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.

Thursday, April 28, 2005

Blame the Doc, Not DTC!


"Researchers funded by the National Institute of Mental Health (NIMH), part of the National Institutes of Health, have found that requests from patients for medications have a "profound effect" on physicians prescribing for major depression and adjustment disorder. These findings indicate that direct-to-consumer (DTC) marketing of prescription medications for depression may exert significant influence on treatment decisions."

Results of the study were published in JAMA ("Influence of Patients’ Requests for Direct-to-Consumer Advertised Antidepressants," JAMA. 2005;293:1995-2002)/

The study employed actor patients who visited physicians in 2 states, presented themselves with some medical complaints and asked (or did not ask as the case may be) for a specific drug by name.

I won't get into the details of this research -- you can read the full NIH News Release yourself -- but suffice it to say that the research does NOT prove that "marketing of prescription medications for depression may exert significant influence on treatment decisions."

Rather it proves that physicians, more often than not, will prescribe a drug if the patients asks for it. That says more about the practice of medicine than it odes about DTC advertising. I agree, therefore, with Dr. Richard L. Kravitz, lead investigator on the study who said "Prescribing antidepressants for adjustment disorder, as presented in the study, is at the margin of clinical appropriateness."

The press, however, is making DTC the culprit rather than the physicians! See, for example, the LA Times story: "TV Ads for Drugs Help Boost Prescriptions, Researchers Say."

The very first paragraph of this article states: "Doctors are easily persuaded to prescribe antidepressants — often unnecessarily — when patients mention having seen them in television advertisements, researchers reported Tuesday.'

I haven't read the full text of the JAMA article, only the abstract. However, the researchers do not say the actors specifically said anything about seeing the drug advertised on TV. The abstract only says: "The [actor patients] made a brand-specific drug request, a general drug request, or no request (control condition) in approximately one third of visits."

The researchers came to these conclusions:

1. Patients’ requests have a profound effect on physician prescribing in major depression and adjustment disorder.

OK, I will give them that.

2. Direct-to-consumer advertising may have competing effects on quality, potentially both averting underuse and promoting overuse.


I don't see where the study supports conclusion #2. Maybe I need to see the full text of the JAMA article -- if you have a copy, please send it to me at johnmack@virsci.com.

"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."

I'm not sure what "evidence-based marketing" means (see future post), but it sounds like a good thing, not a bad thing. Anyway, I would say that treatment of patients should be based on good medical practice rather than on "give patients what they want and get them out of the office."

[BTW, the FDA did a much better survey of physicians about the influence of DTC advertising on their prescribing behavior ("Results from FDA Physician Survey on DTC Advertising").]

Tuesday, April 19, 2005

The Drug Sampling Problem


For pharmaceutical marketers, sampling is the single largest promotional investment, accounting for 55 percent of the $19.1 billion spent on promotion in 2001 (see FIGURE below; taken from "Intelligent Online Sampling Strategies"). It's no wonder -- efficiently expanding sample coverage has been shown to drive significant new prescription growth with impressive ROI.

However, sampling by drug companies as a marketing tactic may be getting out of hand and critics contend that it increases drug prices for all of us. It may not even be very popular with drug companies that use samples to gain physician access but also lose sales because of the giveaway.

Promo

In the chart above, how is the monetary value of samples calculated? If you know, please tell me. My guess, however, is that it uses what's called the "Average Wholesale Price" (AWP). According to the U.S. General Accounting Office (GAO), the AWP may be neither "average" or "wholesale." It's really a "list price" or equivalent to the "sticker price" of a car. (BTW, there are many other analogies between selling cars and selling drugs; giving away free sample, however, is not one of them -- unless you consider the Oprah giveaway). The actual price of drugs is probably much less than the AWP. [For a paper on this subject, see "
Average Wholesale Price for Prescription Drugs: Is There a More Appropriate Pricing Mechanism?"]

Some physicians love samples and claim that it helps them provide care for patients who couldn't otherwise afford the new fangled, expensive drugs (i.e., patients without drug benefits like the elderly or working poor without health insurance).

