The product manager of 2017 really doesn’t know what to expect from our current president, is dealing with chaos in the insurance market, and is worried about increased pressure on drug pricing. Many, understandably, don’t have a clear picture of what our healthcare system will even look like as they wait on any potential reform. And yet, despite all of that, today’s product manager is feeling pretty good.
The average salary of our respondents increased by 12%, slightly more marketers received a budget increase from last year (36%) compared to a budget cut (35%), and the number of respondents who have been with their current employer for six or more years increased by 15%. Even better, 7% more of respondents reported high satisfaction levels with their current position overall. Who wouldn’t be happier with more money in their back account, extra funds to do their job, and a stable position with their long-term employer. These are all dream-come-true factors for any marketer.
Today’s product manager is also all about digital. Not only is more money from a marketer’s budget now allocated to digital media channels, but respondents are also far more confident in their efforts in the space. The number of respondents willing to rate their brand’s digital marketing efforts as a competitive advantage has increased 24% compared to last year. Furthermore, 58% of marketers rate a digital channel as the best source of ROI for their brands.
So, yes, 18% of respondents report having no clue as to what Trump will do in the healthcare space. Another 13% feel his actions will hurt the industry, while only 8% feel his impact will be positive. But that is not yet altering product managers’ positive outlooks. They feel good about their successes over the past year. Plus, they are used to uncertainty. They know how to adjust and come out the better for it. The product manager of 2017 is ready for anything.
As always, PM360 would like to thank all of the people who took time out their busy schedules to complete this survey. You can see a list of respondents’ companies in the tab below. This comprehensive survey was conducted online by Litchfield Research, an independent research firm based in Atlanta, GA, between April and June of 2017. The analysis provided on the following pages should offer you a view into the job today’s product manager tackles, the challenges they face, and what is important to them now and in the future.
As in past years, the majority of our respondents hail from the pharma industry (67%). In fact, the industry breakdown lines up very closely to prior years, with a lone aberration in 2015 when we received a bit more responses from those working in medical device (19% that year, compared to 11% this year.) The rest of our respondents work in biotech (17%). Also similar, though harder to judge in a direct comparison to past years, is the size of the company in which our respondents work. This year, rather than ask about the size of their company by ranking (One of the Top 10, Next 10 Biggest, 21-50 Next Biggest, Boutique), we provided respondents with a range of the number of global employees to choose from in order to better judge the size of the company (Figure 1). This should provide a less subjective opinion of company size moving forward. Still, we found that most respondents work at a large company as 54% hold positions at a company with more than 10,000 global employees. Meanwhile, 30% work at a mid-size company (2,000 to 10,000 employees) and 16% work at a small company (less than 2,000 employees).
The amount of experience that our respondents report also lines up very closely with recent years. Overall, respondents have worked an average of 17 years in the industry—the same number reported last year. The difference, however, seems to lie in the highest role they achieved in these 17 years. While last year we received responses from several C-suite executives, including some CEOs, the highest level of employees responding this year held titles such as President, General Manager, Senior Director, or Senior Manager. Keep in mind, that isn’t a bad thing. After all, this survey’s target was those who work in marketing roles at life sciences companies. Overall, respondents included 43% Directors, 25% Senior-level Managers, 21% VPs, and 11% Product-level Managers.
A more significant difference compared to recent years: The level of stability respondents enjoy at their current company (Figure 2). In 2016, 54% of respondents had only worked with their current employer for five years or less. That was similar to 2015 when 49% of respondents reported the same range. This year, that drops down to 38%, which is on par with findings in 2014. In previous years, we speculated that the drop in average years employees spent with their company was due to the rise in M&As and the constant turnover seen in this industry. So perhaps, things have calmed a bit down recently. Or most of this year’s respondents just proved too invaluable to let go.
Despite fewer C-suite executives weighing in than last year, the average salary of respondents actually increased quite a bit. Last year, the average salary was $150,352 compared to $153,200 in 2015 and $155,000 in 2014. This year it is $171,400. One obvious reason—more respondents then ever before noted that they make more than $200,000 (Figure 3). We also received the most “prefer not to answers,” so it is likely that affected the average salary reported as well. But the fact that people are with their current employer for longer periods of time could also play a role as the average salary is the highest it has been since 2014, when respondents also reported staying with their employers longer. Companies may be rewarding their employees with raises that help push up the average salary, rather than respondents needing to prove their worth at a new company or needing to accept a lower role elsewhere due to layoffs. Another explanation: The increase in respondents in Senior- or Director-level positions compared to Product Managers helped to increase the reported salary levels. That would help to explain the record low number of respondents making less than $100,000.
