direct-to-consumer business model. In fact, 80 percent of consumer-directed marketing budgets are still focused on general advertisement and acquisition efforts, such as print and TV campaigns. CRM has been used to generate incremental revenue gains around adherence, but overall, marketers have not made adherence or CRM a priority.  

PRM, on the other hand, has the opportunity to revolutionize the physician marketing model by re-prioritizing of direct marketing to physicians. Today, physicians are bombarded with multiple, conflicting messages for the same brand. PRM gathers brand insights, identifies physicians who have a higher propensity to respond, and executes precise tactics to leverage data and knowledge. 

Successful PRM is rooted in understanding the customer. It's not about using lower cost channels to deliver the same general, often ineffective, messages. Effective PRM accounts for the needs of specific, targeted physicians. It involves creating personalized messages, content, and services. In short, it's about being relevant by leveraging knowledge gained through PRM analytics, which can be categorized into three broad areas: data management, analytics management, and performance management.    

Data management is a process that capitalizes on quantitative techniques to identify all valuable data that can be used. Data is the pharmaceutical marketer's analytic fuel. It helps create a 360-degree view of a physician by including details such as: 

» Promotion history, both personal and non-personal

» Practice and institution affiliation data

» Demographic, socioeconomic, and profiling data

» Behavioral data (i.e., prescription-level data) 

Pharmaceutical marketers often do not capture this data, and whatever is captured usually exists in separate databases. The first step should be creating a data infrastructure and process to capture, evaluate, and integrate this data.  

At one large pharma organization, physician data existed in highly disparate systems: One database contained physician/practice identification data; another contained physician monthly Rx-level data; another contained managed care plan data at the geographic level; and yet another contained sales rep primary detail equivalent (PDE) and physician-targeting data. Little historical non-personal promotion data existed; what did exist was stored with the data vendor. 

To improve data visibility, the pharma company evaluated its data, plus other data of similar types, and determined which data were valuable. The company then built a central marketing database to house the data so that it could be evaluated at the physician level. The new system created, in effect, a 360-degree view of each physician.  

Analytic management leverages the tools and techniques that generate marketing insights. These insights help: 

» Define the value of each individual physician to your brand(s), based on criteria such as prescription behavior

» Track each physician's behavior across all touch points, including personal (sales rep details) and non-personal promotions (such as direct mail and e-mail)

The prescription for better pharma marketing: Gain understanding of your physician-customers by leveraging key analytical insights.

Pharmaceutical Executive-09-01-2009

An Open Conversation

Lemonade 101

The Power of Joe

Industry Audit 2009

Maximize Your Marketing Spend

Going Global

Relationship Building

An Essential Bed Check

A Different World

One Pill Makes You Small