Pharmaceutical Drug Manufacturers

23 March, 2010- As in other industries, marketing plan for advertising or promoting products is crucial to pharmaceutical industry too. However, the pharmaceutical marketing strategies (as well as advertising strategies) are different from other businesses because pharmaceuticals or drugs can negatively affect both- the end consumers or the patients and the health care profession. Also, the advertising strategies included in the marketing plan of any pharmaceutical company is not 'direct to consumer'. Any pharmaceutical marketing strategy targets the health care professionals or the Doctors who in turn prescribe the drugs to the patients (end consumers) liable to pay for the products. However, a few countries (till date two countries- New Zealand and United States) allow Direct-to-consumer advertising (DTC advertising) for pharmaceutical products.

Traditional Pharmaceutical Marketing Strategies

The pharmaceutical companies traditionally adopt four major marketing strategies for promoting their products-

• Giving drugs as free samples to doctors;
• Providing details of their products through journal articles or opinion leaders;
• Gifts that hold the company logo or details of one or multiple drugs; and
• Sponsoring continuing medical education.

Pharmaceutical representatives, also popularly known as medical representatives, are the major pharma marketing strategy for marketing drugs directly to the physicians. Typically, the expense of this sales force of any pharmaceutical company comprises anything ranging from 15-20% of annual product revenues. However, with changing times and new developments, the pharmaceutical industry faces some very serious strategic issues.

New Pharmaceutical Marketing Strategies- Why Needed?

While most of the pharmaceutical companies successfully employ a host of marketing strategies to target various types of customers, the current business and customer trends are continuously creating new challenges as well as opportunities for increasing profitability. If the pharmaceutical companies want to improve their Return-On-Investment (ROI), they have to adopt new communication technologies (digital media) along with their conventional sales force of medical representatives. They really need to adopt this multi channel marketing strategies for the following reasons.

• The concept of blockbuster drugs is dying out for big pharmaceutical companies where 2-3 drugs were good enough to pay back the whole investment for a larger number of manufactured drugs. Now the limited prospective for blockbuster drugs (thanks to low investment on R&D and patent expiry) makes it essential to focus on more specialized drugs sold in lower volumes. And when there is low volume products, sales driven marketing strategy (with high cost of sales force) is not feasible.
• As far as small pharma companies are concerned, they already have small sales force. However, with the use of digital media, having a lower investment cost (both for the company and its targeted customer) they can easily get return on investment.
• Customer behavior (doctors behavior) is rapidly changing. Doctors, who are getting more and more busy with increasing patients, can be hardly seen by the medical representatives. They are more inclined towards Internet for obtaining relevant information. It is the time for pharmaceutical companies to build their marketing strategies around this digital media. Website marketing, online marketing, blogs, social media, forums, chat rooms and any other such media is an influential means to present the company's products and offers through opinion leaders.

The Right Pharmaceutical Marketing Strategy

The right marketing strategy for any pharmaceutical company would be to build on proven strategic marketing principles, along with a focus on changing customer behavior. Use of digital media through Internet marketing plan is the best marketing strategy that can provide the basis for a changed business model. However, there should be some planning for using digital media for marketing too. It should be a multi channel marketing strategy but should identify the target audience. Every digital media used for all people can not be called the right marketing strategy. The focus should be on the high value customer segment for pharmaceutical products.

To formulate a marketing strategy, it is also crucial to know the existing markets as well as emerging markets of pharmaceutical drugs. Read Pharmaceutical Market Trends 2010