From Wikipedia,
the free encyclopedia
Pharmaceutical marketing
is the business of selling
pharmaceuticals or
drugs.
History
The marketing of medication has
a long history. The selling of
miracle cures, many with little
real potency, has always been
common. Marketing of legitimate
non-prescription
medications, such as
pain relievers or
allergy medicine, has also
long been practiced. Mass
marketing of prescription
medications was rare until
recently, however. It was long
believed that since doctors made
the selection of drugs, mass
marketing was a waste of
resources, when specific ads
targeting the medical profession
would be cheaper and just as
effective. This would involve ads
in professional journals, and
visits by sales staff to doctor’s
offices and hospitals. An
important part of these efforts
was marketing to medical students.
Direct and indirect marketing
to health care providers
Physicians are perhaps the most
important players in
pharmaceutical sales. They write
the prescriptions that determine
which drugs will be used by the
patient. Influencing the physician
is key to pharmaceutical sales.
Historically, this was done with
large pharmaceutical sales forces.
A medium-sized pharmaceutical
company might have a sales force
of 1000 representatives. The
largest companies have tens of
thousands of representatives.
Sales representatives called upon
physicians regularly providing
information and free drug samples
to the physicians. This is still
the approach today, however,
economic pressures on the industry
are causing pharmaceutical
companies to rethink the
traditional sales process to
physicians.
Pharmaceutical companies are
developing processes to influence
the people who influence the
physicians. There are several
channels by which a physician may
be influenced, including
self-influence through research,
peer influence, direct interaction
with pharmaceutical companies,
patients, and public or private
insurance companies.
There are a number of
firms that specialize in data
and analytics for pharmaceutical
marketing (Yellowikis).
Individual research
Physicians discover
pharmaceutical information from
such sources as the
Physician's Desk Reference and
online sources such as
Epocrates.
They also rely upon
pharmaceutical branded e-detailing
sites, pharmaceutical sales and
non-sales representatives, and
scholarly literature. Scholarly
literature can be in the form of
medical journal article reprints,
often delivered by sales
representatives at their place of
employment or at conference
exhibitions.
Journal article reprints are
available from companies such as
Infotrieve, Inc..
Peer influence
Key opinion leaders (KOL) are
respected individuals, such as
college professors, who influence
physicians through their
professional status.
Pharmaceutical companies generally
engage key opinion leaders (KOL)
early in the drug development
process to provide advocacy and
key marketing feedback.[1]
Some pharmaceutical companies
identify key opinion leaders
through direct inquiry of
physicians (primary research).
Physicians acquire information
through informal contacts with
their colleagues, including social
events, professional affiliations,
common hospital affiliations, and
common medical school
affiliations. An influential
physician may not also be a key
opinion leader. Some
pharmaceutical companies identify
influential colleagues through
commercially available
prescription writing and patient
level data (see list of data
providers in this article).
Direct contact with
pharmaceutical sales
representatives
Currently, there are
approximately 100,000
pharmaceutical sales reps in the
United States pursuing some
120,000 pharmaceutical prescribers.[2]
A given pharmaceutical
representative will often try to
see a physician every few weeks.
Because of the large size of
the pharmaceutical sales force;
organization, management, and
measurement of the effectiveness
of the sales force are large
business challenges. Management
tasks are usually broken down into
the areas of physician targeting,
sales force size and structure,
sales force optimization, call
planning, and sales forces
effectiveness.
Physician targeting
Identify the universe of
physicians most likely to
prescribe a given drug.
Historically this is done by
measuring the number of total
prescriptions (TRx) and new
prescriptions (NRx) per week that
each physician writes. This
information is collected by
commercial vendors (see list in
this article). The physicians are
then "deciled" into ten groups
based on their writing patterns.
Higher deciles are targeted. Some
pharmaceutical companies use
additional information to decile
physicians such as
- profitability of a
prescription (script),
- accessibility of the
physician,
- tendency of the physician to
use the pharmaceutical company's
drugs,
- effect of managed care
formularies on the ability of
the physician to prescribe a
drug,
- the
adoption sequence of the
physician (innovator, early
adopter, late majority, etc.),
and
- the tendency of the
physician to use a wide palette
of drugs
- influence that physicians
have on their colleagues.
