Pharmaceutical marketing

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Pharmaceutical marketing is the business of advertising or otherwise promoting the sale of pharmaceuticals or drugs.

Contents

[edit] History

The marketing of medication has a long history. The sale 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; specific ads targeting the medical profession were thought to 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.

[edit] 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 the key to pharmaceutical sales. Historically, this was done by a large pharmaceutical sales force. A medium-sized pharmaceutical company might have a sales force of 1000 representatives. The largest companies have tens of thousands of representatives around the world. 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).

[edit] Individual research

Physicians discover pharmaceutical information from such sources as the Physician's Desk Reference and online sources such as PDR.net, as well as via PDAs with applications such as Epocrates and Thomson Clinical Xpert.

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..

[edit] Peer influence

  • Key opinion leaders

Key opinion leaders (KOL), or "thought leaders", are respected individuals, such as prominent medical school faculty, who influence physicians through their professional status. Pharmaceutical companies generally engage key opinion leaders 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).

  • Colleagues

Physicians acquire information through informal contacts with their colleagues, including social events, professional affiliations, common hospital affiliations, and common medical school affiliations. Some pharmaceutical companies identify influential colleagues through commercially available prescription writing and patient level data[2].

[edit] Direct contact with pharmaceutical sales representatives

Currently, there are approximately 100,000 pharmaceutical sales reps in the United States [3] pursuing some 1,000,000 pharmaceutical prescribers. [4] A pharmaceutical representative will often try to see a given physician every few weeks. Representatives often have a call list of about 200 physicians with 120 targets that should be visited in 4-6 week cycles.

Because of the large size of the pharmaceutical sales force, the organization, management, and measurement of effectiveness of the sales force are significant 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.

[edit] Physician targeting

Marketers attempt to identify the universe of physicians most likely to prescribe a given drug. Historically, this was 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 more aggressively targeted. Some pharmaceutical companies use additional information 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 (that is, how readily the physician adopts new drugs in place of older, established treatments), 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.

[edit] Sales force size and structure

Marketers must 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.

[edit] Patients

Since the 1980s, new methods of marketing prescription drugs to consumers have become important. Patients are far less deferential to doctors[citation needed] 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.[citation needed]

[edit] 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.

[edit] Regulation

In the United States, marketing and distribution of pharmaceuticals is regulated by the federal Prescription Drug Marketing Act of 1987.

[edit] 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)[5]. For these reasons, 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, they 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 [6]. "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."
  • Recent legal cases and US congressional hearings have provided access to pharmaceutical industry documents revealing new marketing strategies for drugs. [7] Activities once considered independent of promotional intent, including continuing medical education and medical research, are used, including paying to publish articles about promoted drugs for the medical literature, and alleged suppression of unfavorable study results. [8]

[edit] See also

[edit] Bibliography

[edit] External links

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