Pharma’s Digital Lens

As I meet more people and discuss their digital ideas and strategy, I think Pharma looks at digital through the wrong lens. The question I am often asked is: “This is my business model, how can tech help?” I think trying to answer the question framed that way cannot lead to the write answers. It is simply too product-centric. It is all about me, my Rx and my brand.

Instead if the question was to be re-framed thus: “I get a sense that it’s not business as usual. The fundamentals are changing. What should I do?”, I think business leaders could open their marketing teams to considering many more possibilities than they currently do. This would be true customer-centricity since the concern here is about how to serve the customer better in a changing environment, rather than worrying about I, me and myself.

Trying to make teams think of how to use technology in the existing business model and in the current framework can be misleading. The shift is fundamental. Do business leaders think this is understood and internalized well by everyone?

Maybe the real problem is that the shift is slow and imperceptible. Fundamental shifts creep upon us and are imperceptible until we are engulfed by it. For eg: the shift to a rental economy (I rent a car instead of owning one, I rent a home away from home, instead of staying in an expensive hotel) wasn’t felt and perceived by everyone. Yet, today, Uber and AirBnB are a way of life. Similarly, today, we can’t imagine life without touchscreens, but Nokia was King not so long ago. There are many more such examples of how imperceptible fundamental shifts have damaged the businesses of many a strong incumbent.

So if pharma marketing teams feel that fundamentals aren’t changing in the way customers behave or the way business is conducted, then probably forcing them to adopt digital won’t work. It explains why so many say “we do a lot of digital”. You don’t “do” digital. You “go” digital i.e. transform. You “do” digital if you are either forced to do it, or you don’t understand or agree with it. If you don’t feel the shift, then you probably don’t need digital. So, don’t do it.

However, if you’re worried about missing out, or that its not right to avoid digital, then maybe you feel the change in your gut, but you aren’t too sure. So look more closely. Do you know your customers really well? Or do you think you do? Are they still the same? Or are there signs that things have changed?

Once you understand and agree that the shift is indeed happening then begin to re-examine the basis of your current business model and framework. Look for areas which don’t appeal to your customers and see if tech tools can help you regain the engagement of your valuable customers.

That’s the essence of transformation:

1. Ask if you notice shifts in macro factors such as environment, customer behaviour and business basics.

2. Update your understanding of each factor.

3. Identify areas in your model/framework that are outdated.

4. Can tech help to update?

This would be the right lens through which pharma looks at digital.

Digital Awareness to Digital Utilitarian

Two unrelated new articles caught my attention last week. The first one was about a prominent Indian pharmaceutical company who seemed to have got into the news for their digital strategy. The second one was a comparison of prices for mobile data across the world.

The first news article about the digital strategy of a pharmaceutical company intrigued me, as it did many others – given a tweetchat that ensued during the day. My intrigue was about how this company used technology to do more of the same, rather than to carefully consider the different options that technology throws open. This is a classic case where digital is ‘done’ instead of the business transforming to leverage technology.

I will not embark on a long post on the merits of digital transformation since I wrote a bit on the topic in the past. Suffice to say that technology is best utilized when its potential is understood. Instead of looking to find how technology can help a business do more of what it is already doing, business leaders must seek to understand what new tech tools can offer and how those new options can transform the way they did business. “Moving beyond the pill” is not merely the stuff that ppts are made of. It is right here in the real world.

It is well known that there is tremendous growth in technology and the number of tools that have emerged from it. What is not so well known is that those tools have application in the pharma business model and can solve for many an inefficiency that business heads have worried about. Very rarely do business heads seek insights into the tech that they buy, or the tools that they deploy. Business plans, when looked at from the window of such insights, can look inadequate and tech can then be very meaningfully deployed to get much better results or to achieve a business objective in a much easier and cost-effective manner.

This is the essential difference between being digitally aware versus being a digital utilitarian.

A digitally aware business head generally considers digital to be ‘in addition’ to organizational objectives, thinks of technology as more important than strategy and will spend huge resources to buy new tech and as the novelty wears off, declare tech to be of no use.

A digital utilitarian will on the other hand, understand that the need to change is not because tech is available, but because the fundamentals of business and customers have changed. These business heads realise that customers are well into the digital economy. Doctors, patients and caregivers alike, search for a lot of health-related information on the net. Can you therefore not afford to be where people are looking for you and insist on pushing more money after bad, on a sales force that doctors increasingly reject? A digital utilitarian will thus, be acutely aware of the challenges that the changing environment has on his business and will look for tech solutions to *transform* the way he reaches out, engages and converts his customers.

Typically, pharma businesses grow when more doctors prescribe their brand and patients consume it. This means that these two sets of customers need to be familiar with the brand. The current pharma model falls short on both fronts. The company with the largest sales force in India can barely cover 3/4th of the doctor universe. Others fall woefully short. On the patients’ front, in most cases, pharma is still learning how to.