Data for drugs prescribed in a
hospital are not usually available
at the physician level. Advanced
analytic techniques are used to
value physicians in a hospital
setting.
Sales force size and structure
Decide on the appropriate size
of a sales force needed to sell a
particular portfolio of drugs to
the target universe. Design the
optimal reach (how many physicians
to see) and frequency (how often
to see them) for each individual
physician. Decide how many sales
representatives to devote to
office and group practice and how
many to devote to hospital
accounts.
Sales force optimization
Design sales territories in a
manner that evenly spreads the
work load across territories,
districts, and regions. Minimize
the amount of time a sales
representative spends driving and
maximize the time the
representative has to meet with
physicians.
Call planning
Design the optimal timing for
each individual physician sales
call. Forecast each physician's
prescribing response to a sales
call over the next few weeks.
Minimize the "annoyance factor."
Sales force effectiveness
Monitor the performance of the
sales force in the target universe
of physicians. Adjust market
message, reach, frequency, timing,
territories, or other actions in
order to increase sales.
Patients
Since the 1980s new methods of
marketing for prescription drugs
to consumers have become
important. Patients are far less
deferential to doctors and will
inquire about, or even demand, to
receive a medication they have
seen advertised on television. In
the United States recent years
have seen an increase in mass
media advertisements for
pharmaceuticals. Expenditures on
direct-to-consumer (DTC
pharmaceutical advertising) have
more than quintupled in the last
seven years since the FDA changed
the guidelines, from $700 million
in 1997 to more than $4 billion in
2004.
Private and public insurers
Public and private insurers
affect the writing of
prescriptions by physicians
through formularies that restrict
the number and types of drugs that
the insurer will cover. Not only
can the insurer affect drug sales
by including or excluding a
particular drug from a formulary,
they can affect sales by tiering,
or placing bureaucratic hurdles to
prescribing certain drugs. In
January 2006, the U.S. instituted
a new public prescription drug
plan through its
Medicare program. Known as
Medicare Part D, this program
engages private insurers to
negotiate with
pharmaceutical companies for
the placement of drugs on tiered
formularies.
Controversy
- The mass marketing to
consumers of pharmaceuticals is
controversial. It is banned in
every western country except the
US and New Zealand, which is
considering a ban. Some feel it
is better to leave the decision
wholly in the hands of medical
professionals; others feel that
consumer education and
participation in health is
useful, but consumers need
independent, comparative
information about drugs (not
promotional information)[3].
Due to these concerns, among
others, most countries impose
limits on pharmaceutical mass
marketing that are not placed on
the marketing of other products.
In some areas it is required
that ads for drugs include a
list of possible side effects,
so that consumers are informed
of both facets of a medicine.
Canada's limitations on
pharmaceutical advertising
ensure that commercials that
mention the name of a product
cannot in any way describe what
it does. Commercials that
mention a medical problem cannot
also mention the name of the
product for sale, at most it can
direct the viewer to a website
or telephone number operated by
the pharmaceutical company.
- The number and persistence
of pharmaceutical
representatives has placed a
burden on the time of physicians
[4]. "As the number of reps
went up, the amount of time an
average rep spent with doctors
went down—so far down, that
tactical scaling has spawned a
strategic crisis. Physicians no
longer spend much time with
sales reps, nor do they see this
as a serious problem."
Bibliography
-
Insider's Guide to the World of
Pharmaceutical Sales, Seventh
Edition (Paperback)
- Merrill Goozner: The $800
million pill. University of
California Press, Berkeley 2004,
297 S.,
ISBN 0-520-23945-8
- Ray Moynihan, Alan Cassels:
Selling sickness: How the
world's biggest pharmaceutical
companies are turning us all
into patients. Nation Books, New
York 2005
-
Be Brief, Be Bright, Be Gone:
Career Essentials for
Pharmaceutical Representatives
(Paperback)
-
PharmRepSelect-Your Complete
Guide to Getting a
Pharmaceutical Sales Job (Pharmrepselect,
1) (Paperback)
-
The Rx Factor : Strategic
Creativity in Pharmaceutical
Marketing (Response Book)
(Hardcover)
-
Pharmaceutical Marketing:
Principles, Environment, and
Practice (Hardcover)
