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A New Pharma Marketing Combo Places Patients At The Center Of Business

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As discussed in several of my previous articles, most pharma players need to walk the talk on ‘patient-centricity’, coming out of prevailing high decibel lip-service. This is not an easy task, and far from being every company’s cup of tea.

Effective implementation of patient-centricity by an organization, entails understanding of behavioral science by today’s pharma marketers. Many of them, I am sure, have already studied it in Business Schools. Be that as it may, by harnessing this scientific knowledge, the insights that they will acquire on primary and secondary pharma customers, will be unique. The important cues that will come out of the insights, will help them create well- targeted strategic marketing game plans having a cutting-edge. When implemented on an ongoing basis, this will help catalyze a win-win business environment, for reaping a rich harvest over a long period of time.

In today’s article, I shall dwell on the increasing relevance of an interesting combo of behavioral science – predictive analytics and patient-centricity, for a sustainable business performance. This is especially for the millennial pharma marketers to try and implement. With blessings from the top management, this model will help them jettison – the increasingly counterproductive – ‘gratification model’ of pharma business, imbibing ‘patient-centric ones’ – that patients themselves can feel and will appreciate.

The basic requirements to make it happen:

The basic requirements of the pharma companies to make it happen is to gradually move away from its core strategy of ‘buying prescriptions’ that often happens through contentious means. No doubt, it has the power to create a temporary strong brand push. But is definitely not sustainable, as these usually go against patients’ health and economic interest.

For a sustainable demand for a pharma brand, pharma companies would need to design a strong ‘brand pull’ in the new paradigm. This would prompt drug companies acquiring deep insights on how to leave a cherishing treatment experience with the patients for the brand. This would, consequently, have a strong-positive rub-off effect on the corporate image, as well. Likewise, a doctor would also like to know, how to create similar patient-experience with his treatment, to draw more of them in the future. This is diametrically opposite to generation of demand for a brand through ‘payment to doctors for prescriptions.’

Pharma marketer’s understanding of behavioral science is necessary:

This is because, it helps to get targeted deep-stick studies done on the way pharma customers, such as doctors and patients, behave. The span of the behavioral study should commence from the onset of a patient’s search for a disease treatment process, right up to when the individual gets an ‘after treatment experience’ – good, bad or average. It is, therefore, necessary for a drug company, to become more patient-centric, rather than self-serving, for achieving the desired goals of pharma business, consistently.

This wisdom would enable pharma marketers developing the following five broad insights for being ‘patient-centric’:

  • Understanding the process of thinking of a type or a group of patients about making their treatment choices. It could often mean not going for any treatment at all, or not adhering to prescribed treatment.
  • What makes patients behave the way they do, while undergoing a treatment?
  • Understanding both mental and physical feelings of patients while suffering from certain disease conditions, for effective engagement with them.
  • What type of holistic treatment experience the patients would value most to cherish.
  • What type of treatment experience the doctors would value most to provide to patients to enhance their practice and professional reputation.

While doing so, pharma marketers would need to clearly harmonize the two areas – one pertaining to doctors, and the other involving patients. This is important for the purpose of a clear focus on a comprehensive brand strategy formulation, based on well-analyzed data.

The key point to note, however – a creative blend of behavioral science with new-age pharma marketing tools can bring a sea change in the business performance of a company, along with providing a delightful treatment experience to patients with its drugs.

Generation of a huge pool of customer behavioral data is the starting point:

The first step of making a patient-centric organization is the generation of a huge pool of data on customer-behavior dynamics. That said, making predictions on the company’s customer behavior for future outcomes of the brand performance, from this data pool, would involve the use data analytics, which for this purpose will be ‘predictive data analytics.’

The use of ‘predictive analytics’ in pharma marketing:

In my article titled, ‘Data: The New Magic Wand For Pharma Business Excellence’, published in this Blog on October 01, 2018, I discussed the importance of well targeted data-based decision-making process, across the pharma functional areas. Taking this idea forward, let me explain here the critical role that ‘predictive data analytics’ can play in acquiring insights of the trend of behavior of the customers, especially patients and doctors.

Simply put, ‘predictive analytics’ is a type of advanced analytics, which are used to get deep insights and making well-informed predictions, based on both past and current data feeds. In pharma, especially for the subject that I am discussing, it pertains to insights on doctor and patient behavior related predictions, encompassing the entire span of a disease treatment process. Skillfully executed, this will strengthen, at least, two critical success factors in the pharma business:

  • Acquiring predictable insights on the targeted customers’ behavioral trend and pattern any given time-frame.
  • With such customer insights making the organization ‘patient-centric’ for more effective engagement with its customers.

Combining the above two points, I can well say, by analyzing a huge pool of data from behavioral-science-based information – ‘predictive analytics’ helps acquire deep insights on predictable customer behavior, with high precision. These are so useful, not just for better engagement with doctors, patients and other stakeholders, but also in making the organization patient-centric, in true sense. Nevertheless, many still question - Is ‘patients centricity’ really feasible in the pharma industry?

Is ‘patient centricity’ really feasible in the pharma industry?

This question was also raised in the 2017 paper titled, “Patient Centricity and Pharmaceutical Companies: Is It Feasible?” -  published in Vol. 51(4) of the Therapeutic Innovation & Regulatory Science (TIRS). The paper captures patient-centricity as integrated measures for listening to and partnering with patients, and placing patients’ well-being at the core of all business initiatives. It represents a holistic approach to the disease management process.

The concept brand-oriented patient-centricity is not too difficult to understand. But, I reckon, the difficulty lies somewhere else. It is to fathom where and how a pharma player can predictably add differentiating value, for those patients who need a right kind of treatment. That’s why, the question of feasibility of ‘patient-centricity’ is being raised.

There is no doubt that such an effort presupposes considerable insights on patients’ behavior, alongside the requisite expertise to predict these, for different time-frames, with a great degree of precision. This not an insurmountable task, either, particularly in today’s paradigm – with state-of-the-art ‘predictive data analytic’ tools. This prompts me to believe, it is very much possible to make a truly patient centric organization, assuming that there will exist a strong will to survive in the business and prosper!

Are ‘predictive data analytics’ different from other analytics?

Yes, the following two key points make ‘predictive data analytics’ quite different from other data analytics:

  • General data analytics usually help acquire insights on the past and present.
  • Whereas, predictive data analytics help looking at near-mid and long-term future, regarding most probable customer behavior pattern and trend, with great accuracy.

Currently, with the ability to generate relevant and real-time big data pool, together with application of machine learning, data-mining and statistical modelling – predictive analytics have the power to help acquire future insights. This insight is totally data-based, sans any gut-feel. Thus, effective use of this process can enable pharma players effectively predict trends and behaviors of doctors and patients for meaningful engagement with them for their chosen brands.

Has potential to create a win-win outcome: 

To ensure a game-changing payback from this process, crafty dovetailing of the following three steps, complementing each other is critical:

  • Generate a huge pool of real-time data on doctors’ and patients’ behavior pattern, for a pre-selected time-frame.
  • With the knowledge of behavioral science, help analyze them with predictive analytics.
  • Understand from the results, the trend of behavioral dynamics of selected customers from the brand perspective.
  • Frame rewarding business strategies to create a win-win situation, involving both – the pharma players and the patients.

Some pharma players are on the ball:

One of the key reasons for imbibing patient-centricity, is the proliferation of ‘me-too’ types of brands – both patented and generics. It has started happening even in the market of high-priced oncology medicines, with not much difference in price between them.

In this situation, predictive data analytic tools can help understand multi-variable relationship between patient’s needs, their interaction with physicians, the oncologist’s prescriptions to them, type of physician-engagement of drug companies and patients’ experience before, during and after the treatment. This is not an easy task, nor all pharma companies have wherewithal of doing this, to gain brand market share, significantly.

With predictive data analytics, many pharma companies are keeping eyes on the ball, using it in different business areas, such as drug discovery. But not many of them, are using this combo-approach to make a patient-centric pharma organization. It is just a matter of time, I reckon, that global pharma will decide to move in this direction – fortified with deep pockets, but with a battered reputation, and facing a hostile pricing environment, across the world.    

Conclusion:

Customer insights, acquired through the crafty application of behavioral science, have immense potential to make sales and marketing decisions more informed, than what it is today. In tandem, it will help create a ‘worth remembering’ treatment experience for the patients with the brand used.

From this perspective, I reckon, skillful application of behavioral science to generate a huge pool of data, and their analysis with ‘predictive analytics’ will go a long way to create a truly ‘patient-centric’ organization.