This brings me to the second article that caught my attention – the one comparing the prices of mobile data around the world. No one needs to be told about the penetration of mobile phones in India or the emergence of high speed and dirt-cheap (Rs. 18 per 1GB data compared to global average of Rs. 600) data connectivity. How many pharma managers have changed their plans or even thought about this? When I recommended this to clients I was countered by the lack of speed that accompanies the cheap prices. They don’t seem convinced even when I tell them that online video audiences are expected to double to 500 million by 2020. What does that say about speed and connectivity?

Almost every pharma business worries about increasing awareness, penetrating and gaining access to new customer groups and geographies. If these are your business challenges, shouldn’t you be looking for tech options that can help you achieve this? At such cheap data prices, you have so many options to create live channels, conduct social media campaigns, create communities, reach specific targeted customer groups or even something as mundane as increasing the number of contacts with your targeted doctors at a fraction of the cost of hiring new reps.

Technology offers a plethora of solutions and more to tackle these mundane problems that have plagued pharma for years. Pharma on its part has moved from being digitally illiterate to digitally aware. The next step towards business transformation would be to become a digital utilitarian.

Don’t make it feel like it’s marketing

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Changes in pharma marketing will be profound with the advent of technology. Digital marketing will allow pharma marketers to engage the customer in very meaningful ways which were not always possible through the work of sales reps.

While sales reps are important in the scheme of things, they are but one channel. In-clinic time with doctors is massively decreasing today and that is because neither the channel (rep) nor the content can engage the doctor and hold his attention.

Through digital it is possible for pharma to know more about their customers than they ever have in the past.

This additional knowledge is thought to hold the key to understanding the customers needs and wants. Through this pharma can offer better services to them, thereby building loyalty along the way.

None of these tenets are new. This is what marketing is about. However, most of it has got lost along the way as pharma-doctor engagement became tactical and transactional; from information sharing and knowledge building to ultimately benefit the patient.

Overseas – especially in the US, pharma is more advanced in the use of digital technology considering that the market is matured to these advances. In India, pharma is scraping the tip and tentatively exploring these options. We have started to see pharma companies create websites, run email contact campaigns, conduct online CMEs and webcast them, create apps for their brands as well as explore the creation of discussion forums and social pages.

While all these are great initiatives, not integrating them will not allow doctors to understand the context of each initiative. Therefore, each digital piece is likely to be viewed as a random one. If doctors are unable to link all its initiatives, the company also risks their customers not consuming/linking key pieces of information. This can make the strategy look incomplete and leave customers with a sub-optimal experience.

Is Digital effective?

This can be viewed in two different ways. The first way is to view digital marketing as another channel of marketing. This makes it integral to the entire marketing strategy and increases its overall effectiveness. This makes it almost impossible to evaluate the effectiveness of individual pieces of the strategy and say that it was digital intervention alone that drove the success.

The second way is to re-assess the things we measure to define success. Generally marketing campaigns measure their success against increased prescriptions for their brands, more sales, higher market share etc. Yet as David Ogilvy said, “I know half of my advertising budget works; I only don’t know which half”.

The good part though is, digital can track and stream data like no other channel ever could.

We know how many people opened emails, how much of the email they read, clicked on a link, watched a video, visited a website, how long they stayed, what content they read and where they went from that website. These are the sort of metrics that digital marketing can throw up and these are the ones that should be measured to determine success or determine the specific lift that digital intervention provided to the marketing campaign.

The best part of digital is that when done right over a period, it becomes predictive.

Now very few other marketing tactics can tell a marketer in advance what their customer is thinking of doing. This predictability can be great differentiation and a source of competitive advantage as Google, Amazon, Facebook, Netflix and your local bank have shown.

Benefits of digital marketing

The time-tested mantra for efficient selling has always been “the right message to the right customer at the right frequency”. Digital adds “through the right channel” to it.

The new channels that tech allows access to help marketers to reach their customers at the place and at the time of their choice. Specific to pharma, doctors would always be inaccessible except for the stipulated days and hours at which they chose to meet sales reps.

Today pharma can reach doctors at a place of their choice, at the time of their choosing and through a channel that they most love. It could be a video, an infographic, a webcasted seminar, an email or in some cases a virtual rep. The choice therefore empowers the customer to seek info when he deems fit rather than having it thrust at him.

Of course, this isn’t as easy as is made out to be. To ensure that the doctor ‘consumes’ their content, pharma must make it very relevant and interesting. To make it relevant, they need to know as much about the doctor as possible.

The fundamental shifts in marketing are that it becomes all about the doctor/patient (customer-centric) rather than product-centric; it becomes data-driven (the more pharma knows about the doctor, the better they can serve him) and it focuses on experience (if the doctor finds pharma to be too nosy or the content uninteresting, he simply dumps them). This moves pharma marketing from the ABC – awareness (of the brand), (prescription of the) brand and CRM – to the CDE – customer, data and experience.

