A new Rx for pharmaceutical marketers

Iris Jacobson is director of North American sales training and development with ICOM Information and Communications, a database marketing solutions provider based in Toronto....

Iris Jacobson is director of North American sales training and development with ICOM Information and Communications, a database marketing solutions provider based in Toronto.

Imagine you’ve been given a brand management assignment. You have a very strong product to work with. It addresses a very real consumer need. However, there are a few catches. Your target consumers are almost impossible to identify. You’re not allowed to mention your product’s name. By the way, the objective is to make your product the market leader.

Sound ludicrous? Unfortunately, the scenario just described is the reality for marketers of prescription drugs in Canada. Strict regulations exist for advertising these products to consumers, the most daunting of which is the ruling that brands cannot be named. Pharmaceutical marketers have no choice – if they want to market their brand directly to consumers, they must ‘mask’ the product and rely on generic company identification.

Pessimists might walk away from the task – for them a masked world is a no-win proposition from the outset. Optimists, however, see the task as the ultimate marketing challenge. They use ingenuity and creative solutions to overcome what at first seem to be insurmountable barriers.

In the business of prescription medication, the rewards for tenacity are enormous. On the human side, you can make a real difference in people’s lives. On the marketing side – although you will need every ounce of creative effort to make your pitch – the profit contribution for even a small gain in market share is often more dramatic than those in the infamous cola wars.

Diagnosing the problem

So what does it take to be successful in Canadian pharmaceutical marketing? It boils down to the essential principles of marketing – a good product, clear objectives, consumer insights, the right medium, excellent execution, and measurement. The first few are fairly straightforward to seasoned marketers. The challenges are to identify the consumers, to find a way to reach them, to develop an execution that speaks to their needs, and of course, to evaluate the program’s success.

Let’s assume you have a great product – say an osteoporosis treatment that is better than anything else at not only treating the disease, but also at preventing further bone mass deterioration. Your objective might be to create broad awareness of the drug so that when active referrals from professionals begin to occur, consumers will understand it and be open to it. Or perhaps you want the consumer to actually go to the doctor to learn more about your product. To get the insights you need to proceed, you’ll want to use research from the medical community as well as consumer demographics and behavioural/lifestyle traits.

But what medium is targeted enough to compensate for the necessary obliqueness of your message? Many pharmaceutical companies are recognizing that direct-to-consumer (DTC) marketing is an excellent delivery method for their particular form of advertising.

Determining whether to have a database-driven DTC component in your Rx drug-marketing program starts by asking some very pointed questions about the drug or therapy:

• Does your product have a unique competitive advantage?

• Is there little or no generic activity?

• Is there a significant base of prospects to target?

• Do you have different messages for different types of patients?

• Is it likely the doctor will recommend your product once the consumer has been encouraged to talk to him or her?

• Will patients need this drug for a long period, or for life?

• Is there a high level of patient involvement in this therapeutic category?

If the answer to many or most of these questions is ‘yes’, a DTC approach may be appropriate.

Prognosis for payout

A brand manager needs to have a feel for payout before deciding how much to spend on any significant marketing program. Payout translates into the cost of getting to the right consumer, and like any other business decision, it must be rationalized.

In evaluating any marketing investment, there are three main variables to consider: product margin, dosage/duration of treatment, and the size of the potential patient base. The first two variables combine to arrive at the ‘lifetime value’ of a single user. Once this is known, you can decide on the likelihood of converting enough users to pay back your investment.

Let’s use our osteoporosis drug example to calculate the dollar value of an individual patient to your brand. In this example, assume:

Gross margin per pill = $0.10

Pills per day = 2

Days per year = 365

Average years taken = 5

The lifetime value of this patient is: $0.10 X 2 X 365 X 5 = $365

Let’s say you have a budget of $250,000. By simply dividing that budget by the lifetime value you can determine how many patients you will need to convert to achieve payout:

Program Budget = $250,000

Lifetime value per patient = $365

The number of patients required to payout is: $250,000 = 685

Using the lifetime value calculation, you will have paid out the $250,000 investment in a year by converting only 685 consumers to your therapy. Sounds easy, but how do you find the ‘right’ 685 people when you know that, using our example, only about 8% of the population is afflicted with osteoporosis? Your $250,000 budget would be stretched to the breaking point if you used mass advertising methods to reach this small group.

Alternatively, with a DTC approach, you can target the right consumers and tailor both your message and your delivery mechanism, therefore optimizing your spending on your best prospects. It means that even modest budgets can achieve payouts, most often with dividends.

So, while doing payout calculations first may seem to be premature, your drug research and understanding of the potential market size, combined with the payout calculations, helps establish how tightly targeted your marketing campaign should be. When using precision marketing, you’ll also have the comfort of knowing that minimal wastage has occurred – a major drawback of mass mailings. In fact, you could say that eliminating wastage is one of the key competitive advantages of precision data marketing.

Writing your marketing

prescription

When you understand the payout implications, you’re in a position to get the consumer ready. Consumer programs should be timed to be synergistic with your professional detailing programs. There are a few givens that prescription drug marketers have to keep in mind in determining their DTC strategy:

The only way that an Rx drug gets into consumer’s hands is through the doctor.

We can make the consumer more open to receiving information from the doctor;

or

We can make the consumer more knowledgeable when he/she visits the doctor.

Now comes the challenging part. Since medical practitioners are forbidden to release confidential information about their patients, how can you get to your audience, and make them more open or more knowledgeable?

When targeting a group with a unique, specific need, data companies can provide immeasurable added value. Their strength is in identifying the ‘top tier’ target consumer segment for a product by using detailed information about behaviours, attitudes, and demographics. Once they develop a profile of this consumer, all consumers in their own huge databases (or in other databases) can be modeled against it. The digging that helps identify this target can also help in the development of consumer insights that can drive your creative.

Remember that a key competitive advantage of using a targeted list is the ability to design more relevant, high-impact messages to predisposed consumers. Most importantly, any information you send to consumers should work in tandem with the information the medical community is receiving. You don’t want to confuse consumers; you want to increase their interest level.

The execution of your DTC mailing could focus on education, and will work best if it has a specific call to action. If there’s something in it for the consumer – a club, an offer, or an 800 number for more information, your piece will be more likely to achieve its goal. The chart below shows that the response rate for direct mail which offers further information to specifically targeted consumers is as much as 10 times greater than the traditional co-op mail or magazine ad response rate!

Treatment successful?

How will you know if your assumptions about your target consumers were right? The impact of DTC activity requires an up-front commitment to regular and ongoing measurement. You’re setting up a communication channel with your target consumer, so it’s worth the time and trouble it takes to let it succeed.

Set up a research system in advance, and get commitment to the ‘slow build’ nature of the program. You’re not only looking for new prescriptions tomorrow. You’re trying to measure whether you can get your target consumers to respond in some fashion, which will lead to the next step in the process: a consultation with the doctor or another activity.

Measurement tools could include: test-versus-control scenarios, where all variables but the direct mail are the same; recall testing; comparing information request follow-up levels to other proven programs; and pre/post image and attitude research. Don’t overlook the usefulness of U.S. data, results from comparable OTC programs, and any agency learning that might be available. Set your benchmarks carefully – these programs can give you a unique competitive advantage, but results don’t happen overnight.

In summary, there are ways around the prescription drug marketing conundrum imposed by regulations. Success may require an extra dose of determination, but like any good campaign, strong results can be attributed to product benefits communicated creatively to the right audience.