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When all is said and done and when we arrive at the new normal, and even while we work our way to the new normal, the effects of COVID-19 will be everlasting.  Many of the changes COVID-19 has brought to the industry have been the focal point of conversations and action over the past few years. However, going forward, these decisions regarding how to go to market must be made now.  Omni-channels have become more prevalent, new sales channels will need to be created, and marketing and selling efforts expanding past Healthcare Providers’ offices into the consumer’s hands will need to be augmented.  Pharma/Biotech companies will be placing greater scrutiny on spending to ensure they are surrounding decision-makers with the information they need ensuring sales volumes will maintain the high rates they have maintained for years.  But how should companies allocate their spending through Health Care Personnel’s (HCP’s), Payee’s, and consumers to ensure their message is getting out, and products are moving at the rate necessary to achieve success?

How We Got Here:

Although the COVID-19 pandemic is having a material impact on how sales reps interact with HCP’s, the ongoing decrease of face to face meetings is a trend that sales leadership has been dealing with for years  as over 50% of Physicians restrict access to Sales reps, that’s up from only 20% 8 years ago. [1]    Many factors are causing a decrease in HCP time; for starters, HCP’s are overworked they are educated throughout their college and clinical years on how to work with sales reps, and ensuring their focus is on patients.  More importantly, information around clinical trials and medications are readily available for HCP’s to consume, creating a more educated buyer in a competitive field.  With that, the differentiators between drugs must be material for an HCP to make a change to a new medication.  On the financial front, M&A activity in the medical field has increased, with large hospitals acquiring smaller medical clinics, creating a large network with a centralized decision center higher up in the network.[2] This creates a more complex buying cycle with a sales rep now having to navigate additional levels of an organization to reach a decision-maker.  These trends have been forcing Pharma/Biotech companies to think outside the box, focusing on their other channels, including payers and consumers.  Chief Commercial Officer’s in concert with Brand Leaders, Sales Leaders, and Market Access Leaders need to determine the best approach going forward to successfully launch new products and grow current products in the age of the informed buyer.

Where We Are:

The culmination of channel spend allocation is at the top of every Chief Commercial Officers mind.  The traditional Direct to HCP focus by Pharma/Biotech companies on HCP’s has been a heavy reliance on push marketing through direct sales, assuming the patient is an uneducated buyer.  To combat this, Pharma/Biotech companies have been increasing their spend in their Direct to Consumer channel through marketing spend targeting the consumer through multiple channels ranging from traditional B2C marketing (TV, web, signage, etc.) and revenue focused (rebates, bulk discounts, etc.) creating brand awareness as well as educating buyers on the benefits of their drug with the end goal of creating a pull market.  This method, along with the push methodology, creates a sales vacuum both upstream and downstream creating demand at the HCP level of the value chain.

Reliance on both a push and a pull supply chain has gained traction. However, as drug prices balloon and increased scrutiny is placed on testing, the ability to work with the payee through the Direct to Payee channel has become more prevalent.  Insurance providers are tasked with providing the right care for their customers at a cost-effective price for both the patient and the insurer.  With the control to block payment on medications that can bankrupt patients, the pharma companies must work directly with insurers for them to 1) understand the value of the medication created; and 2) price the medication in a way that works for both the payee and the pharma company.

Going Forward:

Since the onset of the COVID-19 pandemic many of the issues the pharma industry faced initially have been expedited across all channels.  Now more than ever, must leadership analyze their spend across all their channels and make educated decisions on what initiatives to support and what ones to pull back.  A reallocation of spend from direct to HCP to Digital media has been occurring but must be expedited as, although there is a greater up-front cost, the long-term benefit of this spend can page the way towards a more profitable brand.  Chief Commercial Officers must work collaboratively with Sales and Marketing leadership to ensure a cohesive plan and execution on that plan to ensure continued success.

Direct to HCP: is no longer a decreasing trend; meetings are non-existent.  Tele-meetings are no longer an idea, they are the new normal.  HCP’s are no longer difficult to access, they’re inaccessible.  As the HCP is a key stakeholder in the sale, ensuring they continue to be informed will continue to play a vital role. However, the tactics used will be more of a profound surround tactic, all while ensuring the information they need is readily available through multiple channels.  Sales leadership must continue to work with HCP’s to ensure their medication is staying top of mind in offices and pharmacies through flexible pricing strategies, including rebates at the consumer level, bulk referenced discounts, etc.  The ability for sales leaders to pull specific levers for medication at the HCP level will ensure pricing that is aggressive enough to stay in front of the competition as well as profitable to the Pharma/Biotech companies, ensuring they’re receiving their desired margins.  If Pharma/Biotech companies could reduce the cost of medication to the consumer, how much wider could their market share grow?  In addition, off-label testing of drugs must be continued to ensure the full benefit of the medication is being received by the HCP’s.  Sales leadership must work cohesively with brand leaders to ensure the product is priced competitively as well as in a range that fits the drugs category.  Without the time available or accessibility to HCP’s, pharma companies have been increasing their focus on other channels.  As HCP’s become more educated on not only the health but also the financial benefits of the medication they prescribe, continued rebates must be offered to ensure.

