Our cup runneth over…

February 6, 2009 – 5:00 pm by Joshua Slatko

At Med Ad News, we are constantly receiving white papers on all manner of subjects. Most of them, unfortunately, aren’t worth the white paper they’re written on – they are either shot through with meaningless buzzwords, poorly written, thinly disguised pitches for a product or service, or some combination of the above.

In the past two weeks, though, we’ve been particularly fortunate to receive two of the most interesting white papers I’ve seen in a while.

The first came from the consultants at Frost & Sullivan and explores the topic of online physician surveys, a tool that pharma market researchers are using more and more frequently to get quick and inexpensive insight straight from doctors. Apparently, though, not all the survey respondents are really doctors. The leader of the Frost white paper is particularly instructive:

“Ever wondered about the real identity of the nameless, faceless physicians who participate in those online ATU studies? What if they aren’t physicians at all? What if the survey respondent is actually a nurse who saw the survey invitation at the office fax machine? Or a retired physician trying to make a quick buck? Or worse still, some enterprising biology student who saw an opportunity? Ever wondered how these fake respondents could affect your study? “

The Frost analysts elaborate on this nightmare by exploring methods that vendors use to confirm the identities of survey participants, and the weaknesses of some of those methods. Before seeing their analysis, I hadn’t heard or thought much about the reliability of online physician surveys – and, apparently, I wasn’t alone. The Frost authors again:

“While most seasoned professionals in the pharmaceutical industry affirm that participant verification is crucial for the integrity of data collected from an online physician survey, they are largely unaware that it is one of the most neglected fields of inquiry. The relative security of an anonymous online survey, combined with the possibility of earning a significant amount of money, makes these surveys very attractive for someone looking for a way to make a quick buck. Yet most pharmaceutical market research managers are quite oblivious of the measures taken by physician panel vendors to ensure the identity of their respondents.”

For anyone involved in pharma market research, especially of the online physician variety, this is important reading. I’ll be going into more detail in an article in the e-Marketing section of Med Ad News‘ March issue. But if you just can’t wait and want your very own copy of the Frost white paper, e-mail Johanna Haynes at Frost – tell her who you are, what your title is, and what you do, and if she’s sufficiently impressed, she’ll send you a copy.

The second white paper came from Paul Jones and Jan Malek of Cisco IBSG Global Life Sciences. Mr. Jones and Mr. Malek make a radical proposal – that someday soon pharmaceutical pricing will be based on actual performance. Their words:

“Many medicines work for fewer than 50 percent of the patients who take them, but the pharmaceutical companies that manufacture them nevertheless get paid for every prescription filled. This model is about to change dramatically. We believe that in the future—driven by powerful demographic, sociological, and technology forces—many medicines will be reimbursed on the basis of the performance they deliver to different patient populations.”

The two authors go into considerable detail explaining why a long list of factors – including the growing availability of large-scale health-related databases, rising healthcare costs, increased expectations of effectiveness, the development of biomarkers, etc. – will drive pharma, kicking and screaming, to the future that they foresee, a future in which in medicines are reimbursed according to the outcomes they produce in individual patients. That future, though, will require a considerable investment in technology. The authors again:

“At the core is the virtual aggregation of real-life medical and outcome data from electronic medical records, remote monitoring devices, and other sources, along with the ability to correlate it with genetic, environmental, and behavioral factors … Establishing such an advanced infrastructure is not a simple task, but experience from other industries shows that it is possible. The financial services sector, for example, built a network of interlinked automated teller machines that enables customers to access their money across the globe, regardless of the institution with which they bank. Similarly, in the airline industry, global distribution systems are used to book and sell tickets on multiple airlines. The infrastructure required to improve healthcare is more advanced than either of these, but both examples point to what is possible.”

Apparently some insurers are already trying to push pharma in the direction of pay-for-performance pricing; the authors mention that Cigna is trying to work out a deal under which manufacturers of statins would pay the medical expenses of any patients who suffer heart attacks despite taking their medicines on a regular basis.

This argument doesn’t seem totally unreasonable to me. After all, if you buy a TV at Best Buy, take it home, and discover that it doesn’t work, you can return it and get your money back. I’m quite aware of the vast difference between appliances and pharmaceuticals … but the underlying point stands. And besides, the pricing power of payers will only grow as the cost and need for healthcare grows. As the authors say:

“(This shift) will take place whether pharma likes it or not, because healthcare payers—be they governments, insurers, employers, or patients—have strong financial incentives to ensure that it does.”

This is a fascinating read. With the authors’ permission, I’ve posted the entire paper online – to download a copy, click here.

Tags: Cisco IBSG, Frost & Sullivan, market research, pricing, white papers