When executed by a well-integrated expert team of market research, medical affairs and pharma marketing professionals, this new marketing-combo-approach has the potential to fetch a game-changing performance outcome, placing patients at the center of business. The net gain to the organization will be much more than the sum total of what each of these steps can ensue individually – remarkably enhancing corporate reputation, in tandem.

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.

Innovative ‘Medicines Too Damn Expensive’: Health Risk For Billions of People

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Most ‘medicines are too damn expensive. And a key part of the problem is the lack of consistent information about drug pricing. It’s not often that the Trump administration and the anti-poverty NGO Oxfam find themselves singing from the same hymn sheet.’ This was articulated in the article carrying a headline, ‘No One Knows The True Cost Of Medicines, And Blaming Other Countries Won’t Help,’ published by Forbes on March 03, 2019.

In the oldest democracy of the world, on the eve of the last Presidential election, Kaiser Health Tracking Poll, September 2016 captured the public anger on skyrocketing cost of prescription drugs, which they ranked near the top of consumers’ health care concerns. Accordingly, politicians in both parties, including the Presidential candidates, vowed to do something about it.

Ironically, even so close to General Election in the largest democracy of the world, no such data is available, nor it is one of the top priority election issues. Nevertheless, the discontentment of the general public in this area is palpable. The final push of election propaganda of any political party is now unlikely to include health care as one of the key focus areas for them. This is because, many seemingly trivial ones are expected to fetch more votes, as many believe.

In this area, I shall dwell on the ‘mystic’ area of jaw dropping, arbitrary drug pricing, especially for innovative lifesaving drugs – drawing examples from some recent research studies in this area.

High drug prices and associated health risks for billions of people:

New Oxfam research paper, titled: ‘Harmful Side Effects: How drug companies undermine global health,’ published on September 18, 2018, ferreted out some facts, which, in general terms, aren’t a big surprise for many. It highlighted the following:

  • Abbott, Johnson & Johnson, Merck and Pfizer – systematically hide their profits in overseas tax havens.
  • By charging very high prices for their products, they appear to deprive developing countries more than USD 100 million every year – money that is urgently needed to meet health needs of people in these countries.
  • In the UK, these four companies may be underpaying around £125m of tax each year.
  • These corporations also deploy massive lobbying operations to influence trade, tax and health policies in their favor and give their damaging behavior greater apparent legitimacy.
  • Tax dodging, high prices and political influencing by pharmaceutical companies exacerbate the yawning gap between rich and poor, between men and women, and between advanced economies and developing ones.

The impact of this situation is profound and is likely to further escalate, if left unchecked, the reason being self-regulation of pharma industry is far from desirable in this area.

As discussed in the article, titled ‘Why Rising Drug Prices May Be the Biggest Risk to Your Health,’ published in Healthline on July 18, 2018, left unchecked, the rising cost of prescription drugs could cripple healthcare, as well as raise health risks for millions of people. Although this specific article was penned in the American context, it is also relevant in India, especially for lifesaving patented drugs, for treating many serious ailments, such as cancer.

Is pharma pricing arbitrary?

The answer to this question seems to be no less than an emphatic ‘yes’. Vindicating this point, the above Forbes article says: ‘It’s a myth that the costs of medicines need to be high, to cover the research & development costs of pharmaceutical companies.’

Explaining it further, the paper underscored, ‘Prices in the pharma industry aren’t set based on a particular acceptable level of profit, or in relation to the cost of production. They’re established based on a calculation of the absolute maximum that enough people are willing to pay.’

The myth: ‘High R&D cost is the reason for high drug price’: 

Curiously, ample evidences indicate that this often-repeated argument of the drug companies’, is indeed a myth. To illustrate the point, I am quoting below just a few examples, as available from both independent and also the industry sources that would bust this myth:

  • Several research studies show that actual R&D cost to discover and develop a New Molecular Entity (NME) is much less than what the pharma and biotech industry claims. Again, in another article, titled ‘The R&D Factor: One of the Greatest Myths of the Industry,” published in this blog on March 25, 2013, I also quoted the erstwhile CEO of GlaxoSmithKline (GSK) on this subject. He clearly enunciated in an interview with Reuters that: “US $1 billion price tag for R&D was an average figure that includes money spent on drugs that ultimately fail… If you stop failing so often, you massively reduce the cost of drug development… It’s entirely achievable.”
  • In addition, according to the BMJ report: ‘More than four fifths of all funds for basic research to discover new drugs and vaccines come from public sources,’ and not incurred by respective drug companies.
  • Interestingly, other research data reveals that ‘drug companies spend far more on marketing drugs – in some cases twice as much – than on developing them.’ This was published by the BBC New with details, in an article, titled ‘Pharmaceutical industry gets high on fat profits.’

World Health Organization (WHO) recommends transparency in drug pricing:

The report of the United Nations Secretary-General’s High-Level Panel on ‘Access to Medicines’ released on September 14, 2016 emphasized the need of transparency in this area of the pharma sector. It recommended, governments should require manufacturers and distributors to disclose to drug regulatory and procurement authorities information pertaining to:

  • The costs of R&D, production, marketing and distribution of health technology being procured or given marketing approval to each expense category separated; and
  • Any public funding received in the development of any health technology, including tax credits, subsidies and grants.

But the bottom-line is, not much, if any, progress has been made by any UN member countries participating in this study. The overall situation today still remains as it has always been.

Conclusion:

The Oxfam report, as mentioned above, captures how arbitrarily fixed exorbitant drug pricing, creates a profound adverse impact on the lives of billions of people in developing and underdeveloped countries. Let me quote here only one such example from this report corroborating this point. It underlined that the breast cancer drug trastuzumab, costing around USD 38,000 for a 12-month course, is almost five times the average income for a South African household. The situation in India for such drugs, I reckon, is no quite different.

To make drug pricing transparent for all, the paper recommends, “attacking that system of secrecy around R&D costs is key.” Pharma players have erected a wall around them, as it were, by giving reasons, such as, ‘commercial secret, commercial information, no we can’t find out about this’…if you question intellectual property, it’s like you’re questioning God.” The report adds.

In India, the near-term solution for greater access to new and innovative lifesaving drugs to patients, is to implement a transparent patented drug pricing policy mechanism in the country. This is clearly enshrined in the current national pharma policy document, but has not seen the light of the day, just yet.

In the battle against disease, life-threatening ailments are getting increasingly more complex to treat, warranting newer and innovative medicines. But these ‘drugs are too damn expensive’.

In the midst of this complicated scenario, billions of people across the world are getting a sense of being trapped between ‘the devil and the deep blue sea.’Occasional price tweaking of such drugs by the regulator are no more than ‘palliative’ measures. Whereas, a long-term solution to this important issue by the policy makers are now absolutely necessary for public health interest, especially in a country like India.

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.

Pharma Marketing: Time For A Disruptive Change with A New Breed of Marketers

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In Today’s fast-changing world, as I indicated in several of my previous articles, more and more people first try to understand the causative factors of their ailments, and options available for effective remedial measures. They strive to get such information, either from the cyberspace or by word of mouth from well informed individuals or other sources. This process starts before treatment, and continues, at times, even after remission of the disease.

Even in the developed countries, a scope exists for self-medication for common ailments with OTC drugs, duly approved by respective country’s drug regulators. A point to ponder, most of these were ‘only prescription’ medicines before going off-patent, and after enjoying 20 years of exclusivity with pricing freedom. During their patent life, self-treatment was illegal with any of these molecules, if not dangerous. The same tradition continues today.

The bottom-line is, many patients are now trying to understand their diseases from sources other than the physician. Good or bad, the reality is, such patients generally prefer to visit a doctor as and when they deem it necessary. While visiting a clinic, they already have, not just some idea of the ailment, but also in what way they would prefer to get themselves treated and approximate cost of each. One should not presume, either, that majority of them are unaware of the risks involved with this approach.

Pharma marketers today can’t just wish away this emerging trend of patients and patient groups getting increasingly more informed. Trying to stop this trend will be a Herculean task, similar to swimming against a very strong current. Managing this situation in a win-win way is now a key task of a pharma marketer. In this article, dwelling on this trend, I shall focus on the need for a disruptive change in pharma marketing and the new breed of drug marketers.

Calls for a fundamental shift in pharma ‘marketing focus’:

Achieving this objective warrants a fundamental, if not a disruptive shift, in the ‘marketing focus’ of pharma companies – from traditional ‘product management’ to modern ‘brand management.’

With patented ‘me-too’ drugs, including ‘Fixed Dose Combinations (FDCs)’, as well as generics, now dominating the market, some sort of ‘commoditization’ of drugs are taking place in the pharma industry, whether one likes it or not.

No significant differential advantages oruniqueness exist between such products manufactured by different drug companies. Consequently, doctors or patients have enough choices to prescribe or buy, drugs with comparable efficacy, safety, quality standards and matching price range, from different pharma players.

