• July 1, 2013
  • By Leonard Klie, Editor, CRM magazine and SmartCustomerService.com

Drug Makers Are in the Midst of a Digital Revolution

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The pharmaceutical industry is undergoing a customer engagement revolution that demands improved capabilities from sales and marketing organizations, according to new research from Accenture.

The research found that senior sales and marketing executives at large U.S. pharmaceutical companies—all with corporate revenue exceeding $1 billion a year—plan to sharpen their focus on multichannel marketing and step up their use of digital technologies and analytics in 2013. In fact, nearly one in four direct sales force interactions at these companies has already been replaced with digital interactions for targeting doctors, health insurance providers, and patients, and executives plan to increase their use of digital interactions by 26 percent, on average, during the next two years.

Ironically, this comes at a time when 83 percent of the executives see cost reduction as their number-one priority for the year.

As they work to meet their bottom-line goals, executives plan to combine cost-cutting efforts with increased marketing efficiency through the following strategies:

  • greater use of analytics to target spending and drive improved ROI (87 percent);
  • boosting their use of digital and multichannel interactions (83 percent); and
  • using third-party service providers (72 percent).

Additionally, nearly half of the respondents said their sales and marketing organizations had opportunities for greater efficiency, with more than 10 percent of them citing a need for a complete overhaul.

"From this survey, we believe a correlation can be drawn that cost reduction is enabled by mastering multichannel marketing using digital interactions and analytics," observes Craig Robertson, North American managing director of Accenture's Life Sciences Sales and Marketing Practice.

One of the key goals behind the digital initiatives—largely encompassing new mobile apps that let patients track their medicines and share the results with their doctors—is greater patient care, Robertson adds.

The new mobile apps are replacing online portals that drug companies had used to push information about their products.

Digital technologies are also changing how the drug companies' salespeople meet with potential clients. Face-to-face meetings in busy doctors' offices are being replaced by Web chat sessions, voice and video conferencing, and online product demonstrations, the research found.

The companies are also creating online forums where doctors and patients can discuss medical conditions, treatment options, potential side effects, and drug interactions and track the outcomes of certain drug regimens.

The whole industry, Robertson says, is moving from focusing largely on product promotions to open communications with all the parties involved: doctors, patients, health insurance providers, pharmacies, and drug manufacturers. And then, it's happening "on more of an on-demand basis," he adds.

And while the practice of marketing prescription drugs directly to consumers largely through television and print ads is going to continue, according to Robertson, this, too, will take a different format. Once greater interaction starts between all the parties involved, companies will be able to perform more targeted, segmented marketing to consumers with specific medical conditions. "There will be an increased focus on showing [consumers] how their products address their real-world medical problems better than competitors' products," Robertson states.

But the drug companies have the obligation to manage this so consumers aren't self-diagnosing and self-medicating without consulting their doctors and pharmacists. "Access to medical information about medical conditions and treatments is greater than ever," Robertson says. "We continue to need controls. We need more diligence around the appropriate use of medicines and medical care."

Government regulations around patient privacy are also going to play a greater role in how pharmaceutical companies conduct business and might even lead to some hesitation to adopt the new technologies at first, Robertson predicts, but that shouldn't slow progress. "You can take the traditional channels and apply them in new ways to meet customer needs," he says.

"It's not just about pushing your branding message through one channel, but about greater engagement with targeted consumers in their preferred channels," Robertson continues. "This proliferation of channels creates a lot more options for customer engagement, but it also requires a lot more direct effort from the pharmaceutical companies to manage it."

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