As an ex-pharma veteran, I have experienced first hand, the challenges that Big Pharma faces as it struggles to figure out how to compete in a radically changing healthcare system. This mini series focuses on some changes that I would love to see in the industry, and quite frankly, changes that are necessary if Pharma wishes to remain sustainable and profitable in the long run.
[DISCLAIMER: I’m aware I’m only covering some issues- the bigger picture would take an entire blog devoted to fixing Pharma. This mini-series will focus on marketing, social media and promotion, because that it what is near and dear to my heart.]
Pharma has historically been one of the most profitable industries in the US, seeing extremely high (21-30%)margins. It has enjoyed bargaining power, patent protection and a montage of direct-to-consumer advertising. People will always suffer from illnesses, and with a general lack of human motivation/commitment to prevent illness before it happens, people will continue to need pharmaceuticals. Demand is not going anywhere. Or is it?
A consumer shift is on the horizon. I believe we are witnessing the advent of a motivated consumer population. (Hooray!) As healthcare costs rise rapidly, trends in consumer behavior shift towards a desire to live healthier lifestyles and to make healthier choices that help prevent disease before it occurs. This is important, especially in my field of work, cancer diagnostics. Preventing cancer is significantly less expensive than treating it. The New England Journal Medicine finds that, “prevention is key to addressing the growing disease burden and cost of chronic illnesses.”
Consumer tastes are also changing. Consumers want to interact with brands, to feel connected, and to engage with other users of the same brands. FDA violation after violation in Pharma has left consumers (HCPs and patients) with their guard up. In fact, a great article called “Innovate or Die” states that:
“The impacts of a negative perception can include patients and researchers unwilling to participate in your clinical trials, hesitation by potential licensing partners to be associated with a company, formulary exclusion decisions by payors, decreased willingness of physicians to meet your sales representatives or prescribe your products, increased skepticism and a ‘higher bar’ placed by regulators, and potentially, government-imposed price controls. Reputation risk… is a killer in this business.”
Patients and physicians want transparency, they are asking Big Pharma for more, asking for a better consumer experience, and they deserve it.
Corporate social responsibility, or a company’s initiatives that consider the social, economic, an environmental impact of brands and products continues to grow in importance. Pharma has long argued that their medications improve the lives of patients (true, mostly), that they have programs to help with patient cost burden (often, yes), and that at the core of their business, its activities benefit society (somewhat true).
CSR’s growing role also plays into transparency and engagement with customers. Engaging with customers is an extremely risky, difficult task for Pharma. Who is Pharma’s customer these days? Patients, HCPs, payors, government? More to come on this in subsequent posts. Today we focus on engaging with patients and physicians. This highly regulated industry must follow numerous laws- more than most people would care to know about- interacting with the population it serves is a tricky, uncharted path.
It’s risky for two reasons. Firstly, risk exists due to the regulations that could easily be violated-via HIPAA or quid-pro-quo accusations. Secondly, engaging directly with customers is risky because it means that Big Pharma will hear, first hand and in real-time, what its end consumer has to say. Once Big Pharma has access to that information, it can no longer claim ignorance or proclaim its excellence.
Big Pharma might not like what it hears.
So how does pharma compete in an increasingly regulated, consumer savvy, social media addicted marketplace?
It gets with the program.
Enter the social media addicted consumer. When is the last time you went to the doctor and did not look something up online? Thought so. The wide-spread availability of the Internet, the increasing use of smartphones, and changing consumer tastes have all made access to information (whether correct or incorrect) easier.
In my opinion, pharma has been slow to adopt strategies that facilitate social brand interaction. It will be crucial to the industry’s success for pharma to cultivate better social media strategies that are truly strategic. I’m not talking about having a Facebook page and asking everyone you know to like it. I’m talking about real strategic social media goals and implementation that allows pharma to capture the most valuable information possible: customer voice.
Social media allows for direct access to physicians and patients. Social media builds communities and acts in real-time. Every day I am witness to HCPs and patients who break barriers to converse about real health issues and trends through platforms like Twitter.
I have been a part of #BCSM (Breast Cancer Social Media Chat) and was amazed with the sense of community it provided for patients and how much I, as a healthcare marketer, learned from spending one hour listening and interacting with this community. Pharma misses out on these opportunities because of the perceived risk in communicating directly with patients and the good old “prisoner’s dilemma” that Big Pharma has found itself unable to escape.
Building brand loyalty is not just about a product brand. Pharma could build incredible brand equity by pulling back the curtains and getting real with patients and HCPs. Sure, it’s a risk, but so is investing $500 million in an unapproved, barely discovered molecule.
Strategic Social Media will not be easy for Pharma. In the Big Pharma culture, listening and acting on what is heard, is a skill that still has not been mastered. In addition, anything strategic must be directly tied to dollar signs and that is not what strategic social media provides- directly.
Strategic Social Media provides something more valuable than dollar signs: it provides the ability to capture real-time customer voice allowing nimble companies to quickly improve delivery of their brands and customer experience.
Improved brand/product delivery and customer experience will ultimately lead to higher perceived value, repeat business and the all-powerful dollar sign. In the end, simply listening and acting on consumer voice is a win-win strategy that has the potential to completely revolutionize the way Big Pharma operates.
- How Big Pharma is Using Social Media to Cross Borders (medmeme.com)
- Upcoming Conference to Focus Heavily on Pharma’s Future in Social Media (medmeme.com)
- Can Pharma Marketing Push Toward More Transparency? (medmeme.com)
- Is Big Pharma Utilizing Too Many Resources on Potential Blockbusters? (forbes.com)
- Social Health Activists distrust Big Pharma (scienceintelligence.wordpress.com)
- Pharma needs to embrace social media (kevinmd.com)
- 47% have a negative opinion of pharma companies on social media (worldofdtcmarketing.com)
- Survey shows gains made by pharma firms on social media and where they need improvement (medcitynews.com)
- Pharma flocks to social media analytics (fiercebiotechit.com)