The race to effective e-business solutions is on. Case studies of successes and failures are multiplying
E-business conferences for the pharma industry are proliferating and shifting from being about theoretical benefits to dealing with real case study, an example of how the market has matured in the past year.
A Cap Gemini Ernst and Young/Insead survey published in May 2001 estimates that the Industry has invested between 0.5% and 1% of sales (approximately $2 billion) on e-business over the past year, with mixed results. The majority of respondents (70%) agree that the biggest impact will be on sales and marketing.
The race is on, but while some companies try to get it right first time, others are just trying everything while mistakes are still an option. The difficulties lie in the choice: today there are several strategies to market drugs more efficiently but speed is of the essence.
e-Detailing a miracle solution to market pressures?
The market is saturating and the sales representative channel is becoming an expensive one. A ZS report published in 2001 put the average cost for a typical rep including salary, benefits and expenses at $160,000…a significant sum for an average call lasting no more than 3 minutes and a sales representative spending most of his/her time travelling and waiting.
Doctors are closing their doors to sales representatives, citing too many visits and have too many products to choose from. But paradoxically, they are more in need of product information than ever whilst have to face the pressure of the new breed of Internet informed patient.
The solution to increase the sales force does not appear like an attractive one anymore, still there is a need to build brand recognition amongst prescribers and competition keeps rising with a shortage of potential blockbusters (53% of top drugs will come off patent between now and 2005).
Is there a miracle solution with quick wins and early ROI? Here comes e-Detailing.
e-Detailing delivers product information and services to the doctor through electronic channels. It is emerging as a means for pharmaceutical companies to reduce their sales force expenses -–without losing sales- and to interact with doctors in a value-added way.
Much more than a cost saving solution, e-Detailing is about offering value added services
Operational and organisational benefits. The business case is simple: E-detailing cost $100-$125 compared to $300 traditional one per ‘call’, and is more substantial.
Michael Wong, Director of e-Business sales at AstraZeneca in the US confirms that “an average e-detailing rep session is 9 minutes compared to the traditional 30-seconds to 2 minutes “fire drills””.
But more and more, e detailing is being perceived as a revenue generation tool and it is on the strategy side that benefits will be the most significant.
New opportunities for applications appear: extend customer reach (targeting low prescribers as well as high ones), promote a leading drug, milk a mature product, boost the launch of a niche drug with minimal budget and offer value added services to doctors such as continuous medical education online…the sky is the limit.
Dr David Pearson, e-business director at Novartis in the UK agrees, "many of our customers are interested in exploring new communication channels with Novartis…ones which complement traditional face to face selling"
There is also the potential for a better "doctor to company" interactive relationship. "The flexibility and control for doctors gives an opportunity to build long term customer loyalty" declared Richard Trio, e-detailing director at Pharmacia in the US at a recent conference on e-business for Pharmaceuticals in London.
"The flip side of the coin"…some challenges
The picture is rosy but not without challenges. A lot of challenges arise as consequences of the benefits and at all level of the organisation, e-Detailing is proven to be a difficult proposition to implement.
Operational challenges - "24/7 availability for physicians, becomes a challenge” declares Dr Pearson “we need to be available when they want us to be".
Wong adds “ROI is a tough measure to grapple with. The nature of the business makes it difficult to screen out other factors like advertising, launch programs etc…that might distort the testing procedures involved with a ROI analysis”.
Organisational challenges - Michael Wong also comments on organisational and change management challenges: “As with anything that requires change, there is the natural tendency for resistance and often there is an inclination to “get back to the basics”, to the established best practices (….) What motivation is there for you to try something new when the “tried and true” has worked so well for your predecessors?”.
Even on the strategy side, there is the challenge to serve every doctor in a customised way when needs, cultures and level of Internet readiness are so different.
At the moment, "Data from the US are convincing - here in the UK, the jury is still out…" declares Dr David Pearson.
The suppliers of e-Detailing are in majority US ones.
60% of the top 20 pharmaceutical companies will underwrite videoconferencing applications and installations in physician offices by 2003 - Gartner predicts.
Aventis, Bayer, Novartis, Roche, Schering, Pharmacia, Bristol Myers Squibb, MSD and Astra Zeneca are already amongst leading pharmaceutical companies conducting e-detailing.
As the entry barriers are low, providers of direct to doctors' communication are multiplying.
All of these suppliers differ slightly in their value proposition, depending on the level of interactivity and the attractiveness of their community.
Physician Interactive provider of point of care decisions for physicians: 40% of doctors who go through the programs want reps to visit them and 70% request samples. The service is available 24/7. They have the largest program to date, targeting 60,000 doctors nationwide. Clients include: Searle (Pharmacia); J&J, Amgen, TAP, Boehringer Ingelheim
MyDrugRep.com is a virtual detail interactive website.
iPhysicianNet e-detailing system utilises a network of video conferencing to provide physicians with access to live interactions with pharmaceutical companies. Recently Wyeth Ayerst was the eighth company to join the client base (GSK, AstraZeneca and Novartis are existing customers).
These suppliers are now developing some strategic partnerships in order to leverage their value proposition.
For example, Physician Interactive agreed an agreement with emedicine, a CME Company.
Last year my drug rep and iphysician net formed an e-strategic partnership. My drug rep will become an iphysician net preferred provider of alternative web based detailing services.
In the UK
Very few UK companies are doing e detailing. Pilot's are usually in the US before coming to Europe and technology adoption is behind in the UK.
"There are no standard suppliers yet in the UK. Many American companies are testing the waters, but they are not yet established" highlights Dr Pearson.
Nevertheless, barriers to entry are very low and more companies are starting in the UK.
Potentially, doctor's portals will catch the opportunity to leverage their customer base and get into detailing services.
e-Detailing will contribute to transform the way sales representatives and doctors communicate
Sales representatives will see their role changing. They will have to develop excellent customer service skills, be available for the client, be knowledgeable about a broad range of topics and act as a technology literate consultant.
Michael Wong emphasis the point that sales representatives perceive e-Detailing as a complementary channel “At AstraZeneca HQ, we conducted a survey that polled a subset of the field force. One key finding was that the vast majority of respondents (97%) believed that e-Detailing is a collaborative effort with Field Sales”.
Doctors apparently welcome the e-detailing offer: a Datamonitor report indicates that 90% of doctors would like internet based detailing on demand while only 8% have been offered e-detailing.
Critical success factors:
To the question of what the critical success factors for a successful e-Detailing implementation are, Dr Pearson insists on "the benefits to the customers, sales management support, flawless IT execution, interesting new product news to communicate”.
Looking at another angle, Michael Wong mentions the change management capabilities “ since our e-Detailing pilot was something completely new to the organization, there were no text book answers for people to refer to – instead these innovative folks had to create new processes as they went along”.
In conclusion… real segmentation starts with the customer and their needs…
The shift has happened: everybody agrees that e-Detailing enhances and facilitates the traditional approaches rather than replacing them.
The barriers to entry are low but the learning curve might be important (ZS).
E detailing is still in its infancy, the amount of power it can eventually leverage is yet to be seen and many more initiatives are to come for the most intelligent players that know how to capture the customer.
In the face of all this optimism there is still the fact that an estimation of the UK market is still less than 1% and we will have to wait 2-3 years before e-detailing is an established route to sell.
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