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Pharmaceutical Marketing
in the 21st Century
Perri Cebedo & Associates
Santa Clara, California [email protected]
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Pharmaceutical Marketing
in the 21stCentury
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 ofTraining
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The Growth of DTC
DTC: Direct to Consumer Advertising
Phenomenal growth in the last 5 years
Journals: 200m vs. $3.7B on DTC! Morepatients askPhysicians what they want
So, Moresamples
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Effects o
fDTC
Morepatients telling their Doctor what
medicines they need
Products with DTC: highest sales increases Increase ofsamples
More informed patients
Betterpatient compliance Moresatisfied patients
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EMarketing
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
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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
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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% ofSales
Middle 33% ofTop 50 Companies: RD=18% ofSales
Top 33% ofTop 50 Companies: RD= 15% ofSales
Conclusion? Additional 6% ofProfits compared to bottom 33%!
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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
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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% ofe Details doneevenings orearly mornings
or weekends
E Detailing lasts 8-10 minutes
Increased use of attention mechanics
MD selects the time. So attention
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The Changing World of
Medical Education PhRMA Voluntary Code
Growth ofOnline CME
Moreelectronic Media will support live Meetings, eg
CDrom orOnlineeducational support Small low budget events can have bigger impact if
supported with CDrom, withslides, speaker bios,transcripts, abstracts and interviews
Casestudies can come alive withelectronic media
More CME, moreprofessional Reps!
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Increasing Field Forces
Increasing Sales and Marketing Staff
Increased Pay and Reward!
Only slowdown in the use of Contract Sales Slower turnoverexcept in Specialty Reps
Pharma salaries now ahead by 20% compared
with other industries
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Growth in Pharma Salaries Primary Care Rep $45,800--$47,000
TopPC Rep $81,000--$82,300
Oncology Reps plus 30%
DMS plus 13% more than their top reps
Highest salary increase: Senior DMs=11%
IncentivePay is 25-30% of basepay
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Changes inIncentive Schemes
Incentivepay =25-30% ofsalary
Performance vs goals; Quantitative: 83%
Qualitative: 17% 82% Individual Performance
TopTen PCRep in 2001=59% of basesalary
TopTen PCRep in 2002=76% of basesalary
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Drug Discount Programs Senior Poor struggle to pay for
medicines
No drug insurance coverage
GSK: Orange Card
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Successful Use o
fthe
Internet
Marketing to Physicians who regularly go
online
For latest information on diseasemanagement, research
Latest clinical papers
Networking with others
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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 MDconventions!!!
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Dinner Meetings
Pure CME Activity
Group Selling Focus Group Discussions
MAPs or Marketing Advisory Panels
Social Activity to Celebrate Something
Peer Selling
As MDs get harder to see...
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Peer Selling over Meals
Evolvement over Focus Groups in the 80s
MAPs: Marketing Advisory Panels
PIG
s: PeerI
nf
luenceG
roups Based on the more the MD knows, the more
convinced he is, the more likely to share
experiences
The Key: The Facilitator!
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Group Selling at Conventions
The Rationale: Foreach MD contacted at the Booth, 6 walk by
4-6 MDs for 10-15 minute interaction The Key: Training in Groupselling Techniques
Special Training in Questioning Techniques
Eliminate give-aways in the Counter and eliminate the Counter
Benefits: More MD contacts, better interaction, more time!
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Growth of E-SalesTraining Cuts costs of bringing Reps to theOffice
BringsTraining to the Reps
Information transfer can beefficient & consistent
Learning curve is 60% faster
Average content retention of Instructor-ledcourse: 58%
E-Learning adds additional 25% retention
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Other Benefits o
fE
-Training More fun, less fear and apprehension
Moreerrors, the deeper the knowledge asconsequence oferrors areexplained
Allows courses to be broken up in shortersessions Will grow faster withhighspeed DSL and cable
connections
PDA and JIT: Just-in-timeTraining
Savings of 50%-70%
Used best in conjunction with conventional training
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DifferencesinTraining Practices USA Specialized Field Forces: Preceptorships
Use ofMultimediainTraining
Training theTrainerPrograms Cost to traina Rep: $100,000
Amount:TrainingperRep: 5% ofSalary
ProfessionalDevelopment Programs
ContinuingTrainingand Education
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Situation Outside the USA Training=Product Training
No SalesTraining System
Product Launchesprovide 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!
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New Techniques in Training Elimination of the Classic RolePlay
Replaced by theHappy Griller
The Use of Video Models
Focused on Selling Skills
Each Rep role-plays 40 times!
Reinforcing his/her own confidence andenthusiasm
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Problems are Opportunities!In disguise
The only thing permanent is change
How quickly & how well we adapt, willdetermine oursuccess.
Time to change the conservatism of ourIndustry.
Time to invest in training!
Our capacity to learn faster is only sustainableadvantage wehave against competition!
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Perri [email protected]
Thank You for Your Attention!