The Indian pharmaceutical market is highly attractive despite its fragmentation. It comprises more than 20,000 pharma firms, 60,000 distributors and significantly larger retailer base. The cost of research and developing new products is becoming more challenging day-by-day due to increased input costs and regulatory hurdles. It takes 8-10 years to successfully develop a new chemical entity (NCE) with an average investment of $800-1,000 million. Even after the product launch in the market, the regulatory requirements are comprehensive in terms of pharmacovigilance and reporting.
Salil Kallianpur, a senior executive in an MNC pharma firm, speaking in his individual capacity, points out that over the years, doctors have decreasing regard for information provided by pharma companies. Some pharma corporate chieftains have identified trust as the number one challenge that the industry faces. In light of this, doctors offer less time for one-on-one interaction with medical representatives while preferring to access information at their own convenience. Digital technology has thus offered pharma an alternate medium to reach out to customers at times that are convenient to them and also to customers who could not be covered due to capacity constraints by companies.
 “It is all about positioning the product correctly to save, preserve and improve human lives. This is the reason why marketing and promotion cost is more in the pharma industry.” Pawan Chaudhary, CMD, Venus Remedies |
Pawan Chaudhary, Chairman and Managing Director, Venus Remedies says, “Today’s modern means of communication are good in their own way as they are fast, easily accessible and effective. The new means of communication offer various platforms to explain a particular product. For instance, 3D modelling can be easily explained on a laptop or tablet, while a piece of paper will only allow demonstration of 2D models.”
New technology complements the old…
The trend of opting for less literature and more interactive mediums like demos, e-detailing and so on is in vogue in the pharma industry because are highly efficient, easily accessible and less time consuming.
Chaudhary explains the necessity of having a tech touch and says, “The pharma and healthcare industry is highly competitive, because of which medical representatives from various companies do not get much time with doctors to explain to them the details of a particular product. Due to this, many big pharma firms have started adopting this trend and are exercising it at various levels.”
 “Investment with full disclosures that ensure transparency must be ensured so that the intent is clear to all stakeholders and there is no lack of information leading to misinformed medical treatment or loss of patient lives.”Salil Kallianpur, Senior Executive in an MNC pharma firm |
As the usage of technology evolved over the last decade, its application was touted as a mantra to control manpower costs – the largest head under selling costs. Understandably, pharma marketers were reluctant to substitute tried and tested sales forces with newer and less familiar technology. This didn’t happen even in the developed markets where products are patented and exclusive, hence it was considered totally inapplicable in generic markets like India where a very high share of voice is required to stay relevant with customers. Gradually the understanding has shifted towards accepting technology as a complementary tactic to the sales force.
“This means that the limitations of a sales force (such as reach to customers, use of multi-media, ability for customers to access information at their convenience and interactivity) is effectively met through technology. At the moment companies are more comfortable with this method and are not actively considering reducing the size of their sales forces and shifting over completely to modern methods,” informs Kallianpur.
 “Newer methods help standardise communication across these vast geographies and groups of people. It helps everyone speak the same marketing language.”Vinay Pinto, Exe. Director, Wallace Pharmaceuticals |
Highlighting the importance of a tech-driven marketing approach in today’s world, Vinay Pinto, Executive Director, Wallace Pharmaceuticals says, “Today as companies expand across oceans and countries, communication has new challenges as it has to travel across many barriers including culture and language. Newer communication methods help standardise communication across these vast geographies and groups of people. It helps everyone speak the same marketing language.”
… but full disclosure is vital
Use of new media technologies and solutions are growing as they allow information to be shared in a convenient and interactive manner. But now companies are also investing in key opinion leaders (KOLs).
Kallianpur, while defining the role of KOLs in pharma companies, says, “Independent observers consider any financial transaction between doctors and the industry as an inducement and an incentive to prescribe their products rather than anything else. These maybe independent research grants for clinical studies or honoraria paid out to opinion leaders for their time at advisory boards or industry meetings where they are invited to share their experience with a company’s products.”
Chaudhary elaborates further and states, “KOLs are capable of influencing other clinicians through their professional status and updated scientific knowledge. They also play a vital role in the drug development stage and the pre and post-launch phase by providing valuable suggestions and bridging the gap between clinical needs and research.”
