S&R Blog


Why Pharma Is Pushing Its Drug Pushers Out

New day. Same story.

Source:Minyanville

The pharmaceutical industry is going through a transformation — not only has it been consolidating with mega-mergers like the one between Merck (MRK) and Schering-Plough, but it’s facing a major patent cliff as the revenues from the blockbuster drugs of the 1990s fall prey to generic competition.

Yet, these larger changes have led to shifts in other parts of the industry, too. Since Big Pharma can no longer rely on new blockbuster drugs to pad their top line, these companies now have to transform how they do business to include the biotech model of finding drugs for diseases with smaller patient populations. This also means a major overhaul of how the industry sells its product to the masses.

Pharmaceutical sales reps will be the first to tell you that the industry is scaling down. Once plentiful — there were more than 100,000 reps in 2005 — the drug sales rep is quickly becoming part of the past. A recent report by Deloitte proclaimed to the industry to change its sales models or bust.

An article in the Indianapolis Star this week shows just how much sales rep are despised by the very doctors they’re supposed to woo. Doctors have been pushing for sales reps to make appointments and cut down their pitch time. In some cases, doctors are asking to ban their presence altogether (one in four doctors now refuses to meet with reps, according to the Deloitte report).

But doctors’ dislike of this incredibly aggressive and confident class of individuals isn’t the only reason that the sales rep is becoming extinct. Doctors are no longer the key decision makers when it comes to what drugs are being prescribed. That decision now rests heavily with consumers (who are highly affected by direct-to-consumer advertising), and even more so with insurers who are the primary payers for the often over-priced drugs being pushed by the pharma companies.

Pharmaceutical companies aren’t blind to the problem. The past year has been a bloodbath for pharmaceutical peddlers. AstraZeneca (AZN) said in 2007 that it would cut 7,600 people by 2013; it later upped that number to 15,000. The company didn’t say where those jobs would come from, but the sales force was offered the buyout first. Sepracor, wholly-owned subsidiary of Japan’s Dainippon Sumitomo Pharma, reduced its number by 530 in 2009, bringing its sales force to 1,325 people. King Pharmaceuticals (KG) eliminated 380 field sales positions last year, bringing its total number of reps down to 720 and Sanofi-Aventis (SNY) cut 750 people from its sales roster.

Jump to 2010: Pfizer (PFE) cut 556 sales reps as part of its broader layoffs due to its merger with Wyeth last year. Earlier in the month, Merck eliminated 400 positions from the Schering-Plough headquarters in New Jersey with a majority coming from the sales team. This is on top of the 1,000 sales reps that Schering laid off in 2008 before its merge.

So how will the new pharmaceutical sales landscape look?

It’s likely that insurance companies are going to be playing an even bigger role in which prescriptions become the drugs of choice. Meanwhile, Big Pharma will likely look to outsourced sales rep to educate those same insurance companies. As a plus for doctors, their knowledge will likely have to come more from medical journals and other non-biased sources.

“Pharma’s challenges require a detailed understanding of each stakeholder’s role and contribution to value,” says W. Scott Evangelista, principal at Deloitte. “By better understanding every stakeholder’s unique needs and motivators, a pharma company would be better equipped to improve its internal capabilities — e.g., knowledge, skills, tools — to interact more effectively with each constituent.”



What do physicians really think about Big Pharma?

According to Dr. Candida Fink’s latest blog post on PsychCentral, not highly. In what clearly wasn’t a good year for pharma in terms of reputation, Dr. Fink highlights why she will “no longer see any drug reps.”

I didn’t want to hear from them, and I haven’t since. I avoid lectures and meetings that drug companies sponsor, and I use no drug company pens or notepads. The longer I avoid direct contact with drug company reps, the better I feel about it. The further removed I am from these things the more I realize I was getting a lot of my information about medications from company reps who had vested interests in my using their product. I realized that I don’t need samples, because the companies give samples only of their newest products, and those don’t have the research or track records that the older products have. Furthermore, the older products are now available as generics, which ultimately save my patients far more money than they save by taking a few free samples and then paying for the priciest, newest product.

