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.

 

Slaying the Digital beast

Digital technology is an amazing system whereby information (words and images) are stored in the form of code. This enables unimaginably vast amounts of information to be compressed on small storage devices that can be easily preserved and transported. Digitization – or converting information to code-  also quickens data transmission speeds. This technology has transformed how people communicate, learn, and work.

It is quite understandable how folks confuse between what is digital and what is not. Largely that’s because they just use the term digital and do not suffix it with either ‘marketing’ or ‘technology’. While ‘digital marketing’ is a new buzzword at least in pharma, ‘digital technology’ is not. Digital technology has been used in phones (landlines) since the 1980s, when the newer models (portable phones versus the old black telephones) were introduced. In the 1990s, digital technology enabled satellite television to enter Indian homes with a variety of 24X7 content instead of the boring, fixed time single channel DD. In the wider context, digital technology transformed information (as libraries digitized books), the airline industry (as more sophisticated air monitoring systems came into vogue).

Once we understand what ‘digital’ and ‘digitalization’ means, it is easier to understand that this is the process and everything else is the channel. Social media sites such as Twitter, Facebook and LinkedIN have used digital technology to create platforms for engagement over the internet. The amazing part of these social media outlets are that unlike traditional media such as newspapers and TV news channels, online sites do not create any content of their own. They merely provide platforms where it is easy for the layman to create his/her own content and engage with like-minded people from around the world. This is called user-generated content where users actually generate the content instead of the website. A more formal example is Wikipedia.

While social media is about humans interacting with machines (computers, mobile phones etc), the Internet of Things (IoT) uses digital technology to make machines interact with machines and humans. This is how a device on your hand can tell the app in your phone how much you walked or ran this morning. Or your laptop at office can switch on the coffee maker at home so that hot coffee awaits you as you drive in. Or the dashboard of your car can inform your doctor if you had a hypoglycemic attack and an accident. This is fascinating stuff and you can imagine how endless the possibilities with digital technology are. IN our business of selling medicines, the applications can be massive and can change the way disease is managed and treated.

Q: Is digital like a photocopier that is used by all the functions in a company or is it something only for the marketing and sales functions?

“Digital” – if it refers to technology – is used by almost everyone in a company. If you’re using a laptop or a phone or a scanner, then you’re using digital technology. However, if this refers to using digital channels to market your product or an activity to support your brand, then this is largely the domain of the marketing and sales team. The success of a digital campaign, in my opinion, is when it steps out of the domain of a marketer. Of course, the concept and execution still stays with them, but if colleagues in office don’t engage with the activity, or if the online campaign is too doctor-focused, then we aren’t leveraging the power and the reach of the medium.

I think it is also very important to understand that digital never drives strategy. It is always the brand strategy which decides the channel. Does a leave-behind piece or a visual aid decide the strategy of a brand? Of course not. They are just tools that a marketer uses to achieve an overarching brand objective (like create higher brand awareness amongst a specialty of doctors). It is the strategy of the brand that decides on which tools you want to use. It’s the same with digital – these are just channels or tools that one uses as one deems fit. I have always been amused when brand leads come to me and say “I have a Facebook strategy”. You can’t have a facebook strategy. You have a brand strategy. Using Facebook or not using it depends on that strategy.

Q : How can digital lead to better engagement with doctors and patients?

Digital technology allows innumerable options to engage with doctors and patients. As you would know customers engage most effectively with organizations or products that solve a pain point or what we call as an ‘unmet need’. One of the larger ones in health care for quite some time is ‘information asymmetry’ or the lack of availability of information that can be easily understood for patients or care-givers. This prevents them from understanding their choices and making informed decisions. Websites like iodine.com attempt to bridge that gap.

Some other pain points are when patients want to consult another doctor to take a second opinion. This is very different from ‘doctor shopping’. Again there are websites that allow such discussions. Today finding the right doctors, setting up appointments, using mobile/digital prescribing and having medicines home-delivered through online orders reduces costs (makes it easier, sometimes cheaper) for health care transactions.

All this is possible through the use of digital technology. Pharma may not probably play in all those spaces. Yet, in its core area, pharma is making major changes to its operating model to wrap it around the possibilities that digital tech creates. Globally, there is a move to use big data to glean sharper and more relevant insights into patient and doctor thinking and behavior. There is also a realization that the industry must move away from monologues or ‘pushing’ information to engaging in a conversation or creating a ‘pull’ for information. This engagement of course will be required across all the possible channels (omni-channel) and must occur almost in real-time. No customer will wait if he/she receives an auto-response saying “Thank you for your email, you will receive a response from us in 7 working days”. Those days are long gone!

Considering the constrained environment that the industry operates in, it is little wonder that pharma is taking so long to institutionalize these changes. However, stellar examples in digital engagement can be found from companies such as Pfizer, BI, AZ, J&J, GSK and some more. These convince me that the industry is surely headed in the right direction. In the future, I think we will see more tie-ups and collaborations to create better and user-friendly products. That will make health care democratized (of the patient, for the patient and by the patient) in the true sense.

