Why is Pharma innovating so little in terms of the go-to-market model?
Undoubtedly, the world has changed dramatically for the last 30 years. The digital revolution has brought two main consequences. The first one is the foundation of new companies providing value to consumers due to the internet: namely Google, Apple or Amazon. The second one is the democratisation of the marketplace. Please, take this statement with a pinch of salt. What I mean is that in order to reach consumers is no longer needed to allocate big budgets in media and, thus, the barrier of entry
However, the Pharma industry doesn’t look like having changed so dramatically. If we took a peak to sales & marketing budgets 20 years ago and at present, there wouldn’t be a significant change. I’ve gathered the main reasons for this:
1- Product orientation
The product is king, period. The innovative pharma industry is focused on bringing new medicines to light, and after that, producing real-world data to endorse the adoption of that new medicine. I guess everybody will have heard the figure of $1 billion. This is supposed to be the cost of developing a new medicine, none of the Pharma company provides a detailed cost breakdown with the cost involved in R&D, though. Therefore, once a company has succeeded in its R&D efforts, it doesn’t sound sensible to try a totally different promotional strategy, such as to use only digital channels to sell its new product.
2- Reliance on Sales Reps
While access to physicians is a problem on the rise for Pharma reps, they are still the main link between companies and prescribers. They provide meaningful information with regard to the products are promoting, they engage with physicians, and they try to get the name of their products on the prescriptions that doctors will write down.
Clearly, the information regarding the product could be delivered using a number of non-personal channels but, taking into consideration that sometimes the differences among some products for the same pathology are very soft, the role of Pharma reps is beyond of providing just information. They ask prescribers if they’re using their product, they try to get a compromise that their product is going to be tested/widely adopted. In brief, they drive sales.
To replace traditional media channels by digital channels seems to be quite straightforward, but to replace a personal contact point looks like a huge endeavour.
The amount of data available in Pharma is unimaginable in other industries. Are you launching a new medicine and you want to know who the potential prescribers are? Then, give a call to
Facebook, LinkedIn or Google have changed the go-to-market in many industries because they make it easier to reach specific targets, but I can’t imagine a Pharma company using LinkedIn to identify and to target a particular prescribers segment.
4- Corporate vs Start-up
As described initially, many billions in sales depend on a handful of products for many Pharma companies. Every detail to market a product is planned well in advance, and there are as many SOPs as potential activities within Pharma companies. Decisions are made after many analysis, involving many departments and people, and hiring many consultants. It doesn´t seem to be the best breeding ground to the test and learn approach needed for innovatation. Contrarily to the start-up world, resources are not so scarce, but freedom of movement is.
Honestly, I guess it’s important to know what are the hurdles to come up with a solution. I definitely think there’s plenty of room to evolve the traditional promotional model in Pharma. No need to turn into buzzwords such as AI or blockchain, but to go back to the basis. I’ll discuss it on my following post. I’ll wait for you then!
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