Obviously, this is the opinion of one physician, but the points Dr. Fink brings up about her disdain for pharmaceutical marketing tactics have been echoed more than once lately. So if not from pharma companies, where would physicians get their information about products? According to Dr. Fink,”That isn’t to say I don’t keep informed and try new products that are appropriate for certain patients, but I do so based on research and my patients’ needs, not who bought me lunch last week.”

Samples, proper medical education, and other informative materials should be needed to help improve patient outcomes. But physicians seem to be turning their heads the other way.  If pharma doesn’t heal the wounds and restore the trust with physicians, credibility will be the least of its problems. What do you think?

Read Dr. Fink’s post here.



Doctors increasingly close doors to drug reps, while pharma cuts rank

Many physicians see detailers only with scheduled appointments. Drugmakers are responding to hard times with layoffs and a shift toward online marketing.

Source: American Medical News

The relationship between doctors and drug reps may never be the same again.

Pharmaceutical companies — battered by a sluggish drug pipeline, the looming loss of blockbuster patented drugs, an economy in recession and scrutiny of their relationships with physicians — are re-examining the value of sending drug reps into doctors’ offices. Detailers are struggling to grab a shrinking slice of physicians’ valuable time and attention while adjusting to new drug industry rules banning freebies such as pens and notepads.

At its peak in 2007, the American pharmaceutical industry fielded 102,000 sales reps, said Chris Wright, managing principal for the consulting firm ZS Associates’ U.S. Pharmaceuticals Practice. Drugmakers have slashed the number to 92,000 since then, and ZS projects the number will fall to 75,000 by 2012 at the latest, saving the industry $3.6 billion.

Pharma’s return on investment in its sales force has plummeted. For every 100 reps who visit a practice, 37 place their products in the office’s sample cabinet, and only 20 speak to a physician in person, said the New York-based consulting group TNS Healthcare. Profit per drug rep visit fell 23% from 2004 to 2005, said a February PricewaterhouseCoopers report on pharma’s future.

“The old sales model is broken now, and who knows how it will look in the future,” said Peter H. Nalen, president of Compass Healthcare Communications, an online drug marketer in Princeton, N.J. “What’s happening is that pharmaceutical companies are realizing there are other ways to reach the doctor instead of banging on the door of the doctor who just doesn’t want to talk to you.”

1 in 4 doctors works in a practice that refuses to see drug reps.

The time squeeze and the new drug industry rules are “changing the landscape quite dramatically,” Nalen said. Another troubling sign for drugmakers: More than a third of medical schools require drug reps to have appointments before seeing physicians or residents, according to the American Medical Student Assn.’s 2008 PharmFree Scorecard. The Assn. of American Medical Colleges recommended the by-appointment-only policy in May 2008.

While most physicians still have positive views of detailers and drugmakers, those sentiments are cooling.

About one in four physicians works in a practice that refuses to see drug reps. Of doctors who do see reps, about 40% will meet with detailers only with scheduled appointments. The by-appointment-only figure jumped 23% during the last six months of 2008, according to a survey of more than 227,000 medical practices representing 640,000 physicians that was released in February.

The survey, conducted by the doctor-profiling firm SK&A Information Services Inc., did not seek to determine why some physicians are giving drug reps the cold shoulder. But physicians and pharmaceutical industry consultants say doctors have felt besieged by the number of reps visiting their offices and taking up precious time in an era of declining payment.

Last year saw a slight drop in a measure of the quality of detailers’ relationships with doctors, based on a TNS survey of more than 1,500 doctors. And negative word-of-mouth about pharma rose sharply among physicians — this so-called market-resistance index jumped 62% in the last year, TNS said.

Controversies over the drugs marketed as Vioxx (rofecoxib), Avandia (rosiglitazone) and Vytorin (ezetimbe and simvastatin) appear to be making doctors more skeptical of drugmakers as an information source, said Jerome L. Avorn, MD, professor of medicine at Harvard Medical School in Massachusetts.

“Doctors are increasingly concerned that the sales pitches from drug reps are not giving them the full story,” said Dr. Avorn, author of the 2004 book, Powerful Medicines: The Benefits, Risks, and Costs of Prescription Drugs.

