Pharmaceutical Marketing

in the 21st Century

Perri Cebedo & Associates

Santa Clara, California U.S.A.
prosperocevedo@attbi.com
 Pharmaceutical Marketing
in the 21st Century

• The Growth of DTC

• The Shift in Marketing Mix
• More Reps, Less Doctors Calls
• Opportunities in the Internet
• The Growth of Chain Stores
• Changing Aspects of Training
 The Growth of DTC
• DTC: Direct to Consumer Advertising
• Phenomenal growth in the last 5 years
• Journals: 200m vs. $3.7B on DTC!
• More patients ask Physicians what they want
• So, More samples
 Effects of DTC
• More patients telling their Doctor what
medicines they need
• Products with DTC: highest sales increases
• Increase of samples
• More informed patients
• Better patient compliance
• More satisfied patients
 E Marketing
• Training via the Internet
• CME in the Internet
• Internet Portals for the MD
• Using the Internet to Support
Marketing Effectiveness
• Patient Groups in the Internet
 Pharma Consolidation
• Slowdown in mergers, but they will continue
• Previous M&As driven by fear and pain
• Now by conviction that bigger is better
• Makes financial sense, redundant costs
• Strategic sense
 Do Pharma M&As make
Strategic sense?
• Combined field forces could call on more MDs
• Savings on support Staff
• Modest savings, but with new RD & Marketing muscle
• More products in the pipeline less risky
• Bottom 33% of top 50 Companies: RD=21% of Sales
• Middle 33% of Top 50 Companies: RD=18% of Sales
• Top 33% of Top 50 Companies: RD= 15% of Sales
• Conclusion? Additional 6% of Profits compared to bottom 33%!
Growth in Promotional Spend
Last 5 years
• Total Promo Expenditure= $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 of
Medical Education
• PhRMA Voluntary Code
• Growth of Online CME
• More electronic Media will support live Meetings, eg
CDrom or Online educational support
• Small low budget events can have bigger impact if
supported with CDrom, with slides, speaker bios,
transcripts, abstracts and interviews
• Case studies can come alive with electronic media
• More CME, more professional Reps!
 Increasing Field Forces
• Increasing Sales and Marketing Staff
• Increased Pay and Reward!
• Only slowdown in the use of Contract Sales
• Slower turnover except in Specialty Reps
• Pharma salaries now ahead by 20% compared
with other industries
 Growth in Pharma Salaries
• Primary Care Rep $45,800--$47,000
• Top PC Rep $81,000--$82,300
• Oncology Reps plus 30%
• DMS plus 13% more than their top reps
• Highest salary increase: Senior DMs=11%
• Incentive Pay is 25-30% of base pay
 Changes in Incentive Schemes
• Incentive pay =25-30% of salary
• Performance vs goals; Quantitative: 83%
• Qualitative: 17%
• 82% Individual Performance
• Top Ten PCRep in 2001=59% of base salary
• Top Ten PCRep in 2002=76% of base salary
 Drug Discount Programs
• Senior Poor struggle to pay for
medicines
• No drug insurance coverage
• GSK: Orange Card
Successful Use of the Internet
• Marketing to Physicians who regularly go
online
• For latest information on disease
management, research
• Latest clinical papers
• Networking with others
The Drive for New Types of
MD Contacts
Background (INCOMM Survey of 500 Reps):
• 26% =less than 1 minute
• 63% =1 minute
• 11% = 3-5 minutes
• In Conventions, MD contacts =5-10 minutes
• Many Hard-to-See MDs or No-See MDs
(84%)!
• So, expect more participation at MD
conventions!!!
 Dinner Meetings
As MDs get harder to see...

• Pure CME Activity

• Group Selling
• Focus Group Discussions
• MAPs or Marketing Advisory Panels
• Social Activity to Celebrate Something
• Peer Selling
 Peer Selling over Meals
• Evolvement over Focus Groups in the 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!
Thank You for Your
Attention!
Perri Cebedo
prosperocevedo@attbi.com