Some statistics (see article above):
* 29% of samples distributed go to indigent patients
* 13% of samples distributed go to the elderly

"You are talking about billions of dollars worth of free medicine given out by the industry," said one doctor on a conference panel at a recent meeting (see "
A Crisis in Professional Detailing"), "but I have never seen this mentioned anywhere in the lay press. Doctors don't appreciate and patients don't appreciate it. To me this is a typical pharmaceutical PR faux pas."

Another doctor on the panel said "Samples are indispensable. I would never start a patient on a new prescription without a trial run with samples first."

Recently, these comments from physicians were posted to the
PHARMA-MKTING listserv:

"I cannot practice evidence based medicine with amoxicillin and hctz. I need expensive meds many of which some of my patients cannot afford, and samples play a huge role on getting some of these meds to my patients, and so endure the reps and the "talks" to get my patients some of their meds.I also think the Medicare system could not afford to make up the difference in meds if samples were not available. Until there is a better way to help my patients, I will continue to see reps for samples."

Yet other physicians feel they are just helping pharma companies sell more product without being paid for it. "When a physician accepts these samples and then dispenses them, he is the middle man and in effect is working for the drug company for free."

Some have even suggested that drug prices increase as a result of sampling: "I have noticed a sharp increase in the price of Zyprexia after the company left samples in doctors offices."

Terry Nugent, a regular contributor to PHARMA-MKTING discussions, said:

"The real answer to the sample situation is to cut the salesforce. They use samples as bribes to get in to see physicians who otherwise won't allow them on the premises. It's a sick game that costs the companies billions in unfilled Rxs from doctors who give samples sufficient for the entire therapeutic regimen to patients who can perfectly well afford to fill the lost Rx at the local pharmacy (exhibit A is yours truly)."

"It's not the free samples that drives up the price," according to Nugent, "it's in part the cost of the highly paid personal delivery system (the reps). In addition, only the higher margin drugs are sampled, so sampling is actually a function of price, not vice versa."

If the cost of the delivery system is the problem, there are other solutions aside from decimating the sales force, no matter how necessary that may be for other reasons (see, for example, "
Pharma Sales Force Bloat and the Mythical Man-Month").

One solution is to switch to eSampling (see "
Intelligent Online Sampling Strategies" for a complete discussion of this approach).

Eliminating the hand delivery of samples by the drug rep will have a huge negative effect on access to physicians. It will be difficult both for the pharma company and the many physicians that have become dependent upon the samples to keep some of their patients happy.

Education vs Drug Samples
What else could be used to improve access to physicians by sales reps and at the same time help physicians treat their patients? How about product knowledge and patient education materials?


Knowledge is highly valued by physicians. When asked "What do you like about sales reps?", physician respondents in an unpublished study (see "Give Docs What They Want" and "Marketing's Role in Limiting Physician Access and What to Do About It") cited product knowledge first, relationship second, and samples third.

Instead of acting like the drug pusher outside the school gates, drug reps should go into the school and learn more about their products. One knowledgeable rep is probably worth 1.5 ordinary, sales-oriented rep.

I think physician education and the use of the Internet to deliver that education (and samples) will become more and more the mainstay of the pharmaceutical company-physician interaction. You can read more about this in the upcoming April issue of Pharma Marketing News.

Friday, April 15, 2005

Separation of Church and State

Chairman Bob Ehrlich over at DTC Prespectives is a well-known conservative commentator in pharmaceutical marketing circles. He likes coloring criticism of the pharmaceutical industry with a "liberal" bashing brush.

For example, this week he states in his commentary ("Punishing Critical Media"): "Coverage of the drug industry is bordering on creating a war of 'liberal idealism' versus 'profit hungry big business'."

Chairman Bob specifically takes a shot at the sensationalist tactics of evening news programs: "Unfortunately, many media stories about the drug industry go beyond the bounds of objective reporting and cross over to unfair bashing. For example, news outlets like to get ratings. To do so sometimes they will run a drug story with a headline, 'Millions of people at risk of dangerous side effects.' Or 'Common pill can cause liver failure- news at 11.'

This is hardly a tactic of the "liberal" media and I often see it used by the Fox network, for example.

If you were to talk with my wife, she would tell you how much I hate the way news programs prey on people's fears by focusing on violent crime and other negative news. This was a point made by arguably the most liberal person in America -- Michael Moore. In his documentary "Bowling for Columbine," Moore suggested that Americans are afraid in part due to programs like the local news and Cops, which exclusively focus on crimes with the greatest fear factor.

