The days of the televised drug advertisement may not be coming to an end, but there is mounting evidence that the next pitch you hear for “the little purple pill” is more likely to come on a little handheld screen than sitting in front of the tube.
Analysts say the pharmaceutical industry is increasingly replacing face-to-face doctor visits and broad product promotion with greater use of digital channels and online interactions, precipitating the need for sophisticated analytics to reach customers and cut costs.
According to a recent survey from Accenture’s Life Sciences Sales and Marketing practice, roughly 25% of pharmaceutical marketing to doctors, insurance companies and patients is now delivered over a digital platform – with 87% of respondents reporting the need to apply greater use of analytics to target spending and drive improved returns on investment.
But the poll of 200 pharmaceutical executives suggests the industry still has some work to do on applying the skills of Big Data to tap new channels and get the most from what they find there. Nearly 60% of respondents report experiencing difficulty ironing out redundancies in their analytics efforts and cutting through the noise to boost efficiencies.
One hurdle is that Big Pharma came late to the Big Data revolution. Scott Evangelista, principal at Deloitte Consulting, attributes this to a simple case of need. “Pharmaceutical companies have been late because the burning platform has not been there,” Evangelista said. “They’ve been flush with cash. They’ve been very profitable. The more profitable companies are, the less they look for the pennies and the minor tweaks and twists that would boost efficiency and return on investment.” Evangelista says that looming health care reform, which is anticipated to take a toll of drug makers’ profit margins are propelling the industry to catch up. To this end, many are now taking on third-party analytics experts in lieu of building their own competencies, leading to an across the board reduction in staff.
While the trend is a boon for solutions providers, and ultimately leads to a leaner sales force, some experts say the industry is missing out on the organic traction offered by expanding internal Big Data competency. To date, these efforts have been largely concerned with innovation and confined to research and development, but the benefits to adding next-generation analytics models to branding and marketing campaigns are hard to miss.
Among other things, predictive analytics can help drug companies dramatically cut waste by targeting their efforts at consumers most likely to benefit from their products. Unlike most consumer items, the efficacy of pharmaceuticals relies on a complex set of variables; with some drugs displaying efficacy rates of 50% or less, knowing your market takes on added significance.
What’s more, since Big Pharma often faces the added layer of complexity that comes with marketing their product through a “gatekeeper” (a prescribing physician), analytics can help drug makers crunch data on geographical trends and gain insight into which physicians are most likely to utilize a specific therapeutic avenue and when prescription rates peak. Pharmaceutical companies also are using advanced analytics to gauge the success of sales visits to doctors and better direct on-the-ground marketing efforts.
Big Pharma may be behind the curve when it comes to effective marketing analytics but with benefits like that at stake, and sweeping regulatory changes right around the corner, it’s not likely to stay there for very long.