Pharma marketing and market research
Why market research must reflect a strategic as opposed to tactical view of markets
Just as landmark scientific advances are accelerating the pace of innovation, rising costs and demands for affordable healthcare are challenging the economics and traditional business assumptions of the global pharmaceutical industry.
Costs of product innovation are rising as increased regulatory scrutiny is raising internal development costs, risks, and time requirements for clinical trials, while licensing and acquisition markets have become more competitive.
Markets are becoming fragmented as physicians, providers, patients, and payers look for focused solutions that have optimal efficacy and safety profiles for narrower patient populations, even as reference pricing takes hold. (For more on reference pricing, see ‘Market access: Risk sharing and alternative pricing schemes’ and ‘Market access: China and international reference pricing’.)
The role of payer organizations is increasing as the complexity of decision-making moves further from the physician.
Traditional sales models have become more expensive and less effective.
Finally, there is much greater skepticism among key internal stakeholders (investors, regulators, payers, physicians, patients, politicians, and the public) in the integrity and soundness of the industry.
Across the world, payers are clamping down on healthcare costs by saying “no” to new products, line extensions and, of course, price increases.
Reacting to the prospect of exponentially increasing liabilities, payers of all types are demanding hard comparative clinical and health economic data to justify any change with bottom line impact.
Going forward, growth will depend on country-by-country, payer-by-payer, and patient-by-patient decisions to pursue a treatment or not, or to choose a newer, more expensive treatment vs. an older, less expensive one.
The case for economic and clinical value (ECV) will be the lynch pin for success.
Marketing implications for pharma and device manufacturers
At this point, the industry is still in the early stages of addressing the strategic and operational implications of the new environment.
With ECV emerging as a dominant basis for competition globally, healthcare product companies must rethink key business decision-making processes, such as new product development, portfolio management, demand forecasting, and the development of new commercial models.
Correspondingly, this is creating new demand for market research, analytics and trend analysis that goes beyond what traditional marketing services functions have delivered.
Most critical is the need for market research that reflects a strategic as opposed to tactical view of markets.
Moving beyond brand position or product features and benefits seen through the eyes of specific market segments, strategic market analysis requires research that
Segments markets in new ways, identifying specific customer segments a company can ‘own’ and use to sustain differentiation from its competitors
Identifies unmet needs in these market segments
Provides insight into new product platforms, pulling together needs and products into distinct portfolios that may reflect continuums of care in a specific therapeutic area
Enables insight to guide product portfolio prioritization and support deployment of commercial resources to ensure short- and long-term growth and profitability.
The ability to achieve this starts with “white space” research, taking a forward-looking view at customer needs, extrapolating from what’s known and seeing what’s ‘missing.’
The ability to see ‘what’s-not-there’ frequently presents a challenge to market researchers, as it represents a very different way of looking at the world.
It requires a market research capability that can identify, gather, and analyze data that supports decision-making about a different future, one that is not just about extrapolating what the company has been doing historically.
“Where is the business going?” “Where is the environment going?” and “What business(es) should we be in tomorrow?” are three of the bigger questions market research needs to help frame and answer.
Rita E. Numerof is president of Numerof & Associates, Inc.
For more on marketing, join the sector’s key players at 3rd Annual Market Access Canadaon November 1-3 and eMarketing Canadaon November 8-9 in Toronto, and Marketing Europeon November 22-23 in Berlin.
For exclusive business insights, download eyeforpharma's Pharma Emerging Markets Report 2011-12 and Pharma Key Account Management Report 2011-12.
For all the latest business analysis and insight for the pharma industry, sign up to eyeforpharma’s newsletters.