Value pricing is taking the life sciences industry by storm, providing an opportunity to create goodwill with customers and positive brand recognition. More and more companies are coming up with creative ways of implementing value pricing strategies and the reality is, sooner or later, strategic and commercialization teams industry-wide will need to understand the full scope of value pricing and what it takes to effectively implement a successful value pricing tactic. In this post, we will define and examine value pricing from the following perspectives:

• What is value pricing?
• What does value pricing mean in the pharmaceutical industry?
• How will value pricing work in the pharmaceutical marketplace?
• How will it be implemented?
• The bottom line.

What is value pricing?

Value-based pricing (also known as value optimized pricing) is a pricing strategy that sets prices based primarily on the perceived value of a product or service to the consumer, rather than according to the cost of that product or service, according to Wikipedia. When a value-pricing tactic is successfully implemented, it improves profitability by generating higher prices without really impacting sales volumes.

In other words, a manufacturer of a good or service allows the market to tell it what a fair price is for that good or service. This type of model is most often seen in markets in which the majority of sales are made based on emotion, such as in the fashion, artwork and entertainment industries – and, at the top of that list, pharmaceuticals.

Pharmaceutical sales are based disproportionately on need. There is no stronger emotional buying driver than pain. In the pharma business, you’re quite literally dealing with a product that dictates the difference between life and death.

What does value pricing mean in pharmaceuticals?

With value pricing comes certain guarantees offered to the consumer, which can present a significant risk to a company. Ultimately, by turning to a value-pricing model, the manufacturer is essentially guaranteeing a successful clinical outcome, “or your money back.” And to the consumer, this might sound great!

What could go wrong, right?

Well, there are a few things to consider:

First, would this mean the consumer (hospital, insurance company or the patient) is not obligated to cover any of the drug costs on a failed clinical outcome? Would they get all of their money back, or just some? Would the physician still receive his fee given that he had to provide his professional insight, expertise and time, or would he not be entitled to any compensation since the “value” of the procedure wasn’t realized due to a failed outcome? What about the pharmacy and suppliers? It stands to reason that the pharmacies won’t want to give up their fees and that the suppliers won’t either. In the end, what could be exposed in this value pricing model is not only the actual cost of the pharmaceutical product to the patient, but also the other fees and costs associated with treatment.

Second, doctors and suppliers may not want patients and/or payers to know the true cost of a product. Perhaps this is one of the more subtle (or not so subtle) aims of the manufacturers. While only $.06 of every healthcare dollar spent is driven by drug costs, the price the consumer ultimately pays for the drug is driven up substantially as it moves through the supply chain. After adding in the average wholesaler markup, pharmacy pricing, managed market rebates, and doctor and hospital fees, the pricing for treatment becomes extensive.

And finally, like any fiscally responsible for-profit business, manufacturers must consider their profit margins, as they have a duty to their shareholders, who have entrusted them with their hard earned money.  To ensure a profitable outcome in a value-pricing model, a company needs to be incredibly confident that their treatment is going to work. This means that they must have complete faith that their clinical trials have been built correctly. As it is, clinical trials are conducted with very tight controls – the exclusion criteria for patients in a given trial is not always matched well with the real world. For example, many trials exclude smokers. In the real world, a lot of people smoke and don’t always disclose this fact to their doctors. That poses a real vulnerability when billions of dollars are spent over the development cycle of a drug. So, how much money is a company willing to put at risk for a commercial product to gain initial traction, to preserve the life of a product, or to gain goodwill in a market before they cross over the line to “too much”? Every company will have to define what its walk away value is going to be.

How will value pricing work in the pharmaceutical marketplace?

The question that companies need to answer is whether they have enough faith in their study data to guarantee a positive outcome for the patients being treated in the real world.

That, in turn, begs the question:  What actually qualifies as a successful clinical outcome? How long does the outcome have to last? Who defines this outcome? Do clinicians drive the decision on what worked and what didn’t, or does the manufacturer? Both sides have several conflicting interests in this equation. A doctor might believe an outcome is unsuccessful if a patient doesn’t experience the same result seen in the clinical trial. Conversely, the company may say that the patient was not appropriately qualified to utilize their product (a closet smoker, for example) and thus the standard outcome was not to be expected. What happens then? Is there an independent arbitrator who can make the final decision in these types of situations, and if so, who will that arbitrator be?