Q : How well prepared are professionals in terms of skill levels to facilitate digital adoption by companies?

Not much at the moment. There is too much of entrenchment into the traditional style of operations. We see human capital being built up within organizations but it is too focused on execution at the moment. There is limited play of digital natives within executive teams where decision making lies. That’s probably why we rarely see brand managers or business heads evolving their plans to wrap around the massive opportunities that digital creates. There is no ‘new-orbit’ thinking at the moment and therefore we see pdfs of visual aids on iPads, aspirations to create mobile apps (with little understanding of what end that will achieve) and 2-hour long CMEs distributed over web streaming platforms, once or twice a year. This belies little or no understanding of either the medium or the consumer of such content. This is the typical “monologue” or “push” mode that pharma is so comfortable with.

One could argue that reverse mentoring can help move understanding up the chain, but like most things that try to defy gravity, such initiatives rarely gain altitude. I am waiting for the day when pharma hires a CEO from a tech company. Someone who is told, “We are in the health care (not pharma) space and we need your help to do better in the new age economy.” That will be the day.

Q : Any good examples of digital adoption by pharma – global and domestic?

There are quite a few examples that are isolated (brilliant iPad campaigns or SM engagement etc.) but I want to focus on a couple of them. One of them is the “Don’t turn your back on it” campaign by Abbvie. This is for lower back pain and it is phenomenal in its omni-channel presence and the way it is being executed. I do not know the result of it, but I am sure it is good. Another such campaign in India is the “Knowledge Genie” project that Abbott rolled out in India a few years ago.

There are definitely many more such examples, but the reason I picked out these two campaigns are because of their distinct uses and I think there are lessons here for us. The Abbvie campaign is a glocal one – designed and created by the Global team but executed by individual markets. This shows a great alignment of the ‘go-digital’ spirit through the entire breadth of the organization. This is a brand-oriented campaign.

The Abbott India campaign is different in the sense that this is a doctor engagement campaign and not a product/brand-oriented one. Both these are long-term engagements that require a tremendous amount of capabilities and alignment within the organization and therefore worthy of mention.

Q  How useful are platforms like Docplexus, Curofy and others to Clinicians? 

This is a tough one for me to answer considering that I am neither a clinician nor a part of these platforms. However, I think the need for such platforms exists in terms of a neutral discussion forum for doctors to exchange ideas and to network. Recently I saw another such platform which advertised its USP to be “pharma-independent”. Of course, this may be done to differentiate this platform from the others who engage pharma; but I see a lesson here.

If pharma not participating in such platforms is considered a boon, then there is something seriously wrong. The industry which has to be an enabler of such initiatives is considered unwanted. It’s a shame since it signifies how wrong we have gone with our understanding of our customers’ needs and wants.

Who are the others new players in healthcare – what do companies Practo signify for healthcare?

There are many new players and it excites me tremendously. When Sergey Brin famously said that health care is ‘over-regulated’ he expressed the angst of millions of people amongst who are hundreds of innovators. I was afraid that these words from the co-founder of Google would scare off many of them. Fortunately, it hasn’t.

I have been fortunate to have the opportunity to coach a few startups in India and the energy, enthusiasm and never-say-die attitude that these youngsters have is just phenomenal. It is such a refreshing change from my day job.

“Startups” – as the new entrants in the space are referred to – are run by very smart youngsters who have identified “white spaces” in the health care arena. White space is jargon for an area in the sector that has a potential (and lucrative) customer pool but nobody to service them. To illustrate that, take the example of knowing the right doctors to meet when there is an urgent medical need. While this was a very obvious unmet need, the established players (hospitals, doctor organizations or pharma) did nothing for years. It took one determined youngster to begin a company that specialized in that area and then built around that core proposition.

This is what companies like Practo signify for healthcare. These companies have the potential to disrupt the health care space. They can create efficiencies in processes that established players have little incentive to reform. If and when they do that, it won’t be very pretty for the incumbents. We are seeing start ups all across the value stream – from data analytics to R&D, clinical trials, manufacturing straight up to managing the end-user experience. Almost every area in health care is looking at potential disruption. How soon will it happen? Only time will tell.

Q : Will tech products like Uber and Ola mean a better deal for doctors and patients? How can pharma partner with such players?

This has been a fascinating question and one asked quite often. To elaborate on your analogy – Uber and Ola are aggregator organizations. This means that they use digital technology to bring a cab to a customer. The beauty of the model is that they neither own the cabs, nor are the drivers their employees. In health care, the likes of Practo bring patients to doctors and the likes of Nightingales bring doctors to the patients.

While on the face of it, it seems like a good idea to have a service of bringing additional patients to doctors, this hasn’t really gone well with doctor organizations (who protested their members advertising on a website) or with the govt who cannot get themselves around to regulate these new-age services. To answer your question specifically – any program or company that reduces transaction costs for consumers to seek health care of their choice is definitely a better deal for everyone.

Since pharma still focuses on pushing its pills, and will continue to do so for the foreseeable future, I think what it can seek to benefit from these tech players is Big Data. Many of these companies over time will accumulate information on the beliefs and behavior of health consumers. Pharma can glean out great insights from that information. Now whether the tech players will want Pharma to monetize that information or want to do it themselves will be interesting to see.