As always, we asked respondents to rate their satisfaction levels for several factors that can affect their jobs on a scale of 7 (very satisfied) to 1 (unsatisfied). And one of the trends we found true last year, continues to be true this year: Respondents are just not as happy with their brand teams (Figure 4). Prior to 2016, about half of all respondents typically rated their brand teams highly (a score of a 6 or 7) each year, but only 39% did so this year and 37% in 2016. One positive note, only 4% were truly dissatisfied with their team (a score of 3 or lower)—compared to 18% last year. Respondents are also feeling a bit more frustrated with their company’s internal regulatory environment—26% gave it a low score compared to 18% last year.
On a more positive note, respondents are happier overall with their current position: 62% rated it highly versus 55% in 2016. Not surprisingly, they are also less dissatisfied with the salaries: Only 5% gave it a negative rating compared to 14% last year. However, bad news lies with the vendors serving the industry: Respondents are a bit less pleased with the work they provide. Only 33% gave a positive rating to their vendors versus 37% the previous year. Specifically, product managers would like their industry partners to be better at ideation (41%), research (24%), presentations (13%), and selling (8%).
For all the talk around how the presidential election would affect our industry, so far the impact has not lived up to expectations. Every year we ask our respondents to rate the factors that had the most impact on the industry in the past year, as well as to forecast the expected impact in the year ahead (Figure 5). We provide respondents with a list of 10 potential factors, including “Other,” and ask them to provide a score for each one so that their tally ultimately equals 100. We then average their scores for each category. Last year’s group forecasted an impact from the Political Environment of 21—keep in mind that was before we knew the election results. But ultimately, even after Trump’s first 100 days in office, this year’s respondents only rated the political impact to be 17, which is about the same as past respondents scored it during Obama’s final years in office.
Furthermore, respondents don’t seem too concerned with the Political Environment to come in 2018 as they forecast a score of 19 for the year ahead. It should be noted that this survey was conducted during the period in which the House passed the American Health Care Act and sent it to Senate, so healthcare reform was still in play, even though many doubted at the time the Senate would pass anything (which so far has turned out to be true, despite a couple of attempts). What respondents do seem concerned with is the Payer Landscape, as that received the top score for 2017 at 25 and the largest forecasted score at 28. And those scores very well could be influenced by the uncertainly surrounding healthcare reform at the time of this survey, as any reform would impact the payers and market access for products. If you are interested in a deeper dive into how respondents feel Trump’s administration will affect the healthcare industry then you won’t have to look further than the next page, but before we get there let’s look at some of the other factors respondents rated.
Biosimilars, much like the political environment, has been all talk and little impact. Much has been written about how biosimilars could affect branded products, but to this point the FDA has only approved five biosimilar products—and two of those were for the same brand—so very few brands have been influenced. So, despite 2016’s respondents forecasting an impact of 10, it is not surprising that the actual effect respondents felt due to biosimilars was only a 4. Of course, our respondents once again forecast an impact of 10 for biosimilars, so they still expect these medications to affect their brands at some point.
Another interesting trend we have seen over the past few years is a decline of the impact from the Regulatory Environment. What was once one of the biggest factors impacting the industry has become less of an influence over the years. And respondents also expect that decline to continue, even if just minimally, as they predict a rating of 16 for 2018 compared to 17 for 2017. Part of that could be attributed to the rise of payer power, as product managers have become more hampered by market access issues than regulatory ones.
The Trump Effect
Other than the fact that a plurality of respondents expects Trump to tackle the issue of drug pricing at some point, much of them don’t know what to expect from his administration when it comes to healthcare (Figure 6). Or as one respondent put it, “Who knows—that’s the problem.” And that was someone willing to put it kindly. Another said, “The only thing he has proven is that he is totally unpredictable and incompetent.” While one respondent is clearly not a fan of the President’s tweets, “He is all over the place and does not appear to think through the entire process before he fires off executive orders or tweets.”
