Pharmaceutical Industry

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Pharmaceutical Industry

• Emerging Opportunities for Mobile
• Health TechNet Meeting
• June 2005

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Agenda
1. Introduction Background
2. Emerging Trends
3. Opportunities for Mobile
4. Summary
3
Introduction
4
Introduction

• Vianetix is an independent consulting firm that
  specializes in technology-based solutions for the
  pharmaceutical industry.
• Primary focus is on emerging technologies that
  support marketing and sales force automation.
• The company was founded to leverage expertise in
  field force automation and enterprise mobile
  specific to the pharmaceutical industry.
• Clients include major/mid-market pharmaceutical
  companies and venture capital firms that have
  funded solutions targeted at the pharmaceutical
  vertical.

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Introduction

• Mobile Applications
• No compelling business need In the past, very
  difficult to prove business case in the pharma
  market.
• Device Limitations Technology limited the
  usefulness of mobile in the marketplace.
• Low adoption rates Underlying problems caused
  poor adoption rates, particularly
  sales/marketing.
• Few success stories Very few successes early on,
  mostly contact management, sample inventory, SFA
  and medical instrumentation diagnostics.
• Market Dynamics
• New conditions Key market conditions have
  changed the need for mobile technology and other
  alternate channels in the pharmaceutical market.
  

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Background

• Market Dynamics
• Legislation Changes in legislation have created
  increased price pressures, shortened patent life,
  increased generic use, patient privacy issues and
  direct to consumer advertising.
• Managed Care Payers and group purchasing agents
  have become more efficient in measuring and
  influencing physician prescribing practices.
• Sales and Marketing Increased pressure on
  physicians has resulted in less face time between
  the doctor and the pharmaceutical sales
  representative.

Estimates indicate that only 43 of sales calls
result in face-to-face contact with the physician
lasting less than 2 minutes.
- EYEFORPHARMA
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Background

• Market Dynamics
• Product Management companies have had difficulty
  with marketing brands distinctly, overlapping
  development/marketing efforts, phasing-out mature
  products and the proliferation of sub-brands and
  line extensions.
• Channel Management pharmaceutical companies have
  been heavily dependent on a single channel to
  deliver their products and services.
• Lobbying Powerful groups (e.g. AARP) continue to
  support legislation and alternate sources for
  medicine.

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Background

• Pharmaceutical companies have lost their
  informational edge. As a result, return on sales
  and marketing investment has gone down (average
  24) over the last five years.
• 
  - MEDADNEWS
• 
  

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Background

• U.S. pharmaceutical companies have for decades
  relied on the pinball wizard sales model sales
  representatives bounce from one doctors office to
  another in hopes of catching a few moments with
  physicians and influencing which drugs they
  prescribe.
• 
  

In recent years, the changing dynamics of the
business have prompted a massive expansion of
sales forces. The resulting system is costly,
inefficient, and rife with dissatisfaction.
- MCKINSEY
Industry average for field force budgets is
nearly 875 million with top spending
organizations committing more than 1billion
Cutting Edge
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Emerging Trends

• In the past, companies focused on geographic
  segmentation to sell their products. More
  recently, account level segmentation with more
  emphasis on clinical knowledge by the sales
  representative has shown some success

However, market dynamics and the complexity of
clinical differences between specialized
medicines is driving the need for collaborative
interactions between sales professionals and the
physician in ways never seen before.
Pharmaceutical companies are looking at new
technologies such as mobile to add value and
optimize the interaction between the rep and the
physician.
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Emerging Trends

• Market Intelligence
• The clinical complexity of drugs has made the
  need for market intelligence more important that
  ever as companies look to new ways to
  differentiate their product from the competition.
• Increased intelligence is driving new forms of
  market segmentation based upon prescribing
  practices and targeting physicians in specific
  market segments
• Sales strategies are shifting toward targeting
  the right physicians at the right time based
  upon prescribing behavior and practice settings.
  

About 38 of physicians have consciously decided
to make less time for pharmaceutical
representatives than they did in 2001.
- EYEFORPHARMA
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Emerging Trends

• Alternate Channels
• Physicians are using additional channels
  (internet, mobile) to gain information about new
  drugs and treatment practices.
• Physicians are learning about new treatment
  therapies much earlier in their lifecycle.
• Physicians are becoming more technically savvy
  and are relying on new technologies for research,
  education and an alternate channel to deal
  directly with suppliers.
• Sales and Marketing
• Companies are seeking sales reps with broader
  skills that can serve as a trusted advisor to
  the physician on new treatment practices.

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Opportunities for Mobile
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Opportunities for Mobile
The same study that showed 38 of physicians
that have made less time for sales
representatives also reveals that 57 of
physicians would make more time for sales reps if
they provided more value-added services.

• 
  

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Opportunities for Mobile

• Advances in mobile technology are
• Enabling more collaborative experience between
  the pharmaceutical sales representative and the
  physician.
• Providing access to improved market intelligence
  and ability to segment physicians more easily
  based upon their prescribing practices/brand
  loyalty.
• Creating opportunities to more easily capture
  interactions with the patient/healthcare service
  provider.
• Enabling the delivery of medical services in ways
  and to remote locations that were not possible
  before.
• Creating new opportunities around patient
  compliance.
• Enabling consumer-based healthcare applications.
  

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Summary
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Summary
In order to regain their informational edge,
pharmaceutical companies will continue to deploy
technologies such as mobile to improve their
sales channels and their ability to provide
advanced treatments to the patients they serve.