There has been a dramatic change in the pharmaceutical industry in the recent past. Drug manufacturers have had to adjust marketing strategies due to the launch of Medicare Part D, increased competition from new products, and pricing pressure from care organizations (Pedan & Wu, 2011). In order to influence physicians’ drug prescriptions, patients’ preferences and adherence, and insurance payers on the efficacy and value of their products, various promotional and sales approaches have to be undertaken. The huge amount of resources used by pharmaceutical companies to carry out promotional activities is a proof of the increasing competition from generic drugs that opens a wide spectrum of choice for physicians and patients when making decisions on which brand of drugs to prescribe or use. This paper examines the strategies that pharmaceutical companies use in order to maintain their products’ market share, the advantages, and disadvantages of the strategies as well as the analysis of the types and sources of data that are exploited in the strategic planning and decision making processes.
Direct-To-Physician Advertising (DTPA) Strategy
Presently, pharmaceutical companies utilize a variety of marketing strategies in order to gain and maintain their market share, gain compliance by patients, and expand their markets. Detailing and sampling of products is an approach used by the manufacturing company’s sales representatives to conduct the direct-to-physician promotion. In a case where physicians and patients have had relatively more experience with the medication, detailing loses much of its importance and therefore, promotional marketing can serve to remind and persuade physicians’ preference. DTPA entails visitations by sales representatives who conduct direct face-to-face engagements with physicians in efforts to influence them to favor their companies’ drugs in patient prescriptions (Pedan & Wu, 2011).
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Advantages of DTPA
It is less expensive, but can be made more cost-efficient through a direct mailing that favors direct communication and reduces detailing. Detailing and sampling are brand-specific while different brands have different distinct trends thus the choice of one brand may be suboptimal for another. The physician-centered approach has greater and stable effects on brand choice as compared to DTCA.
Disadvantages of DTPA
Competitive DTPA activities can adversely influence prescription behaviors in relation to weaker brands.
Direct-To-Consumer Advertising (DTCA) Strategy
DTCA gained its popularity after the 1997 Food and Drug Administration regulation that allowed pharmaceutical companies to advertise their brands without a summary of the drug’s efficacy, side effects, and contraindications (Pedan & Wu, 2011). The legislation caused changes in the cost of television advertisements making it affordable and cost-effective. DTCA can be achieved through direct-mail letters, newspapers, magazines, pharmacy brochures, nonmedical journals, television, radio, videos and online social and mass media platforms.
Advantages of DTCA
DTCA is an effective way of bringing consumers to the knowledge of new treatment options, thus facilitating new doctor visits and as a result, patient welfare is improved. The effectiveness of DTCA more significantly affects the demand at a therapeutic class level as compared to the individual level of the drug market share. Moreover, DTCA serves the role of expanding a drug’s market by notifying the patients about the drug’s availability for particular illnesses while providing information about the disease, its symptoms, possible medications and side effects (Bala & Bhardwaj, 2010, p. 148). Also, DTCA influences market share by persuading patients to request specific brands during physician prescriptions in the assumption that patients are knowledgeable about a particular disease and the drugs available for the same. In addition, the patients’ drug requests on prescriptions can initiate public policy concerns on prescribers’ transparency of the available drugs, shared physician-patient decision making, and patient rights on decision making (Stremersch, Landsman & Venkataraman, 2013)
Disadvantages of DTCA
DTCA may contain exaggerated statements of claims, camouflaged adverse effects, and improper usage directions especially in this era of internet use that is difficult to regulate due to lack of geographical barriers (Kannana et al., 2015). DTC advertising may mislead patients into requesting heavily advertised drugs, thus promoting the inappropriate use of drugs and unwarranted purchase of costly drugs (Kalyanara & Phelan, 2013).
Medical journal advertising strategy
Manufacturers can also reach physicians through medical journal advertising. This kind of advertisement consumes relatively smaller expenditures compared to DTCA and DTPA but it is objective is limited to a given proportion of physicians who care to read journals.
Pricing Strategy
The pharmaceutical company can adopt an initial high-level marketing and offer price discounts on the medication to capture the stock of knowledge of the physicians and consumers (Kalyanara & Phelan, 2013). As a result, present and future demand for the brand will increase. Price discounting and DTPA are better strategies for increasing market share owing to the perception that DTCA leads patients to incur unnecessary costs and can cause drug misuse.
Data Types and Sources
Marketing data types that are utilized in strategic planning and decision making include physician prescribing data, data on medical claims, data on electronic medical records, healthcare sales data, and promotion audit data. These data sets can be sourced from marketing firms such as International Marketing Services (IMS) Health, Cegedim Strategic Data, and Nielsen Co among others (Mackey, Cuomo & Liang, 2015)
Conclusion
In the presence of broad substitutability among drugs, the selection of prescriptions becomes harder for physicians thus necessitating marketing promotional activities to maintain a medication’s market share. Promotional activities and practices influence physicians’ drug prescriptions, patients’ preferences and adherence and insurance payers on the efficacy and value of their products, various promotional and sales. In pharmaceutical marketing, a complex promotional mix must be effectively managed and optimized through campaigns to realize support and utilization of a firm’s medication brands. In order to make strategic promotional budgetary allocations, the company in question must conduct a comparative quantification of the effectiveness of DTPA on the medication so promoted and that of its competitor brand.
References
Bala, R., & Bhardwaj, P. (2010). Detailing vs. Direct-to-Consumer Advertising in the Prescription Pharmaceutical Industry. Management Science , 56 (1), 148-160. doi:10.1287/mnsc.1090.1074
Kalyanara, G., & Phelan, J. (2013). The effect of direct to consumer advertising (dtca) of prescription drugs on market share, sales, consumer welfare and health benefits. Academy of Health Care Management Journal , 9 (1), 53-69.
Kannana, S., Gowrib, S., Tyagia, V., Kohlia, S., Jaina, R., Kapila, P., & Bhardwajc, A. (2015). Direct-to-physician and direct-to-consumer advertising: Time to have stringent regulations. International Journal of Risk & Safety in Medicine , 27 (1), 77–83. doi 10.3233/JRS-150644
Mackey, T. K., Cuomo, R. E., & Liang, B. A. (2015). The rise of digital direct-to-consumer advertising?: Comparison of direct-to-consumer advertising expenditure trends from publicly available data sources and global policy implications. BMC Health Services Research , 15 (1), 236. doi:10.1186/s12913-015-0885-1
Pedan, A., & Wu, H. (2011). Asymmetric Responsiveness of Physician Prescription Behavior to Drug Promotion of Competitive Brands Within an Established Therapeutic Drug Class. Health Marketing Quarterly , 28 (2), 133-154. doi:10.1080/07359683.2011.545341
Stremersch, S., Landsman, V., & Venkataraman, S. (2013). The Relationship Between DTCA, Drug Requests, and Prescriptions: Uncovering Variation in Specialty and Space. Marketing Science , 32 (1), 89-110. doi:10.1287/mksc.1120.0757