For those respondents who feel up to making an educated guess about what might happen under Trump, more feel that his impact will be negative (13%) than it will be positive (8%). But a slightly larger percent (14% to be exact) said that he will have little to no impact. One even predicted, “I don’t expect he’ll last long enough to cause lasting damage.” And another is “hoping he’ll be impeached before then.”
For those who feel Trump’s impact will be negative, a lot of that has to do with the pressure he may apply to lowering drug prices. One respondent said that Trump will “stifle investment in R&D if pricing controls are put in place.” That respondent also added, “I was very surprised how ‘Democrat-like’ his viewpoints are for our industry.” Another negative effect mentioned by a respondent: “His political tact is increasingly isolating him, his staff, and his policies from key stakeholders and influencers needed to provide a truly improved healthcare reform bill. This will reduce confidence in the current state and reduce healthcare investment.” Meanwhile, another respondent felt that the fact he was trying to change the ACA would be detrimental to healthcare. So, respondents’ political leanings, or just their feelings about the ACA, seem to influence their opinion of how Trump would help or hurt healthcare. Respondents are also worried about issues beyond healthcare reform. One said, “I feel like his rhetoric will only strengthen the public’s hate for the pharma industry.”
It’s not all doom and gloom, though. Some respondents feel like Trump will ultimately help the industry, citing deregulation and quicker drug approvals that get safe medications to patients faster as a big reason why. Respondents also feel Trump’s tactics will help domestic business as “his administration should make it easier for U.S.-based companies to compete and keep jobs and tax dollars in the U.S. in lieu of sending them to Europe.” To add to that, another respondent mentioned how he “may lessen regulation on company mergers and international domiciles to reduce corporate taxes.” Additionally, that same respondent said that “no ACA may open more competition across health plans.”
But respondents felt the uncertainty surrounding healthcare reform—at the time of the survey—was hurting the industry. One respondent described “chaos in the insurance market” while another feared the pricing issues that are creating so much attention will cause providers and associations to take pause and develop a growing reluctance to partner with the industry. Finally, one respondent warned that “Trump may benefit shareholders short-term with promises of deregulation, but long-term, he’ll hurt the industry because his administration will cause global chaos and uncertainty.”
In addition to the decline of impact from the Regulatory Environment, we have also seen concern over the Product Pipeline wane over the past few years. One reason: The number of new products that our respondents are working on has continued to increase over the past three years (Figure 7). In 2015, half of respondents were working on brands somewhere between pre-launch and less than two years on the market. That number rose to 53% last year, which was a record high for our survey. That record did not last long—60% of respondents report working on brands that are either new or still in pre-launch. Of course, that also means that we have a new record low for the number of respondents with brands either mid-cycle or preparing to go generic. Only 40% of respondents’ brands have been on the market three years or longer—the previous low was 47%.
Overall, marketers are feeling much more confident in how their brand stacks up against their competition. On a scale of 7 (very competitive) to 1 (not competitive), 67% of respondents rated their brand’s competitiveness as a 6 or 7. That is a big increase from the 57% who felt confident last year, but it matches what we saw in 2015.
That regained confidence has also translated into more positive feelings about the competitiveness of individual brand attributes, which we asked respondents to rate on that same 7 to 1 scale. We found that respondents are rating attributes as stronger compared to 2016—almost across the board (Figure 8). For instance, Clinical Profile has always rated highly, but only 59% rated it as a 6 or 7 last year and 64% did the same in 2015. This year, 88% of respondents gave it a high score, which is the highest it has ever been. Also, confidence in Digital Media is way up from 21% rating it as competitive in 2016 to 45% this year. The previous survey high was 29% in 2015. So perhaps marketers are finally feeling comfortable in the digital space and in their ability to achieve what they want without being limited by regulations.
Speaking of regulations, that is the one area where marketers feel far less confident. Only 33% rated their company’s regulatory environment as a competitive advantage for their brand versus 40% last year. Additionally, sales force support also took a hit, though much smaller, as 34% vs. 36% gave it high marks.
