Marketing and Sales Roles in the Pharmaceutical Industry

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Marketing and Sales Roles in the Pharmaceutical
Industry
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MARKETING
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The Marketing Concept - Key Principles

• It is easier to change the products and services
  of the individual manufacturer to fit the needs
  of the market than it is to convince the entire
  market to use the products and services as the
  individual manufacturer prefers them
• You can have any color car you want as long as
  its black
• Henry Ford
• All the resources of the firm should be organized
  into a total system aimed at meeting the needs of
  the consumer
• The role of marketing is to influence or direct
  activities from the manufacturer to the patient
• The right products
• In the right quantity
• At the right place
• For the right price
• At the right time

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Marketing as an Actualizing Process

• Markets can be viewed as gaps that separate
  parties interested in an exchange
• Marketing removes the gaps between the parties
  through various actualization processes

MARKET SEPARATORS
EXCHANGE FLOWS
MARKETING ACTIVITIES

• PRODUCT FLOW
• toward the consumer
• INFORMATION FLOW
• both ways
• PAYMENT FLOW
• toward the provider
• USE RIGHT
• toward the consumer

Assembly, transportation storage, packaging,
grading Advertising, personal selling,
publicity, labeling, sales promotions, marketing
research, consumer complaints, drug education
programs Credit and cash payments Purchasing
and selling, pricing, post transactional rights

• TIME
• SPACE
• VALUE
• OWNERSHIP
• QUANTITY
• ASSORTMENT

Source McInnis A Conceptual Approach to
Marketing
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ITs Role in the Actualizing Process

• IT can assist marketing in closing the gaps
  that separate parties interested in an exchange
• IT can make some of the gaps irrelevant (e.g.,
  space and time)

MARKET SEPARATORS
IT

• Connectivity across geographically dispersed
  regions
• 24 x 7 Availability
• Enabling information access
• Enhancing personalization
• Right use
• Right amount
• Right need
• Increasing the number of available options

• TIME
• SPACE
• VALUE
• OWNERSHIP
• QUANTITY
• ASSORTMENT

Source McInnis A Conceptual Approach to
Marketing
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Unique Aspects of Pharmaceutical Marketing and
Sales

• Influence of non-purchasers on the purchasing
  habits of the consumer
• Veto/authorization power of physicians
  consumers need an authorized document to purchase
  a prescription drug
• Importance of the disease to identifying and
  classifying markets
• Professional licensing required to stock and sell
  pharmaceutical products
• Records of every transaction are kept that are
  specific to
• Patient
• Physician
• Product

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Definitions

• Market Research
• Determination and assessment of qualitative and
  quantitative dimensions of a market
• Marketing Research
• Analysis of the effects of various marketing
  activities of a company or its competitors

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Market Research

• Environmental scanning
• Physicians
• Pharmacists
• Pharmacies
• Hospitals
• Data gathering and analysis
• Influence of unique aspects of the pharmaceutical
  market on market research
• Known list of entities
• Knowledge-based decisions
• Similarities in education and thinking
  (professionalization)
• Availability of records for transactional
  activity
• Significant use of outside vendors for market
  research
• Syndicated services
• Custom services

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Questions Answered by Market Research

• Strategic Level
• What diseases or product areas should be
  considered for long-term investment?
• Short-term?
• Market size or potential?
• Availability and utilization of therapies?
• Next logical steps in therapy?
• Potential market segments to be exploited
• Disease conditions (e.g., migraine sufferers)
• Dosing preferences (inhalants vs. injections vs.
  patches)
• Prevalence of disorder?
• Shared conditions?
• Potential development partners?
• Potential acquisitions?

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Questions Answered by Market Research

• Clinical trial Planning
• Seasonality
• Regionality
• Specialty
• Premarketing Planning
• What physician specialties are important in a
  given therapy or diagnosis?
• What patient characteristics are important?
• Who are our competitors in this market?
• How do our competitors promote their product?
• Are there unsatisfied portions of the market?
• How do physicians perceive a proposed product?

