As pharmaceutical manufacturers face impending generic competition for some of their most valuable brands, they’re forced to make tough decisions about how to maximize profit during the drugs’ remaining months of exclusivity. Increasing profit, at this point, becomes a delicate balance between accelerating revenue growth and carefully managing expenditures.
Determining the optimal “not too soon” but “not too late” time to discontinue personal promotion is critical. Personal promotion plays a leading role in driving sales but comes at a high cost. Discontinuing it too soon before patent expiry can hinder revenue growth and attainment of revenue goals, but continuing it beyond the optimal point wastes precious resources needed to fuel the next generation of revenue-generating brands.
The strategy for determining when, and for whom, to eliminate personal promotion is best guided by a thorough analysis that includes four steps:
- Segmenting prescribers using meaningful metrics,
- Identifying whether there is a relationship between detailing and prescribing for each segment,
- Determining the impact personal promotion has on prescribing compared with other factors,
- Evaluating the level of risk and uncertainty in future months.
MEANINGFUL METRICS FOR PRESCRIBER SEGMENTATION
Experienced brand managers and market researchers are already familiar with customer segmentation and how understanding differences in the attributes and behaviors of target physicians can enhance the marketing strategies used to help grow the business. Secondary, quantitative data and primary research studies are typically used to build segments of physicians largely based on market or brand prescription volume and attitudes. Although important, these metrics don’t necessarily provide the level of detail needed for building a personal-promotion strategy or for determining drivers of physician behavior.
The best way to achieve deeper insights on physicians and their treatment behavior is by adding patient-centric metrics to segmentation models to get a view into the types of patients that doctors treat. The insight gained is enormous as it provides an understanding not only of the treating physicians, but of physicians in the context of the patient population that they manage.
Brand managers and market researchers should segment and analyze physicians based on different patient groups of importance (e.g., middle-age men, young adult women, patients 65 and older, middle-class Hispanic males, etc.). In some cases, market dynamics and prevalence will lead the way in identifying which patients are most important to a brand. In others, differences in treatment, persistency, or compliance may prove which patient groups are of most value.
Incorporating the patient view allows us to go further in understanding each segment. For high writers, we can segment by patient type. For instance, segments can be built such as high writers treating predominantly older patients vs. younger patients; high writers treating predominantly Asian patients vs. Hispanic patients; or high writers treating predominantly men vs. women.
In addition to aiding the determination of when to pull back on personal promotion, the results of such an analysis can strongly support the development of programs aimed at both physicians and patients. Especially once personal promotion is reduced, non-personal promotion programs can benefit from this level of specificity and make messages more relevant to physicians. Having well-defined segments of reasonable sizes allows the rest of the analysis to become truly actionable.
THE ANALYTICAL FRAMEWORK
Once physician segments are defined, each group is analyzed individually, as the results for each likely will be different. There is a logical flow that begins with establishing whether or not there is a meaningful relationship between physician prescribing and personal detailing by pharmaceutical sales representatives. From that point forward, statistical and mathematical techniques help tease out the insights required to carefully make decisions about discontinuing personal promotion. A full examination of the framework and its many moving parts reveals this to be a dynamic and fluid business challenge, demanding thorough investigation. (See Figure 1)
THE IMPACT OF PERSONAL PROMOTION
The analysis begins by establishing whether or not a meaningful relationship exists between physician prescribing and personal detailing. For some segments, there may not appear to be a clear relationship between the level of personal promotion and the level of brand prescribing; for others, the relationship is strong.
It is essential to thoroughly analyze the “true” relationship between physician prescribing and personal detailing for each segment. To determine the impact that detailing has on prescribing, regression analysis can be used to control for the impact of all other factors. Determining the impact of detailing is complex and includes related factors, such as promotion carryover, brand equity, and brand halo effect, which can also influence prescribing. (See Figure 2)
In general, sales representatives’ calls on physicians have the greatest positive impact on prescribing during the launch and growth phases of a product’s life cycle. Over time, as physicians’ familiarity increases and the product matures, the impact of each individual detail on prescribing decreases. By the time decisions are being made about whether or not to discontinue personal promotion, products are mature and the impact of each detail is generally comparatively low. While this trend is fairly consistent across markets and brands, the impact that detailing has varies among physician groups, with some segments differing greatly.
In addition, an analysis of other marketing tactics and their impact on prescribing should be conducted for comparison. Determining how the impact of detailing compares with the impact of non-personal promotion, advertising, and other programs will help inform the final decision regarding the discontinuation of personal promotion.
THE UNCERTAINTY OF THE FUTURE
The final piece of the analytical flow involves forecasting the level of uncertainty in the future. Knowing what conditions may change, such as introduction of generics or managed care coverage improvements, and how likely they are to occur, will help brand teams evaluate when or if discontinuation of personal promotion is too risky. Depending on the potential changes, the future could bring a more perilous—or more advantageous—environment in which to compete.
Once the analysis is complete, the next step is to evaluate and decide for each segment the best time relative to patent expiry to terminate personal promotion: early (18 to 36 months before expiry), mid-range (6 to 12 months before expiry), or late (1 to 3 months before expiry).
Each part of the analysis plays a role in these decisions. For instance, if personal promotion and prescribing have no clear relationship, it is easier to eliminate detailing for that segment of physicians. If a relationship exists for another segment of physicians and personal promotion has more impact than other tactics, the team likely will decide to maintain detailing. A future fraught with a high level of risk also would lead most teams to maintain their detailing levels for fear of losing potential prescriptions.
Maximizing the value of a brand is imperative for manufacturers as the inevitable patent cliff approaches. Key products have delivered tremendous financial performance that brand teams don’t want to cut short by discontinuing personal promotion too soon. Using a robust, comprehensive, and analytically sound approach to manage the delicate balance between stopping personal promotion too soon and too late requires skill, knowledge, and expertise. The analytic framework is complex, but the methods used within the framework are tried and tested. The innovation in the “equation” is the strategic use of patient-level data to segment physicians into more meaningful groups.