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Adapt to the new realities of the market or perish
Apr/10/2008 05:46 Filed in: Pharma
Business
Blockbusters; pharma seems addicted to big drugs that provide the revenue for ever big sales forces and fund expense budgets to print a lot of unneeded giveaways. Pfizer bet the ranch on a replacement for Lipitor and lost a lot of money, Lilly is already working on a replacement of it's aging Zyprexa and other big sellers , Avandia & Vytorin, have been dethroned by the lack of transparency in order to save the sales dollars. One has to wonder why pharma has not seen the writing on the wall and changed their organizations to better respond to the realities of the new market. Here are some of the realities of the new healthcare market:
1. New & Improved drugs are going to have to show substantial improved patient outcomes over generic rivals. This is especially true as more of the big chains add $4.00 costs to patients who opt for generics over branded drugs.
2. The FDA is going to take longer to approve drugs and will ask for a lot of data which will add to the costs of drug development. Scenario planning for "delayed approval" should now become standard with all pharma companies.
3. DTC ads need to be supported by the label and change as new data from clinical trials is available. Forget the label, if ongoing clinical trials show that your product may not be as effective as stated in the approval letter you had better change or stop your DTC ads.
4. Marketing becomes personalized. Forget mass market push marketing pharma needs to look at more cost effective ways to reach their audience with a relevant message. Acknowledge that consumers have more power than marketers and look for ways to embrace information to drive brand objectives.
5. Rate your doctor. More and more insurance companies are asking patients to rate their doctors. Doctors with higher ratings get more money but to get these higher ratings docs are going to have to learn to spend more time with their patients and listen to their concerns. This means even less time with pharma reps.
6. Embrace the Web. Start building capabilities NOW for emarketing and Social Media people. They are already in demand by consumer marketing organizations and are commanding big bucks. You can't rotate people into eMarketing jobs and expect them to perform at a high level, it takes years to stay on top of eMarketing trends.
7. Do more with less. Are the days of big DTC budgets gone? It sure looks that way, more and more DTC campaigns are being held to higher scrutiny even after they have been off the air.
It's not like these trends were hard to see, it's more like we know there is a storm coming but we think we won't get hit by the rain and snow. As a result a lot of people who want to work in pharma are being told "thanks but no thanks". Downsizing has now become a tactic of downturns in business while pharma CEO's continue to rake in the big bucks to please shareholders and Wall Street.
Pharma can no longer be the huge ship that takes way too long to change course. It has to become a small functional organization that can implement with speed and quality. It has to remind people within the organization that the reason we are here is to make a difference in patients lives and that great product can lead to great companies. Finally the CEO has to get naked, with a level of transparency never before seen in pharmaceutical organizations. Only when these things are done will pharma be able to thrive in the new realities of the marketplace.
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