Pharmaceutical representatives

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Pharmaceutical representatives
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Pharmaceutical Industry Marketing

• A key to industry profitability
• Highly effective
• Very sophisticated
• Multi-pronged campaigns targeting clinicians and
  patients

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Pharmaceutical Industry Marketing

• In 2004, pharmaceutical companies spent almost
  12 billion on marketing activities
• This amount does not include the retail value of
  samples (gt15 billion)
• Despite (or perhaps because of) these high
  marketing expenses, pharma profit margins are
  among the highest of any industry
• The trend of increasing promotional spending and
  profit margins has substantially increased over
  time

Sources IMS Health, Top-Line Industry Data
Fortune 500, 2006 (http//money.cnn.com/magazines/
fortune/fortune500/performers)
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Pharmaceutical Industry Promotion Marketing
Source N Engl J Med 2007357673-81. 2005
Dollars
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Annual Increase in US Prescription Drug Total
Health Expenditures
Annual Change
Rx Drugs
Health
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Expenditures by Type of Marketing 2004 (
Billions)
IMS CAM Total Percent
Samples 15.9 6.3 15.9 28
Detailing 7.3 20.4 20.4 36
DTCA 4 4 4 7
Meetings No data 2 2 3
E-promo. No data 0.3 0.3 0
Journals 0.5 0.5 0.5 1
Unmonitored No data 14.4 14.4 25
Total 27.7 47.9 57.5
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Effect of Advertising on Drug Sales

• Drugs that are heavily advertised contribute
  disproportionately to the increase in pharma
  spending

Increase in Retail Prescription Drug Sales,
1999-2000
Source Prescription Drugs and Mass Media
Advertising, 2000, NIHCM Foundation, November 21,
2001.
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Drug Promotion the Pharmaceutical
Representative.
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Drug Promotion by Pharmaceutical Companies.

• Journal advertisements
• Mailings
• Samples
• Sponsored meetings
• Gifts
• Direct-to-consumer advertising
• Company representative visits

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Recent Changes in Pharma

• Recently, some large companies have announced
  plans to cut their sales forces
• Late 2006 and early 2007, Pfizer announced it
  would cut
• 20 of its 11,000-person US sales force
• 20 of its European sales force
• In 2005, Wyeth cut
• 15 of its sales force
• Other companies (e.g., Novartis) have announced
  plans to increase sales forces

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Pharmaceutical Representatives

• Still the major focus of pharmaceutical marketing
• Approximately 100,000 reps in 2005 vs 38,000 in
  1995
• 1 rep per 6 MDs in US and 1 rep per 2.5 targeted
  MDs
• 6 million detail visits annually
• Cost estimate 12 - 13 thousand per MD on
  detailing (IMS data)
• PhRMAserves an essential function in the health
  care delivery system

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Characteristics of Representatives

• Presentability/appearance
• Outgoing personality
• Excellent interpersonnal skills
• Assertive

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Representative Training

• How to be observant and assess clinician
  personalities
• How to adjust approach based on reactions and
  profile information
• How to gather and use personal information to
  establish a connection
• How to monitor impact of various marketing
  strategies on prescribing

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How Representative Can Tailor Approach

• Frame interactions as gesture of friendship
• Use literature, humility, appeal to their high
  intellect
• Make best effort to establish personal
  connection, best gifts

• Friendly clinician
• Skeptical clinician
• High prescribers

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How Representaive Can Tailor Approach

• Clinician prefers competing
• product
• Refuses to see reps
• Thought leaders

• Find out why, try to capture a niche
• Try to work through office staff, can get useful
  information
• Friendly thought leaders groomed for speaking
  circuit. Monitor impact of local talks and their
  allegience

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Targeted Clinicians

• High volume prescribers
• Specialists scripts they initiate can continue
  for years by PCPs
• Opinion leaders
• Low volume, non-influential clinicians receive
  much less attention

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Physician Rating of Rep Information Usefulness
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Physician Rating of Accuracy of Representative
Information
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Representatives Objectives.

• Sell company products
• Inform and educate professionals
• Gather information

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The meeting.

• Whats in it for me?
• Be selective
• By appointment with time limits
• Be in control
• Prepare standard questions
• Beware of bold statements glossies (check
  evidence)

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Stages of Rep/Provider Interactions

• Acknowledgement of relative status
• Valuable time, opinion leader
• Find out what is known
• Outline benefits of product
• Expert name drop
• Provider resistance
• Reinforcement of role
• Compliments, sympathy
• Closure ensure opportunity for return, gifts,
  obligation

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Benefits to Provider

• Pleasant respite from workday demands
• Someone who is impressed with their superior
  knowledge
• Can be object of flattery and sympathy
• Psychological benefits
• Receipt of gifts
• Can present themselves as skeptic
• Questions information, doesnt agree to prescribe
• Can feel like they were in control

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Representative Goals

• Develop positive relationship
• Opportunity for future contact
• Create a sense of obligation
• Control agenda
• Promoting product appears secondary in many
  interactions

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Influence on Prescribing

• Studies show that prescribing is influenced by
  industry representatives
• Higher cost, less rational prescribing is
  associated with
• Frequency of use of representatives as an
  information source
• Perceived credibility of representative
• Even a few minutes of contact can impact
  prescribing

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Perceived Influence of Pharmaceutical Reps
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Physician/Drug Representative Meetings

• Specialty Meetings/Month
• Family Physicians 16
• Internal Medicine 10
• Cardiology 9
• Pediatrics 8
• Surgeons 4
• Anesthesiology 2

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Physician Industry Relationships

• Benefits Reporting
• Samples 78
• Gifts 83
• Travel/CME funding 35
• Payments 28
• Any Relationship 95

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Physician Factors Associated With Receipt of
Payments

• Practice with lt 25 Medicaid/uninsured
• Private practice
• Less likely in hospital/HMO setting
• University/Medical School
• Role as a preceptor
• Developer of clinical guidelines
• Cardiology specialty (of the six specialties
  studied)

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Methods to Deal With Potential Conflict of
Interest

• Eliminate the conflict
• Can be difficult and painful
• Rationalization
• Its educational
• Patients need samples
• Denial
• It doesnt influence me
• I take it with a grain of salt

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Conclusions on Representative Marketing

• Industry invests billions on detailing
• Most prescribers meet with representatives
• Representatives are skilled at developing
  relationships with and influencing clinicians
• Meetings with representatives are associated with
  less rational prescribing and increased costs
• Most physicians feel they are not influenced

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Thank you for attention!