Digital continues to be a top priority for pharmaceutical and medical-device executives, attracting increasing amounts of funding and focus. However, relative to industries that have already gone “digital,” such as high tech, media, and financial services, most pharmaceutical firms are still on the adoption curve and have yet to demonstrate significant financial impact.
But it is imperative that companies move up the curve faster. Our research shows that rapid growth of digital channel availability and adoption by pharmaceutical customers is continuing to reshape healthcare delivery. As the exhibit below reveals, the majority of patients, caregivers and providers uses a range of digital tools to manage healthcare, as do many payors.
Healthcare is going digital
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The need for pharmaceutical companies to master digital specifically and multichannel generally is increasing, driven by the continuing shift of physician and consumer activity to digital, more restrictions on sales rep access, and the increasing number of large, diversified group practices where efficient and continuous engagement cannot be accomplished without digital tools.
Over the last several years, industry players have launched a variety of multichannel experiments. Pharmaceutical companies that want to ‘crack the code’ on digital, however, should look at what is needed to develop a more flexible, scalable, and cost-effective digital operating model. While there will be different starting points based on investments to date, pharmaceutical companies should consider the following three priorities.
Take targeting and segmentation to the next level using customer insights to increase volume.
Develop innovative digital solutions based upon new customer behaviors (both physicians’ and patients’) across the engagement continuum.
Commit to robust measures that can yield both short- and longer-term impact.
This article summarizes how each of these actions can make digital engagement a reality and a major source of value in the next decade.
Priority 1: Take targeting + segmentation to the next level
At a panel discussion involving 40 industry executives, almost half confessed that they lack a ‘customer first’ mindset, and therefore don’t have a realistic and credible assessment of how consumers and providers make decisions today. To close this gap, companies need to ‘get granular’ and break down decision-making by different stakeholders and segments and across the entire patient flow. The sales rep has a role in helping physicians choose brands, but the influence of mobile, social, and search on the buying process, retention, and loyalty must also be understood and reflected in allocations.
One well-known brand used nearly 100 percent of sales and marketing spend on acquiring patients, rather than investing as well in continuous engagement. Unfortunately, after six months 40 percent of patients had discontinued therapy, which grew to 50 percent at the one-year mark. Could compliance and retention have been improved with digital support such as disease and drug education, social support for caregivers and patients, and reimbursement information?
We think it could. Brands routinely spend 50 to 60 percent of their budgets on sales reps, even as evidence mounts that physician recall from brief rep visits is extremely limited. Why not first reach out to physicians through digital channels and media they are already using to ‘hook’ them, get them interested and more willing to engage during rep visits?
Pharmaceutical companies can start ‘getting granular’ by using data they already have. For example, behavioral data should be coupled with customer needs and attitudes, all of which can be easily collected and sorted with basic tools and advanced analytics horsepower. Ideally, this type of data and algorithms should be owned internally to drive differentiated insights and strategies. However, infrastructure for reaching customers or software to track performance metrics can be rented or purchased from vendors with a track record of impact.
Healthcare providers like UPMC and Penn Medicine successfully employed segmentation and predictive modeling to inform which tools and tactics should be used for different customers. UPMC successfully built predictive models to drastically reduce the number of readmissions and used a home-visit tool for a subsegment of patients that proved effective and profitable. Similarly, Penn Medicine used predictive modeling to reduce readmissions by 2 to 3 percent1.
Imperative 2: Develop innovative digital solutions based upon current customer behavior
Innovative interventions will vary enormously and should be specific to disease, brand, and even patient types. By ‘innovation’, we mean going beyond email, online stores, websites, tele-detailing, virtual customer service representatives, and video messages. One lifesaving pediatric innovation was creating and supporting an online parent community, which was determined to be critical to increasing patient compliance. Perceived legal hurdles were overcome as customer needs and better patient outcomes were given priority.
Another set of tactics can focus on designing innovative interventions or add-ons to products, services, and business models. These can range from providing web-based forums for providers to equipping patients with ‘beyond the pill’ products such as diabetes blood-glucose meters and pumps, to proposing pills or services that monitor and encourage compliance.
Innovative ideas are not created and perfected overnight, yet it is critical to increase clock speed relative to the typical pace of change in pharma. Time-to-market could be shortened by increasing the frequency of key decisions (e.g., conducting monthly instead of semi-annual budgeting allocation meetings) and use of agile methodologies and metrics to speed development as described below. Industries like telecom use customer lifecycle management, usage patterns (e.g., talk time, peak vs. off peak usage, friends and family discounts, data allowance), and psycho-demographic data to test different combinations of tactics for different segments. The goal is to identify ‘sweet spots’—or shifts in them—in each segment.
Many pharma companies use the compliance bullet to shoot down multichannel ideas before they get off the ground. Yet 30 percent of the execs told us that they believe compliance will evolve to support truly innovative, patient-centric multichannel approaches. Accordingly, innovators have an opportunity to shape the compliance landscape now by working with the industry regulators and legal teams to develop tools and mechanisms that are effective and compliant.
Imperative 3: Identify robust measures of short and longer term impact
Investments in digital can be a tough sell. Limited C-suite support or an absence of shared vision among brand teams for digital are usually a result of multichannel not showing any real impact. Executives are understandably nervous to take away resources from historically effective tactics and allocate them to untested, blue-sky ideas. One approach to help these organizations get unstuck is to recruit senior executives who understand how multichannel works and are ‘all in’ to change the traditional tactics in pharma.
However, the bigger challenge is measuring the true impact of traditional and more innovative tactics. Yet, do companies even know the ‘real impact’ of existing tactics such as sales reps, or DTC, and what would happen if these were pulled away from certain sub-segments? Many companies stick with tactics until a looming loss of exclusivity forces changes in the marketing mix, so they haven’t quantified the impact of their execution or absence.
The second challenge is measuring the holistic impact of a multichannel campaign implemented at scale. This is a multi-step process, involving reallocation of investments, enough time to allow digital interfaces to gain traction, and improvements in data management. Multichannel elevates CRM and IT as potential differentiators, and the performance of both needs to be tracked. For now, it is pharmaceutical companies that must measure cross-channel impact to augment IMS data on sales reps. A better approach might be to create a cross-industry vendor that systematically collects data for each channel.
Pharma and medical-device companies have been experimenting with digital customer engagement, but it’s time for bolder moves. Sponsorship and involvement of leaders is critical for digital customer engagement to become a reality, as is patience. Segmentation, digital innovation, and new measurement systems take time to develop and refine. These priorities need at least six months and perhaps closer to 24 months to bear fruit. Yet there is no time like the present. Patients, caregivers, providers and payors already leverage digital to improve healthcare in various ways, so in many respects pharma and medical device companies will be joining the party, not breaking new ground.