Generic or brand name; it’s a choice we’re all faced with on a daily basis and it’s a choice that’s causing more and more concern for branded pharmaceutical companies. Since 2005 generics accounted for 43.5% of the total prescriptions filled in Canada, but by 2011 that number had skyrocketed up to 60%.
It’s clear that there has been a shift toward generics and, for branded pharmaceutical companies, fighting that switch will be no easy feat. Brands have already lost huge portions of their revenue streams, which means their budgets for commercial activities have reduced significantly. In order for pharmaceutical companies to adapt to this new environment, they’ll need a highly targeted marketing strategy.
After extensive research into the topic, the Environics’ Health and Wellness team has concluded that the most effective strategy that brands can use focuses on two major stakeholders, physicians and patients.
Convincing physicians to specify a brand when a generic is available is an extremely important part of any pharmaceutical brand’s marketing strategy, especially once a product is off patent, but that can’t be where the strategy ends. Although it is true that a slight majority of doctors in Canada prefer to specify a brand name on their prescriptions, 45% of doctors still prefer to prescribe generic, if it is available. While justifications for that decision range from the perceived effectiveness of generics to the financial concerns of patients, some doctors have stronger opinions than others. Specifically, some are more likely to respond to marketing techniques then others. So, how then can pharmaceutical brands know which doctors they need to focus on?
Typically, doctors would be targeted based on the class of drugs that they most often prescribe. For example, pharmaceutical companies that manufacture cholesterol medication would likely target doctors who have high incidences of prescribing such medication. This approach, however, is shortsighted and doesn’t take into account a physicians attitudes towards prescribing brands. For that we turn to MDConnect™.
MDConnect™ was created by Environics Research, in partnership with IMS-Brogan, a nationally respected provider of health care data, software, research and consulting services. By analyzing both, a nationwide survey of top-prescribing physicians, along with physician behaviors and practices, MDConnect™ is able to create an in-depth portrait of physician concerns and preferences. As you can see from the chart below, MDConnect™ has allowed us to segment these doctors into four distinct groups, Traditionalists, Entrepreneurs, Networkers and Stoics. Given their attitudes, Entrepreneur and Traditionalist physicians, which account for 51% of Canadian doctors, should be the targets for branded pharmaceutical products .
The tactics used for these marketing efforts also need to be segment specific. Traditionalists, for example are likely to respond well when marketers appeal to their sense of social status, as opposed to a sense of intellectual or professional status, which would appeal more to Entrepreneurs.
While targeting physicians is a key component to the success of a branded product, it is only half of the equation. Pharmaceutical companies also need to ensure that the physicians they target are serving a community in which patients prefer a branded product to a generic. This brings us to the second prong of our two-pronged approach, patient targeting.
In the past, patients had little to no access to information about the drugs that could potentially be prescribed to them. They used to rely on their doctors and trust that they knew what was best, but times have changed. The age of the Internet has opened the door to a world of never ending research material for patients and an increasing number are making their own healthcare decisions, separate from their doctor. In fact, 60% of Canadian doctors reported receiving requests for substitutions on one third of the prescriptions they write. Clearly patients have become an important factor in determining health care decisions and need to be considered when developing a marketing strategy.
Much like targeting the right physicians, targeting the right patients involves segmenting them along a spectrum based on their brand sensitivity. To do this, Environics uses PatientConnect™, which utilizes our proprietary value based system. As you can see from the chart below, PatientConnect™ has segmented patients into 5 district groups based on the opinions and perceptions that we collected.
By specifically targeting Responsible Proactives and Doctor Disciples, the two most brand sensitive groups, with their marketing efforts, pharmaceutical brands assure themselves the best return on their marketing investment. Keep in mind also that, like physician segments, each patient segment needs to be approached in the right way for communications to be effective. Doctor Disciples, for example are much more likely to respond to a GP endorsement, while Responsible Proactives respond more favourably to testimonials and social media content.
Without question, we ‘ve entered a new era of generic competition. Brands are dealing with reduced budgets and smaller sales teams and simply can’t afford to waste marketing efforts on targets that aren’t providing a return on their investment. Reaching out to patients and physicians is important, but the real key to an effective brand marketing strategy is physician and patient targeting. It won’t be an easy road for pharmaceutical brands, but with the right strategy in place and an in depth understanding of their targets, they can keep moving forward.