Q : Is there an increased understanding of digital by Indian Pharma? How do you look at digital adoption by Indian Pharma?

Oh yes of course! Adopting digital channels to engage with doctors has picked up rather well in India as it has around the world. I am aware of some very interesting things that Indian pharma is doing on this front.

When we speak of adopting digital, there are two ways in which I would see it – the first way is to evaluate the use of content across channels. I would be very impressed to see content created and customized for multiple channels. I think this has a lot to do with understanding the functionalities and the scope of each channel and how that helps to promote the chosen story/message.

The second way to view digital adoption would be to see if content across multiple channels carries the same message or storyline. Most often I see messaging created for Twitter being quite different from Facebook which is itself far removed from website banner adverts. It would seem odd to customers if they’re unable to see the same message or connect the dots when they view that content over different channels. This, in my opinion, is quite key to superior engagement of digital technology. Of course all of this stems from the broad strategy for the brand/company.

That said, its great to see marketers finally accept this technology for its scope and power. One must experiment with it to learn how to use it best.

Q : Is there is need for education in digital adoption by way of workshops and what should these workshops focus?

Education is always useful. It helps to know what the industry is doing at large. Of late, I have noticed that fewer pharma managers are skeptical about non-pharma examples and this is a very encouraging trend. Earlier, I would see people rejecting any great example from non-pharma without understanding that the principle is more important than the example. The change means that pharma managers are opening up their minds and this augurs extremely well for the industry.

I don’t think workshops on digital technology would work in isolation. Since technology only adds further scope to engage with doctors and patients, the workshop should examine marketing plans to see if they have really built in the use of technology to optimize results. Ideally this exercise should happen a few weeks before the marketing team begins to work on their brand plans. If they understand the technology available, its functionalities, scope and results it can bring, I am sure marketing managers will understand better how to use it in their work.

Health and the freedom of choice

People talk a lot about “freedom” these days.  Be it freedom from colonial rule or the freedom of expression, the freedom of the Internet, the freedom to watch porn, to have consensual sex in beach-side resorts or the freedom to marry irrespective of faith. At the root of each of these passionate beliefs is the resentment of the State intervening in the freedom of personal choice. Why then, does this resentment dissolve when we think of health and health care?

Health and health care is as much a subject of personal choice as is the right to choose what you want to watch on the internet or do in your free time. Would you like it if the State told you to consult this doctor and not that one? Or if they told you which hospital you could be treated in or to what cost your treatment should be limited to? And yet, that is exactly what a pharmaceutical industry lobby in India, demanded that the government should do!

At a recent event, the Organization of Pharmaceutical Producers of India (OPPI) asked the government to increase public spending in the health sector. This would include subsidizing health insurance and providing universal health care. This sounds perfectly reasonable, doesn’t it? After all, shouldn’t everyone be able to access free healthcare?  It isn’t really very reasonable, if you think about how it would actually be done.

The first thing the government would look for is the money to fund this mammoth task. And that money would obviously come from the taxes that we pay!  Just as the industry should choose to resist a move by the government to fund universal health care through an increase in corporate taxes, ordinary citizens should also have the choice to pay lower taxes from hard-earned salaries.

As if in preemption, the National Health Policy recommended a ‘sin-tax’ – a tax on fast food, tobacco, alcohol, aerated drinks and other such – to fund healthcare. Do you think companies who sell these products will pay that money – or will you? And do you think the money collected through an indirect tax is enough to fund free healthcare for 1.25 billion people and more? The next step is prioritization. Should money be spent to build new medical colleges, or hospitals, or primary health centers? Isn’t it more important to give away free medicines? Maybe health insurance for everyone is an urgent need too. See the confusion? There are just too many things to do, and the money is too little. Even the NITI Aayog – that advises the government on policy matters – doesn’t think this to be a good option.

I believe the OPPI – as a powerful industry body – should focus on getting the government to simplify if not simply to do away with healthcare laws in their present form. For example, if the laws that require licenses to set up hospitals and medical colleges are simplified, they could attract many more players to the health sector. The result will be more colleges and better trained doctors and paramedics.

Today, despite the attractiveness, even the biggest home bred industrialists running multi-sector conglomerates, fear to tread into this space because of over-regulation.  Yet, CEOs of pharma companies have rarely – if ever – called for a simplification of or doing away with the law.

Simple economics tells us that markets immediately respond to increasing demand. The healthcare space in India is bursting at its seams with demand. Why then is supply still regulated by the government? Open it up! Allow anyone who wants to enter the space to come in and set up shop. This will reduce an enormous amount of workload on the government and pressure on the health budget as private capital is infused into the sector. The increased competition will also drop prices, improve quality and allow consumers the freedom to choose instead of being told what to do.

