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Marketing and Sales Roles

in the Pharmaceutical I ndustry
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MARKETI NG
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The Marketing Concept - Key Principles
It is easier to change the products and services of the individual
manufacturer to fit the needs of the market than it is to convince the
entire market to use the products and services as the individual
manufacturer prefers them
You can have any color car you want as long as its black
Henry Ford

All the resources of the firm should be organized into a total system
aimed at meeting the needs of the consumer

The role of marketing is to influence or direct activities from the
manufacturer to the patient:
The right products
In the right quantity
At the right place
For the right price
At the right time

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Marketing as an Actualizing Process
Markets can be viewed as gaps that separate parties interested in an exchange
Marketing removes the gaps between the parties through various actualization
processes
Source: McInnis; A Conceptual Approach to Marketing
MARKET
SEPARATORS
TIME

SPACE

VALUE

OWNERSHIP

QUANTITY

ASSORTMENT

EXCHANGE FLOWS
PRODUCT FLOW:
toward the consumer


INFORMATION FLOW:
both ways



PAYMENT FLOW:
toward the provider

USE RIGHT:
toward the consumer


MARKETING ACTIVITIES
Assembly, transportation storage,
packaging, grading


Advertising, personal selling, publicity,
labeling, sales promotions, marketing
research, consumer complaints, drug
education programs

Credit and cash payments


Purchasing and selling, pricing, post
transactional rights

PRODUCERS
CONSUMERS
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ITs Role in the Actualizing Process
IT can assist marketing in closing the gaps that separate parties interested in an
exchange
IT can make some of the gaps irrelevant (e.g., space and time)

Source: McInnis; A Conceptual Approach to Marketing
MARKET
SEPARATORS
TIME

SPACE

VALUE

OWNERSHIP

QUANTITY

ASSORTMENT

IT
Connectivity across geographically dispersed
regions

24 x 7 Availability

Enabling information access

Enhancing personalization

Right use
Right amount
Right need

Increasing the number of available options

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Unique Aspects of Pharmaceutical
Marketing and Sales
Influence of non-purchasers on the purchasing habits of the consumer

Veto/authorization power of physicians consumers need an
authorized document to purchase a prescription drug

Importance of the disease to identifying and classifying markets

Professional licensing required to stock and sell pharmaceutical
products

Records of every transaction are kept that are specific to:
Patient
Physician
Product

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Definitions
Market Research:
Determination and assessment of qualitative and quantitative
dimensions of a market

Marketing Research:
Analysis of the effects of various marketing activities of a
company or its competitors
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Market Research
Environmental scanning:
Physicians
Pharmacists
Pharmacies
Hospitals
Data gathering and analysis
Influence of unique aspects of the pharmaceutical market on market
research:
Known list of entities
Knowledge-based decisions
Similarities in education and thinking (professionalization)
Availability of records for transactional activity
Significant use of outside vendors for market research
Syndicated services
Custom services
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Questions Answered by Market Research
Strategic Level:
What diseases or product areas should be considered for long-term
investment?
Short-term?
Market size or potential?
Availability and utilization of therapies?
Next logical steps in therapy?
Potential market segments to be exploited:
Disease conditions (e.g., migraine sufferers)
Dosing preferences (inhalants vs. injections vs. patches)
Prevalence of disorder?
Shared conditions?
Potential development partners?
Potential acquisitions?

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Questions Answered by Market Research
Clinical trial Planning:
Seasonality
Regionality
Specialty

Premarketing Planning:
What physician specialties are important in a given therapy or diagnosis?
What patient characteristics are important?
Who are our competitors in this market?
How do our competitors promote their product?
Are there unsatisfied portions of the market?
How do physicians perceive a proposed product?

