Posts Tagged ‘pharma’

Pharma and its Innovator’s Dilemma

A recent conversation with a friend in the pharma industry validated my thoughts and concerns about the systemic challenges that pharma is facing. The pivotal insight came from my friend’s comment that he wants his next job to be “not just about pills,” but a job that takes on a broader role in healthcare, one that’s more focused on patient outcomes.

This personal revelation was a bit surprising given the fact that my friend’s entire career has been pharma marketing. Promoting drugs is his area of expertise. So why did it take a career “transition” phase to bring about this personal commitment to the need to broaden pharma’s mandate?

innovation highwayWhy not innovation?
The challenges and obstacles that senior-level pharma executives face are extraordinary, especially when it comes to innovation and moving the industry forward. Pressure from Wall Street, business partners and investors who are focused on revenue growth and short-term profitability makes it incredibly difficult for top executives to think outside the box or consider what’s next for the industry or their company.

Every day, pharmaceutical companies large and small are managed to meet performance and revenue expectations. My friend observed first hand how even the long-term planning process (5 to 10 year horizon) doesn’t give senior executives the flexibility to discover and engage in innovative opportunities that might allow them to consider new offerings or business models.

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Is it Digital Marketing or just Marketing?

In a recent article about the future of pharma, Craig DeLarge was quoted extensively about how to organize a “center of excellence” within a pharma company to ensure it is taking advantage of digital tactics and multi-channel marketing. He sees this as the first step in the process of digital transformation for pharma.

marketing dig ageWhat his remarks drive home is the fact that digital and marketing aren’t separate disciplines. “We are marketing in the digital age,” says Craig. This means that marketing and digital marketing shouldn’t be seen as two separate initiatives or even act in a parent-child relationship. Yet very often that’s what happens as evidenced by the typical marketing budget process.

Marketing in the digital age is still marketing, but technology now enables a custom marketing mix that’s appropriate for our product and our audience. It’s not simply a case of adding a few new online or mobile tactics to the marketing mix. That’s just a recipe for adding more promotional noise, without the benefits that we can get from digital.

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Expectations on the Rise for Digital Marketing in Pharma

ExpecatationsI’ve begun to observe among our clients a distinct shift in expectations for the role of digital marketing. Even though pharma marketing budgets continue to invest in the traditional channels of television and print, I’m seeing a change in how digital is viewed, and that’s a positive sign.

Smarter Marketing Talent
The caliber of marketing talent in key pharma leadership roles has improved, bringing higher expectations for technology and digital-based marketing. Marketers in both so-called centers of excellence and at the brand level are demanding measurable goals for what technology can be and should be doing for their company and their products. They reward success and fire agencies or technology partners that don’t meet expectations.

The Amazon Effect
Online retail and social media companies have raised the bar of consumer expectations for access to information and the ability to search and buy in a very seamless way. But until recently, consumer expectations didn’t impact pharma. Now, the online consumer experience is raising the bar on healthcare.

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Pharma and its Love of Deal Making. All Good This Time.

3-wayThe recent 3-way deal between GSK, Novartis and Lilly represented a major transaction for all three companies. The deal has been scrutinized by the Street like a master chessboard swap of assets, in this case, molecules. Obviously, it took a fair bit of corporate development work to make these deals happen, so it’s actually pretty impressive from that perspective. But what’s more interesting to me is the strategy that these moves belie. It’s another clue to how pharma is changing.

For the past thirty years, pharma companies rose or fell based on their ability to develop or acquire a drug with blockbuster potential. Sometimes blockbusters just showed up, as did the disappointing blood pressure medication with unusual side effects called Viagra. Or the also-ran cholesterol-lowering drug that was almost cancelled because it would be the fifth drug in its class and that went on to become the largest drug in history. Read Full Article Now »

Creating Pharma(x)

pipe1Mention change in the pharma industry today and you’ll get raised eyebrows along with a sarcastic alliterative remark suggesting you must be Sherlock Holmes…

No, the question is not whether change is happening, it’s how you predict, control and channel change to your advantage. Or acquiesce and allow it to happen to you.

Secular industry change is risky and challenging. But it’s only through market-defining challenges that companies and people come out stronger and better poised for the road ahead. Embracing risk and creating ambitious goals is what keeps companies moving forward and ultimately leads to new and exciting discoveries.

Larry Page, co-founder and CEO of Google, recently commented that as Google takes even more ambitious and costly bets, one would expect their failure rate to go up. But in fact, it hasn’t. And even when they may not achieve an ambitious goal, the path they take often leads to important things. Read Full Article Now »

Getting schooled at closerlook

I’m often asked why I never went back to get my MBA. We have two of the best b-schools in the world right here in Chicago. My answer is simple – closerlook is my grad school. Everyday I have the opportunity to learn more about health, interactive marketing, and human behavior.