To be sure, a lesser regulated sector will definitely attract the greedy.  This is why I do not advocate for public-private partnerships (PPP). PPPs are as full of cronies as any crony organization is, and is as full of opportunists as the government is. PPPs often have a low probability of working efficiently since the government controls private capital and promote “profiteering” over “profit”. Distinguishing “profit” from “profiteering” is an important task the OPPI must undertake. To ensure that players understand the differentiation and stay fair, we need a less-burdened government to run an efficient justice system.

As a representative of the industry, the OPPI must remind the government of what it’s Chief Executive promised India’s people – minimum government, maximum governance. If the government focuses only on governance, we might have a more efficient justice system in India and with it, more providers of service.  In such a situation, power moves to the consumer and he is free to reject cronies and cartels and opt for those who serve him well. That is the power of choice.

In a country driven by electoral politics and vote-banks, the most dangerous part of large-scale welfare is that it cannot be rolled back. Look at the newspapers to see how many countries with welfare went belly-up. To continue funding such welfare, the government slowly but surely will begin to control everything else.  Is there any part of the state-controlled apparatus that you like? Why should you expect healthcare to be any different then?

State provided insurance will probably be worse. The sums for which you are insured are ridiculously low and rarely keep up with evolving prices. Look up the fines that convicted criminals have to pay! If we still follow a penal code made in 1860, what are the chances of the health policy keeping pace with escalating health costs in the future?

When the insurance sector opens up to competition, the few players who have formed powerful cartels will be forced to break them, resulting in cheaper and better insurance schemes. Also with lesser taxes and benefits to pay, you have more money in your pocket to decide how to use it. Think of it as a 50% increment every year!

With efficient courts, cronyism and cartels will reduce. Pricing mechanisms that are “set-up” or “rigged” will be set free to respond to market realities. More hospitals, more doctors, paramedics and lower medicine prices; health insurance that does not ditch you when you need it the most – isn’t this the stuff patients’ dreams are made of? Why does the OPPI not think of this approach to improve access to healthcare?

The OPPI’s appeal probably reflects a point of view that it is the role of the government to provide healthcare. Not so! It should be the role of anyone capable, to provide it. Instead of asking for access to free healthcare, the OPPI should instead ask for free access to healthcare. The government’s presence hinders that. I would resent having to entrust my healthcare to it, if I had the freedom of choice.

Published in the September 2015 edition of MedicinMan

Will pharma forsake emerging markets?

The post-9/11 world was a difficult place for both political and business leaders to adjust to. As power structures in the world shifted, the developed world struggled to retain political and economic control in a scenario sometimes described as the ‘decline of the West’. Capital fled these risky markets in search of those that were relatively safe and presented opportunities to grow. The influx of capital from the West into markets around the world caused ‘the rise of the rest’. These markets in the developing world quickly adopted open-door policies and welcomed large western corporations to their humungous customer bases.

This context is important to understand how the pharmaceutical industry viewed the developing world and how they leveraged opportunities that it offered. It is also important to understand how governments and policy makers in the developing world responded to the influence that western businesses wielded in their jurisdiction.

While growth strategies in the pharmaceutical industry had become dependent on expansion into emerging markets, they did not seem to consider a growing middle class in these areas as an opportunity to improve the quality of life there. Instead companies treated these populations just like their customers in the western world. Almost identical business strategies were deployed in geographies that were – in reality – culturally, socially and economically very different.

What caused markets to ’emerge’?
What the industry failed to acknowledge was the ‘DNA of the emerging markets’: the failure of state-led economic development and the need for capital investment. First, state-led economic development failed to produce sustainable growth in the traditional developing countries. This failure and its tremendous negative impact pushed those countries to adopt open door policies, and to change from the state’s being in charge of the economy to facilitating economic growth along market-oriented lines. Second, developing counties desperately needed capital to finance their development, but traditional government borrowing failed to fuel the development process.

In light of the unsatisfactory results of government borrowing, developing countries began to rely on equity investment as a means of financing economic growth. They sought to attract equity investment from private investors who they hoped would become their partners in development. In the past, the pharmaceutical industry failed to grasp this.

As governments saw industry practices that seemed more exploitative than collaborative, the enthusiasm for foreign equity seemed to disappear. Emerging markets became keen to ensure that medicines were more accessible and affordable to their population, while also ensuring that healthcare bills remained within control. So, in parallel to rolling out health cover, China for example has also introduced several cost containment initiatives that are expected to keep costs under check.

Similarly, other markets increased their market access barriers. Turkey — which possesses a generous public health insurance system — recently increased its social security discount rates on reimbursed drugs. This, along with changes to the reference pricing system, saw the pharma industry lose billions of dollars in that country. Russia and India also took steps towards controlling prices of their respective essential drugs. Brazil has adopted several protectionist policies that seek to assist its domestic industry. The bad news is that matters like these that were of utmost importance to local governments; lay at loggerheads with business plans of the pharmaceutical industry.

What should pharma do in Emerging Markets?
The initial enthusiasm that erupted when emerging markets first demonstrated their potential has often given way to disappointment, as early—and possibly exaggerated—expectations remain largely unfulfilled. Since go-to-market models typical of mature economies have often failed to adequately tap the huge potential attributed to emerging markets, pharmaceutical industry leaders are rethinking and, in many cases, transforming their operating models to better address what they have learned about these markets. This is the good news.

