Multi-channel Engagement: A New Normal in Pharma Marketing

Multi-channel Engagement: A New Normal in Pharma Marketing

The 2015 Report of AffinityMonitor reconfirms that access to important doctors for pharma Medical Representatives (MRs) continues to decline. Now, fewer than half of all doctors are truly accessible to the MRs, down from nearly 80 percent in 2008. In other words, though MRs continue to be the best way to engage the average physician, this “best way” is steadily getting worse.

However, for physician engagement, all digital channels put together to rank the second highest. These include both digital “push”, such as, email or alerts sent to a physician’s smart phone – followed by telemarketing, direct mail; and digital “pull”, such as content that doctors can access on their own from the Internet, and peer interactions, like webinars.

With the new digital channels emerging, pharma companies will have a wider range of promotional and engagement channels to reach out to not just the doctors, but also other important stakeholders. Additionally, various non-personal marketing channels could also help pharma companies overcome the declining trend of restricted access to physicians for MR.

No single channel works for all physicians:

Although, no single channel works for all physicians, as each doctor has a unique preference for how he or she wants to receive information across various channels, most doctors will engage with pharma players in some way. The findings of this report are based on data compiled from more than 100 pharma brands, including engagements with 632,000 physicians across a wide range of specialty areas, and more than 123 million individual physician interactions.

The report suggests that by understanding those channels on a physician level, and targeting their marketing and promotion accordingly, pharma companies can hone the effectiveness of each physician engagement, and thereby improve sales and marketing productivity considerably, for excellence in business.

Similar trend in India with varying degree of difficulty:

Similar trend, though with varying degree of difficulty, can be noticed in India, as well. Over the past several years, many top pharma companies have been already experiencing the steadily declining quality of access of pharma MRs to many important doctors.

This is primarily due to the number of patients coming to these busy practitioners is fast increasing, and as the doctors are trying to see all these patients within the same limited time that was available to them, as in the earlier days. In tandem, their other obligations of various kinds, personal or otherwise, are also overcrowding the same highly squeezed time space.

Thus, an increasing number of MRs, which has more than doubled in the past decade, is now fiercely competing to get a share of lesser and lesser available time of the busy medical practitioners. Added to this, a gross mismatch between the inflow of doctors with similar prescription potential and ever increasing inflow of patients, is making the situation worse.

Reevaluating traditional marketing and sales communication models:

In this complex scenario, the key challenge before the pharma players is how to make sales communication with the busy medical practitioners more productive?

Consequently, many pharma companies, across the globe, have started reevaluating their traditional sales communication models, which are becoming increasingly expensive with diminishing returns from the MR calls.

As I discussed in some other article, a few drug companies have commenced using various interesting multi-channel digital platforms, though mostly fall under the traditional pharma sales communication process.

I shall now briefly glance over the trend of responses of the Indian pharma companies over a couple decades, to meet these challenges of change.

MR based Experimentations:

With a strong intent to squarely overcome this challenge, many Indian pharma players initially tried to experiment with several different MR based approaches, in various permutations and combinations. It was initially directed to make the prescription generation process more productive, by equipping the MR with a wide range of soft skills................

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Price Negotiation for Patented Drugs: Still Continues A Policy Paralysis

Price Negotiation for Patented Drugs: Still Continues A Policy Paralysis

Many poor and even middle-income patients, who spend their entire life savings for treatment of life-threatening ailments, such as, cancer, have been virtually priced out of the access to patented new drugs, across the world. As articulated by the American Society of Clinical Oncology in 2014, prices of these medicines are increasingly getting disconnected from the actual therapeutic value of these products.

The plight of such patients is worse in India, and would continue to be so, as there is not even a remote possibility of Universal Health Care/Coverage (UHC) visible anywhere near the healthcare horizon of the country.

There is no recent worthwhile Government action either, to give shape to its an important decision on this issue, in a meaningful way. That critical decision was also scripted in Para 4.XV of the National Pharmaceutical Pricing Policy 2012 (NPPP 2012), and was notified on December 07, 2012. On ‘Patented Drugs Pricing’, it categorically states as follows:

“There is a separate committee constituted by the Government Order dated February 01, 2007 for finalizing the pricing of Patented Drugs, and decisions on pricing of patented Drugs would be based on the recommendation of this committee.”

Just a couple of months after, on February 21, 2013, the Department of Pharmaceuticals (DoP) in a communication to the stakeholders announced that the committee to examine the issues of ‘Price Negotiations for Patented Drugs’ has since submitted its report to the Department. Simultaneously the stakeholders were requested to provide comments on the same urgently, latest by March 31, 2013.

Following this long overdue report, lack of any worthwhile action, both by the previous and the current Governments, possibly coming under a strong pressure of the self-serving interests of the constituents of ‘Big Pharma’ and their trade associations, is indeed glaring. I shall dwell on that in this article.