Ken Johnson, senior vice president at the Pharmaceutical Research and Manufacturers of America, said in a statement that detailing visits are good for doctors and patients. “Interactions between physicians and pharmaceutical company representatives benefit patient care through the exchange of information about new medicines, new uses of medicines, the latest clinical data, appropriate dosing and emerging safety issues.”
Interacting with detailers

For every physician, it seems, there is a different way to handle drug reps.

Charles E. Crutchfield III, MD, is a dermatologist with a high-volume practice in Eagan, Minn., a suburb of Minneapolis. Though five to 10 reps visit his office daily, he strictly limits detailers to one five-minute session a week and requires that the rep provide lunch for his staff.

More than a third of med schools require drug reps to make appointments.

“The reps know they are not allowed to disturb me when I am seeing patients,” Dr. Crutchfield said. “If they do bring samples, I have a nurse who will bring the pad back to me so I can sign it. I will not see or talk to reps when I’m in clinic.”

Ari Silver-Isenstadt, MD, persuaded the four other doctors and office staff in his Baltimore pediatrics practice to adopt, in January 2008, a “no soliciting” policy for drug reps. Dr. Silver-Isenstadt is a member of the National Physicians Alliance, whose Unbranded Doctor Campaign urges physicians to refuse industry gifts and stop seeing drug reps.

Despite the new survey figures showing that doctors are cooling to drug reps, he said physicians should be more aggressively addressing the conflict of interest detailers pose.

“More than half of us doctors still just have a feeding frenzy of reps in our offices,” he said. “We should be ashamed of ourselves for allowing such an intertwining of our patients’ best interests with the convenience and niceties of drug reps.”

Not all doctors share Dr. Silver-Isenstadt’s hard-line view.

Most are simply pressed for time. Drug companies are trying to reach out to doctors via the Web, experts said. About 45,000 doctors meet with detailers using online video, and 300,000 physicians say they are open to doing so, said a September 2008 study from Manhattan Research, a drug marketing research firm.

Visits by drug reps will not disappear entirely, experts said. Rather, the sales force that survives the layoffs will be better trained and have a greater depth of clinical and scientific knowledge.

Detailers “reach the customer in a way that other promotional techniques do not,” said Wright, of the ZS Associates consulting firm. “And for many of these doctors, the choices they make about what to prescribe are worth a considerable amount of money.

“When that’s on the table, it makes sense to send a highly trained person to make sure the doctor knows about the medicine before making those choices.

Kevin B. O’Reilly – American Medical News



78 percent of US interested in mobile healthcare solutions
October 19, 2009, 3:57 pm
Filed under: mobile | Tags: , , , , , ,

Attention healthcare industry! Mobile healthcare solutions will be a reality sooner than you think. And we aren’t talking about just blood pressure monitoring apps, but full-blown health services.

According to a new study conducted by wireless industry association CTIA with Harris Interactive, a vast majority of the US (78%) is interested in mobile health solutions and 15 percent of the U.S. is extremely or very interested in learning more about mHealth.

The study used a combination of two online studies of U.S. adults (5,563) and physicians (115 general practitioners and 129 specialists) to gauge their interest in mHealth service options.  Survey respondents felt that access to mHealth would allow for more home-based care (68%), make medical care easier to obtain (51%), and give patients more freedom and choice (51%). More highlights are below.

mHealth Today

mHealth Appeal

mHealth Appeal

Read the full report here.



If your ad suffers from one of these traits, you may need to rethink it
October 1, 2009, 1:55 pm
Filed under: advertising | Tags: , , , , , , , ,

Every brand manager, marketing director, CMO, account person and creative wants to know –  what makes the perfect ad? Is it the headline or the visual? What about that brilliant logo? Maybe it’s the call-to-action or the tagline that keeps them coming back for more? Or that one design element that caused you to stop in your tracks and stand at attention?

Whatever it may be, the folks at Business Week (Steve McKee) have created a simple list to tell you what it shouldn’t be:

1. Boring. Yep, boring. Why do we watch TV, listen to the radio, read the newspaper, or go online? Three reasons: information, entertainment, and engagement. Ads that fail to offer at least two of these three benefits flop.