How relevant is digital marketing?

Currently, Pharma marketing is all about the ABC – awareness (of the brand), (prescription of the) brand and CRM. This is exactly why pharma hasn’t truly grasped the essence of digital marketing. Digital marketing moves it to the CDE – customer, data and experience. In simple words, this means that marketers must focus less on their product and focus completely on the customer.

In the digital economy there are 3 rules:

  1. Your business is not to sell your product. It is to engage your customer
  2. Your differentiation is not how good your product is. It is how well you know your customer (data)
  3. Your competitive advantage is not the size of sales force, or the number of SKUs you sell. It is the experience that you create for your customer which determines how loyal they stay to you.

Products have stopped to differentiate. Experiences have begun to differentiate. Does this mean that product selling is not important? On the contrary, the CDE of digital marketing only strengthens product sales. Through digital channels, you can engage the customer better. And engaged customers don’t need to be sold to.

Is Pharma Coping?

Pharma was for a long time in denial and even today the odd digitally illiterate executive exists. However, most of the pharma has now moved to the digitally aware phase where the newly initiated are smitten with technology. This explains why there is so much buying/subscribing to tech products and large-scale digitization of internal processes. This is a very important stage of the transformation cycle, but in their excitement, they often forget that success rides on three pillars – people, business models and things. When companies focus on technology (things) they ignore the other two that are the more important pillars.

Pharma will cope soon. After all, it is exactly what it has always wanted to do – engage with customers, ensure relevance of marketing content and ensure spontaneous brand recall. With digital there is a difference – it won’t feel like it is marketing.

 

 

 

The Digital Economy

The first time I heard the term ‘digital economy’ in the medical context, it was from a reputed doctor who was a co-panelist and speaker at a company town hall event on digital marketing. It did not surprise me one bit that the doctor knew more about the digital economy than most of the pharma marketers gathered in the audience. But, it set me thinking.

The digital economy is the effect that advancements in technology have on the ways of doing business. Things change in the digital universe only in shape and form. The principles stay the same. It is probably why marketers think that everything is new. They have simply forgotten the old.

Customer engagement, not products or services

While in the analogous world the golden rules of marketing have gathered a thick layer of dust, the digital world is brutal. It is ruled by customers who are spoiled for choice. In this economy your business is no longer only about your products or services. Customers believe product quality and features to be hygiene factors that are to be taken for granted. They do not give brands that dupe them a second chance. Not only do they expect honest and transparent business, they pay a premium for brands and companies that engage them.

Rule 1: In the digital world, your business is to engage customers in the most meaningful ways.

Data, not money

It goes without saying that customers will never engage with brands that do not recognize them. In the words of Keith Weed – the CMO of Unilever, customers today are informed, presumptuous and impatient. If you do not know enough about your customers to engage them almost instantly, they will ‘bounce off’ your website. They presume that you are tracking them and that you know everything about them. And it makes them impatient if they think brands will make them waste time by getting to know them when all they want to do is satisfy their needs. This makes data the new currency – not money. Money is just incidental for customers to get what they need and they will choose to spend that money wisely. Brands or businesses that do not know them, will not get their money.

Rule 2: The digital economy is powered by data – not money.

Customer experience trumps all else

If customers expect you to know them well and are willing to engage only with those who do, there is a reason for it. Let’s say you Skyped with your friend one morning and she told you about a new book or a video game. It fascinated you. You never heard of it and you want to know everything about it. Instantly, you Google it and read up every review that you can lay your hands on. Once you have, you want to buy it. Amazon it is! All in the matter of a few minutes. And since you’re all happy, you want to watch a new flick on Netflix.

Now imagine if this scenario had played out 15-20 years ago. You would have had to go over to your friend’s place to have that conversation and then walk over to the lone book store, then off to the bank to withdraw some money and then back to the store to buy the book or game CD. And if you had the energy to watch a movie, then you would trudge off to the local single-screen cinema to try your luck with buying a movie ticket on the black market.

Rule 3: Customer experience is your competitive advantage

Digital has made everything so easy! In the new world, experience trumps everything else. Digital natives keep ‘in touch’ on social media, text their friends more than speak to them, transact online, cannot remember when they last went to a supermarket or to the bank and don’t know what it means to have to wait for a cab!

Its almost like the physical world doesn’t exist anymore.

Why would you think that doctors and patients are any different? Digital has (in most cases) done away with time and distance. One can talk to a doctor on call and not have to go to a clinic or hospital (unless in emergencies). Doctors can get all the information they need at the click of a button. They don’t depend on medical reps anymore for it. And that’s probably why they don’t value meeting them so much anymore.

This is not to say that medical reps have no jobs to do. Far from it! It means the nature of their jobs have gone back to being what they were originally meant to be. The time-tested yet now forgotten – serve the customer. Its time to brush the dust off those principles.