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Questions Answered by Market Research

• Post-marketing Monitoring
• Adverse events
• Product sales
• Patient information (medical history)

This can be critical in product defense
situations! Example Pfizers defense of Viagra
when suits were filed alleging an increased risk
of stroke.
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Types of Market Research
Hospital Purchases
Retail Pharmacy Purchases
Warehouse Withdrawals
Periodic Surveys
Promotional Media
Retail Pharmacy Prescriptions
Physician Panels
Retail Pharmacy Sales
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Types of Market Research
Retail Pharmacy Purchases

• Measures the inflow of products from the
  manufacturer to the pharmacy
• OTC
• Prescription drugs
• Indirect (through wholesalers)
• Direct purchases from manufacturers

Periodic Surveys
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Types of Market Research
Hospital Purchases

• Measures the inflow of products from the
  manufacturer to the hospital
• OTC
• Prescription drugs
• Indirect (through wholesalers)
• Direct purchases from manufacturers

Periodic Surveys
Growth of pharmaceutical purchases by hospitals
has greatly exceeded purchases from pharmacies on
a proportional basis In many communities, the
hospital has become more important in routine care
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Types of Market Research
Warehouse Withdrawals

• Measures the outflow of products from the
  warehouse to all purchasers
• OTC
• Prescription drugs)
• Does not reflect direct purchases from
  manufacturers
• Provides ability to analyze small segments of the
  marketplace such as zip code or territories

Periodic Surveys
Can be valuable in dealing with questions of
individual territory performance and potential or
different selling techniques
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Types of Market Research

• Measures the outflow of prescription drugs from
  the pharmacy to consumers
• Most sensitive indicator of prescription product
  performance (factual)
• Reflects mindset of prescribers and consumer
  demand
• Best indicator of marketing or promotional effort
  effectiveness
• Data available at national and sub-national
  levels

Periodic Surveys
Retail Pharmacy Prescriptions
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Types of Market Research

• Specialized research services to identify patient
  product usage along specific variables
• Diagnosis
• Patient characteristics
• Location of visit
• Drugs used
• Action desired from drugs used
• Tracking of new prescriptions over time and
  monitors changes in doctor prescribing habits

Periodic Surveys
Physician Panels
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Types of Market Research

• Historically used for non-prescription
  pharmaceuticals
• Data typically collected for products of interest
• Collect unit and dollar information at the
  package size level
• Main use is to obtain prescription counts by
  product
• Used for pricing analysis and cross-tabulation
  analysis using data warehouses

Periodic Surveys
Retail Pharmacy Sales
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Types of Market Research

• Monitoring of detailing visits to physicians by
  sales representatives
• Monitoring of journal advertising
• Monitoring of direct mail advertising
• Physician sampling

Periodic Surveys
Promotional Media
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Generic Stages of Market Research
Marketing Problem

• Marketing Objectives Reviewed
• Problems Defined
• Alternative Marketing Options Considered

Written marketing brief

• Exploratory research
• Formulation of data requirements, sources
• Research objectives defined

Research Design
Costing
Research Proposal
Was this what was requested?
Select Sample
Design Survey Feedback
Design coding, analysis instructions
Interpret
Present Findings
Take Action and Monitor
Source Smith, Pharmaceutical Marketing
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Market Research Organizations

• IMS Health
• Datamonitor Healthcare Consulting
• Frost.com
• Reuters
• Also check out
• Eyeforpharma.com
• FDA.gov
• Journal of the American Hospital Association
• AMA Drug Evaluations

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Market Research Industry Associations

• EphMRA European Pharmaceutical Research
  Association (www.ephmra.org)
• BHBIA British Healthcare Business Intelligence
  Association (www.bhbia.org.uk)
• PhRMA Pharmaceutical Research and Manufacturers
  Association (www.phrma.org)

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SALES
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Sales Roles

• Detailing
• Face-to-face visits to physicians or purchasing
  managers (e.g., hospitals, HMOs) to present new
  prescription drugs
• Influence prescribing habit
• Increase current prescription usage
• Deliver samples
• Build relationships with doctors
• Get drug into a formulary pull through
• Sample Management
• Track delivery of prescription drug samples to
  physicians or other purchasers

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Effective Detailing
Influences on Physician Prescribing Habits
Potential drug-drug interactions
Side Effects
Efficacy
Dosage
Drug delivery method
Payor formulary status
Cost of drug
Patient request
Personal preference
Brand
Source IBM Analysis
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Detailings Value to the Physician

• Learn new drug information
• Get drug samples
• Connect with peers or physician thought leaders
• Receive the perks
• Establish personal contact with the drug company
• Provide stress release