One must then define the appropriate patient for a particular treatment. Do only “on-label” patients qualify? What happens when there is a contraindication in a patient that was unknown at the time of prescription, or if the clinician felt that the potential benefit was greater than the risk of a poor outcome? Is there a shared risk between the company, the clinician, and payer or patient?

How will value pricing be implemented?

The only fair and appropriate way to base pricing on value is to utilize the clinical trial protocols. Companies will need to take a full-scale approach to designing and implementing these protocols. This means that medical, legal, regulatory, marketing and sales teams will need to work closely together. Currently, there are often firewalls between the medical and marketing teams at many pharmaceutical companies. These firewalls will need to be breached or else the program goals will be misaligned, and predictable patient outcomes will not be certain. At the same time, clinicians and payers will have to agree to specific measurements that qualify for the patient value pricing guarantee.

Many companies are starting to launch products with the value pricing approach to drive a fast uptake at product launch and to build goodwill in the market for expensive products. Time will tell if value pricing accomplishes both of these objectives. In the meantime, pharma companies will have to ensure that their overall profits are not only stable, but growing in spite of the value pricing discounts needed, to keep shareholders happy and to avoid shareholder lawsuits.

The bottom line.

The bottom line is, there’s a whole lot of thought and analysis that needs to go into the structuring of a value-pricing scheme. First and foremost, the one question that must be answered: Is there enough emotion in the healthcare business to drive the desired outcomes of the pharma companies in this value pricing game? The recent trends in the industry seem to suggest so, but it is up to your individual strategic and commercialization teams to determine the worth – and assess the risks – of developing a value pricing strategy for your company.

CMK Select is honored to be recognized for our dynamic growth this year by NJBIZ, New Jersey’s leading business journal publication, as an NJBIZ Fast 50 Company.  This award is given to companies who progressively contribute to the success of the state’s economic growth and stability.

CMK Select and the remainder of the NJBIZ Fast 50 Award Winners will be presented with this honor at an event on November 14, 2017 at The Palace at Somerset Park. At the event, the Fast 50 Award Winners that have been recognized for their growth will be celebrated for their hard work and success this year.

We are truly honored to receive this award.  In the last three years, we have worked to achieve exceptional growth in our service offerings. The key to our success is grounded in our people.  We have made a commitment to attracting, retaining and rewarding our employees by offering them unique career paths and mentoring programs.  The talent and resourcefulness of all our employees has given us the opportunity to expand our services and to benefit the pharmaceutical and life sciences community.

During this growth period, we have faced challenges that are common in such a competitive industry.  It can be difficult to navigate this marketplace with changes in regulation and an increase in more specialty products.  We have stayed nimble and innovative in providing services and methods that continue to help us grow and overcome these challenges.
With our formalized Commercial Practice, we can provide services addressing every phase of the pharmaceutical product lifestyle.  Our services now include New Product Strategy and Planning, Product Launch Excellence, Brand Maximization and Loss of Exclusivity Planning.
Going forward, we will continue to focus on growing our services offerings, regional service delivery, client relationships and employee base.  To accommodate this growth, we are making key investments in talent and infrastructure to help us best respond to clients’ needs and to achieve our goals.
We would like to thank all our employees for their hard work this year and NJBIZ for recognizing us with this award! We look forward to the event on November 14^th!

There are many ways to measure how successful a product launch really is. With over 60 launches under our belt in the pharmaceutical industry, at CMK Select we looked at all the launches we managed to come up with a Launch Success Model.

There are 6 essential elements to a successful launch:

1. LAUNCH PLAN: This is the key element of a Launch Success. A well-developed launch plan that incorporates all the cross-functional areas and highlights the dependencies between them, can make all the difference. A great Launch plan includes all the key milestones, dependencies, resources, budget and schedule that can be monitored, tracked and reported on.

