Market Focus: Pharmaceuticals -- CRM Undergoes an Experimental New Treatment

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The customer relationship in the pharmaceutical industry is complicated. A customer can be a physician, an institution, an insurance company, a clinic, or even a patient. Because of the vertical’s stringent requirements — security of data is paramount — CRM solutions are often highly customized or provided by niche, industry-specific vendors. 

“One of the key things for the pharma industry in general is that [it’s] moving away from customized solutions,” says Ruchi Mallya, an analyst with Ovum who specializes in the life sciences industry. In the past, the solutions were not only highly customized, but hefty, on-premises, and difficult to upgrade and integrate with other solutions. 

“What’s happened is that there are a lot more vendors that understand the pharmaceutical industry, and systems that are much more pharma-focused,” Mallya says. That’s a shift from the days when CRM vendors merely tried to add a pharma twist to vanilla CRM solutions — which didn’t work out well, Mallya says. 

Prescribing Fewer Salespeople 

Mallya suggests the pharma industry actually encountered the economic recession in 2005 and 2006 — a few years earlier than the rest of the country. As a result, says Dale Hagemeyer, a Gartner Research managing vice president, CRM software is more critical than ever to pharma business operations. “Sales forces were bloated,” Hagemeyer says, but no longer: Pharmaceutical sales representatives, he says, “are getting liquidated in the thousands. So now we have to turn to technology.” 

With fewer reps selling pharmaceutical products and services, companies are embracing software solutions to do better targeting and to reach more customers. But the technology can only take a company so far. “The rep…has to evolve,” Hagemeyer says. “They have to have something more compelling and do more interactive selling…or provide something more catered for the doctor.” Basically sales reps must wow healthcare providers because, as Mallya says, “[healthcare providers] aren’t all that interested in seeing sales reps.” 

To address the issue of having less time with providers, pharma salespeople must develop tailored approaches, Hagemeyer says: “You have an itch, I have to find a custom scratch.” The messaging and pitching can’t be too customized, however, due to Food and Drug Administration (FDA) regulations. The real tailoring happens in the channels through which sales reps reach out to providers. 

The Doctor Isn’t In 

“Doctors want to spend more time with patients—not sales reps,” Mallya says. They still want to get information about treatments and medications, but they just want to do it on their own terms. Both Hagemeyer and Mallya note a developing trend: marketing to physicians through Medical Scientific Liaisons, individuals with Ph.D.s and medical degrees who build relationships with doctors and talk to them about emerging research. The blossoming peer channel, Hagemeyer says, represents a changing environment more oriented toward pull and less toward push. Physicians can now visit a pharma company–owned portal to view materials, or a sales rep and a healthcare provider can “cobrowse” materials online in place of in-person PowerPoint presentations. 

Hagemeyer emphasizes the difference between selling to an institution and selling to a physician. Institutional sales, also known as “managed care,” represent a huge portion of the pharma industry — the United States government, after all, is the biggest pharma customer in the world. 

Despite the multiple channels to market to customers and the varying definitions of “customer” in the pharma industry, one universal truth holds: Pharma-related information is highly regulated and requires intense security and management measures. Given the nature of clinical drug trials, for example, it’s no wonder that pharma companies were hesitant to embrace the idea of putting data in the cloud. 

Pharma On Demand

“When we started 10 years ago it was a much harder sell,” says Alison Shurell, vice president of product marketing for IntraLinks, an on-demand information management company with a high percentage of its client base in life sciences. The company’s first customers were in the financial services industry — in which security is also critical — but Shurell says IntraLinks has not only seen an uptake in subscriptions among top-10 pharma companies over the past few years, but explicit interest in software-as-a-service solutions. 

“[Pharma] is a conservative industry dealing with people’s lives,” Shurell says. “They want to make sure if they’re going to rely on a solution that it’s not going to fail them and increase their risk of exposure — especially because they’re regulated by the FDA.” Now, Shurell says, the business case for pharma going on-demand is easier to make. The solutions are flexible and quick to deploy, and can integrate with other applications. 

At FFF Enterprises, a supplier of critical-care biopharmaceuticals and plasma products, the use of Salesforce CRM has been so well received that the company recently scaled up to Salesforce.com’s Unlimited Edition. Sales reps at the company also use the Salesforce Mobile solution, says Sheryl Perez, FFF’s vice president of marketing and communications, calling it essential to operations. “A sales rep can check [in] moments before a live meeting with a pharmacy director and be familiar with the biopharmaceutical products [that] account has purchased that day, month, week, etc.,” Perez says. 

Hagemeyer says he expects to see prediction-based modeling take hold in pharma, with companies looking to improve targeting through an improved understanding of a physician’s past prescribing behaviors. One avenue he says he doesn’t see pharma diving into in the near future is social networking. Due to extreme security needs, he says, “pharma is not ready for primetime in this space.”  


SIDEBAR: Top 3 Vendors in Pharma

  1. Oracle 
  2. Cegedim Dendrite
  3. Salesforce.com 

Source: Ovum


For the rest of the November 2009 issue of CRM magazine — a look back at the first 10 years of Salesforce.com — please click here.

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