Pharmaceuticals are not lollipops
Marketing for prescription drugs (Rx drugs) is largely similar to marketing for other products. However, there are serious differences in some key aspects. As the incorrect use of a medicinal product can cause major damage, the state intervenes to regulate the market launch and advertising:
- The product characteristics that may be advertised are largely determined by the regulatory authorities' approval process for the medicinal product.
- In addition, the possibilities for communicating with doctors and, above all, with patients are severely restricted. In addition to the Unfair Competition Act (UWG), the Therapeutic Products Advertising Act (HWG) must also be taken into account.
- In contrast to many other products, medicinal products require a great deal of explanation and doctors expect a medically and scientifically sound approach.
In order to take these special features into account, the following sub-steps have proven to be particularly effective:
Step 1: Get to know your product in detail.
Detailed knowledge of the product is essential for planning marketing activities. Therefore, take an in-depth look at your product. Learn exactly what it is approved for and how it should be used.
My tip: Start by taking a close look at your product, including the packaging, and at the same time study the product information, which is available for every pharmaceutical product at www.fachinfo.de. Here you can find out more about the exact composition and obtain information about the indications for which the product is approved. You can also find a lot more information in the information for healthcare professionals, such as how the product works in the body and what side effects are to be expected. The contents of the information for healthcare professionals are often the basis for the legal assessment of the extent to which your advertising claims are compatible with current law. You should also obtain an overview of the clinical studies and their results in order to be able to better assess the effects and tolerability of this medicinal product on the patient. Use the knowledge within the company and seek the advice of experts, such as doctors, to better assess the clinical results.
Step 2: Get a clear picture of the market.
Get a good understanding of the market situation and find out the positions of the competitor products:
- How do the competitors' products differ from your product?
- How are the competitor products positioned?
- At what prices are competitor products offered on the market?
- How do competitors operate in the market and how active are they?
These are some of the classic questions to which you need to find an answer.
Specific basic questions for pharmaceutical marketing
Clarify how many patients could potentially be treated with your product. Are there certain patients who are particularly suitable? Find out which target groups (doctors) could prescribe your product. Are they general practitioners or rather certain specialist groups? What criteria do these target customers use to make their treatment decisions? Find out what influence patients have on the prescription.
Medical societies often formulate treatment guidelines for certain diseases. Find out from the specialist literature whether there are current guidelines for the indication of your product and assess the extent to which your product is integrated into these recommendations.
My tip: Before you spend a lot of money on time-consuming market research, first use all the data that is available free of charge on the Internet. In addition, use all internal company sources. Ask colleagues from the Medical, Training, Market Access and Regulatory Affairs departments. Search the hard disks for market research studies that have already been carried out in the past. You will often find a great deal of helpful information about the product environment within the company. In addition, expert surveys provide quick, pragmatic and inexpensive qualitative findings, for example on customer behavior. You can ask doctors directly (e.g. at congresses) or ask your sales force for their opinions. This gives you a direct ear to the market and allows you to better assess the situation.
A so-called "SWOT analysis" helps to evaluate the product and the environment in a structured way. These results help to find the right strategy for marketing. Which specific market data is still needed to create a strategic plan must be carefully analyzed and decided on a case-by-case basis.
Answers to these many important questions are provided by market research. Professional market research agencies provide market data that can give you a very accurate impression of the market size and dynamics. So-called "secondary market research" gains its findings from data that has already been collected. This is a quick and usually comparatively inexpensive way to obtain a primarily quantitative description of the relevant market. Qualitative findings, for example on the specific prescription behavior of doctors, are obtained through costly and lengthy primary market research. This includes personal interviews with individual doctors and moderated group discussions ("focus groups").
Step 3: Define a clear destination.
Before embarking on any trip, you need to define your destination. Only when you know exactly where you want to go can you determine the mode of transportation and decide which direction you need to take to get to your destination. Defining marketing objectives is therefore essential for further strategic and operational planning if you want to ensure that you achieve your goals.
Marketing objectives are usually defined by the management, taking into account the general corporate objectives, and can vary greatly in nature. These are often economic indicators such as turnover or profit. However, market success-related targets such as the number of customers, the number of patients, sales or market share are also frequently specified. The definition of qualitative goals such as company image, product awareness or customer satisfaction are often the prerequisite for the customer to decide in favor of the respective product.
