Live from Plainsboro
September 24, 2009 – 3:24 pm by Joshua SlatkoThis morning I spent a couple of hours at PharmaMed, Med Ad News’ annual marketing and media conference, hosted at the lovely Wyndham Princeton Forrestal in Plainsboro, New Jersey. Thusly, a little live blogging…
9:15AM: Leading off the morning’s activities is Stan Bernard, president of the tastefully named Bernard Associates, a pharma/healthcare consulting company, and former big fish at Bristol-Myers Squibb. Title of presentation: The Pharma Survivor Game: Swim with Competitors without Being Eaten Alive. Mr. Bernard seems to be the high energy type; he kicks off with, “Are you fired up? Are you excited?”
9:16: The bit about being eaten alive in the title was no joke. According to Mr. Bernard, there are three possible outcomes for pharmaceutical marketers: “You can be a shark (gobble up competitors and market share), you can be shark-proof, or you can be shark bait.” My feeling is that in this circumstance, being shark-proof is just a slightly slower version of being shark bait, but the point is well made.
9:17: The audience participation segment begins – a multiple choice game called “Pharma Survivor.” Mr. Bernard: “Good news: The questions are easier than Jeopardy. Bad news: You don’t win anything. These questions have not been reviewed by regulatory or legal.” Gets a laugh out of the crowd.
9:18: First question – “Which of the following best describes the primary diagnosis of the U.S. Pharma industry?” And he lists a couple of options, including “selectile dysfunction,” the lack of ability to choose the right compounds. The winner is, “Classic middle age.” Mr. Bernard discusses the four stages of industry development – commencement, commercialization, competition, commoditization. Apparently in the late 1990s pharma passed from the high-growth phase of commercialization into the competition phase, characterized by intense cost pressures, higher R&D costs, fewer new products, and falling prices. This is normal and to be expected, not a sign of the apocalypse.
9:25: This shift of phase means that the game has changed. Mr. Bernard: “We’ve moved from playing golf, or a friendly competition where everyone won, to contact sports.”
9:26: Next question: “Which of the following is the single best indicator that the U.S. pharma industry has reached the competitive stage of its lifecycle?” And the winner: single digit growth rates. Life cycle stages are based on growth rates, and the growth rate of the pharma industry has been leveling off for years now.
9:31: “Anyone know what the growth rate will be this year in the U.S.? Negative one percent. Would have been zero, but for the recession.” Ouch. At least we’re doing better than real estate agents.
9:32: “With less growth, the way you get sales is to steal from your competitors.” If you thought that companies were competitive 15 years ago, now things are getting positively bloody.
9:34: Mr. Bernard gives the audience a quote - “The way I see it, if and when it is approved, Effient will be a niche product … there are three important subgroups of patients that seem to derive either net harm or no clinical advantages” – and asks who said it (Effient is a cardio drug marketed by Daiichi Sankyo and Eli Lilly). Surprise answer: Lamberto Andreotti, then COO and now president, Bristol-Myers Squibb.
9:37: Why is this surprising? Because BMS has historically avoided speaking to the press and analysts not least about a competitor’s product that hasn’t even been approved yet. “This is very, very unusual behavior, reflecting a new aggressiveness …”
9:38: According to Mr. Bernard, BMS clearly had a “counter-launch” strategy – something that the industry is going to do more and more effectively in the future. “You don’t want a new product coming into your little market pond, because the pond isn’t going to get bigger. And the best time to attack a new product is before it’s launched.”
9:39: Why? “Instead of letting a competitor position its new product themselves, you position it for them – and the competitor can’t talk about their product before it’s approved.”
9:44: Apparently, due to the acquisition of Genentech, Roche is expected to hold 38% of the worldwide oncology market by 2014 – the largest share of any therapeutic area by any company. “Don’t you think oncologists will want to talk with their reps?”
9:45: The point: “We’re going to be competing at the franchise, portfolio, and even corporate levels – not just brands.”