I didn’t say this – the doctor at the town hall did. Doctors get the digital economy. You can be dead sure that he and his colleagues aren’t waiting with bated breath for pharma to start participating. Its time we accepted that and played by the rules.

 

The Digital World – Be there or be square!

A few weeks ago I had the opportunity to talk to a group of mid-level pharma marketers on what marketing means in a digital world and how the rules of the game have changed. I began by asking them what they thought was the basic purpose of a marketer. They responded in their own ways and after a bit of debate, we agreed on headlining it as “promoting my product”. Didn’t that sound too much like a product-oriented approach, I asked. Isn’t that exactly your problem as a pharma marketer? That there is a clutter of products? That the market is commoditized with over 60,000 brands? Heads nodded in agreement.

As the group warmed up to the chat, they threw up the challenges that they faced every day. Customers did not see value in sales reps calling on them, hence did not give them more call time in their clinics. They often complained to senior company executives who called on them, that pharma marketing was getting dull and boring and did not provide them with information that was helpful to treat their patients better. On their part, marketers faced the constant challenge of slow sales and sought to constantly improve product sales. They wondered if the panacea for all their problems was “digital”. Is digital the answer, was their eager question.

Of course not! Digital is not the solution to all the problems that the industry faces, but it surely is the way the world is moving, so why not catch up? If the pharma industry – that for long had held up the flag of innovation – was comfortable launching new and better products, why was it such a laggard in recognizing and adopting the advancements in technology?

Digital is simply about leveraging technology

It is often misunderstood that digital means reorienting the entire company and sometimes even the business model. This is not always required. Most pharma companies have very customer-facing business models. A majority of the industry makes a sincere effort to understand and serve customers. Going digital simply means understanding technology and how it can help the company serve its customers better. It’s more about the mind-set than anything else.

Shifting the mindset

If the dominant mindset in a company is “promote my products”, digital does play a role, but the purpose of digital adoption might be slightly different as compared to another company where the mindset is “engage or serve my customers”. If more and more customers have an increasing digital presence, does it make sense for the company to not be there? Like an old adage goes, “fish where the fish are!” If all the fish are downstream, looking for them to bite upstream might be stretching the optimism a bit, wouldn’t it? So, if your customers are looking for information online and using digital tools and platforms to update themselves, would it make sense for you to not be there? As they say in America, be there or be square.

Misplaced obsession with sales

A “promote my products” mindset betrays an obsession with product sales. While this is not necessarily bad, it misses a crucial point. You can sell only to those who engage with you. If the idea is to simply push your product all the time, it won’t necessarily work. However, if the customer is engaged and sees value in engaging with you, they are already sold to. Engaged customers don’t need to be sold to, they already love your company and your product. Sometimes, they are even willing to pay more for your product because they love it so much. While this may set off alarm bells in the howling winds of price control, the point is that engaged customers become agnostic to price. This means that you will succeed even if you have a premium-priced product. Provided you have engaged your customer base very well and consistently. Digital provides you with tools to do exactly that!

If today the only way you engage your customers is through your sales force, why then would you ignore or avoid more channels of reaching and engaging them? Instead of just the visual aids that reps carry, technology allows you to create content in multiple different ways (graphics – simple and in 3D, videos – short and long, using augmented and virtual reality and a lot more) that bring novelty and value to customer interactions. Platforms allow you to host all the wonderful content that you create and apps allow that content to be distributed in the most efficient manner to your customers – at a time and place of their choice. And the best part is that all of this augments the efforts of the sales force. Where you have one channel (the sales force) to engage your customer, technology allows you multiple channels. Hence, multi-channel marketing or MCM.

Marketing in a digital world

In an almost totally digital world, marketing is therefore about:

  1. Engaging your customers and not merely promoting your product.
  2. Providing to customers what they want to see and not what you want them to see
  3. Personalizing content – each individual (your customers are individuals too) has different likes and dislikes. Personalise by curating content. There is a ton of it already created, so don’t waste your time creating more (as much as you would like to think otherwise, your visual aid bores your customer. So show her what she wants to see or someone else will).
  4. “Pulling” customers. Pulled customers look for excuses to engage. They wait for more content, new products and are willing to pay more for it.

I asked the group to imagine a world where they could provide their customers a fast, personalized and frictionless experience. They had difficult imagining it, so I asked to think of the kind of experience that they had while searching for information, buying or selling something and completing banking transactions online. All at a time and place of their choice. That’s the kind of experience your customers seek in the digital world. It is your role to give them that experience. So, dear pharma marketers, be there, or be square!