So let's not pin this on us liberals! First, not just the liberal news media use this tactic and second, liberals are not prone to support or use such tactics. In fact, I would say that this is a typical conservative ploy.

Every industry has to deal with negative PR, but I don't think that "critical" media should be punished by withdrawing ad money as Chairman Bob recommends. He hopes this tactic will only be used sparingly by drug companies -- i.e., only for continued "biased" coverage.

However, "biased" is in the eyes of the beholder. A marketer is likely to consider biased any report that falls short of a ringing endorsement!

There is a bigger issue here than whether or not liberals are to blame for negative pharma PR. The issue is really the integrity of the separation of church and state in the media -- protecting editorial content from being influenced by advertising.

The pharmaceutical industry should not be caught undermining the "Chinese wall" between editorial content and advertising that reputable media take pains to maintain. Especially considering that the pharma industry itself has been accused of a less than stellar record of maintaining separation between education and promotion to physicians and consumers.

When CME is attached to pharmaceutical-sponsored physician education, for example, a firewall between support (the ad) and the program (the content) is absolutely imperative. The ACCME (Accreditation Council for Continuing Medical Education) 2004 Updated Standards for Commercial Support reminds CME providers and commercial supporters that the goal of CME is to enhance physicians'’ ability to care for patients. Accredited providers have the responsibility for certifying that CME is independent of commercial interests.

Just as pharma companies should not undermine CME by trying to influence the content of physician education it sponsors, they should not undermine our independent news organizations by using their ad dollars to influence the news content.

Thursday, April 07, 2005

Cox-2's (and Pfizer?) on Slippery Slope


The FDA has just hammered Pfizer's Bextra and Celerex as well as other NSAIDs (see "FDA Announces Series of Changes to the Class of Marketed Non-Steroidal Anti-Inflammatory Drugs (NSAIDs);
FDA Press Release).

FDA, which previously requested Pfizer to add a "black box warning" to Bextra's label (see "Bextra Label Updated with Boxed Warning Concerning Severe Skin Reactions and Warning Regarding Cardiovascular Risk"; FDA Talk Paper), now requests that Bextra be withdrawn from the market completely. FDA sad: "the overall risk versus benefit profile for the drug is unfavorable."

"FDA has also asked Pfizer to include a boxed warning in the Celebrex (celecoxib) label. Pfizer has agreed to suspend sales and marketing of Bextra in the U.S., pending further discussions with the agency. Pfizer has agreed to work with FDA on the boxed warning for Celebrex."

"In addition, FDA is asking the manufacturers of all OTC NSAIDs to revise their labels to include more specific information about the potential CV and GI risks, and information to assist consumers in the safe use of the drugs."

Slippery Slope
Celebrex is currently on a slippery slope to total withdrawal or at least very low market share. Take another look at the chart I published some time ago ("Vioxx Redux") and you will clearly see that Celebrex and Bextra have lost a lot of share of new prescriptions being written. Of course, Bextra will now have no new Rx's written and Celebrex is likely to continue its downward trend, despite what Pfizer and analysts had to say at the April 5th analysts' meeting with Pfizer:

"We believe with the continued development work, and continued clinical revelations, and appropriate labeling, these medicines will remain critical treatment options for many years to come." -- Thus spoke Karen Katen - Pfizer - Vice Chairman, President, Pfizer Human Health (See Final Transcript of Pfizer Analyst Meeting; Thomson StreetEvents).

Richard Evans, a drug-industry analyst with Sanford Bernstein, said, "the two things that concern me are the notion that Pfizer returns to growth in 2006 and 2007, and the extent to which that's predicated on Cox-2s growing." (see "Pfizer Plans a Revamp And $4 Billion in Cost Cuts," WSJ 4/6/2004). As far as growth goes, it doesn't look good for Celebrex.

I don't expect Pfizer to take this lying down. "Pfizer said it will explore options with the agency under which the company might be permitted to resume making Bextra available to physicians and patients." (see "Pfizer's Press Release In Response to the FDA"). They will be even more aggressive in defending Celebrex. "We are committed to conducting longer-term comparative benefit and risk studies," says Evans (see Transcript).