Source IBM Analysis
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Detailing - Physician Concerns
What are your top complaints about detailers?
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Biased information
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Inconvenient timing
44
Too many from the same company
40
Take too much time
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Not enough medical expertise
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Not enough samples
Source The Forrester Report Pharmas Detailing
Overhaul, February 2001 (IMS Health,
Scott-Levin, Forrester Research, Inc)
(Ziment/WebSurveyMD.com) IBM Analysis
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Companies Are Experimenting with e-Detailing
There have been promises made about the benefits
of e-Detailing
Benefits to Physicians

• Allows physicians to see sales reps, gather
  information they deem important, and to have the
  flexibility and control to do it in their own
  schedule

• Offers physicians a range of convenient
  interactive channels

• Provides timely updated drug information

• Provides simpler sample ordering and delivery

• Provides quality peer-to-peer discussions on a
  topic that interests a physician.

Source IMS Health, iPhysicianNet website,
Aptilon.com website, IBM Analysis
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Sample Management

• The pharmaceutical industry in America
  distributed 6.7 billion worth of samples to
  physicians in 1999
• During a typical month, the average
  pharmaceutical sales representative will visit
  150 physicians, distribute thousands of packages
  of drug samples, obtain FDA required signatures
  on 150 sample distribution forms and receive
  scores of new sample cartons to their home-based
  office, and expend as much as 25 of their time
  tediously managing a paper-based process

Source IMS Health
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Sample Management and Regulatory Requirements

• PDMA (Prescription Drug Marketing Act)
• Designed to minimize the threat to the public
  health posed by prescription drug diversion and
  counterfeiting
• Requires that samples distributed by
  pharmaceutical representatives be signed for and
  tracked to create audit trails
• Helps to ensure that the correct physician
  receives the correct samples. If a pharmaceutical
  company is found to be non-compliant, they could
  face significant penalties, fines, and possibly
  even prison terms

Source FDA
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Typical Sample Distribution Process

• The pharmaceutical sales representative (rep)
  arrives at a physicians office.
• The rep manually fills out a pre-printed sample
  distribution form including physician
  information, sample product information, and the
  proper quantity of all samples to be
  distributed.
• The representative conducts a 3-5 minute
  presentation with the doctor about the product he
  or she is promoting, encouraging the physician to
  write more scripts for the product.
• The rep ends the detail by giving the physician
  the intended samples, and asks the physician to
  manually sign for the samples on the distribution
  form.
• At the end of the day, the rep will review each
  distribution form to check for accuracy, and then
  manually type all of the data from every form
  into their laptop Sales Force Automation (SFA)
  system.
• The rep then removes a copy of the triplicate
  form for his or her own records which must be
  kept for seven years, and mails a copy to a
  central processing location.
• The data sent to the central processing location
  is then manually entered for a second time into a
  database by a team of data processors. Since this
  is a manual process, there is an increased chance
  for the data to be full of errors. Each
  discrepancy found must later be reconciled during
  an audit to meet PDMA standards. It can often
  take weeks before this information is matched to
  the sales representatives inventory, and even
  longer for the marketing manager to gain access
  to it.
• Finally, the representative will place a manual
  order, writing everything out on yet another
  pre-printed form, to replenish their own sample
  inventory

Source Pharmiweb
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OTHER MARKETING SALES TECHNIQUES
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Key Opinion Leader Management

• Expert physicians -- often called "opinion
  leaders" or "thought leaders" -- play critical
  roles in driving pharmaceutical sales
• Participate in ongoing RD
• Have privileged access to RD information
• Company-sponsored featured speaking engagements
  at prestigious conferences
• Exchange ideas with other physicians regarding
  new products or indications or adverse events
• Helps convince other doctors to prescribe new
  products and can make the difference between a
  successful product launch and a major
  disappointment
• Program is actively integrated with marketing
  program
• Physician recruitment (specialty, name
  recognition, etc.)
• Matching to appropriate RD efforts
• Matching to appropriate marketing programs

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Medical Science Liaisons (MSLs)

• Scientific professionals
• Pharmaceutical PhDs
• Pharmacists
• Physicians
• Nurses
• Generally have more scientific knowledge than
  sales representatives
• Roles
• Support and expand sales representatives
  marketing of a product
• Be able to speak to the purchaser on a more
  scientific (peer) level not on a marketing level
• Will focus on clinical information
• Focus on key opinion leaders
• Typically will only see more knowledgeable sales
  reps
• Organize symposia, conferences, focus groups,
  etc.
• Training and continuing education programs
• May be involved in setting up Phase IV trials
  (post launch)