Pharmaguy's Insights Into Drug Industry News
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Pharmaguy's Insights Into Drug Industry News
Pharmaguy curates and provides insights into selected drug industry news and issues.
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Consultants Advise Pharma to Act More Like Biotech to Revive ROI for New Drugs

Consultants Advise Pharma to Act More Like Biotech to Revive ROI for New Drugs | Pharmaguy's Insights Into Drug Industry News | Scoop.it

The an­a­lysts at De­loitte con­tinue to cal­cu­late a dwin­dling re­turn for Big Pharma’s R&D dol­lars. Their lat­est num­ber crunch­ing for the world’s top 12 bio­pharma com­pa­nies con­cludes that ROI on their in­vest­ment cash has shrunk to 3.7%, the low­est level yet after hit­ting 10.1% in 2010.

What’s killing these com­pa­nies’ num­bers, De­loitte says, is that while de­vel­op­ment costs on new drugs has plateaued at about $1.5 bil­lion on each pro­gram, their rev­enue keeps falling. There’s been an 11.4% drop in rev­enue year-on-year over 6 years, which has now fallen to $394 mil­lion in av­er­age peak an­nual sales.

A hunt for any sil­ver lin­ing in this new re­port can be des­per­ately hard. The De­loitte guys — Colin Terry and Neil Lesser — con­clude that the num­ber of block­busters pro­duced by this crowd has dwin­dled by more than half, so they keep spend­ing big in search of smaller drugs. And as they focus more and more on their own pipeline, they are ig­nor­ing the ex­ter­nal pro­grams that can de­liver bet­ter re­turns — set­ting up a push, per­haps, for a surge in M&A as the re­al­iza­tion sinks in that they are on the wrong track.

The best ap­proach, they add, is to think and act like a biotech. Smaller biotech groups sim­ply do bet­ter than Big Pharma at R&D. And the big com­pa­nies that stay fo­cused on core dis­eases do far bet­ter than the com­pa­nies that keep shift­ing R&D spot­lights.

Pharma Guy's insight:

What's the best way to emulate biotech companies to increase ROI? Raise prices like Gilead did, of course (read, for example, “Gilead Dodges Taxes While Gouging Prices, Says Advocacy Group”; http://sco.lt/7IjyXR). Or hire consultants to be CEO like Valeant did.

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Diabetes Drugs Dominate Pharma TV DTC Advertising

Diabetes Drugs Dominate Pharma TV DTC Advertising | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Type 2 diabetes is on the rise in the U.S.--and so is TV adspending for drugs to treat the condition. New medicines, along with increased marketing budgets on older meds, more than doubled diabetes category spending on TV advertising in 2015 to $468 million, up from $194 million in 2014, according to data collected by real-time TV tracker iSpot.tv.


The four new diabetes drug entrants to TV advertising last year were Sanofi's ($SNY) Toujeo, Boehringer Ingelheim and Eli Lilly's ($LLY) Jardiance, Eli Lilly's Trulicity, and GlaxoSmithKline's ($GSK) Tanzeum.


However, it was Johnson & Johnson's Invokana, already on the airwaves, that made the biggest splash, spending $101.2 million on TV ads in 2015, up from $35.2 million in 2014. iSpot noted that just one Invokana ad, "You're Not Alone," accounted for an estimated $75 million additional spending, or 16% of the category total for the year.

Pharma Guy's insight:

Was all the TV ad spending for Invoking worth it? Find out here: http://bit.ly/1Kbh0NV 

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Sanofi's DTC ROI for Afrezza: Lost 53 Cents for Every $1 Spent!

Sanofi's DTC ROI for Afrezza: Lost 53 Cents for Every $1 Spent! | Pharmaguy's Insights Into Drug Industry News | Scoop.it
Sanofi spent $3.75 million on advertising for Afrezza in the third quarter of 2015 yet the therapy only brought in about $2 million in revenue.


Sanofi in April will stop marketing Afrezza, MannKind's inhaled insulin, citing the low number of prescriptions even though the drugmaker made what it described as a “substantial” investment in sales and marketing, including the launch of the “Surprise, it's insulin” campaign in mid-2015.

Pharma Guy's insight:

The last time DTC ad ROI was in negative territory was when Abe Lincoln was sleep-deprived "president" in Rozerem sleep-aid ads. Takeda spent more on ads than the drug made back in sales: between January and September 2006, Rozerem earned $48.7 million in estimated wholesale revenue, according to IMS Health (that number does not include prescriptions handled by mail). But the company spent nearly $100 million on ads, per Nielsen Monitor-Plus. More about that here: http://bit.ly/lincolnshotdead 

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Forget ROI! - Pharma must measure return on engagement

Forget ROI! - Pharma must measure return on engagement | Pharmaguy's Insights Into Drug Industry News | Scoop.it

One of the biggest challenges currently facing pharma is the increasing difficulty of not only reaching, but also influencing HCPs through traditional and non-traditional sales and marketing efforts. As we've known for some while, sales forces are getting ever increasingly smaller. In fact a recent study showed that just 27 per cent of sales visits result in the rep actually getting to see a HCP – on the flip side the survey showed only 23 per cent of the HCPs would rate the sales force performance as excellent.


At a time of increased competition, these findings are worrying. Costs are skyrocketing, engagement is decreasing, and the demand for RoI is higher than ever. With responsibility of every penny spent needing to be attributed, the vicious circle of unease continues to swell.


