Transcript Pharmaceutical representatives

Pharmaceutical representatives
Pharmaceutical Industry Marketing
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A key to industry profitability
Highly effective
Very sophisticated
Multi-pronged campaigns targeting clinicians
and patients
Pharmaceutical Industry Marketing
• In 2004, pharmaceutical companies spent
almost $12 billion on marketing activities
▫ This amount does not include the retail value of
samples (>$15 billion)
• Despite (or perhaps because of) these high
marketing expenses, pharma profit margins are
among the highest of any industry
• The trend of increasing promotional spending
and profit margins has substantially increased
over time
Sources: IMS Health, Top-Line Industry Data; Fortune 500, 2006
(http://money.cnn.com/magazines/fortune/fortune500/performers)
Pharmaceutical Industry
Promotion & Marketing
$35,000
Samples
Expenditure ($ millions)
$30,000
Detailing
DTC
$25,000
Professional Advertising
Samples
$20,000
$15,000
$10,000
Detailing
Professional
Advertising
$5,000
DTC
$0
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
Year
Source: N Engl J Med 2007;357:673-81.
2005 Dollars
Annual Increase in US Prescription
Drug & Total Health Expenditures
Annual % Change
20%
18%
16% 15%
16%
13%
14% 13%
12%
10%
11%
11%
12%
12%
11%
11%
8%
6%
10% 9%
6% 7%
7%
4%
6%
8%
Rx Drugs
17% 17%
9%
5% 5% 5% 5% 5% 6%
9%
9%
8% 8%
6%
7% 7%
9%
Health
2%
0%
1990
1992
1994
1996
1998
2000
2002
2004
2006
Expenditures by Type of Marketing
2004 ($ Billions)
Samples
Detailing
DTCA
Meetings
E-promo.
Journals
Unmonitored
Total
IMS
15.9
CAM
6.3
Total
15.9
Percent
28%
7.3
4
No data
20.4
4
2
20.4
4
2
36%
7%
3%
No data
0.5
No data
0.3
0.5
14.4
0.3
0.5
14.4
0%
1%
25%
27.7
47.9
$57.5
Gagnon MA, Lexchin J. PLoS Medicine
2008;5:1-5
Effect of Advertising on Drug Sales
• Drugs that are heavily advertised contribute
disproportionately to the increase in pharma spending
Increase in Retail Prescription Drug Sales, 1999-2000
Source: Prescription Drugs and Mass Media Advertising, 2000, NIHCM Foundation, November 21, 2001.
Drug Promotion by Pharmaceutical
Companies.
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Journal advertisements
Mailings
Samples
Sponsored meetings
Gifts
Direct-to-consumer advertising
Company representative visits
Recent Changes in Pharma
• Recently, some large companies have announced
plans to cut their sales forces:
▫ Late 2006 and early 2007, Pfizer announced it
would cut:
 20% of its 11,000-person US sales force
 20% of its European sales force
▫ In 2005, Wyeth cut:
 15% of its sales force
• Other companies (e.g., Novartis) have
announced plans to increase sales forces
Pharmaceutical Representatives
• Still the major focus of pharmaceutical
marketing
• Approximately 100,000 reps in 2005 vs 38,000
in 1995
• 1 rep per 6 MDs in US and 1 rep per 2.5 targeted
MDs
• 6 million detail visits annually
• Cost estimate $12 - $13 thousand per MD on
detailing (IMS data)
• PhRMA:”serves an essential function in the
health care delivery system”
Characteristics of Representatives
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Presentability/appearance
Outgoing personality
Excellent interpersonnal skills
Assertive
Representative Training
• How to be observant and assess clinician
personalities
• How to adjust approach based on reactions and
profile information
• How to gather and use personal information to
establish a connection
• How to monitor impact of various marketing
strategies on prescribing
Plos Medicine 2007;4(4):0621-25
How Representative Can Tailor Approach
• Friendly clinician
• Frame interactions as
gesture of friendship
• Skeptical clinician
• Use literature, humility,
appeal to their “high
intellect”
• High prescribers
• Make best effort to
establish personal
connection, best gifts
Plos Medicine 2007;4(4):0621-25
How Representaive Can Tailor Approach
• Clinician prefers competing
product
• Find out why, try to
capture a niche
• Refuses to see reps
• Try to work through
office staff, can get useful
information
• Thought leaders
• Friendly thought leaders
groomed for speaking
circuit. Monitor impact of
local talks and their
allegience
Plos Medicine 2007;4(4):0621-25
Targeted Clinicians
• High volume prescribers
• Specialists: scripts they initiate can continue for
years by PCPs
• Opinion leaders
• Low volume, non-influential clinicians receive
much less attention
Physician Rating of Rep Information
Usefulness
Kaiser Family Foundation Report March, 2002
Physician Rating of Accuracy of
Representative Information
Kaiser Family Foundation March, 2002
Representatives Objectives.