Shift from product marketing to brand marketing:

One may possibly ask aren’t both quite the same? Is there any meaningful difference between these two? Thus, taking a pause, let us try to understand what’s the difference between these two.

Yes, for many there is not much difference between these two, especially in the pharma industry. Hence, many drug companies name this function as ‘product management’, while others call it ‘brand management’. In fact, these two are often used as interchangeable terminologies in the drug industry. Nonetheless, this understanding is far from being correct.

The key focus in ‘pharma product marketing’ is on the drug itself – its intrinsic value offerings to patients in terms of efficacy, safety, quality and often the cost. Thus, ‘product marketing’ approach may work for breakthrough drugs, but not for ‘me-too’ patented drugs or generic ones to achieve the desired goals of the respective companies, consistently.

Whereas, pharma ‘brand marketing’ in its true form, creates much more value than pharma ‘product marketing.’ The former dovetails intrinsic values of the drug with a set of strong feelings and emotions around the brand, purely based on what patients or consumers would want to experience from it. This process makes even a me-too brand stand out, creating a strong personality around it and differentiating itself head and shoulder above competitors. Importantly, the bedrock of conceptualizing these powerful feelings and emotions, must necessarily be robust, relevant and fresh research data. No doubt, the task is a challenging one– and not every marketer’s cup of tea.

Why building personality for pharma brands and services is necessary?

If we look around the healthcare industry, we shall be able to realize the importance of building personality for a medicine, especially generic drugs with a brand name, in the Indian context.

For example, many hospitals offer similar medical treatment facilities, follow similar treatment guidelines and their cost may also not be very different. But why different people prefer different ones among these, and all hospitals don’t get a similar number of patients? Same thing happens during the patients’ selection of doctors from many, having similar qualification, experience and expertise.

This happens mainly due to the attachment of a persona around each that creates a particular feeling and emotion among patients while choosing one of them. The process and reasons of creation of a persona may be different, but it certainly differentiates one from the other for the consumer. The same thing happens with virtually undifferentiated ‘me-too’ patented drugs or generic medicines.

Time to create a ‘strong pull’ for a drug, instead of ‘push’ by any means:

To create a ‘strong pull’ successfully, specifically for ‘me-too’ patented molecule or generic drugs, there is an urgent need for a fundamental change in the organization’s marketing approach – a shift in focus from ‘product marketing’ to ‘brand marketing’.

Otherwise, current pharma marketing practices for creating a ‘strong push’ for drugs that often involve alleged serious malpractices’ will continue. But continuation of this approach is not sustainable any longer, for scores of reasons.

The benefits of pharma ‘brand marketing’ in bullet points:

To summarize the key benefits of ‘brand marketing’ in pharma, the following points come at the top of mind:

  • ‘Brand marketing’ of drugs helps escaping avoidable and unsustainable heavy expenditure to create a ‘strong product push,’ often resorting to contentious marketing practices.
  • Proper ‘brand marketing’ of drugs needs high quality cerebral and multi-talented marketing teams, rather than the power of ‘deep pocket’ to buy prescriptions. This creates a snowballing effect of cutting edge talent development within the organization, along with a culture of leading by examples, for a sustainable future success.
  • ‘Brand marketing’ is a better, if not the best way to make a drug most preferred choice in a crowd of similar branded generics or ‘me-too’ patented drugs.
  • Paying doctors for prescribing a drug does not help developing loyal customers, but creating feelings and emotions for a brand among them, helps foster brand allegiance.
  • Creative ‘brand marketing’ of drugs will appreciably boost the image of the organization, as well, but ‘pharma product’ marketing in its present form, will not.

Pharma ‘brand marketing’ and ‘patient-centricity’ to work in tandem:

My article, ‘Increasing Consumerism: A Prime Mover For Change in Healthcare’, published in this blog on June 11, 2018, deliberated an important point. It was:

If the pharma strategic marketing process is really effective in every way, why is healthcare consumerism increasing across the world, including India?

The focal point of rising consumerism in the pharma industry is unsatisfied, if not anguished or angry patients and patient groups – in other words consumers. There could be various different reasons for the same. But the core point is, contentious marketing practices that pharma players generally follow, is self-serving in nature. These are not patient-centric, and mostly devoid of efforts to create feelings or emotions for the product, among both prescribers and other consumers.

The pharma marketers to keep pace with changing environmental demands:

As I discussed several times in the past, pharma marketers are often found wanting to meet the changing demands of the business environment. This is important, as the general pharma practices of influencing the prescribing decision of the doctors are facing a strong headwind of increasing consumerism, India included. This is slowly but surely gaining momentum. For example, patients in India are realizing:

  • That a vast majority of people pay ‘out of pocket’, almost the total cost of health care, without having even a participatory role in their treatment choice, including drugs.
  • That they no longer should remain unassertive consumers, just as what happens in other industries when a consumer buys a product or service.
  • That they need to involve themselves more and be assertive when a decision about their health is taken by doctors, hospitals, realizing that pharma and medical device companies often ‘unfairly’ influence doctors’ prescribing decisions.

The role and requisite talent required for pharma marketers have changed:

Keeping aside ‘one size fits all’ type of strategy, even if I look at so called ‘targeted marketing’ in pharma, it appears somewhat baffling. It is somewhat like, ‘empty your machine gun magazine at the target with a hope to win over competition.’ Whereas, today’s environment requires making healthcare product marketing, including drugs and services, more personal, and in some cases even individual, like latest cancer therapy. The wherewithal for technological support to move towards this direction is also available. State of the art marketing and product research tools and analytics should be put to use to facilitate this process.

Increasing usage of digital marketing, in an integrated or holistic way, is going to make traditional pharma marketing less and less productive, whether we like it or not. To maintain a sharp competitive edge in this new ball game, on an ongoing basis, pharma marketers will need to keep raising the bar.

Consequently, the role and requisite talent required for pharma marketers have also changed. The new generation of drug marketers will not just be creative, but their creativity will be guided by a huge pool of credible research-based data, avoiding gut-feel. All guesses in this area must pass the acid test of validation by what the research data reveals. Moreover, pharma marketers will need to possess, at least the working knowledge of various digital platforms and possible usages for each of these.

Conclusion:

There is an urgent need to realize that drug marketing is now at the crossroads, pharma players will have a choice, either to follow the same beaten path or gradually make a course correction to keep pace with changing environmental demands. If a company decides to choose the second one, the role of pharma marketers and the talent required for doing the job effectively, will be significantly different from what it is today.Maintaining the status quo in this area, carries an inherent risk for the future success of pharma companies.

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.

 

Are Cancer Patients Victims of Pharma’s Payment to Doctors – For Prescriptions?

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In pharma industry, people of all socioeconomic backgrounds have no other choice but to visit doctors, to seek their expert advice for medical treatment. Patients expect them to prescribe the right and most affordable medicines for desired relief. Ironically, it appears to be the general industry practice to favorably influence the prescribing decision of doctors of all kinds of drugs, irrespective of any tangible product superiority, and price. This practice has been a decade old general concern of many that still continues unabated, especially in India.

There is nothing wrong, though, in pharma companies’ influencing doctors with unique product and associated service offerings over others, intended to benefit patients. However, when any marketing activity goes against the general patient interest, or may be construed independently as short-changing patients, must not be condoned, the least by any government.

This article will discuss how this menace is not sparing even those cancer patients who can’t afford expensive drugs but want to survive. I shall start with an overall perspective and sign off with the prevailing situation in India.

Are such practices transparent?

Obviously not, as these take place under several benign names and guise, and is an open secret to almost all stakeholders, including many patients. In several countries, India excluded, the government or the legal systems have intervened to make the drug marketing process more transparent, often with strong punitive measures. Curiously, adequate space is constantly being created by some players to hoodwink all these.

Today, one can, at best put two and two together to get a feel of what could possibly be the reality. It still remains a challenge to exactly quantify as to what extent it is going on, and with what impact on common patients, who mostly pay out of pocket to purchase medicines. But the good news is, studies on this particular subject has commenced, a few examples of which I shall in this article.

Some common influencing tools:

Pharma companies’ influencing tools for favorable doctors’ prescriptions are, apparently, directly proportional to a doctor’s prescription generating capacity. Once a doctor is influenced by such mechanism, high product price becomes irrelevant, even for those who find the drug difficult to afford.

The form of influence varies from gifts carrying different price tags, advertising in specific souvenirs or journals, sponsoring medical symposia of doctors’ choice, to arranging company’s own ‘Continuing Medical Education (CME)’ programs in exotic places, with travel, boarding and lodging expenses paid by the company, sometimes including their spouses. Hefty speaking, consulting fees and research grants may also be among these influencing tools. All are commonly done through a third party to avoid easy detection.

