Pharmaceutical Marketing in the 21st Century

1. Pharmaceutical Marketing in the 21st Century Perri Cebedo & Associates Santa Clara, California U.S.A. prosperocevedo@attbi.com

2. Pharmaceutical Marketing in the 21st Century The Growth of DTC The Shift in Marketing Mix More Reps, Less Doctors Calls Opportunities in the Internet The Growth of Chain Stores Changing Aspects of Training

3. The Growth of DTC DTC: Direct to Consumer Advertising Phenomenal growth in the last 5 years Journals: 200m vs. $3.7B on DTC! More patients ask Physicians what they want So, More samples

4. Effects of DTC More patients telling their Doctor what medicines they need Products with DTC: highest sales increases Increase of samples More informed patients Better patient compliance More satisfied patients

5. E Marketing Training via the Internet CME in the Internet Internet Portals for the MD Using the Internet to Support Marketing Effectiveness Patient Groups in the Internet

6. Pharma Consolidation Slowdown in mergers, but they will continue Previous M&As driven by fear and pain Now by conviction that bigger is better Makes financial sense, redundant costs Strategic sense

7. Do Pharma M&As make Strategic sense? Combined field forces could call on more MDs Savings on support Staff Modest savings, but with new RD & Marketing muscle More products in the pipeline less risky Bottom 33% of top 50 Companies: RD=21% of Sales Middle 33% of Top 50 Companies: RD=18% of Sales Top 33% of Top 50 Companies: RD= 15% of Sales Conclusion? Additional 6% of Profits compared to bottom 33%!

8. Growth in Promotional SpendLast 5 years Total Promo Expenditure= $9.2 to $19.1B Promotion Office Based MDs= $2.4 to $4.8 B Samples @ retail value= $4.9B to $10.5B DTC= $791m to $3.7 B Most significant growth product: Lipitor 2001

9. Use of Online Detailing E Detailing: another component of the marketing mix MDs are invited to participate With a promise of a coupon for a book 71% of e Details done evenings or early mornings or weekends E Detailing lasts 8-10 minutes Increased use of attention mechanics MD selects the time. So attention

10. The Changing World ofMedical Education PhRMA Voluntary Code Growth of Online CME More electronic Media will support live Meetings, eg CDrom or Online educational support Small low budget events can have bigger impact if supported with CDrom, with slides, speaker bios, transcripts, abstracts and interviews Case studies can come alive with electronic media More CME, more professional Reps!

11. Increasing Field Forces Increasing Sales and Marketing Staff Increased Pay and Reward! Only slowdown in the use of Contract Sales Slower turnover except in Specialty Reps Pharma salaries now ahead by 20% compared with other industries

12. Growth in Pharma Salaries Primary Care Rep $45,800--$47,000 Top PC Rep $81,000--$82,300 Oncology Reps plus 30% DMS plus 13% more than their top reps Highest salary increase: Senior DMs=11% Incentive Pay is 25-30% of base pay

13. Changes in Incentive Schemes Incentive pay =25-30% of salary Performance vs goals; Quantitative: 83% Qualitative: 17% 82% Individual Performance Top Ten PCRep in 2001=59% of base salary Top Ten PCRep in 2002=76% of base salary

14. Drug Discount Programs Senior Poor struggle to pay for medicines No drug insurance coverage GSK: Orange Card

15. Successful Use of the Internet Marketing to Physicians who regularly go online For latest information on disease management, research Latest clinical papers Networking with others

16. The Drive for New Types of  MD Contacts Background (INCOMM Survey of 500 Reps): 26% =less than 1 minute 63% =1 minute 11% = 3-5 minutes In Conventions, MD contacts =5-10 minutes Many Hard-to-See MDs or No-See MDs (84%)! So, expect more participation at MD conventions!!!

17. Dinner Meetings Pure CME Activity Group Selling Focus Group Discussions MAPs or Marketing Advisory Panels Social Activity to Celebrate Something Peer Selling