Pharmaceutical Marketing in the 21st Century

Perri Cebedo & Associates

Santa Clara, California U.S.A. prosperocevedo@attbi.com

Pharmaceutical Marketing in the 21st Century

The Growth of DTC The Shift in Marketing Mix More Reps, Less Doctors Calls Opportunities in the Internet The Growth of Chain Stores Changing Aspects of Training

The Growth of DTC

DTC: Direct to Consumer Advertising Phenomenal growth in the last 5 years Journals: 200m vs. $3.7B on DTC! More patients ask Physicians what they want So, More samples

Effects of DTC
More patients telling their Doctor what medicines they need Products with DTC: highest sales increases Increase of samples More informed patients Better patient compliance More satisfied patients

E Marketing
Training via the Internet CME in the Internet Internet Portals for the MD Using the Internet to Support Marketing Effectiveness Patient Groups in the Internet

Pharma Consolidation
Slowdown in mergers, but they will continue Previous M&As driven by fear and pain Now by conviction that bigger is better Makes financial sense, redundant costs Strategic sense

Do Pharma M&As make Strategic sense?

Combined field forces could call on more MDs Savings on support Staff Modest savings, but with new RD & Marketing muscle More products in the pipeline less risky Bottom 33% of top 50 Companies: RD=21% of Sales Middle 33% of Top 50 Companies: RD=18% of Sales Top 33% of Top 50 Companies: RD= 15% of Sales Conclusion? Additional 6% of Profits compared to bottom 33%!

Growth in Promotional Spend

Last 5 years
Total Promo Expenditure= Promotion Office Based MDs= Samples @ retail value= DTC=

$9.2 to $19.1B $2.4 to $4.8 B $4.9B to $10.5B $791m to $3.7 B

Most significant growth product: Lipitor 2001

Use of Online Detailing

E Detailing: another component of the marketing mix MDs are invited to participate With a promise of a coupon for a book 71% of e Details done evenings or early mornings or weekends E Detailing lasts 8-10 minutes Increased use of attention mechanics MD selects the time. So attention

The Changing World of Medical Education

PhRMA Voluntary Code Growth of Online CME More electronic Media will support live Meetings, eg CDrom or Online educational support Small low budget events can have bigger impact if supported with CDrom, with slides, speaker bios, transcripts, abstracts and interviews Case studies can come alive with electronic media More CME, more professional Reps!

Increasing Field Forces

Increasing Sales and Marketing Staff Increased Pay and Reward! Only slowdown in the use of Contract Sales Slower turnover except in Specialty Reps Pharma salaries now ahead by 20% compared with other industries

Growth in Pharma Salaries

Primary Care Rep $45,800--$47,000 Top PC Rep $81,000--$82,300 Oncology Reps plus 30% DMS plus 13% more than their top reps Highest salary increase: Senior DMs=11% Incentive Pay is 25-30% of base pay

Changes in Incentive Schemes

Incentive pay =25-30% of salary Performance vs goals; Quantitative: 83% Qualitative: 17% 82% Individual Performance Top Ten PCRep in 2001=59% of base salary Top Ten PCRep in 2002=76% of base salary

Drug Discount Programs

Senior Poor struggle to pay for medicines No drug insurance coverage GSK: Orange Card

Successful Use of the Internet

Marketing to Physicians who regularly go online For latest information on disease management, research Latest clinical papers Networking with others

The Drive for New Types of MD Contacts

Background (INCOMM Survey of 500 Reps): 26% =less than 1 minute 63% =1 minute 11% = 3-5 minutes In Conventions, MD contacts =5-10 minutes Many Hard-to-See MDs or No-See MDs (84%)! So, expect more participation at MD conventions!!!

Dinner Meetings
As MDs get harder to see...

Pure CME Activity Group Selling Focus Group Discussions MAPs or Marketing Advisory Panels Social Activity to Celebrate Something Peer Selling

Peer Selling over Meals

Evolvement over Focus Groups in the 80s MAPs: Marketing Advisory Panels PIGs: Peer Influence Groups Based on the more the MD knows, the more convinced he is, the more likely to share experiences The Key: The Facilitator!

Group Selling at Conventions

The Rationale:
For each MD contacted at the Booth, 6 walk by 4-6 MDs for 10-15 minute interaction The Key: Training in Group selling Techniques Special Training in Questioning Techniques Eliminate give-aways in the Counter and eliminate the Counter Benefits: More MD contacts, better interaction, more time!

Growth of E-Sales Training

Cuts costs of bringing Reps to the Office Brings Training to the Reps Information transfer can be efficient & consistent Learning curve is 60% faster Average content retention of Instructor-led course: 58% E-Learning adds additional 25% retention

Other Benefits of E-Training

More fun, less fear and apprehension More errors, the deeper the knowledge as consequence of errors are explained Allows courses to be broken up in shorter sessions Will grow faster with high speed DSL and cable connections PDA and JIT: Just-in-time Training Savings of 50%-70% Used best in conjunction with conventional training

Differences inTraining Practices

USA Specialized Field Forces: Preceptorships Use of Multimedia in Training Training the Trainer Programs Cost to train a Rep: $100,000 Amount: Training per Rep: 5% of Salary Professional Development Programs Continuing Training and Education

Situation Outside the USA

Training=Product Training No Sales Training System Product Launches provide information overload Reps are not given enough opportunity to practice and role-play No training Videos on basic skills Trainers and PMs: are not given training!

New Techniques in Training

Elimination of the Classic Role Play Replaced by the Happy Griller The Use of Video Models Focused on Selling Skills Each Rep role-plays 40 times! Reinforcing his/her own confidence and enthusiasm

Problems are Opportunities!

In disguise The only thing permanent is change How quickly & how well we adapt, will determine our success. Time to change the conservatism of our Industry. Time to invest in training! Our capacity to learn faster is only sustainable advantage we have against competition!

Thank You for Your Attention!

Perri Cebedo
prosperocevedo@attbi.com