Defining pharma's marketing future Part II - Getting to a better place

In Part I, Slocum examines the current state of pharma marketing and outlines the challenges that lie ahead as the industry works to embrace a new marketing paradigm.

By Editor on Jun 30, 2006

In Part I, Slocum examines the current state of pharma marketing and outlines the challenges that lie ahead as the industry works to embrace a new marketing paradigm. And in Part II, Slocum offers hard-hitting recommendations to the industry on how to build partnerships and embrace technologies to ensure a healthy future for the industry.

To read Part I of this article, Defining pharma's marketing future: You are here, please click here .

Part II Getting to a better place

Slocum, who has spent a lot of time talking with third party payers, says that although there are still some who buy healthcare on the basis of price alone, there is a growing and influential group who understand that cost shifting to patients is not an answer to healthcare problems.

These folks desperately want to understand the value in healthcare and buy on that basis, he says. Over the next five to ten years, either the people trying to buy value will get the tools and evidence they need to make that the predominant model, or the cost barbarians are going to come through the door and slaughter us all. The challenge for marketing is how do we ensure the good guys win?

Partnering for success

In today's pharma environment, Slocum says, decisions about which drugs to pursue and include in a company's portfolio are largely made by researchers. But in the future, he says, that's going to be a shared process. Marketing will have two jobs in this scenario: to push information out to customers and to be the customer's voice internally, he says.

We'sre going to have to get better at that second role and get those third party payers who are so pivotal for us in the room with our scientists and portfolio managers to help them make these decisions about which compounds go forward and how they are developed, Slocum says. Yet another large molecule that costs $200 thousand a year and conveys 3 milliseconds of incremental life is not going to get the support of third party payers.

Slocum says that having the third party payers on the same side of the table with marketers, talking about what is reimbursable and reducing the friction, feels like the last chance to get out of hell free. But pharma must develop an understanding of what payers want.

More than anything else, they would like an end to this tug-of-war, adversarial relationship where we fling molecules and insults at each other across and invisible wall, he says. And they'sd like to replace that with some kind of win-win alliance.

Third party payers really want value for their money, Slocum says, but they understand that value for money means more than just short-term cost offsets. And lastly, he says, payers want some feedback mechanisms to know whether the value they think they get is actually received.

These guys would like at least some assurance of results, he says.

Demonstrating pharma's value

But Slocum says what he calls value myopia (a lack of necessary information to assess results), is about to be replaced by value transparency with the advent of electronic medical records and prescribing. Electronic records, he says, will finally give pharma the ability to talk, for the very first time, with third party payers about not only the cost of pharmaceuticals, but the benefits as well.

With e-records, Slocum says, all of those intermediate clinical parameters that have been invisible for decades will start to appear out of the mist.

I think this makes your job much easier, and if you'sre not encouraging this, you'sre missing a wonderful trick, he says, because this technology infrastructure is also going to be used to monitor pay-for-performance programs for doctors. You'sre not going to be able to keep rolling this rock uphill, because money does trump marketing. Except now, it's not just going to be the patient's money, but also the doctor's money.

The good news, Slocum points out, is that the same technology infrastructure also can be used to facilitate the flow of information into the doctor's office.

Smart companies will be asking if they can use IT to supplant, supplement, modify, shake and change what we presently do with a lot of very expensive human resources and undirected promotional spending, he suggests. And I think the answer is yes.'s The architecture isn'st there yet, but it's coming fast.

Slocum says the federal government is putting a lot of weight behind the effort, but would love the industry's help. He encourages pharmas to get on board, get educated and get involved it's a wonderful way to fix a lot of the problems the industry faces.

Adding value

Lastly, he says the industry needs to realize in an increasingly global economy, its drugs are becoming little more than a commodity. Smart pharmas and their marketers, he says, will begin to develop delivery system services to wrap around their products that improve the value proposition and protect against commoditization.

Slocum suggests using the emerging IT healthcare infrastructure to begin to focus on quality and develop blended product service offerings that address under-use, overuse and misuse of products and begin to improve prescription drug adherence.

That's a win-win-win and the same information tools can then be used to create and monitor a balanced portfolio of outcomes-focused measures, he says.

Slocum predicts pharma's marketing future will rely on hiring more type B personalities who understand and know how to create partnerships. And he says the industry will be centered more on outcomes, something he believes it has lost sight of in the past. He argues pharma also must be more focused on the entire pipeline with the input of third party payers and to strive to be more rational and evidence-based.

Finally, I would put in a plea that we get back to something we'sve lost, he says. A well-known company in our industry says we do well when we do good.'s Selling pharmaceuticals is not like selling laundry soap; we have a higher calling and we need to fulfill that calling.

Business as usual in the commercial marketing shop is closed, Slocum says. But he says there is a different and more satisfying way to attack the problem that will produce results.

And he quotes Peter Drucker: The danger in times of turbulence is not the turbulence, it is to act with yesterday's logic.

Slocum urges pharmas to break out of the paradigm and start doing things differently. Those who do, he predicts, will win.

For more information, contact Kim Slocum, President of KDS Consulting, LLC at kdsconsulting@verizon.net .