Some evidences of drug companies’ payment to doctors:

May 02, 2017 edition of the Journal of American Medical Association, published a couple of survey findings that can be summarized, as follows:

  • About half of U.S. doctors received payments from the pharmaceutical and medical device industries in 2015, amounting to USD 2.4 billion
  • Such payments and gifts very likely encourage doctors to prescribe pricey brand-name drugs and devices pushed by sales representatives.
  • Chances of receiving a general payment depended on the doctor’s specialty — 61 percent of surgeons got a payment, compared with 48 percent of primary care doctors.
  • Pharma companies earned more than USD 60 billion in 2010 for brand-name drugs included in the study. Generic drugs are 80 to 85 percent less expensive, which means hospitals can save lots of money, if doctors start prescribing generics instead of brand-name drugs.
  • Doctors at academic medical centers were more likely to prescribe cheaper generic drugs than expensive brand-name drugs after their hospitals adopted rules that restricted pharmaceutical sales visits, the researchers said.
  • “Many doctors would say they can’t be bought for the low amounts we’re talking about, but the amounts actually aren’t that low. Many, many doctors are getting thousands of dollars. It’s hard to imagine that is not influential,” the article underscored.

Quantification of increased prescription:

Another interesting study analyzed the prescription pattern of cardiologists who were taken out for a meal by sales representatives of Pfizer or AstraZeneca– makers of two expensive branded cholesterol-lowering statins, Lipitor and Crestor. They found that payment to physicians increases prescribing of the focal drug by 73 percent.

It is noteworthy,during the time period examined, which was between 2011 and 2012, there were several equivalent, lower-cost generic statin drugs available in the market. The paper’s findings confirm the general belief that drug companies’ business practices do influence doctors prescribing behavior while treating patients, in favor of the high-cost targeted brands.

Any relationship between soaring cancer drug price and pay for prescriptions?

Dr. Peter Bach at the Memorial Sloan-Kettering in New York City, with the help of a ‘cancer drug price chart from 1965 to 2016 period, established that treatment cost with cancer drugs is soaring. In another article, on the same issue, Dr. Bach commented: ‘Market pricing does not ensure access to new innovation.’ He reiterated:‘Profit maximizing price is not welfare maximizing. This is a policy failure, not a market failure.’

So far so good. However, everybody was surprised when on October 02, 2018, The New York Times reported about the same Memorial Sloan-Kettering that: ‘Dr. Craig B. Thompson, the hospital’s chief executive, resigned in October from the board of Merck. The company, which makes the blockbuster cancer drug Keytruda, had paid him about $300,000 in 2017 for his service.’

The same report further detailed: ‘Dr. Thompson, 65, received $300,000 in compensation from Merck in 2017, according to company financial filings. He was paid $70,000 in cash by Charles River in 2017, plus $215,050 in stock.’ This does not seem to be a solitary example from this hospital, as ‘another article detailed how a hospital vice president held a nearly $1.4 million stake in a newly public company as compensation for representing Memorial Sloan Kettering on its board.’

The question that arises now, how would such behavior of doctors adversely impact cancer patients’ health-interest? This was evaluated in an interesting article, as below.

Evaluation of association between industry payment to doctors and their prescribing practices:

Financial relationships between physicians and the pharmaceutical industry are common. This was analyzed in detail with deft and expertise in yet another very recent research paper titled, ‘Evaluating the Strength of the Association Between Industry Payments and Prescribing Practices in Oncology,’ published in the ‘The Oncologist’ on February 06, 2019. Two critical findings of the study may interest many, which are:

  • The association between industry payments and cancer drug prescribing was greatest among physicians who received payments consistently (within each calendar year).
  • Receipt of payments for compensation purposes, such as for consulting or travel, and higher dollar value of payments were also associated with increased prescribing.

Its implication on cancer patients:

To ascertain its implication on cancer patients by combining records of industry gifts with prescribing records, the study identified:

  • The consistency of payments over time, the dollar value of payments, and payments for compensation as factors.
  • This is very likely to strengthen the association between receiving payments and increased prescribing of that company’s cancer drug.

The outrageous cost of cancer treatment with innovative drugs:

As I said in my previous articles, new cancer drugs are increasingly becoming more innovative with greater efficacy. The fact that the 2018 Nobel Prize in Physiology or Medicine was awarded to James P. Allison and Tasuku Honjo “for their discovery of cancer therapy by inhibition of negative immune regulation,” provides a testimony to the high quality of innovation involved in the discovery and development of cancer therapy.

This progress is excellent, unquestionably! But who is getting benefitted by these innovative cancer medicines? The headline of the article, titled ‘The Nobel Prize is a reminder of the outrageous cost of curing cancer,’ published by the Vox Media Vox Media on October 02, 2018, captures the prevailing reality, succinctly. Articulating, ‘The Nobel Prize is a reminder of the outrageous cost of curing cancer,’ the author further elaborates the point. The paper underscores, for the first time ever, we’re living in a moment when many of our most promising medical advances, such as cancer immunotherapy, are far out of reach for the vast majority of people who could benefit from them.

Innovative cancer drugs are pricey only for the high cost of innovation? 

Let me deliberate this point based on data. Quite expectedly, pharma industry never accepts that prescriptions are bought. But, when get caught, they retort that these are some aberrations, keeping their much-publicized argument unchanged in support of jaw dropping cancer drug prices. They argue, innovative drugs are brought to market after incurring R&D expenditure of over a billion dollars, if not more.

The Vox article quotes the CEO of Novartis, the maker of the immunotherapy drug Kymriah, saying that the R&D costs of the drug were about USD 1 billion. But many experts don’t buy this argument. The article echoed one such expert - Ezekiel Emanuel, a professor of medical ethics and health policy at the University of Pennsylvania’s Perelman School of Medicine.

The professor countered by saying: ‘That’s certainly a big investment, but it is much less astounding when compared with the drug’s anticipated revenue. Based on Kymriah’s list price, treating just 2,700 patients would allow Novartis to recoup its entire investment. Even with significant discounts for many patients, it wouldn’t take many treatments to turn a considerable profit.’

According to researchers at the University of Pennsylvania, the total cost for removing, reprogramming and infusing the cells into each patient is less than USD 60,000—just one-sixth of the USD 373,000 price tag. Production costs do not seem to be driving the stratospheric drug prices, the researchers commented.

Has any remedial action been taken by the industry or the doctors?

Except one report, I reckon, this practice continues virtually unabated, even today.

‘The above conflicts at Memorial Sloan Kettering, unearthed by The New York Times and ProPublica, have had a rippling effect on other leading cancer institutions across the country’, commented ProPublica on January 11, 2019. It reported: ‘The cancer center will now bar top officials from sitting on outside boards of for-profit companies and is conducting a wide-scale review of other policies.’

Further, Dana-Farber Cancer Institute in Boston and Fred Hutchinson Cancer Research Center in Seattle, both of whose executives sit on corporate boards, are among the institutions reconsidering their policies on financial ties, the article said.

Conclusion:

Although, in many countries, at least, some action has been taken by the governments to curb such practices by framing appropriate laws, in India it is virtually free for all types of situation, as prevailing in this area.

A recent news report aptly summarized the Indian situation. It highlighted: “While Prime Minister Narendra Modi recently mocked doctors in a public interaction in London for going on foreign trips sponsored by pharma companies, his government has been unsuccessful in bringing in a law to punish pharma companies that bribe doctors. The Uniform Code of Pharmaceutical Marketing Practices (UCPMP), prepared by the pharmaceuticals department (DoP) to control unethical marketing practices in pharma has been in the work since December 2014, six months after the current government came to power. More than three years later, the code is stuck in the Niti Aayog after the law ministry rejected DoP’s draft.”

With the above global and local perspective, I reckon, even if some changes take place in the developed world, India is unlikely to fall in that category, any time soon. Consequently, a large number of Indian patients may continue to fall victims of common pharma practice – pay to doctors for prescriptions. It doesn’t seem to matter even for cancer drugs.

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.

Uniting Pharma With Business Ethics: A Bridge Too Far?

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Operating ethically not only is the right thing to do but also is fundamental to success in business. Poor governance and poor ethical business practices can lead to fines, public scrutiny and distrust – overshadowing good performance, destroying reputation, and undermining the morale and engagement of employees. …We must act in ways that build and maintain the trust of patients, healthcare professionals, governments and society. This was articulated in the Novartis Corporate Responsibility Report 2017, highlighting how important it is to unite pharma operations with business ethics for each company. But is it happening in reality?