My tips:
- Make sure that the target definitions are always subject to the so-called SMART rule: s specific-concrete (S), m measurable (M), a accepted (A), r realistic (R) and t deadline (T). Only then do you have a chance of measurably achieving the goals you have set.
- Always compare the specified goals with your knowledge of the market. If these targets are not realistic from your point of view, you should definitely enter into a dialog with the management. Explain in detail why the goals are not achievable and what resources you need to achieve the desired goal after all.
Step 4: Set the guidelines for successful marketing with a clear strategy.
The strategy is a long-term, binding plan of action to ensure that the company and product goals can be achieved. A clear and easy-to-understand strategy is the basis for operational measures and helps all employees in the company to always set the right priorities and focus.
Once a strategy has been chosen, it must not be changed spontaneously, as many activities in the company are based on it. At the same time, the chosen marketing strategy is crucial for market success. For these reasons, you should carry out strategic planning thoroughly and coordinate it with all departments of the company.
My tips for strategy development:
- Define which medical specialists prescribe your product and which patients are eligible for your product ("Sources of Business") based on your market knowledge. Identify critical success factors (CRF) that will determine success or failure. Recognize obstacles on the way to achieving your goals and develop measures to circumvent them.
- The SWOT analysis can be helpful in the search for the right strategy. By combining internal "Strengths" and "Weaknesses" with external "Oopportunities" and "Tthreats", various possible strategies can be derived that should be discussed. Compare the strengths of your product with what is important to the customer ("medical need").
- It is often a good idea to carry out the strategy development in a moderated workshop with company representatives from all departments that are important for the implementation. This ensures that everyone involved supports the strategy.
My tip for defining a strategy:
Clearly define the three pillars of a strategy as part of the strategy development process:
- the positioning of the product (features and benefits),
- the target group (which doctor/which patient) and
- the pricing (what does the product cost?).
Once you have defined these basics of product strategy, it is easy for you to decide which operational measures make sense.
Positioning: Profile your product.
The positioning of a product describes how customers perceive your product. It is desirable to have a position that is as clear-cut as possible in comparison to competitor products. Customers make their purchase decision depending on how they feel about your product compared to the competition. Positioning is therefore a very powerful strategic tool in marketing.
My tip: Make a clear distinction between "actual positioning" and "target positioning". You get the "actual positioning" from market research. It describes the current position of your product in the market. Then define a clear profile for your product and consider which key messages you can use to reach the customer with this profile. This "target profile" should ideally differ significantly from the profiles of competitor products.
For this purpose, carefully reflect on the results of the SWOT analysis. Ideally, you will find an outstanding product feature (strength) that appears particularly desirable to the customer (opportunity). Such an "SO strategy" has a particularly good chance of success. Define the appropriate core messages and the resulting advantages and benefits for the communication mix.
In the pharmaceutical market in particular: When it comes to medicines, efficacy and tolerability are always of central importance for both doctors and patients. All market research studies confirm that an effective effect and good tolerability generally have a significant influence on the prescription. Other decision factors include ease of use (e.g. oral administration or intravenous injection), interactions with other medications and price.
Target group: Define the segments in which you can be particularly successful.
By dividing your relevant overall market into homogeneous sub-segments, you have the opportunity to address the various customer interests in a differentiated manner.
In the pharmaceutical market in particular: As a rule, a distinction is first made between the clinic market and the practice market. Pricing can be different in both segments, and the respective doctors require different approaches due to different customer needs. Both segments are also subdivided according to specialist groups. Further subdivision criteria, such as patient potential, therapy behavior or customer type, can be useful. Patients are also a target group that should be treated independently.
My tips:
- Find out in which segment your product is prescribed (clinic/practice, specialist group) and through which channels these target groups are best reached. Depending on your sales force capacities, it may make sense to reduce the target groups using suitable segmentation criteria in order to be able to process a smaller number of customers effectively. Here, "less" can be "more".
- Also find out how much influence patients have on the prescription. In recent years, patients' knowledge about their disease and their desire to have a say in treatment concepts have increased significantly. Look for suitable channels to address these patients - while complying with the legal framework of the Therapeutic Products Advertising Act.
Pricing: Take a close look at the regulations that apply to your product.
In many markets, the price of a product is a decisive factor in its market success. Often, the lower the price, the higher the sales. In the pharmaceutical market, these laws only apply to a very limited extent, as the reimbursement of medicines is heavily regulated by government bodies. In principle, you are free to choose the price of your prescription medicine. To prevent drug prices from skyrocketing, there are maximum reimbursement amounts defined by government bodies and committees.
