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Pharmaceutical Marketing in the 21 st Century. Perri Cebedo & Associates Santa Clara, California U.S.A. prosperocevedo@attbi.com. Pharmaceutical Marketing in the 21 st Century. The Growth of DTC The Shift in Marketing Mix More Reps, Less Doctors Calls Opportunities in the Internet
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Pharmaceutical Marketing in the 21st Century Perri Cebedo & Associates Santa Clara, California U.S.A. prosperocevedo@attbi.com
Pharmaceutical Marketing in the 21st Century • The Growth of DTC • The Shift in Marketing Mix • More Reps, Less Doctors Calls • Opportunities in the Internet • The Growth of Chain Stores • Changing Aspects of Training
The Growth of DTC • DTC: Direct to Consumer Advertising • Phenomenal growth in the last 5 years • Journals: 200m vs. $3.7B on DTC! • More patients ask Physicians what they want • So, More samples
Effects of DTC • More patients telling their Doctor what medicines they need • Products with DTC: highest sales increases • Increase of samples • More informed patients • Better patient compliance • More satisfied patients
E Marketing • Training via the Internet • CME in the Internet • Internet Portals for the MD • Using the Internet to Support Marketing Effectiveness • Patient Groups in the Internet
Pharma Consolidation • Slowdown in mergers, but they will continue • Previous M&As driven by fear and pain • Now by conviction that bigger is better • Makes financial sense, redundant costs • Strategic sense
Do Pharma M&As make Strategic sense? • Combined field forces could call on more MDs • Savings on support Staff • Modest savings, but with new RD & Marketing muscle • More products in the pipeline less risky • Bottom 33% of top 50 Companies: RD=21% of Sales • Middle 33% of Top 50 Companies: RD=18% of Sales • Top 33% of Top 50 Companies: RD= 15% of Sales • Conclusion? Additional 6% of Profits compared to bottom 33%!
Growth in Promotional SpendLast 5 years • Total Promo Expenditure= $9.2 to $19.1B • Promotion Office Based MDs= $2.4 to $4.8 B • Samples @ retail value= $4.9B to $10.5B • DTC= $791m to $3.7 B • Most significant growth product: Lipitor 2001
Use of Online Detailing • E Detailing: another component of the marketing mix • MDs are invited to participate • With a promise of a coupon for a book • 71% of e Details done evenings or early mornings or weekends • E Detailing lasts 8-10 minutes • Increased use of attention mechanics • MD selects the time. So attention
The Changing World ofMedical Education • PhRMA Voluntary Code • Growth of Online CME • More electronic Media will support live Meetings, eg CDrom or Online educational support • Small low budget events can have bigger impact if supported with CDrom, with slides, speaker bios, transcripts, abstracts and interviews • Case studies can come alive with electronic media • More CME, more professional Reps!
Increasing Field Forces • Increasing Sales and Marketing Staff • Increased Pay and Reward! • Only slowdown in the use of Contract Sales • Slower turnover except in Specialty Reps • Pharma salaries now ahead by 20% compared with other industries
Growth in Pharma Salaries • Primary Care Rep $45,800--$47,000 • Top PC Rep $81,000--$82,300 • Oncology Reps plus 30% • DMS plus 13% more than their top reps • Highest salary increase: Senior DMs=11% • Incentive Pay is 25-30% of base pay
Changes in Incentive Schemes • Incentive pay =25-30% of salary • Performance vs goals; Quantitative: 83% • Qualitative: 17% • 82% Individual Performance • Top Ten PCRep in 2001=59% of base salary • Top Ten PCRep in 2002=76% of base salary
Drug Discount Programs • Senior Poor struggle to pay for medicines • No drug insurance coverage • GSK: Orange Card
Successful Use of the Internet • Marketing to Physicians who regularly go online • For latest information on disease management, research • Latest clinical papers • Networking with others
The Drive for New Types of MD Contacts Background (INCOMM Survey of 500 Reps): • 26% =less than 1 minute • 63% =1 minute • 11% = 3-5 minutes • In Conventions, MD contacts =5-10 minutes • Many Hard-to-See MDs or No-See MDs (84%)! • So, expect more participation at MD conventions!!!
Dinner Meetings As MDs get harder to see... • Pure CME Activity • Group Selling • Focus Group Discussions • MAPs or Marketing Advisory Panels • Social Activity to Celebrate Something • Peer Selling
Peer Selling over Meals • Evolvement over Focus Groups in the 80´s • MAPs: Marketing Advisory Panels • PIGs: Peer Influence Groups • Based on the more the MD knows, the more convinced he is, the more likely to share experiences • The Key: The Facilitator!
Group Selling at Conventions The Rationale: • For each MD contacted at the Booth, 6 walk by • 4-6 MDs for 10-15 minute interaction • The Key: Training in Group selling Techniques • Special Training in Questioning Techniques • Eliminate give-aways in the Counter and eliminate the Counter • Benefits: More MD contacts, better interaction, more time!
Growth of E-Sales Training • Cuts costs of bringing Reps to the Office • Brings Training to the Reps • Information transfer can be efficient & consistent • Learning curve is 60% faster • Average content retention of Instructor-led course: 58% • E-Learning adds additional 25% retention
Other Benefits of E-Training • More fun, less fear and apprehension • More errors, the deeper the knowledge as consequence of errors are explained • Allows courses to be broken up in shorter sessions • Will grow faster with high speed DSL and cable connections • PDA and JIT: Just-in-time Training • Savings of 50%-70% • Used best in conjunction with conventional training
Differences inTraining Practices • USA Specialized Field Forces: Preceptorships • Use of Multimedia in Training • Training the Trainer Programs • Cost to train a Rep: $100,000 • Amount: Training per Rep: 5% of Salary • Professional Development Programs • Continuing Training and Education
Situation Outside the USA • Training=Product Training • No Sales Training System • Product Launches provide information overload • Reps are not given enough opportunity to practice and role-play • No training Videos on basic skills • Trainers and PMs: are not given training!
New Techniques in Training • Elimination of the Classic Role Play • Replaced by the Happy Griller • The Use of Video Models • Focused on Selling Skills • Each Rep role-plays 40 times! • Reinforcing his/her own confidence and enthusiasm
Problems are Opportunities!In disguise • The only thing permanent is change • How quickly & how well we adapt, will determine our success. • Time to change the conservatism of our Industry. • Time to invest in training! • Our capacity to learn faster is only sustainable advantage we have against competition!
Perri Cebedo prosperocevedo@attbi.com Thank You for Your Attention!