Pharma sales

1. 1
Marketing and Sales Roles
in the Pharmaceutical Industry

2. 2
MARKETING

3. 3
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 it’s 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

4. 4
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

5. 5
IT’s 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

6. 6
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

7. 7
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

8. 8
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

9. 9
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?

10. 10
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?

11. 11
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: Pfizer’s
defense of Viagra
when suits were filed
alleging an increased
risk of stroke.

12. 12
Types of Market Research
Periodic
Surveys
Retail Pharmacy
Purchases
Hospital
Purchases
Warehouse
Withdrawals
Promotional
Media
Physician
Panels
Retail Pharmacy
Prescriptions
Retail Pharmacy
Sales

13. 13
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

14. 14
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

15. 15
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

16. 16
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

17. 17
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

18. 18
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

19. 19
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

20. 21
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

21. 22
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)

22. 23
SALES

23. 24
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

24. 25
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

25. 26
Detailing’s 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
what’s 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

26. 27
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: “Pharma’s Detailing Overhaul”, February 2001 (IMS Health, Scott-Levin, Forrester Research, Inc); (Ziment/WebSurveyMD.com); IBM Analysis
• “I view them as the liaison but I
don’t 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, it’s 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 doesn’t appreciate
that I am busy and still tries to
pitch the drug to me”
• “I don’t believe that someone with
a bachelor’s degree knows more
about how a drug works than I do”
Physician Comments
78%
47%

27. 28
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 rep’s 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 company’s 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 rep’s 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.

28. 29
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

29. 30
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

30. 32
OTHER MARKETING
& SALES TECHNIQUES

31. 33
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

32. 34
Medical Science Liaisons (“MSLs”)
• Scientific professionals
– Pharmaceutical PhD’s
– 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)