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Goodbye, Willy Loman


The days of pharma sales reps going office-to-office with samples and brochures are done. These days, they need to turn their attention to payers, pharmacists, and consumers

Willy Loman, the protagonist in Arthur Miller’s classic play Death of a Salesman, would be proud that pharma’s door-to-door approach of selling directly to doctors has been around for more than a century. But the truth is, that selling approach is history. A few Willys may today still fan out to medical offices, armed with samples and brochures, trying to peddle prescription drugs-but those folks are a dying breed. They need to turn their attention to new targets-payers, pharmacists, and consumers. The marketplace has changed so dramatically that much of the decision-making power has shifted from doctors to consumers and payers. The era of the “blockbuster drug” is over; pipelines are far less robust; and the physician-focused marketing model has become obsolete. With the proliferation of health Web sites and direct-to-consumer advertising, patients now have more information than ever about diseases and treatment options.

Pharmaceutical companies need to respond to this new balance of power by overhauling their business model and determining how to address the needs and priorities of better informed, Web-savvy patients. Currently, drug companies spend more than 85 percent of their marketing budgets on promoting treatments to first time patients, and only 15 percent on other drivers of demand, such as diagnosis, refills, and compliance. In addition, more than 80 percent of sales budgets are still directed to physicians, even though an increasing majority of them distrust marketing representatives. (A recent survey by Oliver Wyman found that only 56 percent of physicians are willing to meet with pharmaceutical sales reps, and only 24 percent want to spend more than tweo minutes with a sales rep.) In order to fix this imbalance, companies should realign models to recognize the true drivers in the current economy-patients with continuing medical needs-rather than focusing on new prescriptions and new patients. 

Making Changes
In determining how the new model should evolve, it’s best to start with the customer. In the past, the customer was just the physician. Now, the customer is more broadly defined to include payers, pharmacists, and patients, as well as physicians.

Payers (primarily health insurance companies) have the greatest influence on drug utilization, through the use of formularies and benefit design. Payers focus on reducing the cost of care; as a result, pharmaceutical companies treat the payer community as an adversary in contracting and price negotiation. Rather than using price negotiation as the basis of relationships, pharmaceutical companies should build integrated teams of health economists and clinicians who can forge relationships based on improved outcomes.

Pharmacists are the last point of contact with patients, and thus can drive improvements in adherence and compliance. Pharmacists need better information on interactions and protocols to help educate patients and support physicians’ diagnoses and treatments.

Patients themselves are taking a more active role in treatment decision-making. They have been turned off by the high costs of prescription drugs, which many see as a hindrance to their daily treatment regimen. In addition, patients have more varied priorities and choices than in the past; they’re living longer and are more willing to try drugs to enhance or extend their lives. Pharmaceutical companies will have to rethink drug promotion based upon patient needs, not on the old definition of primary or specialty care. Changing the way drugs are passed to the consumer may help salvage dwindling trust in pharmaceutical companies.

Drugs can be developed and marketed based on four categories of patients’ needs and usage:
Life-saving drugs such as anti-biotics and some oncologics, are administered based on clinical information and protocols. Demand is driven primarily by a physician’s decision to intervene, so for drug companies, marketing and sales resources should remain largely focused on the physician.

Life-extending drugs such as statins are used to extend the lives of patients suffering from chronic conditions. Usage of these drugs is based upon disease understanding, diagnosis, and compliance. Marketing and sales resources need to target patients and payers for better disease and treatment understanding.

Life-enhancing drugs such as anti-inflamatories and anti-histamines relieve symptoms of serious, but not life-threatening, conditions. Marketing and sales resources should focus on patient education in treatment alternatives and the repercussions of not addressing symptoms.

Life-style drugs are used for meeting medical wants as opposed to needs. Treatments for hair loss, erectile dysfunction, and cosmetic enhancements are. Demand for these drugs follows a decision process that’s similar to other consumer products: The consumer calls the shots, with advice from the physician. Here, a much greater share of marketing spend should be directed at the consumer.

A New Era
A marketing strategy built around these four categories requires a much deeper and more nuanced understanding of patient priorities and behavior. In addition, more creative programs that involve patients in their treatment plans should be developed to augment direct sales and traditional marketing. Promising ideas include supporting enrollment in Medicare for elderly patients, and promoting “no pay copay” programs for people dependent on life-saving medicines. Instead of offering rebates or discounts to promote a drug to a health insurance company, pharmaceutical companies can use that money to offset copays for patients, thereby providing incentives for the first prescription with the ability to follow protocols and compliance programs. 

Because of the conservative nature of the industry in general, and the fact that it takes years to develop a drug pharmaceutical companies have been reluctant to make these changes. But the current economic climate calls for these shifts to be made.  As we move into a new era, the influence of various customer segments is growing, and regulatory scrutiny over marketing practices is increasing. These factors contribute to the industry arriving at an inflection point where true change is now a necessary component of survival, not just annual cost improvement.

Regardless of which plan a company adopts, drastic overhaul of the current sales and marketing system is in order. The 19th century sales pitch must finally catch up with 21st century medical innovations and patient know-how.


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