Managing a Launch Plan entails weekly reviews with the entire team and capturing status. Track to ensure the team is meeting milestones, and if falling behind the assess dependencies and do impact assessment. Lastly, act to bring the plan back on track with upper management.

There are many tools available in the market to build the plan, however, launch management expertise and experience play a critical role in ensuring a top-notch Launch Plan.

2. READINESS: The second factor that differentiates a good launch from a great one is the Readiness assessments. The Launch team should constantly look at the key milestones and the key success factors to assess status and expedite critical tasks if needed.
3. PULSE ON COMPETITION: From the time, we start planning to the time we launch, there may be various development in the marketplace. The competition will also start taking defensive action against the new product launch, it’s imperative that we stay on top of the situation and take corrective action as necessary.
4. FLEXIBLE LEADERSHIP: A Launch is fraught with uncertainties and ambiguous information. A team that can’t function in such a situation is an impediment to the launch success. Launch team should comprise of members who demonstrate flexible leadership that is not afraid to acknowledge mistakes and makes amendments on the fly.
5. KEY PERFORMANCE INDICATORS: A successful launch defines SMART (Specific, Measurable, Attainable, Relevant and Time Based) KPIs upfront so that it is built into the plan and measured throughout the Launch. Once the product is launched, the KPIs are tweaked to make them relevant to the market performance of the product.
6. GOVERNANCE: An agile governance structure ensures prompt decisions from the key stakeholders. Time is of the essence in a launch and having a rigid Governance can delay critical tasks impacting overall timelines and milestones. Engaging upper management in a regular launch specific forum to make Launch decisions is extremely efficient.

Not every company has launch expertise nor needs to have it in-house. The key is to find the right partner who can not only tell you what to do but help you drive a successful launch.

Fifty percent of new drug launches do not achieve peak sales, with half of them missing their targeted goals by 50% or more.¹ How can you avoid your new drug’s launch from becoming part of this statistic? Read on.

In Part 1 of this Insights series, we discussed the first 3 of the 5 common launch barriers.

In Part 2, we address overcoming the last two barriers by effectively working with the right teams and monitoring your launch post-approval to optimize your launch trajectory.

4. Working in Silos or with Wrong Teams

One individual cannot carry the entire weight of a launch on his/her shoulders and make it successful — the same way an orchestra doesn’t entertain audiences with just one instrument. Launch success comes from various teams coming together and working as a group. The key is ensuring all the right teams are included from the beginning.

Throughout a drug’s lifecycle, the focus is on sales and marketing and brand leads typically work with the teams that influence both of those areas. During a product launch, brand leadership needs to consider which stakeholders can help solve the supply-and-demand equation: finding that sweet spot, the equilibrium price that will prime the market so that when the new drug is approved patients will ask for it, HCPs will prescribe it, and insurance companies will (help) pay for it.

These groups include, but are not limited to:

• Market Access
• Pricing and Contracting
• Manufacturing and Supply
• Trade and Distribution
• Patient Advocacy
• Patient Support
• Regulatory Affairs
• Medical
• Commercial Operations
• External/Internal Communications

Not only is it important to have the right teams involved, but it is crucial to launch trajectory that these multiple constituents recognize and understand the interdependencies between them, and have a structured working environment that embraces maximum efficiency and aligns the cross-functional departments to meet every operation’s launch objectives.

Facilitating regularly scheduled launch-readiness meetings can offer a forum for all functional units to address how they plan to reach their goals achieve, the risks that must be overcome, and what they need from their counterparts.

5. Not Utilizing Metrics and Learnings

For 85% of pharmaceutical launches, the product trajectory is set in the first six months.² That does not afford much time to adjust should efforts go squirrely once the drug receives FDA approval. To ensure optimal trajectory, brand leads need to monitor how the launch is progressing and take the appropriate action when things are not tracking as planned.

As the launch teams are building their strategic and tactical plans, they need to identify the metrics or Key Performance Indicators (KPIs) — beyond the typical total prescriptions (TRx) and sales revenue — that they will use to measure the health and performance of a launch.