• Sell company products
• Inform and educate professionals
• Gather information
London Medicines
Information Service
(Northwick Park
Hospital) - June 2008
‘The meeting’.
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What’s in it for me?
Be selective
By appointment with time limits
Be in control
Prepare standard questions
Beware of bold statements & ‘glossies’ (check
evidence)
Stages of Rep/Provider Interactions
• Acknowledgement of relative status
▫ Valuable time, opinion leader
• Find out what is known
• Outline benefits of product
▫ Expert name drop
• Provider resistance
• Reinforcement of role
▫ Compliments, sympathy
• Closure: ensure opportunity for return, gifts,
obligation
Benefits to Provider
• Pleasant respite from workday demands
• Someone who is “impressed” with their
“superior knowledge”
• Can be object of flattery and sympathy
▫ Psychological benefits
• Receipt of gifts
• Can present themselves as skeptic
▫ Questions information, doesn’t agree to prescribe
• Can feel like they were in control
Representative Goals
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Develop positive relationship
Opportunity for future contact
Create a sense of obligation
Control agenda
Promoting product appears secondary in many
interactions
Influence on Prescribing
• Studies show that prescribing is influenced by
industry representatives
• Higher cost, less rational prescribing is
associated with:
▫ Frequency of use of representatives as an information
source
▫ Perceived credibility of representative
• Even a few minutes of contact can impact
prescribing
Am J Med 2001;110:551
Perceived Influence of Pharmaceutical
Reps
70%
60%
50%
40%
None
A Little
A Lot
30%
20%
10%
0%
You
Other MDs
N Engl J Med
2007;356:1742-50
Physician/Drug Representative
Meetings
Specialty
Family Physicians
Internal Medicine
Cardiology
Pediatrics
Surgeons
Anesthesiology
Meetings/Month
16
10
9
8
4
2
N Engl J Med
2007;356:1742-50
Physician Industry Relationships
Benefits
Samples
Gifts
Travel/CME funding
Payments
Any Relationship
% Reporting
78%
83%
35%
28%
95%
N Engl J Med
2007;356:1742-50
Physician Factors Associated With
Receipt of Payments
• Practice with < 25% Medicaid/uninsured
• Private practice
▫ Less likely in hospital/HMO setting
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University/Medical School
Role as a preceptor
Developer of clinical guidelines
Cardiology specialty (of the six specialties
studied)
J Gen Int Med
2007;22:184-90
Methods to Deal With Potential
Conflict of Interest
• Eliminate the conflict
▫ Can be difficult and painful
• Rationalization
▫ “Its educational”
▫ “Patients need samples”
• Denial
▫ “It doesn’t influence me”
▫ “I take it with a grain of salt”
Conclusions on Representative
Marketing
• Industry invests billions on detailing
• Most prescribers meet with representatives
• Representatives are skilled at developing
relationships with and influencing clinicians
• Meetings with representatives are associated
with less rational prescribing and increased
costs
• Most physicians feel they are not influenced
Thank you for attention!