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Questions Answered by Market Research
Post-marketing Monitoring:
Adverse events
Product sales
Patient information (medical history)

This can be critical in
product defense
situations!
Example: Pfizers
defense of Viagra
when suits were filed
alleging an increased
risk of stroke.
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Types of Market Research
Periodic
Surveys
Retail Pharmacy
Purchases
Hospital
Purchases
Warehouse
Withdrawals
Promotional
Media
Physician
Panels
Retail Pharmacy
Prescriptions
Retail Pharmacy
Sales
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Types of Market Research
Periodic
Surveys
Retail Pharmacy
Purchases
Measures the
inflow of products
from the
manufacturer to the
pharmacy
OTC
Prescription drugs
Indirect (through
wholesalers)
Direct purchases
from manufacturers
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Types of Market Research
Periodic
Surveys
Hospital
Purchases
Measures the
inflow of products
from the
manufacturer to the
hospital
OTC
Prescription drugs
Indirect (through
wholesalers)
Direct purchases
from manufacturers

Growth of pharmaceutical purchases by
hospitals has greatly exceeded purchases from
pharmacies on a proportional basis

In many communities, the hospital has become
more important in routine care
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Types of Market Research
Periodic
Surveys
Warehouse
Withdrawals
Measures the outflow of
products from the
warehouse to all
purchasers
OTC
Prescription drugs)
Does not reflect direct
purchases from
manufacturers
Provides ability to analyze
small segments of the
marketplace such as zip
code or territories

Can be valuable in dealing with questions of
individual territory performance and potential or
different selling techniques
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Types of Market Research
Periodic
Surveys
Retail Pharmacy
Prescriptions
Measures the outflow of
prescription drugs from
the pharmacy to consumers
Most sensitive indicator of
prescription product
performance (factual)
Reflects mindset of
prescribers and consumer
demand
Best indicator of marketing
or promotional effort
effectiveness
Data available at national
and sub-national levels

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Types of Market Research
Periodic
Surveys
Physician
Panels
Specialized research
services to identify patient
product usage along
specific variables:
Diagnosis
Patient characteristics
Location of visit
Drugs used
Action desired from
drugs used
Tracking of new
prescriptions over time and
monitors changes in doctor
prescribing habits
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Types of Market Research
Periodic
Surveys
Retail Pharmacy
Sales
Historically used for non-
prescription
pharmaceuticals
Data typically collected for
products of interest
Collect unit and dollar
information at the package
size level
Main use is to obtain
prescription counts by
product
Used for pricing analysis
and cross-tabulation
analysis using data
warehouses
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Types of Market Research
Periodic
Surveys
Promotional
Media
Monitoring of detailing
visits to physicians by
sales representatives
Monitoring of journal
advertising
Monitoring of direct mail
advertising
Physician sampling
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Market Research Organizations
IMS Health
Datamonitor Healthcare Consulting
Frost.com
Reuters
Also check out:
Eyeforpharma.com
FDA.gov
Journal of the American Hospital Association
AMA Drug Evaluations



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Market Research Industry Associations
EphMRA European Pharmaceutical Research
Association (www.ephmra.org)

BHBIA British Healthcare Business Intelligence
Association (www.bhbia.org.uk)

PhRMA Pharmaceutical Research and Manufacturers
Association (www.phrma.org)
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SALES
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Sales Roles
Detailing
Face-to-face visits to physicians or purchasing
managers (e.g., hospitals, HMOs) to present new
prescription drugs
Influence prescribing habit
Increase current prescription usage
Deliver samples
Build relationships with doctors
Get drug into a formulary; pull through
Sample Management
Track delivery of prescription drug samples to
physicians or other purchasers


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Effective Detailing
Influences on Physician Prescribing Habits
Source: IBM Analysis
Side Effects
Drug delivery
method
Cost of drug
Efficacy
Potential drug-
drug
interactions
Dosage
Payor
formulary
status
Brand
Personal
preference
Patient request
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Detailings Value to the Physician
I like the good, tangible
information about a new drug
The samples determine what I
prescribe for the long term
Samples are extremely valuable
I value the relationships with them.
Overall, I am satisfied with their
service
I rely on them to keep me aware of
whats happening in the drug
industry
I like their presence to break up
my stressed schedule
Everybody likes perks
Comments From Physician
Interviews
Learn new drug information

