23 May 2009

Pharma e-Marketing : Challenges

If consumer e-Marketing is slowly but surely gaining momentum (online marketing industry is a only recession proof industry in this days), The online pharma market is selling like a hot cake in Europe as well as in USA. Pharmaceutical B2B, e-Commerce is still in its infancy. We haven’t seen as many mistakes and bad moves anywhere in the B2B field as with pharma. Unfortunately, many companies are taking the completely wrong approach in employing or subcontracting cross-industry e-Marketing professionals to handle this very complicated and specific field.

There are not many real specialists in this area (we have heard stories from them that when applying for positions within the industry, someone with no idea of pharma-specific problems whatsoever often faces them at interview.

These people don't even know the most common abbreviations used in pharma / API business such as: Brand, Genric, DMF, USP, BP, etc. Therefore, in many cases, pharma or marketing companies take on board new e-Commerce specialists that put emphasis on user experiences, WEB 2, interactivity, and other secondary issues. This approach creates systems of Pharmaceutical e-Marketing similar to the marketing of food and beauty and other consumer products. But the pharma industry is noticeably different. So the main advice would be: if getting on board a pharma marketing specialist then make sure that he/she knows the industry itself not just general B2B(C) e-Marketing.

Meanwhile, let's discuss what pharma e-Marketing is and how it should be organised. Many aspects of it are similar to consumer product but with a number of differences.

The pharmaceutical market is going through turbulent times. In fact, the only thing protecting it from invasion by very advanced R&D companies from Asia and the Far East is the large number of regulations and bylaws. At the same time, the regulations and bylaws in the developing markets are less strict, so cheap generic alternatives are becoming highly competitive.
One of the few weapons left in the hands of the Brands is a media campaign labeling generics as unsafe. If in some cases they do have grounds, then in many others they do not. For example; some simple drugs produced in the Far East are made at the same factory both for generic and brand options. Branded pharma products carry one of the oddest features ever seen on the market, when packaging costs more than content. This is an example of a weak point where generics are hitting them hard! Especially in the developing markets.

As a result, the new media subcontractors are taking on board not pharma specialists but PR professionals with new media backgrounds, in order to create an extensive promotion subsystem making products even more expensive (to absorb the costs). This gives generics more space to operate and requires fresh promotional effort from brands, therefore creating a never-ending circle. Another common mistake made by inexperienced new media professionals is a misunderstanding of the pharma process itself and the stages involved.
For instance, in many cases pharmaceutical companies which want to market their new development are approaching new-media companies which immediately start a campaign for a "new drug". Meanwhile the compound in question is actually an API, which has completely different ways of introducing and promoting as a product. Therefore let us define the actual term "Pharmaceutical e-Marketing" which is in reality not a single concept and could be divided into three categories.

1. End user (including doctors and hospitals): This is actually something which is commonly known as "Pharma e-Marketing" but in fact it is only a tip of an iceberg. At this point most mistakes are being made by mixing it up with the rest of the pharmaceutical industry. It is mostly based on providing reports, scientific data, etc. to the specialists in order to start the promotion of a new drug. A type of the e-Marketing strategy used nowadays is new media.

2. Bulk drugs: This sector is not visible to the end users and mostly involves established drugs like antibiotics, antipyretic, etc. The competition is getting tougher but is mostly left outside the scope of the e-Marketing. Type of the e-Marketing used - anything from a catalogue on the web to the chemical portals.

3.API: New and probably the most exciting area of pharma e-Marketing. APIs are pure B2B as they are distributed between the pharma companies only. There are very few specialists in this area but due to tremendous progress made in this field in countries like India and China the industry is about to gain serious momentum. Type of the e-Marketing used - highly individual, depends on the skills of the specialist involved.

Overall there are two contradicting tendencies in the section 1 and 2 from the above list. In-flow of brand promotions and out-flow of generic products information targeting mostly developing markets. In fact there is a draw situation at the moment as none of them wins. Well, almost a draw as generics have an edge over the brands and if this advantage is pressed home the gap will get wider shortly. There are well known techniques in branding, such as the "smear campaign" method used in anti-generic strategy.

But at the same time the possibilities for e-Marketing generics are truly unlimited as they are not tied by the same restrictions that branding professionals have almost everywhere from pharma to washing-up liquids and cereals. Therefore if someone taps into this very pharma-specific strategy then, even with thousand times less investment than brands, it is possible to achieve much better results.

The third section is a terra incognita for many e-Commerce specialists simply because it has too much industry-specific and scientific information. At the same time there are a large number of high quality R&D laboratories in Asia and Far East whose production and know-how is ahead of the Western competition. So presenting their products to the other pharma and R&D companies is becoming a high-priority task.