For an industry full of brilliant scientists, pharmaceutical companies are slow to adopt evidence based sales methodologies. Here’s why.
Pharma companies spend impressive amounts of money on the clinical development of drugs to bring them to market. A significant portion of this investment is in clinical trials where very smart people design studies that tell us important things about a drug’s efficacy and safety. Rigorous focus on excellence in science, trial design, and statistical analysis allows these companies to rationally make important decisions about whether to continue development of a promising drug or to abandon a line of research in lieu of more promising compounds.
What is fascinating is the complete incongruence between pharmaceutical clinical drug development and how these same companies approach decisions around drug promotion. Part of the explanation is that the pharma sales model is inherently and frustratingly indirect. In fact, I can hardly think of a less direct, more muddled interplay of stakeholders that are involved between the time a drug is produced and when it is consumed by a patient.
For a moment, let’s consider the plight of the individual pharmaceutical sales rep. They do not take possession of the drug, nor do they actually sell it to their customer, the physician. The physician doesn’t actually buy the drug, nor in most cases do they ever see or take possession of the drug. The patient actually consumes the drug, but in most cases they do not pay for the drug; that is left to insurance plans or Medicaid or similar payor sources. The pharmacy typically buys the drug and physically gives it the patient, but neither of these players actually significantly impacts the decision of what drug is dispensed. The point of all this is to start to describe the sheer complexity of this model and the disconnect that a sales rep has from most of these participants.
However, the best pharmaceutical reps play a powerful role in influencing prescribing behaviors among physicians. The proof I would offer in support would be the continuing massive investment pharma companies make in their field based sales teams and the cries from the industry’s detractors to regulate this influence for various reasons that are beyond the scope of this article.
This does bring us to the pivotal question that formed the genesis of this topic. Why do science minded pharmaceutical companies not apply validated methods and tools in driving their promotional efforts? There is a tremendous amount of money spent on rep salaries, bonus, promotional materials, samples, speaker programs and more. And yet, as an industry, pharma cannot say with any scientific certainty what tactics are driving results across their customer segments. The reach and frequency model with intense competition for share of voice among an increasingly difficult to access customer base may still deliver results. But, in an age of mobile CRM, big data, cloud computing, and validated customer behavioral profiles, pharma sales and marketing remains firmly entrenched in the 80's in terms of their application of technology to the sales process.
Is this simply the persistent remnants of a profitable model that did not have the data or the tools to quantify specific tactic’s contribution to outcomes? If so, is this sustainable in a post ACA environment where access and pricing pressures may squeeze the effectiveness out of the industry’s previously comfortable strategies?
These are compelling and immediate questions that pharmaceutical commercial organizations will have to address.