Traditional operating models have for decades been largely defined by fully integrated operations, which included significant investments in R&D hubs and selected manufacturing sites. Emerging markets, on the other hand, have usually been regarded as places only for selling medicines, but very rarely as potential locations for developing or manufacturing them. This view is now being challenged.

The pharmaceutical industry is now trying to balance the drive to build a sustainable business through increased market share, volume, and profits with a global commitment to work with governments and other stakeholders to support efforts to deliver medicines to as many people as possible. Localization is important as Brazil and Turkey have shown. Investments in local research, development and manufacturing will be effective levers to succeed in this geography. The industry does not want to be seen as hesitant to commit itself to long-term investments in the region. To paraphrase a well-known cliché, the industry well realizes that winners will be those who understand how to balance their global competencies with tailored approaches for the local environment. And it is rapidly preparing itself to do so. The industry is actively seeking to avoid an influx of western business practices resulting in a mirror image of western markets, but with a lower price structure.

Are Emerging Markets still important?

By various estimates, the global pharmaceutical industry is expected to derive 30-40% of its total sales in emerging markets. Companies are now actively considering customer clusters, finding cross-border similarities, establishing global reach with local relevance, and creating effective and rapid execution capabilities to be better able to gain the foothold in emerging markets they’ve long been trying to achieve.

As the pharmaceutical industry readies itself for its next wave of growth, are the highly attractive emerging markets occupying an expanding share of its geographical portfolio? The question is more relevant now as US stocks have rallied impressively over the past several months while emerging markets stocks are essentially unchanged since the beginning of 2010 and currencies have been volatile. Even though these have been lagging for several years, investors should not be surprised if that trend reverses in 2014 as the Federal Reserve winds down quantitative easing and moves toward a more hawkish monetary policy. The impact has been visible now for a few weeks as bourses across emerging markets rallied.
The term “emerging” hints at a process that will in all likelihood unfold over a period of time. It is estimated that it will take a minimum of a decade to build the necessary delivery infrastructure and create the ability to pay for sophisticated pharmaceuticals in the emerging world before the pharmaceutical markets there begin to reach the value and volume of those that currently exist in the developed world. Therein lays the great opportunity.

As the pharma industry grabs the chance to channelize its global focus into the developed world for the good of the people there, its business practices will evolve to embrace and not forsake markets that emerge to support it.

Published earlier at www.pharmaphorum.com. Link here.

What can the pharmaceutical industry expect from the new government?

India’s economy is performing poorly, at least compared to its relative dynamism just a few years ago. With a general election to be concluded by the end of May 2014, many are looking to the country’s next government to break India out of its economic doldrums. Pre-poll surveys (whether you like them or not) have predicted a strong wave of support for the Bharatiya Janata Party (BJP), led by its prime ministerial candidate Narendra Modi. It is expected that a business friendly environment and policies that support the health care sector may well be on the cards if this was indeed to happen.

 I am certainly hopeful that a BJP led govt comes to power at the Centre with a majority mandate. This will ensure that the government has a free hand to set the economic agenda of the country. This is, of course, assuming that the agenda will favor right leaning economic policies all the way which may not be likely. 

 Are changes to India’s health policy likely?

 At the moment, it is speculative to say what the changes in policy are likely to be since the BJP has not spelt out its agenda or made its “Vision 2025” document publicly available. That said, the only thing one can be fairly certain about is that market sentiment will be buoyed only if the political environment remains stable. It will be a shame if a fractured mandate forces any party to align with parties of opposed ideologies – or God forbid – an Alternate Front comes to power.

 On the health policy, I can be fairly certain that a new govt will have two important things to address: 1) reduce the current account deficit (to control inflation and prices) and 2) bring in revenues to a depleted treasury. To work towards these two objectives, it can be fairly assumed that industry friendly policies will be adopted since welfare schemes are populist in nature and cannot be withdrawn in India.

 While the FDI policy is clear (uncapped), the same is not true of areas such as clinical trials and IPR. The BJP manifesto promises to support industry that transfers technology into India. If this happens, we may see FDI flow into greenfield projects which has been quite slow so far. However, this will require complexities such as the Land Acquisition Bill, Labour laws etc. to be simplified. At the moment it is assumed that a Modi govt will be more inclined to push Economic Reforms 2.0 than the UPA was. This means that we may see a fillip to the industry overall.

 If the govt pursues industry friendly policies we are unlikely to see capped pricing on patented drugs but a more nuanced approach to balance prices of medicines and access. There maybe an inclination to strengthen insurance coverage through RSBY and the private sector, state-purchase and distribution of medicines through the Jan Aushadi 2.0 scheme, more hospitals through PPPs etc.

 What will be very interesting is to see how the IPR issue is tackled. I believe this is more a diplomatic failure and grandiose posturing rather than a real issue. There have been more cases of CLs being rejected than issued. Validity of patents have been upheld fairly, so I feel it is unfair to term India’s IPR regime as “fluid”. India has the responsibility of protecting the health interests of its citizens and it should continue to do so. The issue can easily be laid to rest through some deft diplomacy which a govt strengthened by stability can achieve. 