The same question haunts yet again with the announcement of a new Code of Marketing Practice by the International Federation of Pharmaceutical Manufacturers and Associations’ (IFPMA),effective January 2019. The pronouncement prescribes ‘a global ban on gifts and promotional aids for prescription drugs wherever the association’s member companies operate.’

However, the overall scenario gets more complex to comprehend, when on January 03, 2019  Bloomberg Law reported: ‘The change is causing concern among both U.S.-based and multinational companies like Astra Zeneca, Bristol-Myers Squib, Johnson & Johnson, and Pfizer Inc. about how to balance appropriate business behavior with respect for cultural norms in other countries.’ Interestingly, the IFPMA membership virtually covers all MNC drug companies, operating across the world. Thus, any concern on its implementation, especiallyamong some of the bigger names, raises more questions than answers about its effectiveness. What exactly has been the outcome of all such actions being taken, especially by the multinational pharma industry associations, from time to time. Have the patients been benefited – at all?

Keeping this recent development as the backdrop, I shall try to gauge in this article, is the bridge still too far to mitigate the widening gap between overall pharma operations and the standard of business ethics -voluntary code of practices of pharma associations notwithstanding?

Why pharma ‘business-practices’ and ‘business-ethics’ are so important?

Before charting onto the sensitive areas of ‘business practices’ and ‘business ethics’, let me recapitulate the meaning of these two terminologies to fathom why these are so important in pharma to protect patient health interest.

  • Business practice is defined as a method, procedure, process, or rule employed or followed by a company in pursuit of achieving its objectives. Itmay also refer to these collectively.
  • Similarly, Business ethics is defined as a form of professional ethics that examines the ethical and moral principles and problems that arise in a business environment. It applies to all aspects of business conduct on behalf of both individuals and the entire company.

Thus, ethical business policies and practices for pharma industry, when worked out both by an industry association or an individual company, aims at addressing potentially controversial issues, such as corporate governance, insider trading, bribery, discrimination, corporate responsibility and fiduciary responsibilities.

Ironically, despite well-hyped announcements of voluntary codes of practices from time to time, no commensurate changes in patients’ health interest are visible in real life. Thus, the very relevance of such edicts is now being seriously questioned by many.

What do reports reflect on ongoing pharma business practices?

To get an idea in this area, let me quote below from three reports, out of which one is specifically on the Indian scenario, which has not changed much even today:

“The interaction between physicians and medical representatives (MRs) through gift offering is a common cause for conflicts of interest for physicians that negatively influence pre- scribing behaviors of physicians throughout the world.” This was articulated in an article titled, “Gift Acceptance and Its Effect on Prescribing Behavior among Iraqi Specialist Physicians”, published by Scientific Research Publishing (SCIRP) in June 2014.

A couple of years before that, on September 07, 2012, Reuters also published an article with the headline: “In India, gift-giving drives drug makers’ marketing.” Thereafter, many similar articles were published in various newspapers and magazines, possibly to trigger remedial action by the regulators in the country.

Very recently, on January 18, 2019, The New York Times (NYT) came out with a mind boggling headline – “Study Links Drug Maker Gifts for Doctors to More Overdose Deaths.” Elaborating on this JAMA study, the NYT wrote: “Counties where the doctors got more meals, trips and consulting fees from opioid makers had higher overdose deaths involving prescription opioids.”

The point I want to drive home here is that freebies in the form of gifts, travel to exotic places with free meals and stay, fees of various types clubbed under a mysterious nomenclature ‘consulting fees’, purported to influence doctor’s prescribing behavior, are now rampant. These are adversely impacting patients, as they are often compelled to buy high-priced drugs, unnecessary drugs, including antibiotics, sedatives and opioids, to name a few.

Are big pharma companies following the codes – both in letter and spirit?

The doubt that surfaces, are these changes just for displaying to the stakeholders how well and with stringent measures, drug companies are self-regulating themselves, on an ongoing basis? Before jumping to any conclusion, let us try to make out whether, at least the big pharma players are following these codes in both letter and spirit.

To establish the point, instead of providing a long list of large pharma settlements with governments for various malpractices, I shall cite just the following two relatively recent ‘novel’ examples related two top global pharma companies, for you to have your own inferences.

  • The first one is related to reports that flashed across the world in May 2018 related to Novartis. One such article described, “Congress demands info from Novartis about its USD 1.2m in outflows to Michael Cohen, just as it was negotiating payments for its cancer drug.” The report further elaborated, Novartis’ USD 1.2 million payment was made in the shell company of Michael Cohen, President Donald Trump’s personal lawyer and so-called ‘fixer’.
  • The second one is the September 13, 2018 report of The New York Times. It revealed: ‘Dr. José Baselga, the chief medical officer of Memorial Sloan Kettering Cancer Center, resigned on Thursday amid reports that he had failed to disclose millions of dollars in payments from health care companies in dozens of research articles.”

The report also stated: “Dr. Baselga, a prominent figure in the world of cancer research, omitted his financial ties to companies like the Swiss drugmaker Roche and several small biotech startups in prestigious medical publications like The New England Journal of Medicine and The Lancet. He also failed to disclose any company affiliations in articles he published in the journal Cancer Discovery, for which he serves as one of two editors in chief.”

Indian companies aren’t trailing far behind, either:

Many Indian companies are, apparently, sailing on the same boat. Let me illustrate this point by citing an example related to India’s top ranked domestic pharma player.

What it said: Way back on November 13, 2010, Sun Pharmain a communication expressed its concern by saying: ‘Over four decades since Independence, the government nurtured a largely self-sufficient pharma industry. But the entry of MNCs is putting most drugs beyond the reach of millions.’

The communique further added: ‘Even as the domestic industry begins to feel the heat of an unprotected market, public health experts are examining why drug prices in India are higher than in Sri Lanka, which imports most of its drugs. The MNC takeover raises the specter of an MNC-dominated pharma sector selling drugs at un-affordable prices, a throw ‘back to the scenario just after Independence, which the government painstakingly changed over four decades. Are we setting the clock back on the country’s health security?’

The reality thereafter: It’s a different story that today, the same Sun Pharma, despite alleged ‘high price drugs of MNCs’, occupies the top ranking in the Indian pharmaceutical market. Be that as it may, the point to note that the same company is now facing similar charges from other countries, almost a decade after. On March 2017, a media report came with a headline: ‘Sun Pharma, Mylan face price fixing probe in US.’

Incidentally,the company is mired with allegation on governance related issues, as well. A media report dated November 20, 2018 carried a headline: ‘Governance cloud over Sun Pharma, stock at 6-month low.’ This example is quite relevant to this discussion, as well, for its link with ethical business practices, as discussed earlier.

Additionally, class-action lawsuits in the United States for alleged business malpractices, including ‘pay for delay conspiracies’, against Indian pharma companies are also on the rise – Sun Pharma and Dr. Reddy’s top the list in terms of those who face most class-action litigation, reported a leading Indian business daily on September 02, 2017.

Pharma malpractices continue, DOP is still to make UCPMP mandatory: 

In this quagmire, where self-regulation doesn’t work, the government usually steps in, as happened in the United States and Europe. Whereas, in India, no decisive government action is yet visible to curb this menace, especially for protection of patients’ health interest. Let me try to illustrate this point with the following chronology of four key events:

  • On May 08, 2012, the Parliamentary Standing in its 58th Report, strongly indicted the DoP for not taking any tangible action in this regard to contain ‘huge promotional costs and the resultant add-on impact on medicine prices’.
  • Ultimately, effective January 01, 2015, the Department of Pharmaceuticals (DOP) put in place the Uniform Code of Pharmaceutical Marketing Practices (UCPMP) for voluntary implementation, despite knowing it has not worked anywhere in that format.
  • When voluntary UCPMP did not work, on September 20, 2016, the then secretary of the DoP reportedly said, the mandatory “UCPMP is in the last leg of clearance with the government. The draft guidance has incorporated suggestions of the pharma industry and other stakeholders.”
  • After another year passed by, on April 16, 2018, a news report reconfirmed: ‘4 years on, code to punish pharma firms for bribing doctors still in works.’ Its status remains unchanged till date.

Conclusion:

Even after Prime Minister Modi’s comment on April 2018 regarding the alleged nexus between doctors and pharmaceutical firms and doctors attending conferences abroad to promote these companies, decision paralysis of DOP continues on this important issue.

Pharma companies continue practicing what they deem necessary to further their business interest, alongside, of course, announcing their new and newer voluntary codes of practices. But, patients keep suffering, apparently for the apathy of the DOP to curb such malpractices forthwith.