2. Boorish. You shouldn’t think of your advertising as being about your brand, you should think of it as an extension of your brand (see “A Practical Guide to Branding”). If it’s loud, annoying, insulting, offensive, or self-centered, people will think the same of your products or services (see “The Cocktail Party Test for Advertising”).

3. Safe. If you worry too much about offending someone, you’re likely to not attract anyone.

4. Trying to do too much. The best an ad can do is communicate one single, compelling idea, and in the age of the Internet—when people know they can go online to get all the additional information they need—it’s crazy to ask an ad to do more than that.

5. Fixing a non-advertising problem. A common mistake many companies make is trying to use advertising to fix another problem. It may be faulty or outdated product design, an uncompetitive cost structure, customer service letdowns, or any number of other things. It’s not as if they do so intentionally; it’s just that it’s a whole lot easier to put on a new coat of paint than it is to fix the foundation that’s causing the drywall to crack.

Read Steve’s full list here.



Has pharmaceutical advertising regressed?
September 17, 2009, 3:27 pm
Filed under: advertising | Tags: , , , , , ,

Simple and effective. More classics can be found at AdViews.



New study reveals 77.5% of physicians use social media professionally

This blog is full of information about social media, including SmartPhone apps, Twitter, and others, and S&R decided to take this topic to the physicians to find out their thoughts on social media.

The S&R Communications Group Social Media Survey was conducted on July 20, 2009, via SermoTM, an online community for physicians. The purpose of this survey was to gather information about the personal and professional use of social media by physicians. The survey was administered to 102 physicians and was directed at physicians in the specialty areas of family medicine, internal medicine, pediatrics, and psychiatry. The survey contained 18 questions on various topics that ranged from basic demographics to use of specific social media sites.

One of the most important pieces of information gathered with this survey was not a surprise: Some physicians do use social media professionally.

Who uses it?

Of the 79 respondents (77.5%) who reported using social media professionally, 72.2% were 25 to 35 years in age. (The other 27.8% were 36 to 55. No one over the age of 55 participated in this survey.)

How do they use it?

Like any other tactical tool, social media will not be effective for every physician or every situation. The majority of respondents reported using social media to connect with physicians within their specialty (87.3%), to connect with physicians outside of their specialty (64.6%), to connect with colleagues they trained with (54.4%), to connect with medical school alumni (53.2%), and to connect with key opinion leaders (21.5%).

Interestingly, only 2.5% reported using social media to connect with patients, which suggests that physicians do not see social media as a viable means of communicating with patients. Why is this?

Perhaps the answer lies in the benefits respondents see in or their reasons for using social media professionally. Because the majority of physicians see social media as a means of gaining professional information, it is reasonable to expect that very few respondents would use social media as a means of communicating with patients. Plus, respondents, even those who reported not using social media professionally, reported that the 2 largest downsides to using social media professionally were issues of privacy (69.6%) and legal concerns (52%). Other downsides included concerns over credibility, time requirements, the impersonal nature of social media, and incongruence with their ideals of being professional.

At the moment, physicians must be careful about interacting with patients via social media. However, social media presents the opportunity to satisfy the demand for more immediate information and to correct mistakes quickly. Doctors already use non–face-to-face methods like letters, phone calls, etc. It may only be a matter of time before social media falls into this same category.

What can we learn from this survey?

As the world of pharmaceutical advertising is changing, we have to change with it. This survey confirms what we already knew: Social media will play an important part in pharmaceutical advertising. This survey indicates that social media is a source for information for physicians, so we know that we have the opportunity to create a place where we can build relationships with physicians while rapidly providing education, information, and the ability to interact with KOLs and other physicians.

In fact, more than 50% of respondents reported that they would be in favor of additional social media designed for better professional interaction with patients and other healthcare professionals.

As they always have, physicians are turning to their colleagues for information, and you have a responsibility to your product to participate in this conversation and ensure that accurate, factual, and complete information is being presented to the physicians who are seeking out that information.

Contact Wayne Dunlap (wayned@srcomgroup.com) for a full report.