Saturday, April 30, 2005

Evidence-based Marketing


Recently, I have seen the term "evidence-based marketing" used in a seemingly derogatory manner as in:

"The use of direct marketing for treatment of depression may boost familiarity with potential treatments of the disorder," said Thomas R. Insel, M.D., director of the National Institute of Mental Health. "However, we must ensure that treatment is based on evidence-based science rather than evidence-based marketing." (See "Blame the Doc, Not DTC!")

Dr. Insel may have been trying to emphasize the difference between medical practice and marketing and warning docs to obey the former and not be swayed by the latter. However, evidence-based marketing may be just what the doctor ordered.

I wasn't sure what evidence-based marketing meant until I attended an industry conference recently. The concept came up in a panel discussion entitled "The Post-Vioxx Era: Shedding New Light on Drug Safety, Risk Communications, and Advertising." I was pleasantly surprised by the out-of-the-box thinking among the panel members.

One of the panelists -- an Rx product global marketing VP -- shared his "vision of the future," at least as it applies to pharmaceutical marketing.

He suggested that pharmaceutical marketing strategy needs to begin early in the drug development process to identify the true opportunities. This involves understanding the appropriate population for the drug based upon the evidence gleaned from trials. Not only appropriate in terms of benefits, but also risks. The appropriate market may be a smaller market, but it will be comprised of a population less likely to experience known side effects.

Let's take one of my favorite examples -- the ED (erectile dysfunction) market. I have complained before that pharmaceutical marketers have overestimated the size of this market (see "ED Drug Sales Limp" and "Pushing the Envelope is Bad for DTC"). Specifically, the marketers of ED drugs overestimate the size of the market in comparison with government (NIH) estimates. Since these drugs have serious risks associated with them, the marketing, which is decidedly NOT evidence-based, serves to expose a larger than necessary population to these risks.

Quality Revenue
Some experts argue that targeting a more appropriate market through evidence-based marketing leads to less income, but the income is of higher "quality."

Quality revenue is a well-understood concept in the insurance industry, which will typically carve out risky populations and deny them coverage.

The insurance industry analogy illustrates an important drawback of using evidence-based marketing techniques and settling for quality revenue in the pharmaceutical industry; namely, no one wants to be denied medical treatment even if the evidence suggests that the risks outweigh the benefits. The pharma industry should not make this decision, only the doctor and his or her own patient.

Between You and Your Doctor
In almost every DTC ad you hear or see the phrase "See your doctor" or "Only your doctor can determine if X is right for you" or "That's between you and your doctor." On the face of it, this sounds like the pharma advertiser is taking a neutral stand and defers to the doctor as the "learned intermediary."

The pharma industry, however, is very pro-actively involved in the patient-physician relationship.

On the one hand, direct-to-consumer (DTC) advertising pushes patients into doctors' offices and encourages them to ask for drugs by name. On the other hand, physician marketing pushes and entices doctors to prescribe these drugs. As a result, when patients ask their docs for a drug by name, much more often than not the doctor prescribes it even if it is inappropriate to do so (see "Blame the Doc, Not DTC!").

It will be very difficult for the pharma industry to adopt evidence-base marketing and be satisfied with lower revenue even if that revenue is of "high quality." The main reason being that Wall Street investors demand increasing profits and the pharma industry is more and more beholding to their shareholders than to their customers.

Lifetime Quality Revenue
However, it IS possible to increase the "lifetime value" of a drug even when marketing is based on evidence.

Currently, pharma brands spend 80% of the sales and marketing budget on acquisition of new patients and only 20% on retention of current patients. Much more effort should go into retaining patients and ensuring that they adhere to the treatment regime prescribed by the doctor. Evidence suggests that outcomes would be vastly improved with greater patient compliance.

This is a great opportunity for evidence-based marketers to make a difference.

Investors, however, are interested in the short term -- i.e., how quickly can a drug reach blockbuster status after it is launched. By focusing on this short-term perspective, most emphasis is put on revenue from new prescriptions and the pressure is there to dig ever deeper into a pool of patients for whom the product is inappropriate thereby increasing the risk in the long term that the product will become the next Vioxx.

What's your opinion on the issues raised here? Participate in the this month's Pharma Marketing News Evidence-based Marketing & Quality Revenue Survey.

5 comments:

  1. Anonymous10:47 AM

    Also, we hear that pharma sales reps are increasingly encountering "That's just evidence-based marketing" as an objection to the studies they present on sales calls. It's as though the fact that a company endorses and distributes a study diminishes its quality. A tough attitude, but it would be interesting to see how these attitudes are associated with prescribing behaviour.

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  2. There is another definition of evidence-based marketing and that is "marketing for which there is evidence that it works!"

    There is an old saying famous among advertisers that gies "I know half my advertising dollars are wasted - I just don't know which half!"

    If you had an effective way of measuring the ROI of marketing, then you might say you have "evidence-based marketing." Some claim that you can does this most effectively with interactive (online/email) marketing, but not with broadcast marketing.

    Pharma compnaies should certainly be able able to measure the effectiveness of most of their physician marketing -- they watch carefully, for example, what physicians prescribe and will typically run controls to get reliable "evidence" that a particular marketing plan is effective.

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  3. Isn't the real issue here "who has the politico-institutional power in any given pharmaceutical company to tell the development committee that drug x is great--but only if you market it to sub-group y, which has the lowest side effects profile.?"

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  4. That's correct. This is the sort of thing that has to come from the top, like so many other remedies suggested by pharma pundits.

    Just like so many other reforms, this is not likely to happen until the current way of doing business clearly is seen to be untenable. As long as the goal is $1b in sales by the second year and as long as that goal is achievable and as long as people's careers depend on reaching that goal, there won't likely be anything new invented here!

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  5. Anonymous5:33 AM

    That's correct. Like so many other remedies suggested by pharma pundits.

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