For three years running, the average marketing budgets of our respondents has increased, and this year has been the highest yet—although there is one caveat. For this survey, we added another tier to our marketing budgets—giving respondents the choice of budgets over $100 million (Figure 9). In the past, we capped budgets at $100 million, but that limit felt small in this day and age. So, that added tier played a role in getting a median respondent budget of $27.1 million, which is a significant increase from $19.6 million in 2016. Still, we now have 26% of marketers reporting a budget higher than $40 million, which is an increase of 10% from last year—even if they weren’t given the choice of budgets above $100 million. Additionally, we added a lower tier not reflected in the graphic. Instead of a budget range of less than $5 million, we split it into “less than $2 million” and “between $2 and $5 million,” in order to get a better idea of marketers who are working with smaller budgets. We will continue to monitor that moving forward, but this year, we had 18% of marketers with budgets under $2 million.
As a result of higher budgets overall, more than half of respondents (51%) feel their budget is enough to adequately market their brand—the highest that number has been since 2013 when it was also just a hair over half. And more of that budget is going towards Digital Media than ever before (Figure 10). While we adjusted the categories that we ask marketers about in terms of how they allocate their marketing dollars, we did find that Digital Media is receiving a larger piece of the pie—5% more of the budget is going to digital compared to last year.
In terms of who marketers want to reach, an average of 45% of their budget is devoted to getting the attention of physicians in 2017 (Figure 11). When we asked marketers the same question last year, they also reported approximately 40% of their budget was dedicated to physician outreach in both their 2016 and 2017 marketing plans. The biggest different between this year’s respondents and last is the amount devoted to payers. Last year, respondents planned to target payers using 20% of their 2017 marketing budgets, but this year’s respondents only put 15% toward payers in 2017, and plan to cut that down to 13% next year. Given the uncertainty of the payer environment, whether healthcare reform comes or not, marketers may be adjusting their plans until things are more sorted out.
The good news: More respondents said their budgets increased rather than decreased from the previous year. The less than good but still positive news: It was only a 1% difference. Overall, 36% got more money for marketing while 35% got their budgets cut. Meanwhile, the remaining 29% simply saw no change to their budget from year to year.
To get a better idea of how marketers change their approach when dealing with more or less money, we asked them to choose which one channel they would cut or add to following their shift in budget. In prior surveys, we allowed marketers to make multiple selections, but we wanted to see if this created a clearer trend of what channels marketers prioritize when forced to make tough choices.
When it comes to making cuts following a budget slash, DTC and Personal Promotion took the biggest hits (Figure 12). Agency Promotion, a newly added category to the survey, also didn’t fare well. One very important thing to keep in mind, however—marketers are already devoting a lot of money to these areas, so it is easier to cut there, rather than areas like Phase IV Studies, which only got 4% of a marketer’s total budget in the first place. Some respondents avoided choosing just one channel, instead opting for “Other” and writing in “all of the above.” Touché, respondents, we get your point. Though interestingly, one wrote in “all of the above, expect digital,” so that clearly reveals his priority.
And digital was certainly a priority for a lot more marketers, especially those who were given more money (Figure 13). The plurality of respondents (22%) choose to put their extra cash into Digital Media. The next closest channel was DTC at 16%, which supports the point that when marketers are able to invest in DTC, they will. The same is true for Personal Promotion as well as Non-Personal Promotion and Patient Education, as each were given budget bumps by 13% of marketers. Analytics and Measurement, another newly added category, also got some love from 9% of marketers. That was also an area that the marketers who saw their budgets cut were reluctant to take money away from, so marketers must see value in that—even if only 8% of their total budgets are devoted to it. Meanwhile, CME continues to get no love from marketers with 0% wanting to throw any extra money into continuing education programs for physicians. Industry support in CME has been in sharp decline over the past few years as transparency has increased under Open Payments and the 21st Century Cures Act, which require the disclosure of physician payments from industry.
Of course, some respondents also used “Other” here to choose multiple options such as “personal and non-personal promotion.” But one went off the board and choose to put his extra dollars towards “planning.”
Return on investment (ROI) is still the leading factor marketers use to determine which channels to invest in (Figure 14). Once again, we asked the question slightly differently this year as compared to last year. Instead of letting respondents make multiple selections, we asked them to choose only one reason why they make certain channel selections. That is why the numbers from this year and last can’t be used as direct comparisons. However, in both years, ROI and Market Research were the number one and two reasons, so it would be fair to say that is the information marketers most rely on.
