Not Really. But There Are A Lot Of Things We Could Be Doing Better
By Steve Carchedi, Pharmaceutical Executive
Albert Einstein was once asked why time exists. His answer was “So everything won’t happen at once.”
Right now, it seems like we’re violating that theory. Everything that can go wrong in our industry is happening at once. Emptier pipelines. More regulation. Less consumer confidence. Reimbursement hurdles. Barriers to physician access. And, in general, a real slowdown of the success we’ve experienced for decades.
It’s not all our fault. But we could be doing a better job of asking the right questions so we get more effective answers. I’ll limit this article just to sales and marketing problems, which are plentiful.
Let’s start with one of the biggest problems: our image. A recent Harris poll showed that just 9% of the public has confidence in our industry. Only stink bugs and Congress are behind us. Why is this? Headlines about scandals (some real and some fantasy). Patient confusion due to a glut of misinformation. The high cost of (some) pharmaceuticals. The high cost of healthcare in general – even though we have little or nothing to do with the price of surgery, hospital beds or insurance plans. And, despite the fact that the FDA has actually been tougher on us in recent years, the perception is still that we’re treating docs to lavish vacations and charging hundreds of times the cost of our products.
What can we do about that? Well, the answer is related to the next big problem: data.
A recent Harris poll showed that just 9% of the public has confidence in our industry. Only stink bugs and Congress are behind us. Why is this?
For the life of me, I don’t know why a sector like ours – considered very high-tech – is so far behind Crest and Coca-Cola in embracing, analyzing and using the data available to us. They have put their entire potential user base under a microscope to see who wants what, how and when. As I’m sure you’re aware, Amazon knows everything about your buying habits: that’s why you’re always seeing ads eerily specific to whatever you recently bought or searched. If you’re a fortyish Italian mother of three with a collection of bejeweled antique bronze toothpicks, you can be sure Amazon will lead you to all the Easter basket, trattoria and toothpick sites on the web.
And you know what consumer products companies do with this kind of information. When the peanut butter manufacturers maxed out their regular market, they crunched the data and saw the possibilities for expansion into other consumer preference areas. Kraft is doing Cinnamon Raisin Granola, Berry Nut and Banana Granola line extensions. Jif caught on to the Nutella craze and now has their own hazelnut-based spread. And the smaller companies are venturing into nuttiness like Java Vanilla Espresso Almond Butter (I’m not making this up). In addition to new versions, many companies are looking at ways of selling the basic product to new health-oriented users. Hormel, owner of Skippy, is promoting peanut butter’s protein punch.
You may be thinking that we do something similar. Yes, pharma invests heavily in developing new indications, but what we don’t invest in is the statistical wisdom that consumer brands use so successfully to really look into the minds of their customers. And I think the reason for this is NIH. No, not the National Institutes of Health, but the Not Invented Here syndrome. We don’t pick up analysts from Microsoft and Google, because they don’t have “pharma” experience. But why would that matter? Pharma is like other products in that we sell to human beings, whether those human beings are HCPs or hospital administrators or pharmacists or patients. Let’s drop our snobbery and get real. Our IT departments have to do more than just make sure we have the right programs on our iPads. They have to expand into data analytics. And they have to get into the same locker room with the people in the marketing departments, so we’re all on the same team with the same playbook.
To circle back to the consumer confidence conundrum, data can help us there, too. If we examine the underlying attitudes that are affecting consumer confidence, which data analysis can tell us, we can address them directly. This involves both messaging and platforms: refining the story lines and finding the right places to tell those stories so they seep into the public consciousness. That’s using high-tech the right way – the way that gets brand names sold and politicians elected. It’s not a coincidence that the team that helped President Obama get in office immediately went out and sold their skills to consumer companies. And what do we do about all the misinformation floating out there, such as the bogus vaccination scare? I don’t have the answers, but it’s obvious our approach so far has been less than successful. I’m sure someone in Silicon Valley or in one of the beltway consulting groups could do a better job than we’re doing now.
Finally, let’s look at the way we sell. Over the years we have moved from our focus on HCPs to DTC efforts, and today we see an emerging Point of Care (PoC) thrust to enhance our marketing campaigns. All this is to the good for our marketing efforts in general. It helps establish segments so that we’re placing the right messaging in the right place at the right time to the right audience. What it doesn’t do is solve the problem of our investment in sales forces, which we’re reluctant to diminish. But circumstances have forced us to change that paradigm, because it’s a very high hurdle these days to actually talk to HCPs – in person, by phone, or through email. So we’re grabbing at new approaches. Webinars. Web campaigns. Social media outreach. Public relations. Event-based education. Does this tell us that traditional sales forces are going the way of brick-and-mortar bookstores? Yes and no.