Selling in a digital era

Recently I decided to buy a laptop. As I looked around for the right one, I realized how little I knew about hardware. Having always used a company provided one, it was one of the things I had never bothered to educate myself on. As I always do for most things that I know nothing about, I spoke to friends. From what they told me, I did a lot of research online. Armed with information of an ideal laptop, I decided to “look and feel”. I headed off to an electronics store and spent the better part of an hour ‘testing’ a few models with the help of the friendly salesman before I bought the one I wanted. Do most of us shop this way? Maybe!

As you see, in my ‘journey’ the human element came in just once – to seal the deal. With so much information available online, I had already made up my mind before I went into a store and bought what I wanted to. This was a case of laptops and dummies, but is this very different in the case of drugs and doctors?

In such an era, pharma companies invest a significant amount of money into hiring and maintaining large sales forces. This component is, in fact the largest part of a company’s selling expenses. This is driven by the decades-old belief that nothing compares to a salesman calling on a doctor to convince him of a company’s product. Yet, in reality, the idea that reps will soon be obsolete is constantly reinforced by reducing in-clinic time for them, as doctors see lesser and lesser value delivered. There is also the constant pressure on profit margins as companies negotiate a fluid regulatory environment. These factors are as true in India as they are overseas. What is yet to be determined is if ‘non-rep’ models are bust-cycle fads that will reverse in soon to follow boom-cycles?

My personal opinion is that in any selling process, a human element is never obsolete, but the effectiveness of that element is maximized when it is introduced at the most appropriate moment in the ‘customer journey’.

old to new model

It is quite well known that in the new era, 70% of the buying decision is made before the first contact with a supplier is made. By the time I walked into the electronics store, I knew which laptop I wanted to buy, its specifications, its size, color and add-ons. I walked into that store just to see how that laptop actually looked and to understand the deals that the store would offer on my purchase. The salesman at the store already had a ready and willing customer and his sale was efficient and quick even though I made a big show of looking and evaluating other options. The actual amount of time he spent on making the deal was not more than 15 minutes of that hour.

Such efficiency is needed in pharma sales as well since the rep model is currently under stringent evaluation. Companies seeking operational efficiency are critically analyzing all major costs and are looking for alternatives. In such a scenario, instead of considering a ‘no-rep’ model, companies should consider a ‘low-rep’ model. This means downsizing a bulging force to just the optimal number of people needed to quickly and efficiently close deals. An example is illustrated below:

customerjourney

As companies build websites, apps, videos and other digital content, is this a ‘customer journey’ that they have at the back of their minds? Are they willing to prime a customer as much as they can using their formidable online resources and connect a medical rep as the final point of contact to seal the deal? If this is how it can be done, how would the medical rep’s job evolve? What kind of training would such sales forces require?

Of course, this isn’t an easy process. Moving away from a decades-old mindset of building armies of medical reps isn’t going to be easy. And to be sure, such models will probably not be the best in every single situation. For example, a new product launch will require a different strategy compared to a more established brand. The fact of the matter is, evolving technology provides superior alternatives to creating value for customers without having to compromise traditional sales metrics.

I am pretty sure the salesman at the electronics store was half-relieved that I knew what I wanted when I walked in. It saved his time and allowed him to refocus his energy to other dummies who wanted laptops. Wouldn’t drug reps and doctors feel the same way?

 

 

 

SALES or MARKETING – The Customer Doesn’t Care!

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Last month, this picture put up by Anup Soans on his Facebook (FB) page elicited 215 ‘likes’, 361 ‘shares’ and 76 comments (as on Dec 2nd). The popularity of this post intrigued me not because it was something that had never happened earlier – Anup is quite popular on social media – but since it quickly assumed an accusatory tone and one of grievance.

Although I have no way to ascertain it, I am sure the cartoonist meant the picture to be something else before another creative person labeled the drummer as the ‘CEO’, the workers on the train cart as ‘head office managers’ and the lone person pulling the train cart with its heavy load of people as the ‘field managers’.  

While the picture is a bit exaggerated, the way it was perceived on the FB post seemed to turn the entire concept of teamwork on its head. Despite a little prodding by the author, not one person looked at this as representing teamwork. It did not occur to anyone that the CEO seemed to be making an effort to keep the functions of the organization (if we assume the train cart to be one) in a smooth rhythm so that efficiency increases – a concept best demonstrated by the famous Kerala boat races. No one thought it was fantastic that all ‘head office managers’ worked as one team towards furthering the objectives of the organization without pushing individual agenda. The red-faced lone ‘field manager’ who pulled the cart didn’t seem to convey to anyone that while it was his job to further the organization towards its planned goal, it could well be a rotating assignment and when he pulled the cart up to a certain point – or goal – he could then hop on board the cart and begin to assist the other ‘head office managers’ with their work while someone on board took up the task of pulling the cart.

