The changing business model is the biggest issue marketers face, and the empowered patient (supported by DTC advertising and the Internet) is the new model’s most potent force. Combining incentives and CRM offers a potent mix for reaching the new patient in the emerging world.
How to Patch a Leaky Bucket
During old-model boom times, pharma was willing and able to live with leaky buckets. Blockbusters were providing such rapid and sustained revenue growth (water pouring into the bucket) that high Rx abandonment, poor compliance, and dismal adherence (water leaking out of the bucket) were not overly worrisome. But in today’s low-inflow environment, brand managers are working overtime to plug leaks wherever possible. High quality digital CRM + incentives are a proven part of the solution.
Successful biopharma marketers have always demonstrated strength under pressure. But even the most seasoned professionals find it difficult to simultaneously manage all the challenges facing our industry today:
- Brands with combined annual sales of over $130 billion will lose patent protection between now and 2016.
- New drug approvals are inadequate to refill the pipeline.
- Pricing pressure is ramping up.
- Regulatory burden and public scrutiny are increasing.
- Internet and mobile technologies are producing ever-more-empowered patients.
- Time-pressed physicians spend less and less time with pharma reps.
In fact, with so many issues in play, it’s difficult to determine which are just temporary inconveniences and which are permanently reshaping the landscape. In a recent Pharma Insights survey, biopharma executives were asked to identify their most pressing issue. The number one response? A plurality (35%) saw “changing commercial business models” as the most pressing issue they faced.
But what, exactly, is the business model changing from, and what is it changing to? The old model featured new blockbuster drugs in previously underserved primary care therapeutic categories (e.g., hypertension, dyslipidemia, GERD), massive sales forces, and extensive physician giveaways. As you’ve noticed, the old model is little more than a fond memory.
THE EMERGING BUSINESS MODEL
The new model has numerous facets, of course, and includes work on many fronts to deal with current marketplace realities: extreme merger and acquisitions activity, revised and refocused R&D, and better alternatives to in-person detailing, among others. And it will continue to focus on vital old-model customers: healthcare practitioners, managed-care gatekeepers, and payers of all types. But more than anything else, the new model is marked by one salient feature: patients are taking charge of their own healthcare. The indicators are everywhere: patient and patient-group blogs and wikis, patient focus on wellness vs. illness, patient self- diagnosis and self-treatment, patient-guided prescribing, and so on.
This movement toward patient empowerment has gained such momentum that experts are beginning to see it as a permanent structural shift. James Datin, managing director of the Life Sciences Group at Safeguard Scientifics, a life-sciences capital company, has looked back over the past 10 years to identify the most important events that have shifted the life-sciences industry. What does he see as most important? Not M&A mania, not healthcare insurance reform, not even the patent cliff. According to Datin, the two most important events are the rise of consumer advertising and the Internet’s effect on patients. It seems clear that at this point the question is not whether life sciences marketers will need to engage the empowered patient, but how they will engage the empowered patient.
BUILD PATIENT RELATIONSHIPS
The key, of course, is to move beyond the urge to “push a product” and instead find ways to build strong long-term relation- ships with patients—relationships that meet patients’ information needs through customized communication, help patients get and stay compliant, and deliver a bigger bang for the market- ing dollars invested (see sidebar, “How to Patch a Leaky Bucket”). But it’s not easy for pharma brands to develop positive relationships with patients. Why? In part, it’s because patients often view pharma companies with a skeptical eye. Let’s face it—patients don’t enjoy “taking their medicine.” They simply don’t have the same warm and fuzzy association with their blood pressure pills as they do with their new iPhones, favorite restaurants, or old college classmates. Therefore, pharma brand man- agers—especially those whose products treat asymptomatic or mild-symptom disorders—must work harder to persuade patients to connect with the brand.
To successfully bridge the relationship gap, brand managers should present patients with interaction opportunities that are really meaningful (think: patient-specific), really easy (think: online and mobile), and really worthwhile (think: financial incentives).