Questions to consider when developing metrics/KPIs include:

• How effective is the sales force in getting new-to-brand prescriptions? Does it vary by physician segment?
• Which messages, and in which media, are resonating the most with HCPs and Patients? Are there any regional differences?
• How fast is the drug getting into the hands of patients? Is there enough inventory to accommodate the launch demand?
• Which carriers/plans are offering the most favorable coverage, formulary placement? Are there any carriers blocking coverage?
• Who is attending speaker programs, and how effective are they in getting your message across?
• How are competitors reacting to the launch of your drug?

Brand teams can best leverage the metrics data in two ways:

• Use it post-launch to course correct on-going activities such as marketing campaigns, supply or distribution issues, as well as for pull-through marketing efforts
• Capture the information post mortem for use in future launches, specifically identifying what worked and what did not, and the best practices for working in a cross-functional environment

Once your drug receives FDA approval, you need to routinely track the status of each metric/KPI to gauge how close it is to achieving target outcomes, and course correct when necessary. We suggest implementing a launch dashboard, a 360-degree visual representation of all the launch activities underway, along with regular cross-functional meetings focusing to understand any differences between the goals set before launch and the actual performance in the market during and after launch.

These meetings also provide opportunities to raise red flags for any actions needing course correction, as well as identify those initiatives that should be continued or strengthened locally or shared more widely as best practices.

All the learnings from the launch-planning and execution should be documented and stored in a repository, from which future launch teams can draw upon the most effective processes and best practices on their path to launch success.

Facilitating the optimal launch

There are numerous reasons why new drug launches fail to reach their trajectory, as covered in this two-part Insights series. Overcoming any one of the 5 barriers discussed will help steer brand teams along a brighter course for success. Because failure is not an option, especially when it costs an average $2.6 billion dollars to get a drug to the market.³

_REFERENCES:

1. _{A new pharma launch paradigm: From one size fits all to a tailored product approach. Bain & Company. Published June 5, 2013. http://www.bain.com/publications/articles/a-new-pharma-launch-paradigm.aspx. Accessed March 29, 2017.}
2. _{McKinsey & Company, “Winning launches: using analytics and creativity to create superior Share of Insight”, Jun 2012.}
3. _{Tufts CSDD Assessment of Cost to Develop and Win Marketing Approval for a New Drug Now Published.  Tufts Center for the Study of Drug Development. Published March 16, 2016. Available at: http://csdd.tufts.edu/news/complete_story/tufts_csdd_rd_cost_study_now_published. Accessed March 29, 2017.}

New Drug Launch, Day 1…

The most anticipated and pivotal day for a pharmaceutical company. It takes an average of 14 years and $2.6 billion dollars to bring a new drug to market; and once it receives the cherished FDA approval, there is no room for failure.¹

Unfortunately, 50% of new drug launches do not achieve peak sales, with half of them missing their targeted goals by 50% or more.²

Why do so many launches fail to reach their optimal trajectories? While each launch is unique, there are several common mistakes that contribute to a poor start and subsequent disappointing financial performance:

1. Taking a One-Size-Fits-All Approach

2. Starting the launch planning process too late

3. Limited Launch Knowledge

4. Working in Silos or with Wrong Teams

5. Not Utilizing Metrics and Learnings

In the first of this two-part series, we’ll discuss the first three launch barriers.

1. Taking a One-Size-Fits-All Approach

Each product launch calls for a tailored approach, and it all begins with the right strategy. The strategy will depend on the disease state the drug is approved to treat, the size of the targeted patient population(s), and how payers and providers perceive its differentiators from competitive therapies already on the market.

A launch strategy can fall under one of four major categories:

• Going All In [High Differentiation, High Patient Population]
• Priming the Market [High Differentiation, Low Patient Population]
• Breaking the Mold [Low Differentiation, High Patient Population]
• Creating Value [Low Differentiation, Low Patient Population)

For a drug to be successful, payers, prescribers, and patients must have a compelling reason to choose your product over existing alternative therapies. It is therefore critical to understand:

• How your product differs from the competition
  • Is it serving/meeting an unmet need?
  • Is it a novel route of administration (oral vs injection)?
  • Does it have fewer adverse events?
• Your targeted population(s) and their specific needs
  • Is it easier to administer and, therefore, stay adherent?
  • Will there be a smaller copay or less out-of-pocket costs?