The bottom line is that the way RoI is measured is flawed. HCPs are not loyal to one brand; they could defect to another brand tomorrow. So measuring the investment in a 'campaign' is not the biggest measure anymore. We now need to treat HCPs as consumers. And in consumer marketing capturing brand loyalty has been practiced for decades.


I believe that it is time to drop our over reliance on just chasing those unattainable and arguably, misleading, RoI metrics. It is now the time to look at incorporating relationship and engagement metrics that build loyalty towards a brand.


Pharma Guy's insight:


"Treat HCPs as consumers," "build loyalty" ... if only pharma could offer physicians a "frequent prescriber rewards" program! But wait, the industry used to do just that -- and may still be doing so -- by offering high prescribers "consultant" gigs. In the old days, pharma gave away free trips to medical conferences and free dinners at nice restaurants. Now, with the Sunshine law in effect, it's not so easy to reward physicians that way any more.


The author, Ash Rishi, suggests that pharma adopt consumer practices to "use the power of emotion, to engage, to attract and then to retain customers"; e.g., HCPs. It seems to me that pharma mastered that practice years ago when it started hiring attractive, young sales reps. See, for example, this.


Regarding "each marketing tactic needs to put the patient at the heart of their branding strategies," emotions and loyalty programs are also used by pharma marketers. Just consider the emotional appeal of DTC ads and drug coupon loyalty programs (e.g., read Lipitor For You! Actually, For Card Carrying Members Only!).


Thanks to Rishi I now have another term to include in the Pharma Marketing Glossary: MOT. Rishi doesn't explain what this is, but here is what I learned: It stands for "Moment of Truth," which is a concept coined by Proctor & Gamble.


There are many variations of this term:

  • First Moment of Truth (FMOT) - the actual term first coined by P&G: "This is considered to be the decision point to buy a specific brand or product." (here)
  • Second Moment of Truth - also coined by P&G
  • Third Moment of Truth
  • Zero Moment of Truth (ZMOT) - coined by Google
  • BSMOT - coined by PharmaGuy: Can you guess the meaning?


The term "First Moment of Truth" (commonly called FMOT) was coined by Procter & Gamble in 2005 to define the first interaction between a shopper and a product on a store's shelf. This moment was considered one of the most important marketing opportunities for a brand, as P&G asserted -- and others believed -- that shoppers make up their mind about a product in the first few seconds after they encounter that product for the first time.


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Which Marketing Channels Have the Best ROI Measurability?

Which Marketing Channels Have the Best ROI Measurability? | Pharmaguy's Insights Into Drug Industry News | Scoop.it
Metrics & ROI - Executives say email and search are the two marketing channels for which it is easiest to measure return on investment (ROI), according to recent research from Millward Brown.
Via Brian Yanish - MarketingHits.com
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Is Direct-to-Consumer TV Advertising a Losing Proposition?

Is Direct-to-Consumer TV Advertising a Losing Proposition? | Pharmaguy's Insights Into Drug Industry News | Scoop.it

2014 was a banner year for TV direct-to-consumer (DTC) advertising in that it saw the highest percentage spent on TV since at least 2001 (see chart and read "Pharma Ups Its Investment in TV DTC Advertising").

A few weeks ago I said "Forgettaboutit! The numbers are not yet in for 2015, but if it's anything like 2014 -- and judging by personal experience -- the drug industry will be spending even MORE money on TV DTC ads."

The Top 10 TV DTC Rx advertisers spent $876.3 million in 2015 (see insert below). The question is: Is it worth it?

My answer: No! 

 

How do I know? Click here for my analysis of TV DTC ROI (return on investment).

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Does pharma need a "chief patient officer"? Hell Yeah!

Does pharma need a "chief patient officer"? Hell Yeah! | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Adding a chief patient officer, alone, is not going to change the culture of pharma from “what’s the ROI?” to “how can we make a difference in patients’ lives?”


A Chief Patient Officer, on paper, sound like a good idea, but what pharma really needs is more people who have empathy and less people who want presentations and spreadsheets.  The culture within most pharma companies is one of “ROI first, patients second”.  Years of layoffs have led to a void of talent and while there are still some good people left within the industry too many have marketers have exited.

Pharma Guy's insight:


Rich Meyer may not have listened to my podcast interview of Sanofi's Anne Beal, the first Chief Privacy Officer of a major pharmaceutical company. Dr. Beal's main role is to be a change manager throughout the organization. The fact that's she in a C-suite position means that she lauds it over mere Directors that Rich complains about. Listen to the podcast here: http://bit.ly/PMT232

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How Do You Measure Social Media Content Effectiveness?

How Do You Measure Social Media Content Effectiveness? | Pharmaguy's Insights Into Drug Industry News | Scoop.it

Social media provides brands with another channel for content sharing. But as this becomes the norm, content marketers are looking to the next step in the process: measuring the effectiveness of this content. Based on an April 2014 study conducted by Ipsos OTX for the Association of National Advertisers (ANA), the overwhelming majority of brands are now doing so.


According to the research, 80% of US client-side marketers measured the effectiveness of their social content, with social media metrics such as “likes” the most common. Usage statistics—daily or monthly active users, for example—fell in the middle of the list. Meanwhile, metrics that could identify business ramifications were not used nearly as much, with financially based measurements such as return on investment and sales landing near the bottom.

Pharma Guy's insight:


See how Boehringer Ingelheim measures success of its disease awareness TweetChats. It's in their "How to" playbook reviewed in this Pharma Marketing News article: 


How to Host a Successful Pharma TweetChat

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