eDetailing: A Strategic Analysis Of Implementation And ROI (mini)

eDetailing: A Strategic Analysis Of Implementation And ROI

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Executive Summary

2

This report discusses the

available evidence on ROI

and illustrates some

models that can be used

Eularis ©2014 www.eularis.com 3

Executive Summary

THE SCOPE OF THIS REPORT Eularis provides a comprehensive insight into the subject of Pharmaceutical detailing using the Internet. As the vast majority of eDetailing pilots have taken place in the US, the report looks at the likelihood of European Pharmaceutical companies following suit. Return on Investment (ROI) is also important. This report discusses the available evidence on ROI and illustrates some models that can be used. Eularis made extensive efforts to provide the most insightful information about this fast moving subject. This involved: Surveying over 200 UK-based general practitioners about their attitudes to Pharmaceutical sales representatives and eDetailing, Carefully assessing the current regulatory environment in the UK and how eDetailing programs could be affected, Sourcing case studies of ROI from the USA, Extensive research into vendor companies and their market positions, Strategic considerations and advice. OVERVIEW AND BACKGROUND TO THE REPORT

INCREASING COST AND EFFORT OF MARKETING MEDICINES It is estimated that in the US, the Pharmaceutical industry spends about $15 Billion a year promoting its products to the medical profession. By contrast, the industry spends a further $2.6 Billion targeting patients. The top 40 Pharmaceutical companies alone employ over 80,000 sales reps. Within Europe, the Pharmaceutical industry employs an estimated 200,000 people in marketing and sales. There are an estimated 11,700 hospitals, 115,400 Pharmacies and 1,090,000 doctors in Europe. The sums the industry spends are huge and is on the increase. Some key reasons for this are:

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What Is eDetailing?

4

Detailing remains a core

part of any Pharmaceutical

company’s sales approach

and has become a large

part of their promotional

spend


What Is eDetailing?

WHY ADD ‘e’ TO TRADITIONAL DETAILING? Whether the medical professional like it or not, doctors often rely on Pharmaceutical companies for drug information. However, having time to see sales representatives is a limiting factor for doctors. Therefore, eDetailing provides the opportunity for Pharmaceutical companies to provide this interaction on the doctors’ terms, reduce sales force expenses without losing sales and continue to develop meaningful and productive relationships with customers. IS THIS APPROACH VIABLE? Three main factors will influence the success of eDetailing. These are: Cost Effectiveness Physician acceptance Typically, physician acceptance is the most important. According to Forrester, 75% of US doctors use the Internet and 80% have a computer at work. These doctors spend a lot more time seeking medical information online than doing any other online activity, according to the report. Therefore, sales representatives have competition in terms of medical information provision but it also shows that electronic delivery of medical information looks like a viable option. Moreover, of US doctors surveyed by DataMonitor, 90% wanted online detailing and only 3% have been offered the opportunity. To date the majority of online medical information offered to doctors by Pharmaceutical companies has been static product information websites. This may be useful as a one-time visit but it does not engage the physician, encourage them to return to the site and development a long-term relationship between the company and customers. This is verified by the Forrester study where doctors ranked Pharmaceutical product websites last with respect to perceived value and frequency of use — indeed more than 50% of the doctors surveyed had not visited a Pharmaceutical company website in the past 6 months. However, several pilots run by companies have found impressive return on investment as measured by increase in number of effective calls, increased length of calls and increases in prescribing and is liked by doctors.

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What Is eDetailing?

eDetailing market research conducted with US doctors who have experienced both eDetailing and traditional detailing showed that doctors found eDetailing: more convenient than other media for obtaining information; a better way to obtain needed drug information from Pharmaceutical companies; helped establish a stronger relationship between the physician and the sales representatives and this relationship was equal to, or better than, the one

they currently enjoyed with their existing non-e-sales representatives.

eDetailing, when planned and implemented effectively, engages the physician, encourages repeat visits and allows the sales representative to be more productive. Productivity increases are in terms of more effective sales calls each day (virtually and face-to-face), decreased costs and potentially increased sales (see Chapter 6: Return on Investment of eDetailing). It should be noted that eDetailing is not appropriate for all doctors, all products or all of the time. Pharmaceutical companies need to review its products, the lifecycle of each product, segment its doctors and use a suitable approach with measurable return on investment. Moreover, it is expected to complement rather than replace traditional detailing.