Careful market research and a deep understanding of the competitive landscape is critical to answering these key (and many other) questions and preparing an effective launch strategy.

2. Starting the Launch Planning Process Too Late

Ideally, launch planning should begin 18 to 24 months prior to approval to allow time for the necessary market research and industry analysis to create the brand’s high-level strategy, positioning statement, and strategic objectives.

Once the high-level strategy is developed, this planning timeframe also allows the cross-functional product launch team to obtain a deeper understanding of the various stakeholders in their respective areas and develop the numerous deliverables required for Day 1, which include, but are certainly not limited to:

• Coverage for the drug: Ensure coverage in commercial insurance, Medicare, and Medicaid plans with the fewest restrictions and the most favorable formulary placement
• Drug availability for patients: Confirm the logistics as to whether the drug will be available in local and/or major retail pharmacies, via mail order, or as a specialty drug with limited access options. Will also need to ensure the drug will be readily available upon approval
• Marketing and communications: Create promotional campaigns, patient access programs, educational materials and leave behind collateral, field marketing tools, etc.
• Prepared field force: Provide operational plans and training for the sales, managed market and medical field teams along with respective tools to educate the market
• Product pull-through strategy: Devise a clear plan for the sales/field teams to continue generating wins once the drug is on the market

Too often, launch teams severely underestimate the amount of time needed for successful planning and execution; and when time runs short, they may cut corners, skimp on cross-functional team collaboration and communication, and fall back on ineffective, outdated strategies — all of which can seriously impact a product’s launch.

3. Limited Launch Knowledge

Many exceptional brand leaders are not launch experts, the two are not mutually inclusive. And while it doesn’t take away from the value they bring to the company and the product(s), the lack of experience can be detrimental if it results in critical launch-planning errors.

Brand leaders are generally focused on the big picture and strategic thinking. Essentially, they are the “president” of a company or nation, with many big ideas that they would like to see come to fruition. Every president needs a strong “chief of staff” who will help execute their ideas and successfully drive their cause forward.

In this critical role, the chief of staff — often an industry consultant — leads the operational end of the launch strategy. Capitalizing on lessons learned from previous launches, he/she understands the issues that may arise, can anticipate and mitigate risks, and uses best practices to implement tailored structures and processes. In the end, the chief of staff unilaterally aligns the cross-functional teams for a successful launch, and facilitates ongoing learning to guide future launches.

Overcoming any of these 3 key launch barriers can improve the launch trajectory of your new drug.  Breaking all 3 barriers would improve it even further. But to really optimize your trajectory and have a launch that others will want to emulate, you need to address all 5 barriers.

In the second part of this series, we’ll discuss exactly what metrics and learnings teams should be tracking and utilizing in the launch process. In addition, we’ll identify what types of teams and team members to include in launch planning and execution, and how to best leverage their contributions to facilitate optimal launch.

Stay tuned for Part 2

_REFERENCES:

1. _{Tufts CSDD Assessment of Cost to Develop and Win Marketing Approval for a New Drug Now Published.  Tufts Center for the Study of Drug Development. Published March 16, 2016. Available at: http://csdd.tufts.edu/news/complete_story/tufts_csdd_rd_cost_study_now_published. Accessed March 29, 2017.}
2. _{A new pharma launch paradigm: From one size fits all to a tailored product approach. Bain & Company. Published June 5, 2013. http://www.bain.com/publications/articles/a-new-pharma-launch-paradigm.aspx. Accessed March 29, 2017.}

How drug companies can avoid penalties, revenue loss, resource drain, reputation issues, and relationship challenges

With the passing of the Physician Payments Sunshine Act, the importance of precise and timely expense report management by drug manufacturers ballooned, magnifying the challenges of an already-burdensome process. The 2012 rule was designed to increase transparency around the financial relationships between physicians and drug and device manufacturers, and it has serious implications for pharmaceutical companies.