 Another development that hasn’t captured public imagination and debate in India is the US sponsored TPP agreement. Indian generic players can be strongly impacted if the TPP comes into effect and the US de-prioritizes India as a result of the agreement.

 Will the new government pursue Universal Health Care?

 UHC is something that has been on the cards of all political parties for a long time. However, there seems to be no clear direction on how to progress. With the BJP proposing to support federalism and strengthening the state govts, it remains to be seen if they will put their money where their collective mouths are and first, increase spending on healthcare as a % of GDP to at least 3% (the WHO mandates 6%) and second, transfer a bulk of that money to state govts.

 This is the tricky part. Opinion polls have shown that the BJP will rule at best in 15 out of 29 states. Assuming 100% of BJP states comply with UHC, ~50% of India’s population would be deemed to be covered. This is in line with the UPA govts plan of increasing health coverage to about 52% of the population, up from the currently covered 35%.

 This alone would be a significant step to achieve in 5 years since UHC would involve a paradigm shift in health policies and programs in favor of vulnerable population groups, restructuring of public health cadres, reorientation of undergraduate medical education, more emphasis on public health research, and extensive education campaigns

What should the new government’s focus be?

 The one big issue would be to ensure quality and affordable health for all its citizens. It is criminal that after almost seven decades, Free India still cannot save mothers and babies from dying, ensuring that the sick get treated without either going bankrupt or being turned away from hospitals for not being able to pay and that productivity of its citizens is so sub-optimal. No Right to Education can make a malnourished child learn. No Right to Food can save lives of children who do not know it is important to wash their hands before eating. No Right to Information can empower the sick and the disabled. No aspiring superpower can afford to miss so badly on MDGs.

 Only when its populace is healthy can India think of educating its young, employing its youth and caring for its elderly. Health can have a multiplier effect on the GDP of India. And it must be available freely and equitably to every citizen of this country.

 Will the change be for the better?

 Apart from progressing on UHC, the present government could have done a lot to ensure that the health care sector was seen as a attractive destination to investors. While there are statistics to show that the sector still is attractive, it has been badly dogged by several flip-flops from the government, be it on clinical trials, on FDI, on drug pricing, on IPR, or on frowning on acquisitions. With the global economic crisis and govts across the world cutting back on health care costs, India had a golden opportunity to position itself as a world class health provider. Formidable terms such as “largest number of FDA approved plants outside the US”, “pharmacy to the world”, “medical value travel destination of the world” were all lost to other nations who grabbed the opportunities with open hands.

Over the last decade, India was a tragic case of epithets becoming epitaphs. There are no silver bullets here. Tackling these issues is a very big project. But the present system needs to change. Many countries have successfully transformed similar systems after seeing them lead to a rise outlays but a drop in outcomes. The next government must do what it can to help push India toward similar progress. 

Pharma Selling Model must Adapt

Pharma Selling Model must Adapt  (Listen to the audio file (5:03) by clicking on the link)

Worldwide, medical research and health care philosophy is undergoing fundamental shifts. The first is a fundamental and significant shift in healthcare philosophy and medical research – from a world in which we “react” to disease and illness after it has happened, to one in which we will be doing far more in advance to “prevent” specific health care problems. The driver for this massive change is the emergence of extremely specialized and highly personalized medical treatments based upon your own particular DNA.

The second shift (which is because of the first) is that healthcare is now becoming

  1. Predictive – forewarn people of susceptibility to diseases
  2. Preventative – empower them with information and resources to take preventive measures and to keep themselves healthy
  3. Personalized – provide information that is most relevant to them and what they want to know instead of generic and unimaginative information (n=1, R=G)
  4. Participative – make people a part of decisions made about their health. After all, its their lives. Enable them and trust them to hold themselves accountable

The common underlying cause for these two shifts is the advent of technology

These developments raise some interesting questions. Are these changes heralding in rapid change across the pharma industry and causing companies to re-evaluate their sales and marketing strategies? Are the pharma industry’s sales forces, with their current structure and training, capable of leveraging – to their advantage – the impact that the advent of technology has on the way patients seek treatment and on the way doctors treat them?

FDI in Pharma – Fools (can) Destroy India

Earlier this month, a Parliamentary Standing Committee tabled its recommendations on Foreign Direct Investment (FDI) in the pharmaceuticals sector. Surprisingly for a country that recently prided itself for unshackling its economy and pushing pro-growth reforms, the Committee recommended a blanket ban on FDI in brownfield projects which means it doesn’t want foreign pharmaceutical companies to invest in existing Indian ones.

This is surprising since it comes from a legitimate body that is mandated to think rationally and rule in the best interests of the Indian people. The committee however seemed more driven by public perception and chose to value Bollywood actor Aamir Khan’s judgement over those of veteran economists!

The argument central is that FDI poses a direct threat to the access and affordability of medicines and threatens to elbow out our pharmaceutical industry. This is purely stupid and shows a complete lack of understanding of how the global pharmaceutical industry operates.