Coming back to where I started from, when the malice is so deeply rooted, would any global ban ‘brand-reminders’, such as gifts, even if implemented religiously, work? Thus, the doubt lingers, for uniting pharma operations with corporate business ethics is the bridge still too far?

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.

Pharma’s ‘Value Delivery System’ Still Tuned To A Self-serving Mode?

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Just as any other industry, pharma business is also primarily a ‘value delivery system.’ Its each and every employee need to understand and internalize this basic philosophy of the business. This organizational mindset needs to be created by the very top – setting examples for others to embody the same. The top could encompass the promoters themselves, or the professional CEOs – truly heading the organization and not working under the shadow of the promoters, or even the Board of Directors of professionally managed companies.

Although, this mindset should prevail pan organization, pharma sales and marketing functions are usually responsible to deliver a well-thought out set of brand values and associated services to doctors, patients and other stakeholders, effectively.

Against the above backdrop, I shall explore in this article whether it is happening in the pharma industry. If yes, is the ‘value delivery system’ is tuned to a self-serving mode, wherever it is happening? If so, to what extent it is denting the reputation and image of not just of the companies concerned, but of the drug industry as a whole. Before I proceed further, let me elaborate on what exactly I mean by the ‘value delivery system (VDS).’ 

Value Delivery System (VDS):

Creating more and more customers and retaining them, as long as possible, is the core purpose of any business, as was articulated by the management guru Peter Drucker, decades ago. Thus, like others, pharma organizations, as well, require making it happen in a sustainable way for business excellence.

The entire organization – starting from product and service development activities, right up to the frontline sales and marketing, should always be engaged in delighting the customers with the values they expect – driven by this mindset. It is worth noting that value expectations of pharma customers, are expressed in various ways. These need to be properly captured, analyzed, interpreted, packaged and effectively delivered during each company- customer contact, such as, while interacting with doctors, patients, hospitals and Government.

Thus, the term ‘Value Delivery System (VDS), encompasses an integrated chain of processes within an organization. From this perspective, it should get ingrained in the culture of a pharma company – without any broken links – between the functional areas and the integrated value delivery process.

Who is deciding what patients would value in pharma?

In the real world, ‘customers point of view’ or ‘what the patients would value’ in a product, is decided by the pharma companies – derived generally from the published clinical trial results of the products. Accordingly, these are woven around the brand features and benefits.

The value delivery system of the company packages these in a way that it thinks would generate increased prescription demand and delivers to all concerned. These values, which are overall financial business performance-centric, are mostly ‘self-serving’, and was working very well to meet the internal objectives, until recently.

How to ascertain value for patients in pharma marketing?

One way to ascertain these factors is to ask patients directly. But this process has certain limitations. This was once aptly articulated by Steve Jobs in an interview, where he said: ‘I think really great products come from melding two points of view -the technology point of view and the customer point of view. You need both. You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.’

Taking a cue from it, I reckon, drug companies need continuously generate and analyze enough relevant data, from multiple sources, for an in-depth understanding of what patients will value. Making these values an integral part of the product and services, in a creative way, pharma should aim at delighting the customers through effective delivery.

The article titled, “Reclaim The Glory Of Value,” published in the eyeforpharma on January 08, 2019 also reiterated that such ‘value’ must always be defined by the customer.  ‘And true value can only be achieved by understanding the world of the patient and solving the issues most critical to them.’

The external impact of product centric value assessment:

This financial result focused value delivery system got exposed to the stakeholders, since sometime. Overall business performance, though generally slowed down, some companies did produce extraordinary results, even after remaining tuned-in to the self-serving mode. Nevertheless, what got dented most is the pharma industry reputation, with a long-term impact.

Although, the survey capturing fast declining reputation of the drug industry, was done in the United States, it is apparently no different in other countries. Consequently, the quality of general public’s trust in pharma started getting murkier. Strong headwinds are now limiting the pace of progress of the industry, with many governments, including India, taking stringent policy measures to protect the patient interest.

The only way is to ‘reverse the pyramid’:

The only way for the pharma industry, in general, is to take a fresh look at their business approach, which still remains a value delivering machine. The companies need to think afresh while arriving at the ‘value for the patients’, by reversing the business pyramid – positioning the patients’ core values at the top, and delivering them to all concerned with well-crafted content, on the most effective platforms.

Tuning VDS in sync with patients’ core values, is fundamental:

It has been well established today the delivering values built around the quality, efficacy and safety of a brand can no longer ensure the best clinical outcomes for patients. This holds good even when the conventional sales and marketing activities are carried out through a large sales force and backed by huge financial resources. The main reason being, the pharma value delivery system is not delivering the core value that modern day patients expect.

Many patients of the new generation value empowerment and desire greater involvement in their end-to-end disease treatment process. For example, when they want understanding and help on how to manage the high treatment cost to survive from a life-threatening illness, some companies try to compare the ‘cost of treatment’ with the ‘cost of life’, which is an undiluted self-serving value.

It may sound absurd, but I have witnessed the top echelons of pharma companies saying so. This can possibly happen only when they feel contended with a smaller patient base fetching higher profit due to high drug prices, though unaffordable to most patients. But this model is not sustainable. It would further damage already dented pharma reputation, drawing more ire from stakeholders, including the government.

Thus, tuning VDS in sync with patients’ core values is fundamental in the emerging scenario. The question that follows what then are the core values of the new generation patients?

Two ‘core values’ that patients generally expect:

In my personal view, there are the following two ‘core values’ that consumers of medicines would generally expect during their end-to-end disease treatment process. However, the signals of such expectations – direct or indirect, may come in different ways and forms that need to be properly captured by the pharma companies, with the careful application mind:

  • Value of unique product and service offerings: The need for this value arises right in the beginning, when patients are in search of a solution for prevention, cure, or management of a disease. It is, primarily, the difference felt by the customers between the product and service offerings of one pharma company from the other. While finalizing the choice for the resolution of the problem, patients may take into account one more important factor. This usually covers the quality of their interaction with the doctors, including the pharma companies, though their respective patient engagement platforms, if any.
  • Value of a unique patient experience: After making the final choice, patients would value to feel a unique experience during the entire span of the treatment process. The quality of a brand, its effectiveness, safety, affordability and accessibility, among others, would be the individual components of the whole experience. What would matter most is the residual impact, created by the sum total of each of these components. And this value may be termed as – the unique patient experience.

Effectively delivered, the wholesome impact of patients’ treatment experience will be a lot more than the sum total of each the individual components, as mentioned above. Conversely, any hurdle faced by patients even with one component of this value chain, can potentially create a bad patient experience. This may adversely affect both patients and the concerned pharma company, in tangible terms, which I shall discuss below. Thus, the perceived value of ‘unique patient experience’ is very high, and can’t be wished away, any longer.

Tangible gain of pharma for doing so, or vice versa:

Let me illustrate this point with an example – drawing from the above core values and a self-serving value delivery system.

As we know, non-adherence to medication is one of the important reasons for poor clinical outcomes, besides progression of the ailment – further compounding the disease burden. Ample research studies indicate that ‘high cost of drugs is the biggest barrier to medication adherence,’ or, at least, one of the major causes of non-adherence.

Patients pay for non-adherence by their deteriorating health conditions. Alongside, pharma companies also pay a high price in terms of lost sales and profit, besides dent in reputation – for this single factor. Another research report estimated an annual revenue loss of USD 637 billion for non-adherence to medications for the treatment of chronic conditions. The same report highlighted, globally, revenue loss has increased from USD 564 billion in 2012 to USD 637 billion in 2015, with US-based revenue losses increasing from USD 188 billion in 2012 to USD 250 billion in 2015. Otherwise, this could have been a significant tangible gain for pharma.

Conclusion:

Pharma business, just as any other industry, is a value delivery system. This system needs to be optimized, both for tangible financial gains and also for building company reputation. Creating increasingly satisfied patients, including other stakeholders, should be the prime drivers for this optimization process.

Two core values – built on signals, suggestions and indications coming from the bottom of a conventional business pyramid – the patients, need to be effectively captured, analyzed, packaged and then delivered through the VDS. In no way, these values are to be based on what the top of the pyramid thinks, based on only clinical trial results. Such values are usually self-serving in nature, the long-term impact of which is not quite favorable, either. Reversing the pyramid, patients should be allowed to play a pivotal role for the company in the core value creation of a brand, in innovative ways, for subsequent delivery on appropriate platforms.

This will create a win-win situation, both for business growth and also in delighting most patients with access to high quality and affordable novel treatments, for a healthy life. However,considering today’s reality where most pharma companies’ ‘Value Delivery Systems’ are still tuned to a self-serving mode, a serious introspection by individual companies seems to be an urgent need. More proactive players in this game, will emerge as winners with better business performance, in tandem with improved corporate image and reputation.