Noncompliance with the Sunshine Act, even if it’s unintentional, can result in hefty fines and adverse publicity. Many physicians concerned with maintaining transparency are already curtailing their interactions with pharmaceutical reps. Any misreporting can create further distrust between physicians and sales reps, undoing hundreds of hours of relationship-building efforts and eliminating sales prospects.

Complying is Complicated

While the principles of transparency are nothing new for many large drug companies, even big manufacturers usually find that internal expense tracking and reporting requirements differ from those mandated by Sunshine Act. Rigorous standards demand that most transfers of value—such as meals, entertainment, and even office-based lunch-and-learns—between rep and doctor be reported in minute detail. A juxtaposed number, outdated contact details, or other inaccuracy can have tremendous implications for the manufacturer.

Many transfers of value are reportable, but there are also several categories that are not reportable, or are reportable only in certain circumstances. While underreporting can mean stiff penalties, overreporting has its own set of consequences. Reporting more than what’s required can negatively impact a manufacturer’s image and impact its relationships with physicians.

Five Steps to Compliance

Simply put, pharmaceutical companies face enormous challenges in maintaining Sunshine Act compliance. To help address these issues, we recommend the following best practices:

1. Take a Team Approach: Delegate a specially trained financial team to report, process, and monitor expenses. This team should function as the facilitator of the entire expense reporting process, employing the necessary checks and balances to improve compliance alignment, data quality, and cost avoidance.

2. Review Every Report: Rather than simply performing random audits, this expense report management (ERM) team should carefully inspect each and every report generated by sales reps for accuracy, compliance, correctness, and completeness, then send a revision list to the appropriate rep for completion.

3. Employ Ongoing Education: During the revision step, it’s critical that the ERM team help each rep understand why the changes need to be made. Not only will this result in more accurate reporting, but it will ultimately reduce the time reps need to spend on future reports. When expense reporting becomes easier to manage, reps are less likely to avoid or put off the task.

4. Lighten the Load: By handing off the majority of the review process to an ERM team, district managers need only review reports when they have been fully reviewed and are ready for sign-off. This reduces bottlenecks and frees management up for more mission-critical tasks.

5. Engage in Continuous QI: To streamline the initial report creation process and facilitate more timely submission, the ERM team should perform regular service reviews. The results of each analyses should be used to fine-tune reporting processes and practices, ensuring continuous quality improvement even as the company grows and evolves.

Boost Productivity, Revenue, and Compliance

Studies show that companies who implement these best practices see huge improvements in productivity and cost savings. A recent study of a large pharmaceutical manufacturer found that after deploying a dedicated ERM team, there was an average reduction of time spent creating, updating, filing, and correcting an expense report by a sales rep that averaged out to nearly 3 hours per week. That same study showed a reduction in time for the Regional Manager of nearly 65% per report due to the shift in report analysis eliminating non-compliance corrective reviews. The Regional Manager only needed to review to ensure that the reports were completed in accordance with company requirements. There was also an 11% increase in sales call activity, resulting in additional three sales calls per week for each sales representative, in addition to an average savings of $70K per month in penalty payments.

The costs of regulatory noncompliance are simply too great to ignore. By implementing these best practices, managers and reps are free to focus on sales, relationships with physicians and public perception remain positive, and significant cost savings are realized.

Learn how CMK Select’s outsourced expense report management solutions are helping pharmaceutical companies maintain Sunshine Act compliance so their sales teams can focus on building revenue.

PART II

As a healthcare marketer, it is important to understand the health transaction model. We recently talked about how good information is necessary as well as access to medications for healthcare providers.

In this healthcare transaction model, the last step we covered was the consumer bringing their medication home and following the instructions offered to them – or compliance. Once the patient starts taking the medication, they decide after a couple of days if the treatment is working. If so, they keep going until the course of treatment is complete and move on. If not, they probably go back to the physician who gave them that prescription and seek further help. How can we, as marketers, ensure compliance with the treatment throughout the course of therapy? In short, how do we make sure that we have satisfied the end users?