Get drug samples

Connect with peers or physician
thought leaders

Receive the perks

Establish personal contact with
the drug company

Provide stress release
Value of Relationship with
PharmaCos to Physicians
Source: IBM Analysis
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Detailing - Physician Concerns
20%
Not enough samples
28%
Not enough medical expertise
40%
Take too much time
44%
Too many from the same company
Inconvenient timing
Biased information
What are your top complaints about detailers?
Source: The Forrester Report: Pharmas Detailing Overhaul, February 2001 (IMS Health, Scott-Levin, Forrester Research, Inc); (Ziment/WebSurveyMD.com); IBM Analysis
I view them as the liaison but I
dont take them at their word all
the time
I hate negative marketing. The
lack of objectivity is a big turnoff
for me
If they keep coming back with the
same information, its a waste of
both parties time
I appreciate the information, but
the reps can be pushy
The thing I dislike the most is
when the rep doesnt appreciate
that I am busy and still tries to
pitch the drug to me
I dont believe that someone with
a bachelors degree knows more
about how a drug works than I do
Physician Comments
78%
47%
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Companies Are Experimenting
with e-Detailing
Source: IMS Health, iPhysicianNet website, Aptilon.com website, IBM Analysis
There have been promises made about the benefits of e-Detailing
Benefits to Physicians Benefits to PharmaCos
Cost-effective: an online sales session costs
about $110 on average, compared with about
$200 for a field reps office visit
Cost effective: Increased contact time per visit
allows for higher information content
Better control of detailing content: as a result,
e-Detailing can be used as an efficient way to
train less-skilled sales reps
Capture relevant physician practice data: with
this information, Companies can identify
potential high prescribers that sales reps can
target later

Counter detailing and off-the-label discussion:
with e-Detailing, the companys medical
experts can speak with physicians about
competing drugs clinical trial flaws and off-
the-label prescription, which is normally not
allowed in a sales reps visit

Increased sales of under-marketed drugs
Allows physicians to see sales reps,
gather information they deem important,
and to have the flexibility and control to
do it in their own schedule
Offers physicians a range of convenient
interactive channels
Provides timely updated drug
information

Provides simpler sample ordering and
delivery

Provides quality peer-to-peer
discussions on a topic that interests a
physician.
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Sample Management
The pharmaceutical industry in America distributed
$6.7 billion worth of samples to physicians in 1999 *
During a typical month, the average pharmaceutical
sales representative will visit 150 physicians,
distribute thousands of packages of drug samples,
obtain FDA required signatures on 150 sample
distribution forms and receive scores of new sample
cartons to their home-based office, and expend as
much as 25% of their time tediously managing a
paper-based process


* Source: IMS Health
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Sample Management and
Regulatory Requirements
PDMA (Prescription Drug Marketing Act)
Designed to minimize the threat to the public health
posed by prescription drug diversion and counterfeiting
Requires that samples distributed by pharmaceutical
representatives be signed for and tracked to create audit
trails
Helps to ensure that the correct physician receives the
correct samples. If a pharmaceutical company is found
to be non-compliant, they could face significant
penalties, fines, and possibly even prison terms



Source: FDA
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OTHER MARKETI NG
& SALES TECHNI QUES
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Key Opinion Leader Management
Expert physicians -- often called "opinion leaders" or "thought leaders"
-- play critical roles in driving pharmaceutical sales
Participate in ongoing R&D
Have privileged access to R&D information
Company-sponsored featured speaking engagements at prestigious
conferences
Exchange ideas with other physicians regarding new products or
indications or adverse events
Helps convince other doctors to prescribe new products and can make
the difference between a successful product launch and a major
disappointment
Program is actively integrated with marketing program:
Physician recruitment (specialty, name recognition, etc.)
Matching to appropriate R&D efforts
Matching to appropriate marketing programs





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Medical Science Liaisons (MSLs)
Scientific professionals
Pharmaceutical PhDs
Pharmacists
Physicians
Nurses
Generally have more scientific knowledge than sales representatives
Roles:
Support and expand sales representatives marketing of a product
Be able to speak to the purchaser on a more scientific (peer) level; not on a
marketing level
Will focus on clinical information
Focus on key opinion leaders
Typically will only see more knowledgeable sales reps
Organize symposia, conferences, focus groups, etc.
Training and continuing education programs
May be involved in setting up Phase IV trials (post launch)