9:49: A great example of the new competitiveness: Novo Nordisk’s ambush of Amylin right before the American Diabetes Association conference in 2008, releasing data from a study that wasn’t even finished claiming that their experimental drug liraglutide is superior to Amylin’s Byetta. Lilly and Amylin were planning a coming-out party for long-acting Byetta at the conference; instead, Amylin stock dropped 8%. Risky, and a textbook counter-launch.
9:53: “Novo’s strategy risked a response from FDA, delay of approval…but we’re going to see more such risk-taking.”
10:01: “We’re going to see a dramatic shift in how we compete. Previously it was hand-to-hand combat with the reps in the physicians office. Now it’s going to extend to DTC and elsewhere, with much more aggressive comparisons. Everything is on the table now – it’s a holistic way of competing. If you can win with your manufacturing, your regulatory, your technology, any advantage you have – whatever it takes.”
10:05: Time for the next session – a panel discussion covering a rather narrow subject: What is or is there a Future for Pharmaceutical Promotions. Ambitious. Moderated by Sander Flaum, presently of Flaum Partners and formerly CEO of Euro RSCG. Other participants: Christine Coyne of Endo, Andreas Eggert of Wyeth, Leslie North of Bayer, and the ubiquitous Peter Pitts, former FDA honcho and presently of the Center for Medicine in the Public Interest. Important note: I’ve compressed everyone’s comments, so if you’re “that guy” who recorded the session and wants to check my work for accuracy, don’t bother.
10:15: Sander goes over a variety of data showing the interest of patients in online health research.
Leslie: “An educated consumer is our best customer. But it’s not sufficient to simply educate consumers. We want consumers to be active participants in healthcare decisionmaking.”
Christine: “Patients are looking across a plethora of channels for information. Everyone seeks advice in different ways. Once my mother got on the Web, I said this is it, this is a channel we have to pay attention to. Put quality information up where your constituents are searching.”
Peter: “Relative to online communications, when legal/reg says no to certain things, from a marketing perspective you have to make a case for the benefit over the cost, to show that the public health would be improved by publishing info.”
10:19: Sander asks, “How are the appointments of Margaret Hamburg and Joshua Sharfstein going to affect FDA?”
Peter: “They are two very different types of people – Margaret is a public health person, Joshua is more of a political animal. But both were city health commissioners. For the first time, you have people in these positions that really understand public health from the ground level. I think we’ll be seeing increased predictability and less policy being made via warning letters. Josh Sharfstein is serving as a shield, so FDA folks can do their jobs without fear – Representative Waxman is unlikely to attack an agency where his buddy is in a high-ranking job. DDMAC has long embraced ambiguity as opposed to predictability, because ambiguity is power – but Dr. Hamburg realizes that this is deleterious to the public health.”
10:23: Sander asks, “Is the traditional format of a sales call outmoded? What is your vision of a sales rep for 2010?”
Andreas: “It’s not about whether reps visit or not or what kind of technology they use. It’s more about an attitude: providing value to physicians, providing information where they want it, when they want it, in a credible and accurate fashion. That may be in a personal way, or maybe through other tools, over the internet.”
10:26: Question: are we looking for a different kind of sales rep?”
Christine: We need to go back to fundamentals of personal selling. I should know what keeps this physician up all night. Does he want to know about safety? Efficacy? What does he care about? Does he have a large senior patient population? Know the person in front of you, have some productive questions, get some answers, and then try to put the best features and benefits of your product forward.”
Peter: “The rep is not dead – the rep is evolving. The most important thing is that doctors need information. The rep plays an important role, whether it’s an avatar online or an in-office visit.”
10:32: Sander discusses applying the Jack Welch model (cut the bottom 10% of performers each year) to pharma sales forces. “We seem to keep a lot of C’s – are we going to get tougher?”
Andreas: “Whenever you consolidate, you look for synergies, and hopefully companies take performance as a major factor. I believe in the Jack Welch principles, but we’re doing it as a result of external forces, not as a philosophy/strategy.”
