Uptick in the Pharma's Market
Two reports released today reveal the growing interest in CRM among pharmaceutical companies.
In a report entitled "Pharmaceutical Customer Relationship Management: Tools to Improve Sales Force Effectiveness and Productivity," analysts from Front Line Strategic Consulting note that CRM tools provide significant opportunities to improve sales effectiveness and efficiency.
According to Front Line, the estimated size of the pharmaceutical CRM tools market will be $455 million in 2003, and is expected to reach almost $625 million in 2008. The United States will be the predominant geographical area of market expansion, while Europe and Japan will account for 30 percent and 8 percent of sales in 2008, respectively.
While growth is anticipated, the market faces various hurdles, including weighty competition -- largely influenced by retiring Baby Boomers and the lack of FDA-approved drugs in the pipeline. To overcome these hurdles, pharmaceutical manufacturers will look to CRM tools to streamline the sales pitch to physicians. Sales representatives are given on average 90 seconds to make their pitch to physicians, so pharmaceutical manufacturers will look to CRM tools to enhance the effectiveness and improve the relevance of their presentations, says Rochelle Ellis, analyst, Strategic Market Reports division, for Front Line states.
The report suggests that the maturity of various pharmaceutical applications has advanced the industry's growth. Some of the solutions cited in the report include Siebel Systems' Siebel Pharma, Dendrite International's WebForce, and iAnywhere Solutions' AvantGo Mobile Pharma. In addition, technologies like tablet PCs will help drive demand with such improved features as electronic signature capture and increased mobility, the report suggests.
Industry insiders say that in addition to streamlining the sales pitch to physicians, pharmaceutical manufacturers are also selling directly to a larger more educated customer base. And, they are using CRM solutions to do so. "Over the next 20 years our patient population will be larger than we've ever seen it," says Tom Murtagh, vice president of healthcare solutions at Braun Consulting, referring to the entrance of Baby Boomers, our nations' largest and wealthiest population, into retirement. "It will provide a catalyst for the industry overall. Also, Baby Boomers tend to be very active and informed about their healthcare. The combination of those has been a factor in determining a robust future for the industry."
Further supporting the increase in direct sales by pharmaceutical companies, a separate report released today by research firm Cutting Edge Information states that pharmaceutical companies are maximizing each customer's lifetime value to promote long-term relationships.
The report, "Lifetime Customer Value in the Pharmaceutical Industry," reveals how companies like Merck, Pfizer, and Aventis drive long-term customer value through new tools and employee focus. The pharmaceutical industry lags behind other sectors in driving lifetime customer value, according to the report. But, that is changing as Web-based tools are directly linking patients with pharmaceutical companies to build long-term relationships. A spokesperson from Cutting Edge Information was not available to comment at press time.
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