The industry also funds academia for fundamental research leading to break-through therapies. KOLs have also helped in clinical data publication, thereby supporting and boosting the scientific value of the drug. “The problem begins when either the funding or its true intent remains undisclosed leading to a clear conflict of interest. In the recent past there have been a spate of such incidents that have badly damaged the reputation of the industry and sullied the reputations of independent and very capable researchers. Investment with full disclosures that ensure transparency must be ensured so that the intent is clear to all stakeholders and there is no lack of information leading to misinformed medical treatment or loss of patient lives,” Kallianpur informs.
Forecasting the increasing need for KOLs in pharma industry, Chaudhary says, “The pharma industry have been and will be relying heavily on KOLs in future too, be it developing a new research product, targeting a unique segment of clinicians for drug promotion, taking first-hand clinical inputs to upgrade the scientific information of the drug, training and education programmes, symposiums or conferences.”
If pharma companies follow new trends and adopt the KOL system then will it be a threat to the medical representative (MR) community? Will pharma companies wipe out the MRs? Or will their importance decrease? The answer remains NO!
Chaudhary stresses, “Pharma companies should not reduce the number of MRs and opt for modern methods as technologies and modern means of communication cannot replace humans. Since pharma marketing is based on relationship building, physical meetings will always be a part of this business.”
Transformation
Pharma companies find it difficult to sustain and build high value of their brands as a number of generic competitors enter each segment and newer molecules offer alternatives and substitutes. Besides these, regulators have defined the marketing strategies and violating the guidelines is an offence. Drug pricing policy hasbecome a big challenge to pharma companies and they are cutting down expenditure on printing product literature and adopting technologies to educate doctors about their products.
Doctors play an important role in building up the brand image of pharma companies. Pharma companies try to make as big an impact on doctors so that they prescribe their drugs. In the late 70s and 80s traditional marketing practices was the only mode of communication. To educate doctors about company’s latest their therapeutic solutions and breakthroughs, companies conducted continuing medical educations (CMEs) and seminars and it became a popular method of learning. The scenario has not changed drastically as doctors still prefer such traditional marketing practices.
Chaudhary informs, “There are many doctors in the industry who still prefer traditional means of communication over the modern ones, especially for R&D-driven pharma companies like ours where the differentiation of products needs to be explained thoroughly.”
Kallianpur opines, “It is important for brands to maintain a high share of voice to remain relevant with customers. Often, strong brands help to serve as an anchor to hold customer loyalty for newer products introduced by the company. In a highly cluttered market this is a definite advantage for companies.”
Chaudhary informs that they spend 8-10 per cent of their total sales budget on promotional activities and indicate thatthisis the industry average.
Market strategies
Pharma companies justify their extensive marketing strategies as a means to recover the amount spent on drug development. According to latest estimates, on an average, a pharma company could spend upto $4 billion for developing a new molecule. Consequently, it will need to spend more on building the brand value of the new molecule to recover this investment.
The total percentage of spending on building brands varies from company to company depending on earning models but the question remains with its necessity. Pinto, highlighted the urge to create brand value and said, “Brands create value for a company and that’s why it is important for the health of any industry to invest in brand creation.”
To achieve the goal of building a blockbuster brand, budgeting plays an important role. Commenting on why pharma companies need to allocate abudget for pharma marketing/promotion, Chaudhary says, “The rising competition and survival of the fittest rule requires proper positioning of the product to establish and make it grow. In the pharma industry, it is all about positioning the product correctly to save, preserve and improve human lives. This is why marketing and promotion cost more in the pharma industry as compared to other industries.”
Kallianpur opines, “In my opinion there is no ‘ideal’ for marketing activities. The marketing budget of a brand/product/company is decided by many factors such as importance of the segment for the organisation, relationships with customers and the entry position of the brand in the category.” He further says, “Typically the highest investments are seen in brands if they are among the first few to enter a lucrative segment. As the order of entry or the company’s position in a category moves lower, the budgets are proportionately lowered.”
Are all companies convinced that the way forward would be these new models? Will this set a new benchmark for transparency in the system?
Kallianpur foresees the opportunities and says, “As early adopters prove that the new models work, regulators make peace with its implementation and the cost of adopting them lowers, the laggards will make sure-footed moves towards the more recent communication models. Technology allows us to tailormake communication so that it remains most relevant to the receiver. This allows it to stand out of the clutter and register better in the minds of the customers. Sadly in India, marketers are more laggards than early adopters for new technology or models. This is because of large businesses at stake.”
There is no doubt that technology offers unique and creative ways of interaction as opposed to a one-way rep detail in the doctors clinics. The emergence of big data and analytics are leading to creative ways of predicting customer preferences and the pharma sector is adapting to this in a big way.