I found it very interesting that most people who commented seemed to do so in a pattern. The pattern was that sales and marketing are not two arms of the organization but are different silos. Marketing personnel know little about what sales personnel do and more often than not ‘force’ their ideas on them. A few other gentlemen, who tried to support the marketing function, did so either feebly or their arguments were quickly drowned out. I was reminded of the ongoing social media battle between supporters of two major political parties, which could be understood as that of opposing ideologies and goals. In this case however, sales and marketing people seemed to worry more about which function was better, more important or needed more effort and not on how the picture was a symbol of different functions within the organization working in tandem to help it attain its goal.

The ‘war’ between sales and marketing goes back a long time and spans across industries. However, it is also well documented that this lack of alignment ends up hurting organizational performance. Time and again, both groups stumble (and the organization suffers) because they don’t work together. There is no doubt that, when Sales and Marketing work well together, companies see substantial improvement on important performance metrics: Sales cycles are shorter, market-entry costs go down, and the cost of sales is lower.

As the Harvard Business Review says[1], the conflict between Sales and Marketing apart from being economic, is cultural in nature. This is true in part because the two functions attract different types of people. Marketers are deemed to have more formal education than salespeople. They are expected to be highly analytical, data oriented, and project focused, always thinking about building competitive advantage for the future. Sales teams do not appreciate it as much as they should because they perceive it to happen behind a desk in air-conditioned offices rather than out in the field. Salespeople, in contrast, spend their time talking to existing and potential customers. They’re skilled relationship builders; they’re expected to not only be savvy about customers’ willingness to buy but also intuitively know which products will fly and which will die. They want to keep moving. They’re used to rejection, and it doesn’t depress them. They live for closing a sale. It’s hardly surprising that these two groups of people find it difficult to work well together. Yet there is not a more opportune moment to harness the skills of both teams than the current one.

The pharmaceutical industry in India just hiccupped. From the customer facing side, new regulations such as the new pricing policy has just made medicines more affordable. However, a clamp-down on clinical trials has put the launch of new, innovative medicines on the back-burner for the moment. Also, there is no inflow of foreign capital into the sector putting capital expansion plans of companies on hold. Additionally, more and more Indian companies derive their real growth in earnings from serving overseas markets.

In such a scenario, the last thing a customer would appreciate is a chasm between internal departments in an organization that hamper his ability to provide services to his patients. Corporate equity is at potential risk if information flow on products is delayed because the marketing team does not respond to requests from the sales team or if crucial travel information of a KOL traveling to an international conference is withheld.

While I will not attempt to offer solutions or debate them here, I want to leave you with some thoughts. Why is it so difficult for colleagues within the same organization to work together? Isn’t everyone trying to do the same thing i.e. attain market leadership? How does it matter where you work or what you do? Aren’t you proud of what you are doing? Are we getting into the quicksand of wanting to do someone else’s role? At the risk of sounding preachy, I’d like to invoke the Bhagvad Gita here which extols us to merely do our duty and not worry about someone else. Just excelling at what we do helps us to create great value – tangible and otherwise. Cumulatively, this ever expanding pool of excellence is the fuel that propels organizations from being good to becoming great. So instead of worrying about why others fail, let us continue to focus on our own success.

If the red-faced man in the picture didn’t pull the train cart, how would it move forward? If the men on board didn’t tighten the bolts on the track and pat down the stones of the ballast, how would that section of the track become secure? If the CEO didn’t beat the drum to a rhythm, how would the overall efficiency of the team increase and progress be achieved?

Now if the red-faced man was constantly badgered by the ones on board, would he pull the cart? If he stopped pulling the cart, would the whole team (organization) move? Would the CEO then really matter?

As economic growth continues at its anemic pace, we’re all looking for ways to make our operations more productive. Bridging the sales-vs.-marketing divide is a way of achieving this. Let us change our perspective. It will make a positive impact on customers. We know well that customers these days are too mobile, too connected, and too informed to tolerate any gap between what one department says and another does. So, if we allow sales and marketing to operate in silos, at the end of the day, do you really think the customer cares? He would just move on to the next company.

Published in the December 2013 issue of MedicinMan


[1] ‘Ending the War between Sales and Marketing’: Philip Kotler, Neil Rackham, Suj Krishnaswamy; Harvard Business Review July-August 2006.

“Why join the Navy if you can be a pirate?”

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This week, the pharmaceutical industry around the world and in India bore witness to how prices of medicines were decided more as a matter of executive grit and determination than any other factor that affects market dynamics. When the chief of India’s top pharmaceutical company, Cipla Ltd., announced an up to 75% cut in prices of some important cancer drugs in its portfolio, it expectedly evoked a general response of relief from all quarters. The one announcement that especially kicked observers, was the huge price reduction in the generic copy of Bayer’s kidney cancer drug, Nexavar. This was the same drug that the Indian Patent Office (IPO) had, in March, allowed another Indian company, Natco, to make and sell in India despite its original research company Bayer, holding a valid patent.

