Multichannel Marketing: Two Important Pharma Trends

On September 6, 2018, Reuters reported the announcement of GlaxoSmithKline (GSK) that it would cut about 650 positions in the United States related to a global restructuring program. This includes 450 Medical (sales) Representatives (MR). Similar announcements on job cuts for MRs by other pharma companies are being made since the last several years. Last week’s GSK announcement was the continuation of the same process. This prompts me to use the aforementioned global news while focusing on two important emerging trends in the pharma industry, as we witness today.

In the rapidly digitalized world, several broader questions are often raised today. These include whether or not e-detailing in the pharma industry will eliminate the role of MRs, or for that matter will digital marketing replace the pharma print media? As the concept of ‘multichannel marketing’ (MCM) gains momentum, finding right answers to these questions or at least the right trends are assuming as much importance for business success. As I don’t have any specific answers to these queries, in this article, let me discuss just two of these emerging trends, as appears to me.

Importance of multichannel marketing in pharma:

Many pharma companies are fast realizing that their customers, such as doctors, patients and others, are showing increasing interest in getting the requisite product or treatment related information from multiple readily available channels or sources. These are accessible both in digital and print platforms, which are often of independent origin. Such behavioral preferences of pharma customers are contrary to what was mostly happening in the past, globally. However, in the pharma world of contemporary India the same old traditional path of product information flow, from drug companies through Medical Representatives to doctors, continues, by and large.

Looking ahead, ‘multichannel marketing’ for pharmaceutical and biologic products is being generally considered as the recipe for commercial success of brands. Thus, pharma players are trying to engage their customers more through multiple channels, both directly or indirectly. This is happening in many countries of the world. It is a matter of time, I reckon, that majority of large to medium Indian drug manufacturers will also follow suit.

Two interesting trends:  

As multichannel marketing in pharma catches up, I find some interesting developments. These are outcomes of different channels getting balanced, based on customer preferences. Let me underscore, these are customers’ perceptions in the real world and not what the drug companies and their associates usually think, hence are worth considering. The two emerging trends, in my view, are as follows:

1. Although, the role of Medical Representatives is still important, but not as indispensable as was in the past.

2. Despite high decibel discussion over digital media, print media is still very relevant.

1. Impact on the role of Medical Representatives (MR): 

“There is an ongoing debate about the effectiveness and impact of the traditional sales representative, with some arguing to discontinue the role while others sense an opportunity to improve both rep productivity and efficiency.” This was articulated in a McKinsey & McKinsey paper titled, “Death of a sales model or not.” The same article also says, even those who champion the role, point out that using richer analytics, better leadership and aligned incentives to deliver stellar results in many geographies.

To comprehend what is really happening in this area, I would quote below from two important global survey reports, with a sincere wish that similar surveys are carried out in India too. Although, these two surveys are different in nature, but address the same basic issue.

A. ZS’s Access Monitor 2014 survey:

According to this survey, “Representatives access to physicians continues to decline, particularly in certain specialties and areas of the country. Overall, close to half of all doctors in the United States are now considered “access restricted” to varying degrees.” It further says: “Since the initial ‘Access Monitor’survey in 2008, access has steadily fallen, with 77 percent of physicians considered “accessible” that year, compared with 65 percent in 2012, 55 percent in 2013 and 51 percent in 2014.

In another important finding the same study captured that “the pharmaceutical and biotech industry wastes approximately USD 1.4 billion in infeasible calls. (A call is considered infeasible if a best-in-class sales rep can’t deliver it.) The cost of infeasible calls appears to have plateaued, as companies have largely squeezed out sales force inefficiencies— making alternative channels the best path to improving access and customer engagement.”

B. CMI/Compas Media Vitals research 2018:

Despite such debate, doctors still value face to face interaction with MR, across the world. However, the digital tools and platforms of various types are increasingly used as the source of both new and existing product information, including updates.

According to CMI/Compas Media Vitals research 2018, as shown in the Table I below, doctors’ dependence on MR for information on new and existing products now stands at 51 percent and 46 percent, respectively. Similarly, for product updates their dependence stands at just 39 percent. The above McKinsey & McKinsey paper also predicts that the number of MR will gradually decline as the multichannel marketing initiatives pick up.