Foreign firms are not acquiring Indian generic companies to stop generic medicines. With a huge number of products going off-patent globally, pharmaceutical companies are building their capabilities to sell generic drugs. They are acquiring Indian companies for their strength in generics, not to obliterate them. Hence, the concern that India’s pharmaceutical industry will die if foreign companies invest here is silly. Why would Mylan – a global generic company spend $1.6 billion to kill Agila Technologies?

Another argument (more moral than rational) is that FDI in the sector will hamper Indian medicine exports. Currently, India exports drugs to more than 200 countries and vaccines and bio-pharma products to about 151 countries. The export growth rate is around 10 percent per annum. And the major chunk of exports relate to generic drugs.

A third argument is that prices of medicines will rise in India due to FDI inflows. This despite a recent study by India’s own Department of Pharmaceuticals that found domestic drug prices to be immune to acquisitions. It is also interesting to point out here that the largest critics of the recent Drugs Price Control Order (DPCO) were Indian companies and not foreign firms. Indian companies were also guilty of over-charging Indian patients, an accusation levied against foreign firms.

If anything, economic literature suggests that inefficient firms will lose market share due to foreign competition, which in the long run should increase the overall efficiency of the Indian economy. Either ways allowing FDI inflows is only beneficial for India and its citizens. Paying heed to sound economics is a much better way of deciding what is good for us rather than letting some fools destroy our country. 

What if clinical trials don’t happen in India?

What if clinical trials don’t happen in India? Indian patients will continue to be treated with existing standard of stagnating care. The world would have moved on to better medicines buoyed by innovation. But Indian patients will need to be excluded from this wave of change for the better.

The Drugs Controller General of India (DCGI)’s office will be less busy and can then focus on other activities. The New Drug Approval/Advisory Committee (NDAC) may need to be disbanded. No new drugs will come to market.

 Even if drugs are discovered or invented in India they need to be evaluated in clinical trials involving Indian patients if they have to be approved for use in India. In fact in such cases phase I or first in man trials will need to be conducted in India.

If the golden goose is killed it won’t lay the golden egg. If innovation is killed, no new drug will need to be evaluated in trials, and no copy or generic will be manufactured using another process. There will be no need for patents for innovation or incremental innovation. No need for data exclusivity.

But why are we thinking of such a scenario? What has the Supreme Court said? Only that if trials are uncontrolled they can play havoc with patients’ lives. Yes. True. So are trials not controlled?

The gold standard pivotal clinical trial is a prospective, double blind, randomized, active and/or placebo controlled trial. But obviously what Justice Lodha meant was unregulated trials. So are trials in India not regulated?

What does Schedule Y of the Drugs and Cosmetics Act have to say? What are the Indian GCP guidelines for? Perhaps he meant to say that these guidelines are not being followed? And who oversees the same? Are institutional or non-institutional ethics committees doing their job of visiting sites and overseeing the informed consent process?

 All valid questions. Let me attempt to answer them.

The first global trials were placed in India way back in 1994-1995. By multinational research-based companies who stand by ethical, quality and compliant principles in the way they conduct trials. Whose SOPs are even stricter than the law of the land. Who regulate themselves even more stringently than the applicable local regulatory requirements.

Why? Because they have the most to lose.

Millions of dollars are spent in doing a trial appropriately. Naturally it is in their interest to do the trial correctly so that the data is credible and patient safety is not compromised. They stand to lose the most if incredible data is the basis for approval. Later if the drug has to be recalled from the market it is the company who faces the worst backlash, not only in terms of financial loss, which one can recover from, but in terms of integrity, trust, and corporate image, which once sullied can never come back.

The sponsor will want to know at the earliest if the drug is not effective or is not safe so that the same can be discontinued as soon as possible. Kill a drug early before it kills you. Rather than make a drug more safe for a patient, make the patient more safe for the drug.

So what do such companies do to ensure that the trial is conducted appropriately, compliant with their SOPs, the protocol, applicable local regulatory requirements and the Declaration of Helsinki principles?

It begins with identifying unmet medical need. Then finding the druggable disease target. From combinatorial chemistry libraries of potential hits, leads, and candidates, robotised high throughput screening methods try to match the best candidate to the target, with optimal pharmacokinetic (what the body does to the drug in terms of absorption, distribution, metabolism, and excretion) and pharmacodynamic (what the drug does to the target in the body) properties.

The best candidate is then taken through pre-clinical, in vitro, in silico, and finally clinical testing where the rubber literally hits the road. Safety first is the motto. Phase O or microdosing is also used to allometrically scale and better predict the dose that needs to be first tested generally in healthy volunteers (phase I).

Phase II involves patients where again safety is paramount followed by proof of concept from an efficacy point of view. Phase III then validates the phase II results in a larger patient population across different sites and countries. If positive this pivotal data is then submitted to regulators for seeking marketing authorisation approval.

Even after approval, testing may continue in the post-marketing environment (phase IV) within the approved label indications. If the drug needs to be tested in a new indication one goes back to doing a phase III trial.