Many questions arise:
- Is it a patent-protected drug or a generic drug?
- Is there a fixed amount in this product category, i.e. a maximum amount that is reimbursed by the health insurance funds?
- Is an additional benefit compared to other existing treatment options proven and accepted?
- Are there discount agreements between the manufacturers of comparable products and the health insurance companies?
A detailed knowledge of the market mechanisms and reimbursement systems is crucial for the development of successful pricing and reimbursement strategies.
My tip: There are no general recommendations for pricing in the pharmaceutical market due to the complex and very different regulations. Find out how your medicine should be classified and what the maximum reimbursement amount is. Consult market access experts to identify the exact regulations for your product. Also find out to what extent the price influences the prescribing behavior of the respective doctors. Discuss with the experts whether price differentiation (e.g. between clinic and practice) makes sense. An empirical assessment of willingness to pay using recognized methods such as conjoint analysis or the Van Westendorp method can be useful in some cases.
Step 5: Bring your product messages to the market with tactical measures.
The tactical measures (marketing mix) comprise the entire operational marketing required to achieve the strategic objectives. This complex is also classically referred to as "advertising", whereby the core messages reach the various target groups via different communication channels. Here, you should first distinguish between doctor and patient communication, as these two target groups need to be addressed differently.
Doctor communication
In the case of prescription medicines, only the doctor ultimately decides on the prescription, as only he or she is allowed to issue the prescription. This is why doctors are usually the primary target group for pharmaceutical marketing.
My tip for communicating with doctors: The sales force has direct contact with doctors due to their discussions and can therefore convey the key messages very directly and effectively. Therefore, do everything you can to support your sales force in the best possible way. This includes the creation of suitable advertising materials and the organization of congresses and training events. Accompanying measures, including multichannel marketing, support communication via the sales force. Digital channels have become increasingly important in recent years. In addition to establishing a professional and valuable website, setting up your own newsletter channel is one of the cornerstones of digital communication. You should therefore start obtaining permission to send newsletters ("opt-ins") from your target customers at an early stage.
Patient communication
The wide range of information available on the internet means that patients are increasingly better informed about their illness and therapeutic options. In addition, the legislator supports the patient's right to self-determination in the healthcare system. This is why the patient is becoming increasingly decisive in the choice of therapy and should be included in the communication mix.
However, you are limited by the law on the advertising of therapeutic products, as the advertising of prescription drugs directly to patients is not permitted.
My tip for patient communication: Find out how influential the patient is in the choice of therapy. Use suitable market research to get an idea of patients' level of knowledge and find out how and where they obtain information. Also ask what information patients want from the pharmaceutical industry and develop a range of information that is of value to patients. Your doctors can pass on requested digital and printed patient information to their patients. Purely digital channels are becoming increasingly important, especially for patient communication. Create a meaningful website for patients and reach out to them via social media channels. Communicate with your patients via newsletters to inform them about the environment of their illness. Get involved in patient organizations as well as digital and analogue patient education.
Step 6: Constantly review your measures through controlling.
Henry Ford once said: I know half my advertising is wasted money. I just don't know which half. In fact, many measures are repeatedly implemented, some of which are very expensive, whose impact on the market is not verified and in some cases cannot be measured.
The aim of marketing controlling is therefore to record the impact of marketing measures as accurately as possible. The efficiency of a measure can be assessed by the ratio of the costs of the measure compared to the effect on the market.
My tip: Avoid flying blind and thus losing control when implementing your measures. Define key performance indicators to measure all operational actions as simply as possible. These KPIs (Key Performance Indicators) help to check the efficiency of measures. Digital communication provides you with a great deal of measurable data: clicks on websites, newsletter opening rates, impressions on social media channels and the like provide detailed information on how well a particular piece of digital information is received. Other typical key figures in pharmaceutical marketing are the number of participants and contacts at congresses and other customer events, response rates to postal mailings and the number of sales force contacts.
Many KPIs do not yet provide any information about the effectiveness of the respective measure in the market. However, these KPIs help you to decide whether to repeat the respective measure or not.
Important: In the broadest sense, controlling also includes checking whether the planned positioning has reached the customer. Use suitable market research at regular intervals to check whether your core messages are being consolidated with the target group and correct your measures if necessary.