The decision was then hailed as one that would benefit Indian patients at large – both because Nexavar became relatively more affordable at Natco’s price of Rs 8,800 per month against Bayer’s price of Rs. 2.8 lakhs a month and also because this decision of the IPO had set a precedence for pulling up other profiteering companies. Yet, the man who walked away with the “Humanitarian of the Year” title was not Natco’s chief, but Dr. Yusuf Hamied, Chairman and MD of Cipla.

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What most people seemed to have missed was that Cipla didn’t introduce its generic product at this price point. It simply reduced the price from Rs. 28,000 to Rs. 6840 per month for a generic version that was already on the market. And, this happened only because Natco had pegged the price of its product at Rs. 8800 per month. Before that, when Nexavar was the only option available to patients, Cipla sold the same product at Rs. 28,000 per month!

So what seems to be the case here was that with a reference price of Rs. 2.8 lakhs, Cipla priced its product at Rs. 28,000 per month (a tenth of market price), and when Natco brought the price to Rs. 8,800 per month, Cipla simply cut its price to Rs. 6840 per month (approx 25% of its original price to still stay the cheapest). Dr. Hamied clarified today that while he was being humanitarian, he certainly wasn’t doing charity. There was a business angle to it and he didn’t deny it. That the price of the product, even at Rs. 6840 per month, is out of bounds to over 90% of Indians is probably what he meant when he said he wasn’t doing charity. Therefore the question, why not make it really affordable while you’re at it? The reason is explicitly offered by Dr. Hamied himself. Its not because Cipla would lose money in the bargain, but because physicians in India associate the quality of the product with its price. So, if Cipla priced its products very low, the doctors who prescribed them would worry about the quality. Seems it’s more about doctors than patients, doesn’t it? Did you hear concerns for the suffering humanity in that argument? I didn’t!

Interestingly, the same yardsticks do not seem to apply when these companies view opportunities overseas. While bidding for tenders in developed markets, most generic companies price their products at a significant premium over the price of the same products in India. Even though these range in the bottom quartile of the category, they are still quite high. And by quoting the least price in large value tenders, generic players are able to bag these orders – despite the high prices – simply because they are lower than the even higher prices of the innovator brands.

So, as Cipla did before Natco triggered the price spiral in the Nexavar category, generic drugs can price themselves just a little lower than the innovators and make significant profits. The question therefore is, do generic manufacturers sacrifice profits a little bit in India and appear “humanitarian”, while making a lot more money in the developed world?

Steve Jobs had once asked of his competitors in utter dismay, “Why join the Navy when you can be a pirate?” suggesting that they took the easy way out by copying Apple’s products and not sweating it out by creating better products (or services) of their own. It is more harmful to customers in the long run when innovation dries up and newer products that can create better value don’t emerge.

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This does not behoove of an industry that holds within it sparkling talent, enviable human capital and an inextinguishable competitive spirit. India must create game-changing moves, not those that can raise unflattering remarks, but those that customers will see most value in and place a premium on. The best successor for Apple is not some cheap Chinese imitator but Samsung, preferred by customers the world over for its innovative and appealing products. That is a worthy way to be remembered. Not as a pirate, but as one who sailed with the navy, proudly.

Is Technology Adoption the Pharma Marketing Future?

The future has bewildered man ever since he walked the Earth. The absence of the ability to see the future forced us to learn from history. Observing events unfolding in chronology and consequence can teach us to expect what tomorrow may hold for us as a consequence of our doings today. As more lies at stake, our eagerness to know increases many fold. This phenomenon gave rise to an entire industry which now capitalizes upon that basic need. Aptly called business intelligence, it is an oxymoron to few and inconsequential to others.  However, to the majority of business leaders it serves as a vital crutch.

The pharmaceutical industry has billions of dollars at stake in India and analysts estimate the size of the opportunity to accommodate tens of billions more as diseases and disorders threaten human life with pain, discomfort and death. From this springs the bewilderment of what the Pharma Future will hold for the industry in the days, weeks and years ahead. Conclaves are one way to assemble the more knowledgeable executives of the industry and pool their wisdom of the past and understand how they see the future unfold. At one such conclave, titled Pharma Future Knowledge Conclave 2011, organized by Indegene Lifesystems, at the Four Seasons hotel in Mumbai, interesting insights emerged as executives who spent over two decades bounced off ideas and insights with young and eager ones who will eventually receive the baton of the industry in a few years.

Disappointingly, most executives believed the future would not be too different from the present especially since nothing much changed over the last two decades. The pharmaceutical industry inIndia is considered a slow adopter of new technology, new media and – simply put – new ways of doing things.  The inertia is more obvious on the commercial front given the dynamism of its customer-facing nature. On the more strait-jacketed back-end, the industry has been fast to adopt best practices in functions such as managing the supply chain and formulation R&D etc. After all, reverse engineering and the expertise that India demonstrated in producing low-cost and high quality products and services resulted in rapidly making it the chosen destination for manufacturing, R&D and medical value travel (also known as medical tourism).