Determining Whether Goals Have Been Met

At the end of the transaction, a physician is “rewarded” for doing good work by the consumer’s utilizing his services again either in that course of treatment or subsequent illnesses. Marketers can help build this relationship between patient and physician by doing our jobs well all along the pathway.

Let’s think about this transaction graphically. It will help illustrate the story:

Transaction Flow:

As marketers, we need to be able to think through the steps of this transaction and help to influence and/or mitigate the barriers to each step.

• How do we make the finding of help easier?
• How do we ensure that the physician knows how to properly diagnose the patient’s problem?
• How do we know that physician will prescribe the right treatment?
• Will that treatment be available at the patient’s local pharmacy?
• Is the treatment easy to use for that patient and will the patient comply with the treatment?
• Will they need more help?
• Does the MD know how to help further or will the patient need to seek specialized therapy?
• How does the patient find that special help?
• Once the therapy works, what feedback do they give to the MD who helped them?
• Who paid for all this work and how was it paid for?

Understanding the Transaction Model Helps Build Successful Brands

The transaction model is complicated with many twists and turns. We do our clients the best service by properly understanding each of these steps and helping them think through the strategic and tactical options to maximize their brands across this broad spectrum of work. One of the key steps to being a good marketer is to know which of these steps we want to make an impact on and how – as well as knowing which ones we can and cannot reasonably influence. If we can successfully navigate this transaction, we can help build successful brands.

All healthcare transactions begin with the consumer. By transaction, I mean the literal interpretation of the word – taking an action across a set of circumstances. As Healthcare Marketers, it is critical that we understand how these transactions take place and what we can do to enhance the actions that a consumer takes and mitigate any exposure to the hurdles that may arise during this transaction.

When thinking about how we all interact with the Healthcare system as consumers, first think about how we know we have a need – are we sick/injured/in need of help:  Do we have a headache? A belly-ache? What is the cause of this? How do we think about the issue and the solution? If it’s minor, we probably either ignore it or take some basic OTC medication to help us solve the problem on our own. The more “major” it gets, the more we start to seek out help from family, friends, possibly the Internet, and ultimately, a medical professional.

Importance of Good Information

As marketers, it is critical that we ensure the consumer has access to good information from the very first thought of seeking help from the healthcare system. We need to know what information is readily available to them through these initial channels. What do their friends and family tell them? What is online? Is it accurate? How do we make sure it is accurate and appropriate? This first interaction with the system is where marketing begins. We need to understand this process, how to handle the initial information, and how we can properly influence the consumer to take the action we would like them to take.

In the case of the pharmaceutical industry, we want consumers to seek out the proper medical professional who can help them with their problem.

We need to ensure the consumer can do this quickly and efficiently. The various channels the consumer follows to find this professional need to be clear and easy to follow. We need to understand how we can properly impact those channels. Once the consumer reaches the medical professional, the next critical step is to make sure that the professional will diagnose the issue appropriately, recommend and/or prescribe medications or treatments that could help the patient, and talk to them about how to feel better.

Once the solution or prescription is written, the next step is to seek the medication – getting a prescription filled for instance. Typically, a consumer will drive to a local pharmacy and submit the prescription for filling, utilize insurance to help pay for the prescription, take the medication home and follow the instructions – compliance.

Ensuring Access to Medications

All of these steps require marketers to make sure the right decisions are made along the way to get our product into the hands of the consumer – make a sale. We need to make sure the medical professional is aware of our brand, knows how to prescribe it –dosage and administration, etc., and actually does write the prescription. Next, we need to make sure that the consumer knows where to find the treatment. While most prescriptions are filled at local pharmacies, there are certain medications that need special handling through specialty pharmacies or there could be an element of mail order or other non-personal access. Marketers need to understand this supply and fulfilment system intimately and know how to make sure our products are where they need to be when they need to be there. Ensuring access is absolutely paramount in the role of a marketer.

But the story doesn’t end there. Stay tuned for our next blog post as we navigate why it is important to understand the healthcare transaction model.