In India, if such innovator drugs have to be marketed they need to have safety and efficacy data in a minimum number of Indian patients. If Indian patients are included during the global clinical development program for the drug it helps in two ways. Eligible Indian patients stand to benefit from the drug at the same time as patients from the rest of the world. This data can then be used to seek expedited approval from the DCGI so that other eligible Indian patients also benefit.

Of course Indian patients are also at risk, as are patients from other parts of the world, which is why such trials are carefully monitored. Selection of the investigator and site, based on specific criteria, is paramount. Training of the investigator and site staff is important. And the close and continuing oversight in the form of monitoring visits, quality checks, and audits. Ethics committees also do their bit of reviewing and approving protocols as well as visiting the sites to ensure there is no oversight. Regulators refer protocols to academic experts before approving the same.

Informed consent is administered as a process. Comprehension is ascertained. It is not a mere signature on a document. The patient can read the information, discuss with the family physician and only then decide on whether to participate. Functionally literate patients can be taken through a Speaking Book so that they understand in their language what it means to participate in a clinical trial.

No payment is made to the patient. The patient is insured. Treatment for any adverse outcome is borne by the sponsor so it’s free of cost for the patient. All investigations and procedures are also done free of cost for the patient.

Compensation is also done in cases where the investigator and ethics committee decide that the serious adverse event is related to the study or drug. Serious adverse events are reported to the regulator, ethics committee and other investigators in a timely manner.

Study-related high end equipment is often donated to the site so that other patients can benefit. In some trials, e.g., in cancer the patient may receive drug free of cost for life. So often the patient may have died if he had not been a part of this trial. He would not have been able to see his grand children graduate or get married if he was not part of the trial. The extra lease of life means a lot to the patient and relatives.

So what if trials don’t happen in India? We won’t get new drugs. Our health statistics won’t improve. The world would have moved on. India will lag behind. Our doctors may continue to go abroad in greater numbers and the brain drain may cripple us. Indian patients too would go abroad in search of cure or alleviation, reversing the current medical tourism. Indigenous innovation may dry up. Is this progress or “congress” or regress?

There is no question. If clinical trials don’t happen in India, disease will advance. And will adversely impact the health of the economy. Old is gold but in such cases a few new advances will always add to the glitter. Your only hope to get better may be stuck in the queue. This is just my view.

This is a guest post by Dr. Viraj Suvarna. It is a part of a series of posts on the state of clinical trials in India. Dr. Suvarna writes here in his personal capacity and not as an employee of Boehringer Ingelheim India Private Limited where he serves as Medical Director.

India’s Decision to Invoke Compulsory Licensing

A variety of factors such as growing population and economy, increasing life expectancy, expanding middle class, higher income levels, rise in incidence of diseases, increased government outlays and better awareness about health are expected to make India’s health care a US$ 280 billion industry by 2020[1].

Despite this growth, health care delivery and services in India continue to be lacking. India houses 16% of the world population, 21% of the global diseases and the largest burden of communicable diseases in the world[2], yet its health care infrastructure is one of the weakest and not comparable with other developing nations. The government spends just 0.9% of GDP on health care.

Health care costs in India have risen in the last few years.  As new technology and better products are introduced, and medical negligence cases are brought under the purview of consumer courts, health care costs have increased. To make matters worse, health insurance covers only 14% of the population[3]. A WHO study has reported that 40 per cent of Indian families end up in debt due to high medical expenditure.

On one hand, it is in this context that the decision by the Indian Patent Office to issue a compulsory license (CL) to Natco for Bayer’s anti-cancer drug Sorafenib must be viewed. The CL means the drug will now be available at Rs 8,800 per month, a 97% reduction from Bayer’s Rs 2.8 lakh. Globally, people working on public health and access to medicines have welcomed the decision.

On the other hand, the first CL issued in India, has set a precedent. This is a rare instance globally where a general CL has been issued, not bound by ‘government use’ provisions or those allowed only in cases of ‘extreme urgency ‘ or ‘national emergency’. A CL that can be utilized by a generic company unconditionally means CLs could possibly be used to promote competition. In certain quarters, the CL on sorafenib is viewed as a step towards building domestic manufacturing capacity and know-how in a new range of drugs. Recently, the government decided to issue CLs on three more cancer products, two from Roche – including Herceptin, the popular drug to treat breast cancer – and one from BMS.

In the past, its decision to invoke CL added to the embarrassment of the Indian government during the 2012 visit of US Secretary of State, Ms. Hillary Clinton. As such the relationship between India and the US has seen a downward spiral, with widening differences on trade and diplomatic issues. During Ms. Clinton’s visit to India, she also raised the case of a first time grant of the compulsory licence[4]. While Trade Minister Anand Sharma has strongly objected to the US move of tightening the screws on India at the WTO, could the Indian government have better balanced the need to create access to life-saving medicine to its citizens and the WTO regulations?


[1] Source: http://www.indianhealthcare.in; Wikipedia article on Healthcare in India

[2] Source: WHO Health Statistics 2011

[3] Source: Rashtriya Swasthya Bima Yojna website [http://www.rsby.gov.in/about_rsby.html]