Big Pharma is rapidly expanding the use of digital marketing channels. What is driving this trend and what are the implications for traditional promotion? Several factors combined help understand the current innovative environment. This article will focus on market forces, technology and industry culture.

1. It's about time
By Christopher Wooden, VP, Cegedim
Excerpted from FirstWord Pharma Outlook, Q1 2013 (access the full report here)

2. 40 All Contents Copyright © 2013
Doctor’s Guide Publishing Limited. All Rights Reserved
Pharma Outlook Q1 2013
It’s about time
Big Pharma is rapidly expanding the use of digital marketing channels. What
is driving this trend and what are the implications for traditional promotion?
Several factors combined help understand the current innovative environment.
This article will focus on market forces, technology and industry culture.
Between 2011 and 2016, the global
pharmaceutical industry is at risk of
losing as much as $250 billion in sales
from patent expirations. As if the threat
of looming revenue reductions were not
enough, the storm is made perfect as
regulators and payers alike take a near
zero tolerance stance towards the health
outcomes and economic benefits of new
molecular entities. Investors beware.
The era of blockbuster drugs is being
written about as history, and with it big
spending on sales force expansion
and lavish marketing budgets. Data
from market research agency Cegedim
Strategic Data (CSD) show dramatic
drops in sales force size in the major
markets: Since 2010, sales rep levels
are down by 16 percent in the US
and 13 percent in the EU 5 countries
(Italy, France, Germany, Spain and the
UK). Despite this, pharma marketing
appears to be entering a new period
of development and creativity with an
emphasis on multichannel marketing
and digital promotion. This isn’t
merely an assumption based on tech
industry hype and over eager Twitter
“evangelists” willing it to happen. Rather,
the evidence is in the numbers: CSD
audits of industry promotional channels
reveal a dramatic increase in digital
channel spending, with the US seeing
investment jump nearly 150 percent
since 2010. The EU 5 was up more
than 90 percent over the same period.
Source: Cegedim Strategic Data
Total FTEs
% Change
Total FTEs
% Change
79 402 73 764
- 7.1 %
66 713
- 9.6 %
86 327 84 658
- 1.9 %
74 779
- 11.7 %
MAT Q4
2010
MAT Q4
2011
MAT Q4
2012
USA Europe Top 5
MAT Q4
2010
MAT Q4
2011
MAT Q4
2012
Figure 1: Sales force rep equivalents (FTE) MAT Q4 2010 - MAT Q4 2012
Christopher Wooden
(christopher.wooden@
cegedim.com)
Vice President,
Global Promotion
Audits,
Cegedim Strategic Data
(www.cegedimstrategic
data.com)

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Pharma Outlook Q1 2013
Market forces: Death of the sales
force – greatly exaggerated.
For good or ill, blockbuster drugs have
defined much of the conversation around
pharma marketing. And early on, much
of the talk was about sales reps. By
the late 90’s, the industry had entered
a “rep race” as multi-billion dollar sales
were at stake with each new drug
approval. Mergers and acquisitions
helped to consolidate portfolios, but
improved sales force efficiencies were
elusive and an exception. In the context
of high sales growth and profits, there
was little incentive to truly innovate
marketing and there were few visionaries
willing to challenge the status quo. The
situation was clearly not sustainable,
but change was going to be painful.
More doctors were becoming “no see”
as the marketing of “me too” drugs
appeared to waste their valuable time.
And yet, only when product pipelines
began to falter did initiatives to redefine
the “share of voice” marketing model
begin in earnest. Inevitably, cuts in
sales forces started as the edge of the
patent cliff came into view. Contrary
to expectations, this period did not
lead to the quick adoption of online,
self-directed detailing or other cost
efficient “multichannel” innovations.
Furthermore, the sales force –albeit
smaller – and the share of voice model
remained intact, but now with a heavier
emphasis on call value than ever before.
Nevertheless, the present and rapid
shift to digital marketing does not mean
replacing sales reps with “robots.”
Instead it is a question of augmenting
the traditional sales force with a richer,
integrated “customer experience” Source: Cegedim Strategic Data
% of Total
Spending
% Change
0.2 %
TotalSpending($m)
0.3 %
+ 37.6 %
e-Meetings + 32.1%
e-Mailing + 43.1%
e-Detailing + 38.8%
% Change
2012/2011
0.5 %
+ 38.9 %
MAT Q4
2010
MAT Q4
2011
MAT Q4
2012
$47 m $65 m $90 m
7
8
14
11
20
58
42
7
33
Source: Cegedim Strategic Data
% of Total
Spending
% Change
1.2 %
TotalSpending($m)
1.8 %
+ 51.4 %
e-Meetings + 14.0%
e-Mailing + 67.5%
e-Detailing + 73.9%
% Change
2012/2011
3.2 %
+ 64.8 %
MAT Q4
2010
MAT Q4
2011
MAT Q4
2012
$353 m $534 m $879 m
368
452
59
212
270
52
140
156
57
Figure 3: E-Promotion –
Europe top 5 total spending & trends on 3 years
Figure 2: E-Promotion –
USA total spending & trends on 3 years

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Pharma Outlook Q1 2013
where a cohesive multichannel strategy
assures that healthcare providers
(HCPs) can easily obtain the information
they need. But to accomplish this,
the industry has had to wait for…
…Technology (and its users) to
catch up
In the early 2000s as broadband
became more widely available and
HCPs – like everyone else – started
using the Internet to find information,
there were predictions that online
based platforms would inevitably allow
for significant rationalisation of sales
forces. Expectations were high as
marketing teams offered “content rich”
websites with attractive “multimedia”
offerings. Some pharma companies
made progress and new, improved
value was found in this area for CME,
corporate PR and investor relations.
However, until recently, advances in
developing a true multichannel offering
could not be fully exploited due to several
crucial and related factors: So called
“Web 2.0,” or the non-static web has
developed sporadically. Mobile devices,
with enough speed and power could
only leverage these advances in the
past few years. The generation of HCPs
(and pharma marketing professionals)
that are entirely comfortable and
conversant with these new tools and
possibilities are only now in a position
to adopt innovative ways of interacting.
Culture: Is it “about time?”
Few would argue that the
pharmaceutical industry has built a
reputation for the innovative use of the
internet in communicating its strengths,
let alone as a PR or marketing tool.
Rather, a conservative approach was
the norm as communication continued to
focus on HCPs who relied on sales reps
as their main point of contact with the
industry. As technology has opened up
a conversation with all consumers, Big
Pharma has in large part shied away in
an attempt to avoid false steps, potential
bad press and regulatory scrutiny.
As the data reveal however, a shift
has occurred and communication
is no longer a one way “pitch” - but
rather HCPs are being invited to not
only access the information they
need anywhere, anyhow, anytime,
but also to share their day-to-day
experience among many stakeholders.
Online physician communities, blogs,
mobile apps and even general social
media are now part of the user
experience for many, if not all HCPs.
Truly innovative companies are now
using multichannel strategies to leverage
this on-going conversation and better
position the value of their products and
services. This is all the more essential as
the “blockbuster” mentality gives way to
“personalised medicine” and real-world
data becomes as important - if not more
so - than clinical data. Far from replacing
reps, the industry is now enabling
sales reps to offer much more than
ever before. Indeed, the convergence
of challenging market forces, evolving
technology and a change in attitudes
and culture has only reinforced the
fact that building a strong value-based
relationship with HCPs remains the
key to success. It’s about time.