Does this mean that while the Indian industry is quick to improve on existing processes, it is not so quick to establish new ones? That India is a unique market has been stated ad nauseum by industry leaders at almost every forum. Despite this, little progress is seen to leverage the uniqueness. Emerging markets is a buzzword at global headquarters of every MNC. Yet, every business model developed by every company looks and feels the same. Foray into branded generics, expand into the rural hinterlands and expand sales forces to increase reach. Hardly anything novel here, excepting that novelty will lie in execution. Companies, when faced with the same environment, challenges and opportunities chose to react to it in almost the same way. The actual execution of those plans will set the men apart from the boys.

So, if field forces expand and companies bring in more generic brands instead of novel products will that not mean more pharma reps discussing more brands with the same doctors? This means a sharp reduction in access to doctors as they restrict the number of days they would see reps and the number of reps they see on those days. How should pharma react? Should it adopt technology? What role will technology play? Will companies reduce field forces as cost effective alternatives to technology? Will e-detailing and e-marketing replace pharma reps? Not quite it seemed. Access to the clinic is limited. Access to mindshare is not. If companies demonstrate a willingness to work with doctors to improve outcomes for their patients, doctors are likely to accept the company as a partner and not view it as an infringement on his time and decision making. This seems idealistic just yet as this approach is a long drawn one. Doctors inIndia seldom practice in groups. Every doctor, even when attached to private hospitals, is an independent consultant. This increases the complexities of the partnership equation as each doctor has unique needs and requirements. Can pharma evolve to a mass customization model? If so, how quickly?

From its current focus on products and productivity the transition of the pharmaceutical business model to one that bundles products with services, customizes offerings to each individual customer and leverages technology to reach out to many more customers than now opens up the need for vast amounts of data. How much data is enough? Data, sometimes, never seems enough. Most often data that gets you to a “yes-no” decision is enough. Can executives differentiate when to ask for more and when to use what is available when business models move from being product focused to becoming customer focused? The critical difference is between data and insights. We may sometimes have an overload of data and a deficit of insights. Knowledge of the customer and insights that you derive from that knowledge can never substitute business intelligence tools, however sophisticated. In-depth understanding of customers can only happen from more and more face-to-face interaction requiring human intervention. Technology therefore, will augment the sales force effort and not substitute it.

Yet why is technology adoption so poor in the Indian pharmaceutical industry? Most business practices that have been adopted inIndiahave at some point been tried and tested in the West. Does this makeIndiaa wait-and-watch market? Even if it does, technology has been tried and tested in the West for many years now. So, let’s just go ahead and adopt it. If we do, does that make us seem as if we’re aping the West? Should iPads be used as detailing tools inIndiajust because reps in the West use them? The point here is that technology should be used only if it makes sense. There is little to gain if we tweak existing and time-tested processes that continue to deliver results, just for the heck of it.  Technology is simply an enabler, not a means in itself. Ask yourself how long the novelty of detailing with an iPad last if the content on it remained stale. Now ask yourself how easy it becomes to quickly update the latest clinical data on the iPads of the sales force using technology.

It seemed from the discussion that the Indian Pharmaceutical industry did not expect too much to change.  Whether or not it allowed its processes to be technology enabled, its focus on core marketing, alliances, M&A and other ways to create more value for the patient was heartening. The little or no demonstration of understanding technology and imagining the wonders that it would help create across the continuum of patient care was disappointing. The use of genomics and personalized medicine (despite Pfizer being close to launching Crizotinib, its first personalized drug for lung cancer) was completely overlooked.

The focus lay too much on discussing the adoption of technology rather than on what new processes would evolve from path-breaking technology. Despite India being the capital of chronic diseases (CVD, diabetes, smoking) there was little or no discussion on how health leaders will become agile caretakers of interdependent networks (referral physicians, tertiary care specialists, pharmacists, fellow-patients, colleagues & peers, family, friends etc.) that grow smarter as they get to know and support each individual patient. Both the young and the old are developing chronic diseases in record numbers, leading to explosive growth in the consumption of resources that is driving up spending and creating liabilities for future generations (ask survivors of cancer patients). It is widely accepted that chronic diseases are associated with behavioral, socio-economic, and genetic factors that are not within the control of today’s medical delivery system. There is a lot that the pharmaceutical industry can do in this relevant area considering that one of the ways in which the Indian market is unique is that it’s a self-pay market.

The pharmaceutical industry can explore robust value creation and revenue generating opportunities in areas that will help prevent onset of chronic diseases or assist chronically ill patients manage their disease in cost efficient ways. What is happening to healthcare is no different from other industries—the power of the individual is increasingly influencing how healthcare is directed and delivered, enabled by the technological and the virtual world we live in. And this is by no means a Western phenomenon. This is the future of the pharmaceutical industry in India. The Pharma Future.