This is why I love our company’s tagline – Smarter marketing for pharma. It reflects our passion for learning.

It’s a subtle difference, but I appreciate that our internal branding team recommended “smarter marketing” rather than “smart marketing.” Smart is static and hard to define. Smarter is dynamic and requires progress. There is a touch of arrogance in the claim that we provide “smart marketing,” but there is a commitment to improvement in “smarter marketing.”

Smarter marketing for pharma is more than a simple tagline. First of all, it’s a real promise to our clients that they will get better marketing results. I suppose that if someone offered a dumber marketing program that got better results, we wouldn’t have a business, but our experience shows that smarter marketing will lead to better outcomes.

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Getting focused on specialty products

Most large pharma companies have managed to muddle through the patent cliff through a combination of strategies including M&A, deep cost-cutting, and simply managing Wall Street expectations. Now that we have largely refactored and resized for this new world of fewer blockbusters, there is a race to own specialty markets.

Therapeutic specialization has the potential for liberating the profit engine in many companies. The benefits of R&D focus and strategic alliance leverage to staff expertise to targeted marketing offer a level of productivity and efficiency not available to large unfocused companies with a Chinese menu of products. Hence, there will be a continuation of focus and specialization around therapeutic areas, patient types, and geographical markets.

Business development and strategic alliance offices have grown headcount and executives are piling up global frequent flier miles looking for new products and companies. The challenge is that many of the leading global markets are getting more sophisticated in their own right, with regulatory restrictions and pricing limits altering the balance of power between manufacturers and markets. Innovation and strong IP are critical to success. For this reason, this move towards specialty products will require a fierce adherence to one’s positioning and a skeptical eye towards opportunism.

Physician Marketing, meet CRM

A lot of ink has been spilled on the decline of the blockbuster and the search for a new specialty-product commercial model. But less attention has been paid to how that changes physician marketing strategy.

In the traditional PCP blockbuster model, promotional saturation was effective. The medical claim could be simple and the sales message clever. It didn’t matter if marketing tactics existed in their own silos with little or no coordination. Whether it was a leading statin or ED product, there was strong consumer demand and the marketing strategy could be share of voice.

In today’s specialty market, these old assumptions are just plain wrong. Not only is the target audience smaller, the buying criteria are more sophisticated. Writing a $15,000 oncology regimen is different from writing a monthly $150 PPI script.

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The internet as intelligence

In most of my conversations with health care marketers, campaign strategy is not complete unless it includes an internet strategy. Everyone wants and needs an internet strategy (and now a mobile strategy, too) to stay relevant.

Usually when people talk about using the internet for marketing, they are thinking of it as a promotional channel. Call it digital marketing, non-personal promotion, or online communication, it doesn’t matter. The point is that for a truly integrated marketing plan these days, there needs to be a set of online tactics to make it complete.

But there is something missing from this picture. Yes the internet is a convenient, cost-effective promotional channel. It doesn’t require sales reps or postage or expensive TV buys. It’s the internet, and everyone is connected. So there you go, right?

No.

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Dark Night of the Pharmaceutical Soul

Tolstoy’s observation that while happy families are all alike, every unhappy family is unhappy in its own way describes the pharmaceutical selling environment today. No standard go-to-market strategy will work for every unhappy brand and every disaffected doctor.

A new focus on flashy iPad sales presentations will slow but not stop the slide in office access. Technology should enable marketers to learn about and serve the customer better and faster than the competition, not simply be a new shade of lipstick on the traditional sales pig.

Relationship Marketing, or “treating different customers differently” is finally getting the attention it deserves. Contrast RM with the more typical marketing approach of “shouting” at the audience with a single message and betting that a brand will get its fair share of the audience. Now with the perfect storm of declining physician access, pricing pressure from private and government payers and the looming patent cliff on many blockbusters, marketers are finally seriously considering the benefits of building long-term relationships with their customers.

This year, brand teams will begin to invest in physician databases and predictive analytics and digital channel integration and will start learning how to treat different customers differently.

There is a day of reckoning approaching when it will become painfully obvious which brands have created meaningful, value-based relationships with healthcare professionals and patients. Pharmaceutical companies are starting to be scrutinized by a new wave of tech-enabled professionals, empowered patients and enlightened bureaucrats intent on holding suppliers to higher standards of value and engagement. And depending on what they find, they will vote with their pocketbook.

The essence of strategy is to be ready before you need to be. This year, from brand teams to board members, there will need to be a new focus on customer strategy and on recalibrating what it means to serve our different customers differently. The way they need to be served and the way they prefer to be served.