A brief recapitulation:

As stated earlier, almost a decade ago, an expert committee was constituted by the Government to suggest a system that could be used for price negotiation of patented medicines and medical devices ‘before their marketing approval in India’.

This committee reportedly had 20 meetings in two rounds, where the viewpoints of the pharmaceutical industry, including large multi-industry trade bodies like - FICCI, various NGOs and other stakeholders were taken into consideration. Simultaneously, it had commissioned a study of the Rajiv Gandhi School of Intellectual Property Law and Indian Institute of Technology (IIT), Kharagpur to ascertain various mechanisms of price control of patented drugs in many countries, across the world, for independent research based inputs for this report.

Salient features of the report:

The salient features of this expert committee report were as follows:

Scope of recommendations:

The Committee in its final report recommends price negotiations for Patented Drugs only towards:

• The Government procurement/reimbursement
• Health Insurance Coverage by Insurance Companies

Issues to remain unresolved despite price negotiation:

In the report, the Committee expressed the following view:

Even after calibrating the prices based on Gross National Income with Purchasing Power Parity of the countries, where there are robust public health policies with the governments having strong bargaining power in price negotiation, the prices of patented medicines will remain unaffordable to a very large section of the population of India. Such countries were identified in the report as UK, Canada, France, Australia and New Zealand.

Thus, the government should extend Health Insurance Scheme, covering all prescription medicines, to all those citizens of the country who are not benefitting under any other insurance/reimbursement plan.

Three categories of Patented Drugs identified:

The committee identified three categories of patented drugs, as follows:

• A totally new class of drug with no therapeutic equivalence
• A drug that has therapeutic equivalence, but also has a therapeutic edge over the existing ones
• A drug that has similar therapeutic effectiveness compared to the existing one

It recommended that these three categories of Patented Drugs would require to be treated differently while fixing the price.

The Apex body for ‘Patented Drugs Price Negotiation’: 

The Report recommends a committee named as ‘Pricing Committee for Patented Drugs (PCPD)’ headed by the Chairman of National Pharmaceutical Pricing Authority (NPPA) to negotiate all prices of patented medicines.

As CGHS, Railways, Defense Services and other Public/Private institutions cover around 23 percent of total healthcare expenditure, the members of the committee could be invited from the Railways, DGHS, DCGI, Ministry of Finance and Representatives of top 5 health insurance companies in terms of the number of beneficiaries.

Recommended pricing methodology:

For ‘Price Negotiation of Patented Drugs’, the report recommends following methodologies for each of the three categories, as mentioned earlier:

1. For Medicines having no therapeutic equivalence in India:

• The innovator company will submit to the PCPD the details of Government procurement prices in the UK, Canada, France, Australia and New Zealand for the respective Patented Drugs.

• In the event of the concerned company not launching the said Patented Drug in any of those reference countries, the company will require to furnish the same details only for those countries where the product has been launched.

• The PCPD will then take into consideration the ratio of the per capita income of a particular country to the per capita income of India.

• The prices of the Patented Drug would be worked out in India by dividing the price of the medicine in a particular country by this ratio and the lowest of these prices would be taken for negotiation for further price reduction.

The same methodology would be applicable to medical devices also and all the patented medicines introduced in India after 2005.

2. For medicines having a therapeutic equivalent in India:

• If a therapeutically equivalent medicine exists for the Patented Drug, with better or similar efficacy, PCPD may consider the treatment cost for the disease using the new drug and fix the Patented Drug price accordingly.

• PCPD may adopt the methodology of reference pricing as stated above to ensure that the cost of treatment of the Patented Drug does not increase as compared to the cost of treatment with existing equivalent medicine.

3. For medicines introduced first time in India itself:

• PCPD will fix the price of such drugs, which are new in the class and no therapeutic equivalence is available, by taking various factors into consideration like cost involved, risk factors and any other factors of relevance.

• PCPD may discuss various input costs with the manufacturer asking for documenting evidence.

This process may be complex. However, the report indicates, since the number of medicines discovered and developed in India will not be many, the number of such cases would also be limited.

Negotiated prices will be subject to revision:

The report clearly indicates that ‘the prices of Patented drugs so fixed will be subjected to revision either periodically or if felt necessary by the manufacturer or the regulator as the case may be.’

Support from the domestic Indian Pharmaceutical Industry:

Pharma MNCs reportedly said that ‘Price Negotiations for Patented Products’ should be made only for Government purchases and not be linked with ‘Regulatory Approval’. They also expressed their serious concern on the methodology of ‘Patented Products Pricing’. Nevertheless, from the domestic Indian Pharmaceutical Industry, such as, Indian Pharmaceutical Alliance (IPA), Indian Drug Manufacturer Association (IDMA), Pharmexcil, Federation of Pharma Entrepreneurs (FOPE) and Confederation of Indian Pharmaceutical Industry (CIPI), there emerged strong voices of support for this Government initiative

DIPP expressed apprehensions: .............

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