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.

Pharma: Experts’ Handholding is Pivotal in Digital Marketing Transition Phase

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“Pilman – A Tapan Ray Website on Helathcare” completes 10 years, today. 

Inspired by some of my dear friends, I created this website on January 14, 2009. Since then, reasonably well-researched articles, penned by me, on various aspects of health care, and the pharma industry, appeared in this blog – on every Monday morning of every week – uninterrupted – not even once. It did not just happen, I took a vow to make it happen with the same zeal, consistency and frequency, in the first 10 years of its launch – come what may. 

During this period, I have been humbled by tens of thousands of my dear readers, from all over the world, who went through these articles –  spending their valuable time. Today, with all humility, I bow my head before each of my readers to make it happen. After Ten years – a time has now come for me to decide what next. Thank you so much, from the very core of my heart.

Talking about digital marketing in pharma is virtually a fad now. It sounds so modern, sleek and is a great attention getter, especially in the tradition bound pharma industry. Advertisements of umpteen number of training programs are spilling all over. Even those who never worked with digital marketing in pharma, or possess any basic theoretical knowledge in this technology, are jumping into the fray. Some trainers claim to impart subject knowledge in the pharma domain, while others assert facilitating quick implementation of digital marketing by pharma executives.

Thus, the question that follows, why is the sudden interest in digital marketing for pharma by such trainers? What is happening in reality after these trainings? Is one blind man trying to help another blind man in this area, or it is a competition for sheer eyeball grabbing? Some friends in the industry do say, the common thread of ‘imparting training’ of this nature on digital marketing – outside any pharma company, is possibly the intent of ‘making a quick buck, while the sun shines.’

To me, this sounds too blunt a statement, as I reckon, expression of such a view will be unfair to formally qualified digital experts with proven experience of success in the pharma domain. Some of them also offer handholding young marketing professionals, with reasonable accountability, as they gradually transition from the traditional pharma to an integrated digital marketing model. In this article, I shall focus on this area by affirming, while digital softwares, tools and their applications aren’t anything new in pharma, making an integrated digital marketing process work effectively, is indeed a new necessity in the industry.

Digital tools and applications aren’t new in pharma: 

As I said, digital tools and applications aren’t new in pharma. For example, many Indian companies have already implemented likes of ‘Enterprise resource planning (ERP)’. This is basically an integrated business process management software that enables the organization to run their business processes, including finance, accounting, supply chain, sales, manufacturing and human resources, in an integrated environment. Some companies have also introduced field-staff reporting in digital format and online. Nevertheless, digital marketing in pharma being a new necessity, let me elaborate below what is digital marketing, and what it is not.

What is digital marketing and what it is not:

As defined by The Financial Times Lexicon, digital marketing is:

  • Marketing of products or services using digital channels to reach consumers. The key objective is to promote brands through various forms of digital media.
  • Digital marketing extends beyond internet marketing to include channels that do not require the use of the internet. It includes mobile phones, social media marketing, display advertising, search engine marketing, and any other form of digital media. 

And what digital marketing is not:

  • Digital marketing is not just yet another channel for marketing It requires a new approach to marketing and a new understanding of customer behavior.  

Pharma’s transitioning to integrated digital marketing is critical:

There isn’t any doubt today that transitioning into an integrated digital marketing for pharma is critical.

The paper titled, ‘Time for Pharma to Dive into Digital – New Medicine for a New World,’ published by AT Kearney advises drug companies to act now or get left behind. The paper makes some interesting observations to drive home this point, some of which are as follows:

  • Digital is changing the way healthcare is delivered, as pharma customers transitioning fast into the digital world.
  • Effective customer engagement in cyberspace with digital tools will increase customer reach, lower costs, improve sales, and enable greater value creation.
  • Necessary technologies are readily available for digital customer management in a cost-effective way.
  • Regulation, while not fully resolved, is becoming clearer.
  • Reduced effectiveness of traditional promotional expenditure makes the transition to digital marketing both critical and timely.
  • Digital disruption has rejuvenated many businesses. It is time for pharma to do the same.

In reality, many traditional pharma companies are still apprehensive:

Digital marketing sounds great. There isn’t an iota of doubt, either, that this new ball game help achieve many business goals with precision, in the complexity of pharma sales and marketing. When conceptualized and implemented creatively with hands-on involvement of both digital and pharma domain experts, its benefits could be exponential, instead of being incremental. All strategic business communication can be accurately targeted and delivered to precise stakeholders for better, faster and quality engagement, yielding desired outcomes.

Nevertheless, the reality is, as I sense through my direct interaction with pharma friends, many of them are still apprehensive of imbibing an integrated digital marketing, going whole hog. They carry ‘a fear of failure’, if… the initiative doesn’t work, for various reasons. Moreover, any possibility that they may even lose what they currently have for such disruptive measures, makes them quite edgy, as well.

Is the apprehension totally unfounded?

As I fathom, the answer is no. They have a genuine reason to think so, because they carry the can and prefer to avoid any kind of possible risk in the performance of their respective business. They may not be totally happy with the traditional model with decline productivity. But are not also willing to make any unfamiliar drastic change by replacing the traditional marketing model by a cohesive digital one, spanning across the organization.

Nether, do they want to take any such decisions where the requirement of employee competency for success will call for a drastic overhaul, which is understandable. Be that as it may, their feelings and the associated views can’t be brushed aside, either, – as they have been at the helm of pharma business with envious track records, since long.

Precise process, timing and the end-goal of digital marketing needs clarity: 

Interestingly, they all understand and agree that the transition from traditional to digital pharma marketing is inevitable. But they are not very sure about when should this transition commence for the India pharma business. Also, what are the sequential steps for the organization to move in this direction with least risk and chaos.

Many of them are also not quite clear of the end-goal of this process, which I think should go beyond offering just good drugs with unique features and benefits, to creating a unique full-service patient experience, with cutting-edge and ethical sales and marketing practices.

When to commence and where to start?

The following two pertinent questions that often arise need to be deliberated before a digital marketing initiative is undertaken by a pharma company:

  • When does a company to commence digital marketing?
  • Where to start with minimal risk exposure?

When to commence it?

Now – is the obvious answer. This is because, as I wrote in my article of June 11, with increasing number of pharma stakeholders using and interacting in the digital space, ‘consumerism’ is fast becoming a strong prime mover, even in the pharma industry. In tandem, patients’ longing for better participative treatment experience, at affordable cost, is turning into a major disruptive force in the healthcare space.Pharma players in the country, require to be on the same page, soon, to deliver sustainable results, before it’s too late.

Where does the transition from traditional to digital marketing start?

The answer will depend on marketing practices followed in a particular company, which digital experts will study and come out with an organization-specific action plan. Whosoever is the initiator of the project, the company CEO should be the final decision maker, with his total involvement in the project, for multiple reasons.

However, in my view, for those who are risk averse, it will be prudent to demonstrate that important marketing strategy when executed on integrated digital platforms, pay handsome dividend. Thus, I reckon, instead of replacing all traditional practices with a totally new and harmonized digital model, in one go, it may be better to add new marketing activities on digital platforms – having the potential to add significant value to the business, for example:

  • Capture and analyze useful information from various sources and functions within the organization, as inputs for marketing strategy formulation, by using state of the art digital tools and analytics.
  • Select those areas of sales and marketing where switching over to digital mode will add speed to the operation and the decision-making process. In any case there should be a parallel run of the traditional process and the digital one, for a pre-fixed time frame, to tighten the loose knots, if any.
  • Trying out social media under expert guidance. When used in innovative ways, it helps immensely to actively engage with targeted stakeholders, including patients, for getting a positive digital ‘word of mouth,’ besides important feedbacks.
  • Using mobile-friendly, well-targeted emails or text messages with useful, well-researched content eliciting response, either as feedbacks on selected business activities or on any other area useful for the business operation.

When ready for digital transformation across all functions of the organization, the CEO should solicit help of well-qualified professional digital experts, preferably from within the organization. If adequate resources are not available internally, experts in digital technology with a proven track record of success may be engaged from outside, equipped with high-quality pharma domain knowledge.

Conclusion:

As I said, digital interventions are not new in pharma. However, a well-harmonized digital marketing is. There could be many starting points for the transition from traditional to digital marketing. However, I reckon, low-risk initiatives to this direction – having the potential to add significant value to the business, would be prudent to start with.

Thereafter, the new and robust digital marketing platform – well-coordinated with all functions, need to necessarily undergo parallel pilot runs. The objective is to resolve the glitches in the new digital system, if any, minimizing business risks. The awareness and the need of digital marketing should preferably generate and be felt from within the organization. The trigger factor may be many, including the professional digital experts recently recruited or the CEO himself, who will decide how to cascade it down the line for effective implementation.

