Marketing: Medical Devices vs. Pharma

June 1, 2012

Pharmaceutical Executive

Pharmaceutical Executive, Pharmaceutical Executive-06-01-2012, Volume 0, Issue 0

Understanding the differences between drug and device marketing can make or break the brand's promotional activities.

If you've spent any time working in the device industry, you've probably heard pharma marketers make premature assumptions about what it takes to market a medical device. It's true that drugs and devices have things in common—both are regulated by the FDA and many devices are prescribed for patients—but that's where the similarities end. Pharma marketers will need more than a tried-and-true approach to drug promotion in order to succeed in the device space.

Amy Smith

If you're willing to understand the nuances of device marketing, however, you can have a lot of fun and create a killer brand. But beware. The secret is in the sauce. Great creative for a device can be the foundation of a brilliant campaign strategy, but if you get the creative wrong, you can bet it will do more harm than good.

In this article, we will examine the variances between device and drug marketing, and how specific differences translate into opportunities, strategies, and approaches.

Four key differences

By understanding the key differences between device and drug promotion, marketers can maximize their effectiveness with customers.

Practice makes perfect. Training is a must with devices. Since healthcare professionals need to be well-trained to operate with confidence, marketers can emphasize this in their sales efforts. Training can be a positive selling tool, allowing a field rep to build invaluable relationships with healthcare professionals through recurring visits. Despite media reports about drug reps getting bounced from practices more frequently these days, the time they spend with docs is holding steady, demonstrating the value of what they bring to physicians.

There are a number of ways that marketers can leverage educational opportunities around devices. Here are a few:

» Create training programs for both the field and healthcare practitioners (and even patients).

» Weave marketing messages into training programs to maximize marketing goals.

» Consider additional education, or "advanced certification," for various levels of device capabilities training.

One decision-maker, multiple targets. Unlike drugs, in which one doctor writes a single prescription and more or less controls the sale, devices require a juggling of many different decision-makers and influencers, from nurses to dieticians to purchasing agents. This means your messages must reach and target the complete spectrum of touchpoints throughout the sale.

As an example, take negative pressure wound therapy devices. To get this device to—and on—a patient, a physician must first write a prescription for it. A nurse then places the device on the patient. If the nurse, a major influencer, feels this device isn't as easy or effective as another treatment, she may convince the physician to change the prescription.

Cost, of course, also plays a huge part in the selection process, so a different set of messages must be tailored to those people who negotiate costs and determine brands. At the treatment center, a hospital materials manager negotiates price contracts for preferred brands, determining which are stocked and available. But once a patient is ready to leave the hospital, a case manager can influence whether that brand will be switched at discharge.

Compare this with a pharmaceutical product, where the equation is simple and touchpoints are few: doctor writes script, patient fills script. With devices, if you overlook a single touchpoint, you could risk losing the sale.

For this reason, device marketers have to develop a locked-and-loaded targeting matrix with comprehensive objectives, message points, and tactics depending on the audience. With multiple audiences, program-based selling can be very effective—going beyond the fundamentals of simple launch branding.

Give your doctors/facilities an "edge." What can a device do that a drug can't? It can give healthcare professionals a competitive edge. Once surgeons or hospitals are trained and equipped to offer a specific diagnostic machine, surgical system, or implant, devices can offer something unique that the practice next door cannot.

To hone in on these advantages, let's first take a broad look at some of the complexities of device reimbursement. When implants are reimbursed, the process is not as straightforward as with a drug schedule.

First, there are numerous cost codes, each reimbursed at different rates. For example, there's a cost for the device itself (HCPCS code), a cost for someone to put the device in the body (CPT code), and a cost for the facility resources surrounding the procedure (ICD-9 code). Each of these audiences has to be addressed in your communications.

Second, not all implants are covered by managed care. Women who want breast implants, for example, generally have to pay out of pocket. Similarly, advanced technologies like prosthetic limbs are only partially reimbursed, so a patient who wants to upgrade from the basic model to a more advanced device may be required to purchase additional coverage. So cost must be taken into consideration.

Third, equipment usually isn't directly reimbursed by managed care at all. An outpatient clinic or a hospital might use a capital expenditure budget or operational budget to purchase the device, with the intent of recouping that cost through procedural fees or diagnosis-related group (DRG) reimbursement. Because equipment is considered an investment in a medical business, such as a private practice or an inpatient facility, messages must target purchasing agents, and offer a sound rationale for the investment.

Implants and equipment can, however, deliver major advantages to healthcare providers and facilities by generating better outcomes and/or unique approaches to, or treatment in, their local areas. These advantages may include:

» Adding value to physicians by helping their practices perform with better clinical success.

» Offering patient training and education materials to supplement a healthcare provider's efforts.

» Delivering specific tools for a practice's self-promotion by supporting the group's advertising, PR, and gateway referral efforts.

Not every type of device or organization has the liberty of offering these kinds of support, however. Some brands may be required to keep the focus on clinical benefit only.

The proof is in the pudding. Unlike pharmaceuticals, devices don't have the burden (or benefit) of launching with three phases of clinical trials right out of the gate, for the following reasons:

» It's difficult to conduct a double-blind study with a device.

» It's much more expensive to conduct a device trial than a drug trial. (Think of the training and intensive involvement from the manufacturer.)

» It's challenging to go head-to-head with competitors, since endpoint definitions may vary from device to device.

You might think this would make things easier for a device manufacturer than for a drug company. However, there are many pitfalls for device manufacturers that muddy the water. For one, the regulatory path for approval is often a 510(k), which is based on a predicate device in the market, so pre-market trials tend to be simpler in order to demonstrate safety. But approval can be challenging for a completely new concept that requires a PMA (premarket approval).

The good news is that for innovative devices, there is a new fast-track pathway for getting a PMA. This year, the FDA's Center for Devices and Radiological Health (CDRH) intends to improve the FDA's premarket approval process using the "Innovation Initiative." But don't be fooled: It still requires significantly less burden of proof than for a drug at launch.

For marketers, then, the benefits of devices are diverse—but so are the challenges.

A few thoughts to keep in mind:

» Although clinical effectiveness is important, look beyond clinical effectiveness alone. Consider: Will it save or make money? Is it easy to use? Will it enhance patient compliance?

» Use a variety of metrics for proof: retrospective data, meta-analyses, even bundles of case studies.

» Don't underestimate the power of trial and experience. With equipment especially, some surgeon specialists are more comfortable than others in taking on some risk to "see for themselves" how a device works in their hands.

Different from pharma

It takes a deep understanding of the nuances of device marketing to get it right.

There's a science to creative, whether it's an ad or a program. And it's important to remember that the expectation of the device customer is not the same as it is for a pharmaceutical product. Implants and equipment require different approaches, but they afford some exciting opportunities to build brands in completely new ways. Be open to the possibilities that devices present, and you can start to write your own rules—without stealing a single idea from your pharma friends.

Amy Smith is Account Director, at HCB Health. She can be reached at amy.smith@hcbhealth.com.