Because the cost to hire and train is so high, some companies are dealing with the problem by placing even more emphasis on outside contract sales forces, or on tactical employment of reps just for special campaigns. But that carries with it the problem of training – or not training. How quickly can you get a new person up the learning curve, not only about the product, but about your company culture? This is why we’ve always put so much time and expense into national sales meetings and launch meetings – to create and communicate and reinforce the idea of what our companies stand for. You can’t always do that with a freelance group of reps.
We don’t pick up analysts from Microsoft and Google, because they don’t have “pharma” experience. But why would that matter? Pharma is like other products in that we sell to human beings.
Dealing with the HCP barrier problem means we need to rewrite what we mean by “sales force.”
So dealing with the HCP barrier problem has to involve more. What it means is that we need to rewrite what we mean by “sales force.” These people are still useful in their “field” role when we have real news to deliver that will open doors to the physician’s office – news that is best delivered face-to-face, and that our customers want to know about, like product launches and new indications.
But what about when we don’t have that kind of headline news? Some companies are getting the message and training their captive sales teams, with the help of their marketing departments, to understand and use social media and other digital platforms. They have to build their skill sets to reach HCPs in the way the HCPs want to be reached. And that isn’t all the job of Constant Contact or other digital techniques. What if we use our established relationships to deliver solutions rather than product detailing – solutions about treatment options or new techniques? What if we probe the mindset of physicians and engage with them in enhancing their own patient relationships? What if we think about teaching reps coaching and partnering skills, instead of just depending on selling skills? We should be teaching reps to micro-target instead of repeating the same script to everyone, to be thinkers instead of report writers.
In addition, many companies are developing unbranded sites, working with patient advocacy groups and creating apps and wearables that help both patients and doctors monitor vital signs and significant events. These tactics, too, help strengthen the HCP-rep relationship.
There are other issues, of course, outside of the sales and marketing realm. The cost of launching a new drug can be as high as $5 billion by the time it gets to market. But it’s hard to defend an $80,000 course of treatment, especially in today’s climate. We haven’t fully used advanced diagnostic techniques to keep down the cost of therapy by determining efficacy earlier in the process. And we should accept the reality that the most expensive drug is no longer necessarily the most effective one. Renowned institutions like the Mayo Clinic and the Cleveland Clinic develop and depend on Comparative Effectiveness Research, and that’s going to influence a lot of practice work in the future.
It’s all happening at once, and it’s more of a shock to us because we had too many years of easy, enormous growth. We have to wake up and accept that we may now be in the same territory as many other modest-profit industries. And we have to adapt.
With it all, though, I’m optimistic about our future. We have a staggering number of bright, motivated people in our industry who came here for the right reasons: to help patients. We just have to keep that focus, ask the right questions, and maintain an open mind for the right answers. •
Steve Carchedi has held key positions at several leading multinational pharmaceutical companies. Most recently, he was President, Commercial Operations North America for Mallinckrodt Pharmaceuticals, the largest U.S. supplier, by prescription, of opioid pain medications, where he led its highly successful spinout from Covidien. He drove its sales growth of 35% year after year, leading to a public market cap of over $2.5 billion. Prior to that he was Chief Marketing Officer of GE Healthcare, SVP Specialty Business for Endo Pharmaceuticals, and head of Commercial Operations for Enzon Pharmaceuticals. His other experience includes executive positions at Johnson & Johnson McNeil, Eli Lilly & Company and Bristol Myers Squibb. Mr. Carchedi is especially adept at getting organizations to work efficiently and in concert. At Endo he developed a business model to integrate sales and marketing. As part of Enzon’s senior management team he devised many of their business and marketing strategies. He has also been associated with numerous major product successes. He led the launch of Velcade®, one of the most successful oncology launches in J&J history, and recipient of the prestigious Prix Galien Award. He played a key role at Lilly in the launch of Gemzar® and Alimta®, two of the leading chemotherapy products on the market today. And he was instrumental at BMS in commercializing Taxol® and Paraplatin®, now standards of care in breast and lung cancer. His achievements have led to him being recognized widely by the industry with leadership awards, and being appointed the Boards of Directors at Sunesis Pharmaceuticals, BioNumerick Pharmaceuticals and PCAsso Diagnostics LLC.