The name of the game is making the concept of digital marketing work effectively in the marketplace – separating the men from the boys, in the midst of cut-throat competition within the pharma industry. To take this giant leap, mere lip-services of external general advisors won’t be enough, and may not work, at all. This process requires a new approach to drug marketing digitally, involving a thorough understanding of patients’ and other stakeholders’ behavior. More importantly, in the transition phase of its implementation, handholding by high quality professional digital experts, ably supported by pharma domain experts, is pivotal for success.

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.

Exigency of Cybersecurity in Digitalized Pharma

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Digitalization – as it unfolds and imbibed by most drug companies, is presumed to herald a whole new ballgame in the Indian pharma business. Equally significant is the quantum benefit that the process will deliver to pharma stakeholders – right from drug companies to patients. It has already hastened the process of new drug discovery and will also help charting newer ways to meaningfully engage with stakeholders, besides enhancing treatment outcomes for patients, appreciably.

However, the flip side is, more benefits a company accrues from digitalization, greater will be the risks of cyber-attacks. Thus, preventive measures should also be equally robust. Otherwise, hackers can bring a company’s digital system to a standstill, causing not just a temporary loss in revenue and profit, but also valuable data leak, with considerable impact on even long-term business.

Strangely, associated risks of digitalization to pharma companies are seldom outlined in any discussion, leave aside alternatives for salvaging such untoward situation, if or as and when it comes. Unless, it is felt that the scope of such discussion doesn’t cover the implementors and falls totally on cybersecurity experts.

Nonetheless, it is intriguing in the pharma space. The reason being, pharma industry believes, while talking about the efficacy of any drug, its vulnerability in terms of side-effects, contraindications or drug interactions, should also be known to its users. That’s the purpose of a packaging leaflet. It’s a different reason though, that most drug companies in India have virtually jettisoned this practice as a cost saving measure, even for drugs that are not under price control. That apart, in this article, I shall explore the relevance of cybersecurity in the digitalized pharma world.

A question that help understand its implication:

During organizational transformation through digitalization in pharma, just like any other business, all crucial documents get transferred from paper to digital formats. The key question that follows in this regard is – what happens to these digital documents post cyber-attacks, if any? Any attempt to answer this question holistically will help people realize its implication – that ‘cybersecurity must be more than an afterthought.’

‘Cybersecurity must be more than an afterthought’:

The article, ‘Cybersecurity in the Age of Digital Transformation,’ published by MIT Technology Review Insights on January 23, 2017, stressed upon this critical point. It highlighted: “As companies embrace technologies such as the Internet of Things, big data, cloud, and mobility, security must be more than an afterthought. But in the digital era, the focus needs to shift from securing network perimeters to safeguarding data spread across systems, devices, and the cloud.”

Thus, while discussing the need to digitally transform a company’s business, cybersecurity must be part of that conversation from the very start – the paper underscored in no uncertain terms. That’s exactly what we are deliberating today - ‘as companies embark on their journeys of digital transformation, they must make cybersecurity a top priority.’

The cybersecurity threat may cripple innovation and slow business:

Cisco explored the concept of Cybersecurity as a Growth Advantage by a thought leadership global study. While assessing the impact of cybersecurity on digitalization, it surveyed more than 1,000 senior finance and line-of-business executives across 10 countries. Some of the key findings, as captured in the Cisco report, may be summarized, as follows:

  • 71 percent of executives said that concerns over cybersecurity are impeding innovation in their organizations.
  • 39 percent stated that they had halted mission-critical initiatives due to cybersecurity issues.

Interestingly, 73 percent of survey respondents admitted that they often embrace new technologies and business processes, despite cybersecurity risk. However, as we shall see below, pharma executives are quite confident of cybersecurity, probably because of inadequate experience in this area, as on date.

Companies are struggling with their capabilities in cyber-risk management:

The paper published in the May 2014 issue of the McKinsey Quarterly journal, titled “The rising strategic risks of cyberattacks”, also flagged this issue. It said: “More and more business value and personal information worldwide are rapidly migrating into digital form on open and globally interconnected technology platforms. As that happens, the risks from cyberattacks become increasingly daunting. Criminals pursue financial gain through fraud and identity theft; competitors steal intellectual property or disrupt business to grab advantage; ‘hacktivists’ pierce online firewalls to make political statements.”

McKinsey’s research study on the subject, conducted in partnership with the World Economic Forum also upheld that companies are struggling with their capabilities in cyber-risk management. As highly visible breaches occur with growing regularity, most technology executives believe that they are losing ground to attackers. Its ongoing cyber-risk-maturity survey research also ferreted out the following important points:

  • Large companies reported cross-sector gaps in their risk-management capabilities.
  • 90 percent had “nascent” or “developing” ones.
  • 5 percent was rated “mature” overall across the practice areas studied.

Interestingly, the research found no correlation between spending levels and risk-management maturity. Some companies spend less, but do a comparatively good job of making risk-management decisions. Others spend vigorously, but without much sophistication. Even the largest firms had substantial room for improvement – McKinsey reiterated.

‘Corporate espionage’– a prime reason behind cyberattack on pharma:

An interesting article appeared in The Pharma Letter on July 18, 2017 on this subject. The paper is titled “Cyber-attacks: How prepared is pharma?” It said:“The pharmaceutical industry is a prime target for hackers. In 2015, a survey of Crown Records Management revealed that nearly, two-thirds of pharma firms had experienced breaches in data, and that one fourth of these same companies had been victims of hacking.”The paper also highlighted ‘corporate espionage’ as one of the prime reasons behind hacking.

In view of this, the author articulated that the need for pharma and healthcare companies to fortify their security systems has become clear in recent years. The best method of protection is to prevent cyber-attacks from happening, or at least reduce the risk of a hack, he advised.

Instances of cyber-attacks in pharma are many:

To drive home the point that when firms and other organizations fail to strengthen IT systems against attacks, they incur high costs -the above paper cited an example from the year 2016. It said: “The average global cost of data breach per stolen record was US$ 355 for healthcare groups, higher than losses in other fields such as education (US$ 246/record), transportation (US$ 129), and research (US$ 112).”

The author further emphasized that besides financial losses, pharma companies and other healthcare groups risk losing the trust of patients and other stakeholders. With the ongoing digitization in pharma, new threats may become even more pervasive and sophisticated. “Thus, investment in cybersecurity must be a priority, if pharma players are to protect their data and the data of their stakeholders”, he added.

Are pharma executives experienced enough on cybersecurity?

As reported by Pharma IQ on July 31, 2018, one of its recent surveys found that around 70 percent of senior pharma decision makers are “confident” or even “very confident” in their company’s IT security. But, digging deeper, the survey uncovered that:

  • 42 percent of respondents’ companies do not routinely follow IT security policies,
  • 49 percent said that the corporate risk profile is not firmly understood across all departments.

The survey concluded that this could potentially lead to gaps in the security process. To me it appears, this could, as well, be due to inadequate experience of pharma executives in this area.

But, investment in pharma IT is increasing:

The good news is, even in the current scenario, many pharmaceutical companieshave started making investments in IT solutions, in general. This is corroborated by the 2018 survey by Global Data. Some of its important findings are, as follows:

  • 79 percent of them are currently making investments in identity and access management (IAM) solutions
  • 72 percent are considering investment in the solutions over the next two years.
  • 75 percent of the respondents are currently deploying some form of backup, archiving, alongside content and web filtering solutions to store, as well as, preserve their online information. 

Conclusion:

In pharma perspective, digitalization of business promotes paperless culture. It radically changes the basic infrastructure of maintaining critical documents in the workplace. Digital document storage systems become the nerve center of information on the company. All data – strategic or related to operations – internally generated or acquired – right across all critical functional areas, such as IP, research, clinical trials, manufacturing, sales and marketing, finance, supply chain legal and even of the CEO’s office, find a space in this digital data sever.

Although, the benefits of digitalization are well known and much discussed, it has a contraposition, as well – related to the vulnerability of the system to cyber-attacks. This flags a demanding need for protection of digitally stored assets from cyber-attacks, or to frustrate even any misdemeanorfrom amateur hackers. Thus, creating an almost impregnable, well-firewalled digital data storage server assumes prime importance. Equally important is formulating and religiously implementing a robust digital policy for the same.

Creating strong awareness among employees and stakeholders regarding cybersecurity and involving them in tandem with a system-approach, sans an iota of complacency, is expected to mitigate such vulnerability, appreciably. Thus, a sense ofexigency for cybersecurity in the digitalized pharma world, I reckon, is very real.

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.