Leslie: “Today we have so much talent out in the marketplace that we can be far more selective. The new reps we are talking to are extraordinarily high-performing reps – no one in the last few classes is coming in with no experience. We’re now saying, because of the talent that’s available out there, we have to take more of a draconian approach where the bottom 10% comes off.”
Peter: “That allows the pride to be put back into being a rep.”
Andreas: “20% of reps are producing 50% of sales – we can’t spend too much time trying to help out the bottom 10%, because it’s not fair to the top producers.”
Sander: “With all the mergers, the lower 20% will go, and it’ll improve productivity.”
10:39: Sander talks about the Sally Field commercial for Boniva, and the viability of such evangelical selling by celebrity spokespeople, which leads to a very interesting exchange.
Sander: “The data on Boniva is nowhere as good as its competitors, but Boniva is still No. 1 – women love Sally Field. She is the credible evangelical spokesperson for Boniva – she loves the product, and women love her. Where are we going with evangelical selling now; is that the new way to go?”
Leslie: “You can’t get any better than having someone who is using the product communicate for you. But how such testimonials are being used is changing – it has to be balanced and include side effects, as the Magic Johnson warning letter showed. This gives people a more realistic picture of what the product can do, which is good for marketers – we want people to have a realistic picture of what drugs can do for them.”
Andreas: “I think we’re going the wrong way here – what is Sally Field’s credibility? We need to be very careful; just because we love her doesn’t mean that she has any credibility or can offer a balanced perspective. With branded advertising, I don’t think there’s room for a celebrity spokesperson.”
Christine: “I think there’s a place for this type of communication. I’ve done it, and it worked beautifully. You need to pick the right person with the right traits, the right channels, the right moments, and build it responsibly. For the Sally Field thing, what I see is, Sally Field has cache. People associate it with her. She showed people what Boniva looks like in her life. I thought that was responsible. So motivated and educated patients went and had productive discussions with their physicians.”
Peter: “Using a celebrity is great for sales and great for recognition; it humanizes the condition. But the celebrity has to be a legitimate user of the product. I’ve had agents of celebrities say that they’d switch to a product to become the pitchman; we shouldn’t go anywhere near something like that.”
10:45: Sander says, “Physicians now spend 8 hours a week on the internet, compared with 2.5 hours in 2002. What new opportunities do you see here that would fly with regulatory and compliance?”
Christine: “Video on demand, streaming video. Where people are, put up good content. Take clinical information, patient benefit information, and put it up online with WebMD – they already have the audience. Get quality information into the doc’s mindset.”
Andreas: “My main concern is that we sometimes seem to chase technologies. Just because a physician uses Youtube or Twitter doesn’t mean that I have to go there too – it may not be the right channel for communicating your brand’s content.” Amen to that. Digital for digital’s sake just makes digital agencies rich.
10:50: A question from the audience. “Are legal/regulatory people willing to accept more risk-taking behavior now that the marketplace has become so much more competitive?”
Andreas: “No.” (Pause. Big laugh). “It’s not about pushing the envelope. I have a responsibility as a marketer to be compliant. The Novo Nordisk and Byetta example – that’s where we as an industry get into trouble, get a reputation for pushing the envelope.”
Christine: “Legal, medical, and regulatory need to be involved in the risk/benefit analysis of social media and other new marketing tools earlier than the process, so they can get a better idea of the marketing department’s views on the value of the tool.”
Leslie: “The risks have gotten greater – it’s not just DDMAC, it’s the states attorneys-general. When our legal/regulatory folks look at something, they tend to look at it at a higher level today than even six months ago, because they know that the states will be looking at it.”
That’s all for today. But I can’t leave without two quick quotes from Joe Shields of Wyeth, who spoke during the 11:30 panel discussion:
“To me the integrated agency is like a unicorn – I think they exist, but I’ve never seen one.” (General laughter)
and, even better,
“I think agencies still always recommend and do what they make money on. If they make TV commercials, for example, that tends to be what they recommend. I want to work with people that care more about the patients that I’m serving than making their P&L this month. When agencies say that they are strategic, I want them to actually be strategic – I’m looking for business problem solvers, not just people who can make detail aids.”
Amen.
