Pharmaceutical Executive
Early e-health enthusiasts envisioned a rapid technology and information metamorphosis that could only be described as a quantum leap. In the aftermath of the dot-com shake out, pharma companies reported e-initiative progress that more accurately resembles a shuffle-with an occasional stumble. Cap Gemini Ernst & Young surveyed more than 100 senior managers from 42 pharma companies, including the top 10, to assess the current state of all things "e." The results are mixed.
Early e-health enthusiasts envisioned a rapid technology and information metamorphosis that could only be described as a quantum leap. In the aftermath of the dot-com shake out, pharma companies reported e-initiative progress that more accurately resembles a shuffle-with an occasional stumble. Cap Gemini Ernst & Young surveyed more than 100 senior managers from 42 pharma companies, including the top 10, to assess the current state of all things "e." The results are mixed.
The Internet has fundamentally changed their corporate structures: 77 percent report that they now have a separate group to handle e-business, and most invest between one-half and one percent of their sales revenue in Internet initiatives, an industry total of more than $2 billion annually.
More than half (54 percent) of that money has been spent on online sales and marketing-e-detailing in particular. Data show that e-detailing costs less and nets more interaction with physicians, but it hasn't generated the expected ROI. One respondent said, "We were extremely excited about the potential of e-detailing, but unfortunately, the latest data are not so encouraging."
One-third of respondents reported that their companies are now conducting e-detailing pilots and hope to cut detailing costs by up to 50 percent, but the rest remain skeptical. Despite those doubts, 80 percent of respondents believe that e-technologies will transform the way their companies market to patients and physicians. The industry now spends 25 percent of its revenue on sales and marketing-clearly an area where online initiatives have room to improve.
The only topic about which participants agreed is clinical trials. Most of the surveyed companies are going online to accelerate them, and nearly 90 percent believe that effort will radically transform the clinical trial process in the next five years. Online data capture and patient recruitment lead the way as Web-enabled processes, and companies reported up to a 40 percent reduction in the time it takes to move from clinical trials to regulatory submission. But only 13 percent of those surveyed expect the R&D transformation to improve the bottom line.
Customer relationship management as an e-initiative is still a trial-and-error effort. Although most respondents claimed the biggest benefit of e-technology is "the ability to communicate directly with patients," one Big Pharma company reported that the launch of its $200 million online CRM system was a failure. And the study's authors rank the pharma industry at the bottom of the CRM development scale, concluding: "These companies, in general, show little recognition of customer preferences. They focus on the product and not the customer experience. And they continue to rely on mass marketing."
Pharma-like the medical community in general-has yet to fully embrace or employ the Internet. In fact, a majority of respondents perceive electronic technologyas a means of facilitating changes that are already underway. "More of the same, only better, faster, cheaper" is how one e-business manager described it. Another said, "Investing in the Internet is just a way of staying in the game."
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