Just a few years ago, pharmaceuticals companies could launch mainstream drugs with greater ease. With just one or two blockbuster releases – a Lipitor, Plavix or Advair, for instance – pharmas could drive billions in sales with 70% to 80% margins, says Scott Rose, assistant vice-president within Cognizant's Life Sciences business unit. Life was pretty good.
Today, however, the commercial model for branded medicine has changed dramatically. Several forces are behind this shift:
1. The market for symptom resolution drugs is saturated, which is why 95% of common medical problems like high cholesterol, diabetes and high blood pressure are now treated with generic prescriptions.
2. With most of the low-hanging fruit gone, it's a lot more expensive to research and develop blockbuster drugs in the current environment.
3. With the shift from private practice to health systems, the sales force's access to physicians is more limited now. In other words, the traditional, single-channel approach to working with doctors has largely run its course.
For many life sciences companies, the answer is to develop smaller, niche or otherwise specialty drugs with subscriber populations in the 400 million to 500 million range, as opposed to billions. Rather than volume, most believe, money will be made on faster turnaround, better anticipation of demand (through social media participation, among other approaches) and a better customer experience (through experience-enhancing apps and devices for patients and providers).
The key to this new approach is data and the digitization of sales and marketing processes. The more that life sciences companies can learn about patient populations' needs and behaviors, the better they can target their efforts, both in drug development and marketing outreach. In particular, leading life sciences companies are considering "digi-social" approaches to gauge the pulse of the marketplace, such as through a social media command center. However, uncertainty surrounds the use of the intelligence that can be gathered; for example, if patients start complaining about drug side-effects (such as a rash) on social media, does the drug maker need to report those findings to the Federal Drug Administration (FDA)? Even more than financial markets, life sciences companies are subject to stricter regulations concerning data privacy, which has slowed their adoption of social media marketing.
At the same time, the rise of Code Halo thinking (i.e., understanding individual demand through digital behaviors) is making data more actionable than ever, says Will Reese, chief innovation officer at Cadient Group, a Cognizant subsidiary that advises pharma companies on digital marketing strategies. This approach, for example, helped make AbbVie's Humira one of the best-selling drugs in the world, he says. By collecting and sharing real-world patient evidence with relevant providers and stakeholders, the company was able to broaden use cases and adoption. In that sense, the future belongs to companies that can collect and derive meaning from the ever increasing volumes of social, Web, app, public and other digital data.
To capture and make meaning from that data, however, many life sciences organizations need to improve their approach to digital customer interactions and the infrastructure that powers them, experts say. For example, companies with disparate patient touchpoints (e.g., multiple Web sites, apps and service centers) are challenged to consolidate all the data into a single dashboard that enables decision-makers to quickly view trends and derive insights. This is an area in which life sciences organizations have found analytics success. By analyzing which channels patients use most, pharmas have been able to prioritize their digital marketing efforts and predict positive outcomes.
To that end, one life sciences company worked with Cognizant to train its global workforce on multi-channel digital marketing, as well as to deploy systems such as customer relationship management for business-to-business sales.
Another client, one of the world's largest healthcare companies, worked with Cognizant to optimize its processes and deploy platform software to reduce time to market by 35%, cut annual operating costs by $3 million and turbo-charge the production of its digital assets in just 18 months. These benefits were largely achieved through forward-thinking programs, faster approval processes and modern data warehousing technology.
"Digital" seems to be the answer to everybody's sales and marketing challenges these days and pharmaceuticals companies are no exception. Adopting new digital assets has gotten easier in the industry with the proliferation of physician iPads and online-accessible patient records. Educational workshops and patient empowerment tools are also coming into play to raise satisfaction and loyalty.
But the real solution is in how you apply such a broad but powerful force to your specific operations. Digital is transforming how life sciences organizations serve the customer, which often means bypassing the physician completely. Instead of just selling drugs, digital will force pharmas to become more focused on customer-centricity, health outcomes and quality of life.
When that happens, operations change for the better. Channels take care of themselves. And the brave new world doesn't seem as daunting as it did before.
To learn more, visit Cognizant Life Sciences.