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Doctor Perspective

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Doctor behavior

in relation to

detailing


It is interesting to look at doctor behavior in the US in relation to detailing. Eularis looked at some of the evidence from US companies. Research from Physicians Interactive shows that 85% of physicians go through eDetailing programs after surgery hours, probably about 50% on their home computers. The length of the eDetail is on average 10 minutes. Other reports suggest that eDetailing sessions last about 17 minutes between 8am - 6pm and 28 minutes between 6pm - 9pm. UK PHYSICIANS’ ATTITUDES AND ACCEPTANCE (SURVEY FINDINGS) Background and Objective Eularis conducted a web-based survey with General Practitioners in the UK to determine: What GPs think about Pharmaceutical sales reps and What GPs think about the concept of eDetailing.

Overview of Eularis’ findings Many GPs enjoy meeting with the sales representative in person and being able to discuss other relevant items. It is considered social and does not appear to interfere with daily schedules once an appointment is secured with the rep.

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Doctor Perspective



Doctor Perspective

The average amount of time spent with a rep is anywhere between 6 and 20 minutes while only 48% of GPs cancel an appointment 1-10% of the time. The meeting with their reps appears to be a useful portion of their time spent. The majority of GPs state they review their prescribing of the discussed products after a rep meeting.

Many GPs would not prioritize eMaterial as highly as they would a face-to-face meeting. As such, 50% of GPs are not interested in receiving promotional material electronically. eDetailing appears to be a completely new idea in detailing for the medical community in the UK. Only 4% of those interviewed had ever heard of eDetailing and the majority - 75% - were unsure of its intended meaning. It appears to be an immature arena and careful, continued research should be considered before implementation in order to secure a healthy mind-set for adoption. GPs appreciate that eDetailing would possibly be a convenient method of information gathering. However, many are concerned that the use of computer hardware/software would actually cause more headaches than benefits. Another area in which eDetailing could be beneficial is the amount and detail of information that could be shared with the GP. One respondent stated that “its advantage is the ability to ask specific, detailed, technical questions (e.g. cost-effectiveness of a new product) which I often find reps have little knowledge about”. Overall, GPs are interested in the idea of eDetailing. However, depending on their computer comfort level, some are apprehensive that the benefits of eDetailing will not outweigh the possible frustration with compatibility and reliability of the technology. In addition, GPs appear to be concerned about the priority they would give to electronic promotional material.

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Implementation

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Pharmaceutical marketers

must determine the most

effective objectives for

eDetailing projects


GLOBAL LESSONS Currently most eDetailing initiatives are being run in the US and the reasons for this are clear: largest Pharmaceutical market, more prescriptions, more physicians and greater Internet penetration. It is clearly the market to pilot first as the benefits found there are likely to be largest in ROI terms. IMS Health (2000) report that the breakdown of prescriptions by region is:

39.6% - US

25.1% - EU

16.4% - Japan

The Rest Of the World (ROW) combined comes nowhere close to meeting these proportions of prescription sales. Also, the majority of case studies showing strong ROI are in US also. Some of the lessons learnt so far are: Physicians want to initiate the eDetail on

their time terms

Physicians value the relationship with their rep

Physicians prefer inter activity.

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KEY QUESTIONS PRIOR TO IMPLEMENTATION Determining whether or not eDetailing is appropriate or not for a specific country or product is a key issue that must be considered prior to developing or buying eDetailing capabilities. Factors affecting whether to initiate eDetailing as well as which form of eDetailing to use will include: drug stage in drug lifecycle and segmentation of physician prescribing

patterns. By examining these carefully, a path will start to become clearer as to whether and how to implement the system. OBJECTIVES OF eDETAILING The first step in any strategy is to set business objectives. The types of objectives set for implementation of eDetailing systems are:

To increase the length of detail To increase the effectiveness of the detail To increase the number of prescriptions To decrease sales force costs without losing

effectiveness

Implementation



Implementation

Increasing Length of Detail A DataMonitor report states that industry experts agree the average length of a traditional detail call is around two minutes in length. However, reports from companies utilizing different technology styles of eDetailing have found that the average length of eDetails in the US is lengthened dramatically. The Physicians Interactive system was reported, by Dr. Gerber (General Manager of Physician Interactive), to increase the length of a detail to around ten minutes. Using a video-conferencing style format, one US Pharmaceutical company found that its average eDetail calls lasted around 17.4 minutes between the hours of 8am to 6pm and 28.6 minutes between 6pm and 9pm. This shows that, at the very least, any form of eDetailing is showing increases of a minimum of 5 times the traditional detail. A key question to ask is whether this is novelty and this length effect will wear off, or whether it will persist. Increasing Effectiveness of the Detail Since the physicians were actively involved for significantly longer and ended the call when they felt ready to end it, it’s believed that the effectiveness of each sales call was higher. The relationship between IMS data monitoring of number of prescriptions written and the length of the sales call has shown that this relationship does seem to exist, as the results have been found to be highly significant with therapy response modeling finding increases in prescribing from 12.5% to 85%. Increasing Number of Prescriptions The overriding objective of any eDetailing activity is to increase the number of prescriptions written. This must be measured to ensure that there is, in fact, a significant return on investment. By dividing the target physicians into two groups (a study group receiving eDetailing and a control group receiving traditional Detailing), this can be measured relatively easily. Do baseline measurements in both groups using IMS sales data or independent market research data and then implement eDetailing in the study group (who are also exposed to eDetailing rather than traditional detailing, as well as to all other sales and marketing activities). After a set period of time, measure again the number of prescriptions in each group to determine whether there is a statistically significant increase in prescriptions written in the study group versus the control group. For more detailed information on ROI measurement, please turn to Chapter 6: Return on Investment of eDetailing.

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Return on Investment of

eDetailing

13

Metrics used in calculating

ROI are directly related to

the objectives initially set


WHAT KIND OF METRICS SHOULD BE MEASURED?

As with any business planning process, the metrics used in calculating ROI are directly related to the objectives initially set. Therefore, the metrics most commonly used are: Increasing length of detail

Increasing effectiveness of the detail

Increasing number of prescriptions

Decreasing sale force costs without losing effectiveness

It is important to remember that ROI implies the concept of time because ‘return’ happens over time. So, what an ROI calculation really asks is “What is my return on investment over time?”. Without looking at time, the ROI cannot be calculated. With regard to eDetailing, Eularis has indented two ‘types’ of time: Short period (probably 2/3 months) for a defined product marketing campaign.

Long-term, taking into account all investment in technology and infrastructure. Software investments could be costed over a 12-24 month period (i.e. a positive return must be achieved by the end of this period).

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Return on Investment of eDetailing




HOW CAN THESE METRICS BE USED TO CALCULATE ROI (I.E. FORMULAS) What is needed before an ROI analysis can be attempted is a time-frame and a baseline. In this example, it would be figures for revenue/profit from a detailing campaign. The metrics can then be plugged into the formula to determine ROI. Eularis suggests the following: pRx = profit from prescriptions written as the result of eDetailing (could use revenue) Rx = baseline profit i = initial investment in eDetailing technologies n = number of eDetails completed c = cost per eDetail excluding initial investment (pRx – Rx) = a (profit attributed to eDetailing) (i / n) + c = b (actual cost per eDetail) b x n = c (cost of campaign) (a / c) x 100 = % ROI This formula may contain certain assumptions but it probably is a good place to start. By measuring the incremental profits from increases in prescriptions written as a result of eDetailing (this will come from IMS or Synavant data), and then dividing these by the cost of the eDetails added to the development of the program (start-up costs), a figure can be reached. Naturally, assumptions are made within this formula. The cost per eDetailing session is not necessarily completely straightforward since: the Pharmaceutical company may negotiate price breaks after a specified number of eDetails have been performed

contracts with eDetailing vendors may state that the Pharmaceutical company will only be charged for fully completed details.

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Case Study: iPhysicianNet eDetailing Study (US) Background

iPhysicianNet is the only company to offer live videoconferencing for face-to-face details. Data from the company, from a 6 month 1,130 doctor study, showed encouraging returns for the sponsoring company.