That said, in Table I – dinner meeting ranks seven and peer to peer information comes in the third place. Digital sources when put together now occupy a significant part of the doctors’ preferences for obtaining product information.This is also clear from the Table I that the doctors have started showing interest e-detailing, as well.

Table I:  How do you want to receive information from pharma companies, for:

In % New Products Existing Products Product Update
E-detailing

15

16

13

EHR

16

16

26

Reps’ Email

21

7

27

Medical Journal

22

19

12

MSL

24

23

14

Pharma Brand E-Mail

24

21

28

Direct Mail

32

29

29

Peer-to-peer

47

40

21

Dinner Meetings

49

45

24

Representatives

51

46

39

(Source CMI/Compass Media Vitals 2018)

Dinner Meetings:

As I said before, “Dinner Meetings” were rated as the second most preferred choice of the doctors for getting new and existing product information, in the above Table I. This is interesting, especially when one reads it along with the findings of the research paper, published in the August 2016 issue of JAMA Internal Medicine. The study concluded with: “The receipt of industry-sponsored meals was associated with an increased rate of prescribing the promoted brand-name medication relative to alternatives within the drug class.” The paper also clarified that “the findings represent an association, not a cause-and-effect relationship.”

2. Print media remains relevant despite digital push:

The research by CMI/Compass Media Vitals 2018 has also shown that despite the abundant availability of online versions of various medical publications, many doctors still prefer to read the print format of the same Journal, as shown below in the Table II:

Table II. How do doctors read medical Journals? 

Online/Digital format (%)

Print format (%)

47

53

(Source CMI/Compass Media Vitals 2018)

Although, the professional portals are the most used to get the requisite information by the doctors, print journals still rank number three, after peer-to-peer information.

That print media is still relevant for the doctors to know about drugs, was confirmed by another study, as shown in Table III:

Table III. Print media is still relevant:

Professional Portal Colleagues Print Journals CME Meetings Online Journals Drug Ref. App In Person Speaker program
72% 67% 66% 66% 53% 53% 53% 53%

(Source :Kantar Sources & Interactions report from September 2017)

It is noteworthy that ‘online journals’ rank number 5, after ‘CME meeting’.

Conclusion:

Despite Millennials in India mostly prefer reading news online through digital media, print media has still remained relevant and growing too. So are the television channels, regardless of easy availability of anytime streaming of all types of news, videos, TV serials and even movies.

Moreover, with increasing preference of digital media by an increasing number of populations, reliance of many industries such as Fast-Moving Consumer Goods (FMCG) haven’t totally shifted from magazine and newspaper advertisements, alongside targeting their customers through digital platforms. The same is expected to happen with various print formats in multichannel pharma marketing, where the physical presence of MRs still play an important role. Thus, to create a greater impact on doctors, patients and other stakeholders, pharma marketers are expected to leverage the best of both print and digital world in the form of comprehensive MCM initiatives. It could well be more on digital platforms and less with print materials, as we move on.

The new role of MRs was epitomized in an interview of the Sales Director, Roche, UK, published in the eyeforpharma on January 26, 2018. In the words of the sales director: “For us, in our market, the traditional showing a visual aid and some messages with the HCP is dead… But the face to face meeting is certainly not. Its role, however, will be more about adding value, about finding the right patients for the right drug.” He further highlighted, “the clear challenge that stands before the pharmaceutical industry’s sales organizations; a world where access to physicians is diminishing, trust in the information the industry provides is dwindling, and having a costly sales force is increasingly hard to defend.”

Against this backdrop, regardless of MCM, the role of those MRs who will be in sync with the requisite applications of technology in their focus areas of work, will continue to remain relevant, though they will be lesser in number. A few of them will also stand out and shoulder higher and higher professional responsibilities in the industry.  Be that as it may, in my view, these two emerging trends are expected to gather a strong tailwind, at least in the medium to long term, heralding the dawn of a new era in the Indian pharma industry.

By: Tapan J. Ray   

Disclaimer: The views/opinions expressed in this article are entirely my own, written in my individual and personal capacity. I do not represent any other person or organization for this opinion.

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