One difference between this year and last: More of the 2016 respondents, perhaps because they could choose multiple reasons, said the “Potential to Reach a New Segment” was another leading reason behind their decision-making. This year, only 19% said that factor influenced their choices, which tied with “Worked for a Previous Brand.” Whether they could make multiple selections or not, neither this year’s respondents nor last year’s respondents are likely to invest in a channel because it is a “Hot New Trend.” Only 3% of respondents base their decision on that factor. The remaining respondents wrote-in their own answers, and mostly focused their decisions based on customer insights or the ability to target specific customers.
Since ROI was the leading answer provided last year, we decided to add a new question asking respondents which channel they feel offers the best ROI. Keeping with the theme, we only let marketers choose one channel. And the top choice: Digital Ads (Figure 15). At only 19%, it is certainly no majority, but that wasn’t the only form of digital marketing that respondents picked. Product Website and Mobile tied for second with 14% and Social Media wasn’t far behind with 11%. When you add all of that up, you do get a majority (58%), so digital channels are where marketers are turning when they want more bang for their buck.
More traditional channels such as TV (6%) and Medical Journal Print Ads (9%) ranked lower, but it is still hard to imagine marketers investing less in those channels as a result of these findings. In fact, the reason they invest so much on these channels is to provide a more broad-shot marketing approach to reach a wider audience, which is likely to result in a lower ROI. Digital channels, as well as Point of Care, offer marketers the ability to better target customers when they are researching healthcare or are making healthcare decisions, which is likely to result in more engagement with their marketing campaigns.
Some respondents also wrote-in other channels that we didn’t list, but that they felt offered a better ROI. That list included CRM, emails, field samples, programmatic, reps, reverse expos, SEM, and unbranded disease/therapy website.
Another new question we added this year: What percent of respondents’ budgets were devoted to Print, TV, and Digital? We wanted to get an idea of which channels, at the very basic level, make up the majority of a marketer’s budget. Furthermore, we asked them to tell us how much of their budgets they invested in those channels last year, this year, and expect to next year. In all three cases, Digital got the largest piece of the pie, though not by much (Figure 16).
When it comes to where marketers are investing their money within the digital channel, it is fairly similar to last year (Figure 17). There are some differences, such as a decrease in those spending for their Product Website (20% vs. 28%), an increase in those using Marketing Automation (13% vs. 9%), and a decrease in those relying on Native Advertising/Sponsored Content (6% vs. 14%). And the only difference between this year’s question and last year’s is that we allowed respondents to write-in their own answers as well. But since they could make multiple selections, it doesn’t account for the changes we are seeing in these three areas.
The fact that less are investing in their product websites is a little odd considering the number of respondents who report their brand.coms providing a strong ROI. But it is less surprising to see marketing automation, such as ad exchanges and programmatic buying, becoming more popular as pharma starts to catch up to other industries. In terms of the “Other” write-ins, two of the most popular were disease websites (so perhaps marketers are putting more into their unbranded efforts rather than their brand.com sites) and lead generation.
To get a better idea of what sites marketers are using to place their digital ads or native advertising, we asked marketers to choose their favorite online website/digital publishers for their brands (Figure 18). And yes, we changed things up again by only letting them select one. So, the figures would look different from last year’s findings if you compared the numbers, but the results remain the same. WebMD, Medscape, Epocrates, and Everyday Health still rank as the top four sites, respectively. As for the write-ins, Doximity was mentioned by several respondents while a smaller handful mentioned specialty medical journals or other websites serving specialty medical information.
What’s on the Horizon
While some marketers continue to insist social media is “new,” it is actually not this year’s hottest trend, which makes it only the second time in the history of this survey that something was mentioned more than social media. That honor belongs to virtual and augmented reality (Figure 19). Combined, VR and AR were anointed as this year’s hottest trend by 16% of respondents, but if you want to treat them separately—and it is fair if you do since they are different mediums—then VR comes out way in front. VR was mentioned by 14% compared to just 2% for AR. But one of the respondents who brought up AR was very specific—pointing to the Layer app as something to watch. Respondents also occasionally got a bit more specific as to what they see as potential uses for VR. For example, one mentioned the rise of virtual trade shows, while another just mentioned creating 360° videos.