Direct to the Consumer: will continue to evolve, focusing on two key areas: brand awareness for new consumers and 2) ongoing awareness for consumption for current consumers.  Through both channels, digital success is a key factor in ensuring a successful marketing campaign.

Pharma/Biotech companies will continue to grow their brand awareness, ensuring visibility beyond HCP’s, pharmacies, etc. The need to become more visible is a twofold: 1) this continues to drive a pull mentality as potential consumers are aware of medications for their conditions to approach HCP’s; and 2) supports a general market trend on a health focus in the first world with education being at the forefront.  Consumers are more willing to educate themselves as to what is on the market as personal care, and overall cultural focus on health has become prevalent.  Furthermore, as individual health has become a cultural focal point in first world countries, buyer personas are changing, and patient engagement is becoming more prevalent.  Because of these factors, pharma companies need to continue to shift towards a heavy emphasis on digital marketing leading to an uptick in media advertising and an exponential increase in web traffic.  Marketing leaders and Chief Commercial Officers must determine the levers necessary to pull in order to allocate funding, and how do they measure success through the ROI of these initiatives.

In addition to brand awareness, pharmacy organizations must improve overall communication with current patients.  As the pharma industry becomes more competitive, understanding current patient medication nonadherence becomes more prevalent, and the investment in a services model allows for pharma companies to gain insight into these rising trends allowing them to become more proactive in addressing them.  According to studies performed in 2018, medication adherence is only at 50% for chronic illness [4], which results in at least 50% of failed treatments and over 25% of recurring hospital visits.  This results from several issues including (but not limited to) lack of understanding of the medication, real or perceived ineffectiveness, financial burden, and aide effect.  Customer advocacy groups can allow for patients to communicate directly with the pharma company, creating a bidirectional network of information helping the Pharma/Biotech company understand the true emotional and financial tolls the medication have on them as well as providing a support group for consumers to network with as a sounding board.  In addition, this will further the education of the end consumer, ensuring they continue to understand the effects of their medication over the short and long term.  Marketing leaders, brand managers, and Chief Commercial officers must continue to invest in these channels as they have a material impact in understanding and acting on recurring revenue streams with their consumers.

Lastly, Pharma/Biotech companies must continue to strengthen their relationships with the direct-payee channels through creative pricing for consumers and increased value for those medications.  As of 2018, over 133 million Americans were diagnosed with a chronic illness [3], creating a heavy strain on the insurance industry.  As medications become more expensive, and the market becomes saturated, the strategic nature of pricing will become more prevalent.  This has led to an increase in pricing techniques, including value-based pricing, more aggressive rebates provided, and a greater focus on strategic pricing.  The ability to prove the effectiveness of medications to Payee’s can ensure medication is at the top of Payee’s mind, however rebates and strategic pricing will ensure it is at the right price point for consumers.  Strategic Pricing and rebates must be calculated with great scrutiny, including multi-scenario analysis as the expected return on discounts is an increased volume.  Brand managers and Chief Commercial Officers will need visibility into the whole picture for each product channel to ensure promotions, rebates, and prices are still returning an economical benefit to the company.

How to Take Action:

Pharma/Biotech companies need to determine where to double down on spending to realize the most value with the ongoing trends we discussed. Do you continue with a pull supply chain creating customer advocacy groups? How much do you invest in maintaining a push mentality?  How creative can you get with strategic pricing? B2C marketing and strategic pricing are going to continue to grow and the ability to make these decisions.  Understanding the levers to pull for each product group can be challenging and Chief Commercial Officers will need visibility into product revenue and spend categories as a whole and the impact of pulling various levers along the sales and marketing channels to ensure the decisions made result in profitable product categories.  Breaking down those respective silos is not an easy task but integrating each channel into an aggregate solution allowing the correct decision-makers to pull the correct triggers along the way to manage the overall product margin as we continue to evolve the pharma sales channels.

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