The Promise of Things to Come

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Norman Selby

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The full impact of the Internet’s capability to create strategic marketing and selling tactics in the pharmaceutical industry has yet to be realized. The Internet’s impact on pharma ceutical marketing and sales has been negligi ble to date, but when used to complement traditional tactics, the future potential of the Internet is in its infinite ability to allow mar keters to develop personalized messages. For the most part, pharmaceutical compa nies have been cautious about embracing Inter netbased marketing and sales tactics. And for good reason, says Norman Selby, who served as a senior officer of Citigroup from 1997 to July 2000. Before leaving Citigroup, Mr. Selby cre ated and led the company’s Consumer Internet Business, which was responsible for central consumer Internet initiatives. Mr. Selby now sits on the board of Medsite Inc., an Internet marketing and pharmaceutical services compa ny, as well as on the board of Millennium Phar maceuticals. “In the core pharmaceutical business, the Internet is still pret ty unimportant,” Mr. Selby says. Mr. Selby offers several reasons for the slow adoption of the Inter net by pharmaceutical marketers. First, traditional detailing methods still work. Pharmaceuti cal sales representatives who are on the road are still very effective. Companies, such as Pfizer, have proven that they can really build blockbuster products with huge salesforces. Second, a number of Internet companies that began hyping their services a few years ago either aren’t around anymore or have had to restructure so many times that big pharma is wary; the industry is not sure that Internet companies are sustainable. And third, many of the compa nies that were trying to develop Internet capabilities didn’t know or understand the pharmaceutical industry very well. Adding to tradition “Traditional selling practices work for big pharma, so there has n’t been a big drive to do other things,” Mr. Selby says. “The major expense in pharmaceutical marketing and sales is by far the salesforce, the men and women who drive the highways.” Going forward, Mr. Selby believes that Internetbased marketing and selling tactics will best succeed when they are used to sup plement or complement what big pharma already is doing. A Webbased tactic that is expected to experience growth is edetailing, which thus far has been limited to pilot programs. “Edetailing is a very, very small piece,” Mr. Selby says. “But edetailing should grow, not as a standalone or separate activity, but as a supplement to traditional selling activities. Edetailing provides an opportunity for mar keters to be more efficient and to be more tar geted.” For example, the salesforce calls on high pre scribers, and uses the Internet to get to low pre PROMISE THINGS COME Marketers who understand Internet opportunities and can translate those opportunities into clear business strategies can capitalize onWebbased initiatives NORMAN SELBY 49 PharmaVOICE S e p t e m b e r / O c t o be r 20 01 scribers. The salesforce holds dinner meetings, and uses the Internet to follow up with physi cians a couple of days later. Another example: sales people drop off samples then follow up with targeted messages via the Internet. Mr. Selby believes pharma companies are going to need to address the issue of salesforce productivity, as such the Internet will become more important to their selling efforts. “Recent data show that pharma companies are growing their salesforces much faster than the physician population is growing,” he says. “Companies are growing their salesforces faster than the number of sales calls is growing. In aggregate, salesforce productivity is decreasing. As salesforce productivity becomes more of a concern for big pharma, which it will, the attractiveness of doing things on the Internet should grow.” Building relationships As fast as the Internet boomed, the crash came just as quickly. Many of the Internet companies that were started a few years ago, claiming to have marketing and selling prowess, are no longer in business. The volatil ity of this sector has left in its wake unease and skepticism. “If I were a big pharma executive and some Internet hotshot executive came in and said, `I’m this cool guy with new technology,’ I might be cynical,” Mr. Selby says. “I would spend a lot of time trying to figure out if the company would be around in a year.” Pharmaceutical companies need to be cau tious. Each pharmaceutical company really only has a few big drugs. They are crown jew els and companies are not going to fool around personalized medicine will happen over time. The same thing could be said in terms of sell ing and marketing to big pharma.” Product pipelines are evolving slowly toward these personalized medicines, and marketing practices will change very evolu tionarily for at least the next five years. The Internet will be a much more important arrow in the quiver than it is today. When Mr. Selby first got involved in the industry, 18 years ago, the marketing infor mation that pharma companies had on doctors was very limited. All IMS data could show were what happened at the local pharmacy; there were no data pertaining to prescriptions by doctor. Before laptop computers, there was no fieldforce automation, so the call reports that physicians filled out went into a big database, which wasn’t very userfriendly. “The only people who really understood the doctor were the detail reps, which is prob ably how they became so important,” he says. Over time, data from companies such as IMS have improved and pharmaceutical sales forces have access to a lot of automation. Phar maceutical companies are investing more resources in their own databases and know a lot more about every individual doctor. Most marketing is about creating customer segmentation, whether it’s consumer market ing or industrial marketing, Mr. Selby says. Pharmaceutical marketers need to identify who their various customer segments are, what they want, how they behave, and what are the various products they have for them. “But companies still can’t send individual ized messages,” Mr. Selby says. “The message is not for Dr. Smith versus Dr. Jones. Using the Internet, however, the message can be targeted to Dr. Smith. With very little incremental money, companies can define the targeted physician population into 15 or 20 segments. And a company can get very specialized mes sages to each one of those segments.” Pharmaceutical companies will be able to determine how Dr. Jones or Dr. Smith got to a Website. For example, if a doctor is doing a lot of research on cardiovascular drugs, then the company can try to promote a cardiovas cular seminar, or a cardiovascular drug, or maybe a symposium. The Internet is not without its disadvan tages. The most glaring is the lack of faceto face contact. Mr. Selby says, however, the advantages far outweigh the drawbacks.F PharmaVoice welcomes comments about this article. Email us at feedback@pharmalinx.com. with unproven tactics unless they are 100% sure that the service the vendor is providing is bulletproof. “A lot of the companies that were trying to develop Internet capabilities frankly didn’t know the pharmaceutical industry very well,” Mr. Selby says. There is now a second generation of medi cal Internet companies, which will have a much better chance of succeeding, because we know what doesn’t work, Mr. Selby says. And, the companies that survive are going to be more stable, more solid, and better managed and know how to work with physicians better. In the beginning, one of the problems with the way the Internet was applied was that companies were trying to change the way doc tors function. “Doctors are creatures of habit, like the rest of us,” Mr. Selby says. “Doctors are busy as hell. They are not going to sit down with a patient, and say `excuse ma’am, let me get on the Internet and look up some thing.’ ” The average patient visit lasts 15 minutes and physicians are not going to take five min utes out of that precious time to search the Internet. What they might do is take 10 min utes before their day starts and go through the detail at their convenience. According to Mr. Selby, the mistake many of the initial Internet companies made was trying to build a model that assumed physicians were online all day. “Only about 50% of doctors use the Inter net, and mostly for email,” Mr. Selby says. “However, I’m quite convinced that the Inter net will become much more important in pharmaceutical marketing and sales.” The future “I can tell you from my experience in finan cial services that one of the great things about the Internet is that a company can experiment and learn, and the next day based on what was learned, try another iteration,” Mr. Selby says. “The Internet can be used to constantly fine tune the message and measure what the results are in a way that is much more immediate than any other marketing practice that I’ve ever seen. Results can be obtained over night or in a week. And it is incredibly specific; you can know which doctors did what.” As the industry moves toward developing personalized medicines through genomics and proteomics, there will be a need to personalize communications in a much more targeted way. “One of the great advantages of the Inter net is that a company can do incredible per sonalization of the marketing message,” Mr. Selby says. “It’s a glorious concept that’s not going to happen tomorrow, but that notion of The Internet can be used to constantly finetune the message and measure what the results are. VIEW on Internet

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