Results The cost of running a detail through iPhysicanNet is less than traditional sales reps. In a study involving Novartis, it was found that sales reps using the iPhysicianNet live video detailing system: Are able to complete 13 calls per day compared to 8 for field reps, Spend 9 minutes per call compared to 3 for field reps, Deliver 2.7 details per call compared to 1.6. Novartis also found that virtual reps cost Novartis $18,000 less per year than field reps and their cost per minute is only $14 against $58, yielding a total cost per detail of $48 compared to the traditional $106. Measured against prescribing results, the bottom line was that Novartis reported an ROI 20% higher than for field reps. However, the research also shows that 58% of primary care doctors prefer to have calls equally divided between field calls and so-called e-calls.

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Technology Issues

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Planning the type of

technology required for

eDetailing


When planning the type of technology required for eDetailing, CRx Solutions provided Eularis with a series of questions that companies should ask before making a technology investment in this area: Has the company invested in any eDetailing

initiatives to date? Describe. What is the product scope of the proposed

initiative – eDetailing solution for single brand? Pilot test (proof of concept) with select brands? Development of corporate eDetailing platform (e.g., iMarketplace linked to corporate site) for any/all company brands?

What therapeutic areas and customer types will be targeted?

What is the geographic scope – global, regional, single market?

What types of brands does the company believe will benefit from eDetailing – any/all, under-funded, launch phase, mature, low sales, etc?

What are the expected outcomes of eDetailing – improved ROI, cost reduction, supplement traditional marketing mix, extend reach to select customers, maintain competitive advantage, etc?

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Were they delivered by third party portals/providers, or within corporate web environment?

How was ROI measured in this instance? What type of eDetail style is desired – static

pages, flash animation, multimedia, live rep session, etc?

Which business units are supporting/sponsoring the development of eDetailing initiatives – individual brand teams, entire marketing organization, eBusiness department, etc?

What is the time line for launching the eDetailing initiative? Will there be specific phases?

How is eDetailing initiative funded? Fixed or incremental based on functional requirements?

Technology Issues



Strategic Recommendations

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The benefits could go way

beyond simple cost savings

achieved by using the Web

to detail


eDetailing is a relatively new idea which uses the latest technologies. The danger with such concepts is the risk of becoming blinded by and over-enthused with the very technology that the service is based on. Like all Web-based applications, the reality of how it can be used in day-to-day business is somewhere between the sophisticated vision that a supplier company will weave and the existing, tried and tested business methods. Companies must approach eDetailing with caution and dispassionately consider how it can be used. The benefits could go way beyond simple cost savings achieved by using the Web to detail. Eularis considered eDetailing from a European Pharmaceutical company’s point of view. We posed a series of strategic business questions that a company should ask if considering investing in an eDetail system:

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Is eDetailing just a passing phase?

What are my competitors doing? If they have eDetailing, will I be at a business disadvantage?

Will eDetailing be hindered by regulation?

How will this affect the way my sales force is structured and mobilized?

Do contract sales forces have a role in eDetailing?

How will this affect the way my company markets products?

Will eDetailing result in better informed doctors, who proceed to prescribe my company’s products?

Will doctors welcome Web-based detailing?

Strategic Recommendations for Pharma Industry



Strategic Recommendations for Pharma Industry

IS eDETAILING JUST A PASSING PHASE? Marketing and sales capabilities are the most important drivers for short term growth. Thus, innovation within this sector is crucial. eDetailing offers Pharmaceutical marketers a radically new method of delivering their messages to doctors. There will be an initial period of novelty as eDetailing is trialed when expectations may exceed the reality.

Strategic Advice Eularis believes the most likely long-term scenario will be the routine integration of eDetailing into everyday sales and marketing activities.

In essence, it will become second nature to use the Internet as a sales tool. Pharmaceutical companies must take the lead from other industries, such as insurance services, which have been using the Internet extensively to market and sell quite complex products. Doctors, like the general public, will appreciate the multimedia/interactive way they can see drug information and will quickly come to expect that promotional product information is online.

Strategic Advice In summary, Eularis believes that eDetailing is here to stay.

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eDetailing: A Strategic Analysis Of Implementation And ROI (mini)

Marketing

Transcript of eDetailing: A Strategic Analysis Of Implementation And ROI (mini)