MAKE IT MEANINGFUL
Provide really meaningful interaction (think: patient-specific). Each patient has a unique set of concerns,
interests, and needs (CINs). A well-crafted, patient-centric website (mobile-optimized, of course) can give
patients an excellent on- demand repository to address common CINs, but it’s just a beginning. Patients will increasingly expect companies and brands to know their personal CINs—and their preferred communication channels—and build inter- action opportunities and pathways that successfully speak to them.
This granular customer relationship management (CRM) process—which is now beginning to emerge—includes multiple touch points that provide patients with customized insight, support, and tools that integrate the brand into the user’s lifestyle. In deference to new-found patient power, these interactions
are strictly informational, not hard-sell. Of course, new-model CRM programming will provide continuous, response-based refinement that will result in patient-specific interaction that becomes even more meaningful over time.
MAKE IT EASY
Provide really easy interaction (think: online and mobile). There is little doubt that new-model patient- centric CRM will be conducted primarily electronically, for three reasons. First, patients are using the Internet to search for health information in ever-increasing numbers. According to a 2010 Harris Poll, the number of U.S. “cyberchondriacs” has risen to a record 175 million. What’s more, frequency of use has also increased: in 2010, 32% of online adults looked for information “often,” compared with just 22% in the 2009 study. Second, only electronic interaction offers the necessary data-management capacity for refinement, ongoing tracking, analysis, and reporting. Third, digital interaction provides a low cost of operation that yields positive ROI. Ultimately, digital CRM is easier and more appealing than mail- or phone-based CRM, yielding higher opt-in and long-term participation rates.
MAKE IT WORTHWHILE
Provide really worthwhile interaction (think: financial incentives). Recent CRM innovations use proprietary technology to combine the educational benefits of traditional CRM programming with adherence incentive programs (such as vouchers and copay cards), thereby digitally connecting patients to the information, interactive support, and incentives they need to get and stay compliant. Digital CRM leverages the cost of copay support by teaching patients to “learn-and- earn”; copay support is tied to patients’ CRM participation. Digital offerings include refill reminders, surveys, video messages, event reminders, links, HCP visit reminders, etc.
These “digital CRM + incentive” programs reach patients with messages customized to and triggered by each customer’s unique behavior. Messaging can be tied to loyalty/incentive cards to provide on-the-fly adjustments as well as activity tracking and reporting. This allows brand teams to provide additional made-to-order assistance at compliance-critical times.
These advances provide a flexible mechanism for communicating new information clearly and making cost-effective adjustments along the way—all while helping patients overcome barriers and address the personal, economic, and social landscapes they face. When brand sponsors provide important information and incentives to patients at key decision points, they see increases in product trial, compliance, and persistency. This drives value for the customer, improves healthcare, and builds loyalty to the brand. As the use of customized CRM grows, some observers believe total biopharma CRM outlays could expand from about $300 million in 2010 to more than $800 million in 2014.
The value of having a clear understanding of a patient’s CINs and then implementing and optimizing a meaningful, easy, and worthwhile digital CRM + incentive program is demonstrated in the specialty- pharma case study (left).
The marketplace is changing…are you? Empowered patients are permanently shifting the pharmaceutical landscape. Those marketers who offer meaningful, easy, and worthwhile CRM + incentive programs—rooted in a keen understanding of patients’ CINs—will be able to most effectively and efficiently drive trial, compliance, and persistency for their brands. Recognizing and capitalizing on this shift will be the key to creating value for the patient, building loyalty for the brand, and improving healthcare going forward. Don’t be left behind holding a leaky bucket!
Loyalty Program at Launch
- A growing oral chronic-disease drug
- Second product launched in class
- Competitive market with many new entrants
Protect and grow market position by increasing usage and loyalty during competitive product launches.
Patients were invited to register online, and upon enrollment were immediately eligible to electronically receive extensive personalized education, interactive support, and copay incentives. A key goal was to pro- vide a convenient, easy-to-use program that addressed patients’ CINs and defrayed the cost of therapy while maintaining physician and patient good-will.
- 46,000 new patients enrolled (18.4% of targets).
- Enrollees filled an average of three (3) prescriptions.
- Cost to acquire a new patient was $13 per patient.
- Incremental revenue was $153 per patient.
- ROI (as calculated by the sponsor) was 11:1.