However, I still believe that Vioxx, Bextra, and Celebrex are all of the same kind of molecule and have very similar molecular structures. Given that, I believe they have similar positive and negative effects, despite what comparative benefit and risk studies may show. See "Cox-2's Die Hard: With a Vengeance," in which I predicted that Bextra and Celebrex would crash and burn. So far, I am batting .500!

Some might say that I am gloating, but I am not. I admire Pfizer and want it to succeed. I want it to succeed, however, by being what it and other big pharma companies claim to be -- innovative. To that end, Pfizer did announce an increase in its R&D budget. However it will also buy technology: "The company's sterling debt rating and cash pile mean 'we can afford to buy things that we want for our portfolio that others may be cautious about,' said David Shedlarz, a Pfizer vice chairman." (see "Pfizer Plans a Revamp And $4 Billion in Cost Cuts," WSJ).

Job Creation Not in the Cards
Ironically, a lot of Pfizer's "cash pile" is coming from "repatriating $28 billion in overseas profits this year under the American Jobs Creation Act. The legislation offers companies a one-time tax break, slashing the corporate rate on repatriated earnings to 5.25% from around 35%." Despite the name of this act, Pfizer is likely to cut jobs (at least by attrition) rather than create them.

Friday, April 01, 2005

"Bioshield" Boondoggle


Whole industries have sprung up based upon our fear of terrorism. And it's being funded in large part by the U.S. government to the detriment of other urgent needs.

Some sectors of the pharmaceutical industry hope to be the latest beneficiaries of this largesse. According to an article in today's Wall Street Journal:
Less than a year after Congress provided the pharmaceuticals industry with incentives to develop drugs for terrorism-related illnesses, a fight is brewing over efforts to offer more goodies -- including the chance to extend patent rights on medications that have nothing to do with homeland security.

Last year's legislation, signed by President Bush in July, provided $5.6 billion for the government to buy and stockpile medications to combat bioterrorism agents such as anthrax and smallpox. Now some lawmakers, convinced the measure didn't go far enough, are developing bills that go far beyond the Bioshield law.
An idea being pushed by Senator Joe Lieberman and likely to lead to a bipartisan bill co-sponsored by Orin Hatch is called "wild-card exclusivity."

"Under his plan, a drug maker that successfully develops a product to prevent or treat a bioterrorism illness or emerging infectious disease could get six months to two years of additional patent life for any product it chooses." (WSJ)

At least one drug company - Pfizer - backs the wild-card proposal as a way to "induce large companies to invest capital and divert the necessary resources to develop promising compounds for countermeasure uses," says company spokesman Jack Cox. Last year's Bioshield law "isn't enough to spur the development of new drugs to counter bioterrorism attacks."

$5.6 billion isn't enough, some want more!

Given the "chronic dysfunction inside American intelligence agencies" (see
NYT Times article "Bush Panel Finds Big Flaws Remain in U.S. Spy Efforts"), how can we trust the intelligence that a real threat actually exists?

Profiting from our fear of terrorism is not a smart PR card for the pharmaceutical industry to play. For an industry that prides itself on innovation, this gambit is a cheap shot to maintain marketing exclusivity despite its failure to be innovative.

I don't blame Pfizer and other drug companies for trying to extend the patent life of their products, but to do so simply by passing legislation and creating drugs that will likely expire in stockpiles is unconscionable.

A Better Way to Extend Patent Life
Some time ago I mentioned a much better way for drug companies to extend the patent life of their products and do it in a way that will address a REAL threat to the health of Americans -- death due to adverse drug side effects.


Here's my suggestion:
"Restricting DTC should be tied into (1) a requirement that drug companies perform more post launch surveillance studies to prove the safety of their drugs in the marketplace -- the restriction on DTC can be provisional upon completion of those studies; (2) increase the patent life of drugs so that drug manufacturers can make up for lost income due to lack of DTC after launch; and (3) make it much harder for "Me Too" drugs to be launched, especially during and immediately after the provisional period of the first-to-market drug where DTC is restricted -- this would prevent the copy cat from taking advantage of the groundwork established by the first-to-market drug, especially with regard to the safety studies." -- See "How the FDA Can Fix DTC"
This plan might actually save lives and at the same time REWARD INNOVATION rather than reward what the industry should be doing in the first place!