Despite VR/AR overtaking social media, it was only by a slim margin, so that remains a popular answer for respondents even if at this point it just seems to be an automatic response for some marketers when asked about new trends. But one respondent did go a little deeper into where the best opportunity in social lies: “I think if you have the staff for it, social condition communities (naturally occurring) are the best place to be.”
Other somewhat popular responses were programmatic and marketing automation, with one respondent adding, “marketing automation is not new, but there is still a lot of innovation happening in that space.” Wearables was also brought up by a fair number of respondents, with one saying the real trend will be “pairing products with other offerings such as companion diagnostics or wearables.” And digital marketing and digital health also garnered some recognition among respondents, although nothing was mentioned except for the very basics in those spaces.
As always, some of the most interesting answers are the one-offs that only a single respondent names as something worth watching. This year that includes, “bolt-on” programs through EHR; DTC using Internet of Things; proclivity (following HCPs around the Internet to serve up personalized content); targeted, dark post advertising on Facebook; and disruption at the pharmacy benefit manager (PBM) level. For that last one, PM360 published an article in last month’s issue on that very subject (http://bit.ly/2vtMWdA). It deals with how PBMs may start relying less on exclusions lists and how they need to adapt a new business model. It is hard to say if that is what that respondent meant by disruption at the PBM level, but it is certainly one way that disruption is occurring.
And, of course, we have a few respondents who simply claim that there are no new trends emerging in this industry. It is not exactly the response we are looking for, but at times it is hard to argue with them. However, one of PM360 staff members’ favorite responses this year, for what it’s worth: “Face to Face (old school).” After all, real human interaction never goes out of style.
Maybe the reason social media remains a “hot new trend” for our respondents is that fewer are using it for marketing purposes, and some are still waiting or unable to enter the space. The number of respondents who are not using any form of social for their brands increased 9% over a year ago (Figure 20). Furthermore, the use of individual social channels decreased almost entirely across the board, with only Pinterest seeing a small bump in use from 2% to 4%. Otherwise, Facebook decreased by 4%; YouTube by 15%; Twitter by 11%; SERMO by 7%; LinkedIn by 10%; Google+ by 8%; Instagram by 3%; and Blogs by 10%. That continues the trend we saw last year with several channels losing steam among marketers, though this year the declines in use are more drastic. In particular, Twitter and YouTube have seen sharp declines since 2015 when about half of respondents were using both of those channels. It is possible that marketers just didn’t see much ROI on their efforts in previous years, which lead to lower use, but that is just speculation. We only started tracking ROI by channel this year, and social came in at 11% of respondents who feel their efforts in the space paid dividends. We will keep an eye on how that number changes moving forward and whether it correlates to social media use.
Finally, we come to our last question, which we also changed a bit from last year. While we asked about novel marketing opportunities last year, we added a limitation to this year’s version. We were specifically interested in learning about marketers who are using these channels for the first time ever this year (Figure 21). When we asked the question last year, we just wanted to know if they were planning to use any of these channels over the course of 2016 or 2017. This way we can see which of these channels are truly new for our respondents. For example, we found that 23% of respondents are just getting into Content Marketing, 16% are now exploring mHealth, 14% are going to test the waters of programmatic buying, and 11% want to get into VR—this year’s No. 1 new trend. We also had one respondent tell us that “none of these are entirely new,” which is a fair point. However, someone also wrote in “social media,” proving that marketers in this industry can move a little slower compared to those in other industries. But that is also nothing new.
Thanks To Our Respondents From These Companies
Astellas Pharma US
Braun Medical Inc.
Bayer Consumer Care
Biogen Idec, Inc.
Braintree Laboratories, Inc.
Breckenridge Pharmaceutical, Inc.
DePuy Synthes Joint Reconstruction
Eli Lilly and Company
FemmePharma Global Healthcare
Fresenius Medical Care North America
Horizon Pharma, Inc.
Innominata dba GenBio
InterMetro Industries Corporation
Kowa Pharmaceuticals America
Lifemed of California
Sandoz, a Novartis Co.
Sunovion Pharmaceuticals, Inc.
Takeda Pharmaceuticals U.S.A., Inc.
Teleflex Medical OEM