Thrive not Survive – A mantra for the times?
Is this a timely question for Pharma and its marketing and communications agencies?
The global credit, or was it ‘creditability,’ crunch has caused many a large corporate to take a closer look at the fundamentals driving their product and share prices.
In Pharma’s case lowering promotional costs would appear to have become more important than brand strategy as a response to the current commercial times.
Apart from pure play biotech and a few pioneering firms could the Pharma industry be undergoing a quiet marketing quality implosion?
It’s sad to say - But probably – Yes it is.
What this appears to mean is that the communications agencies must sell and deliver efficiency with strategic value adds.
Not vice versa.
Effectiveness would appear to have been forgotten in the maelstrom.
Are Pharma demands for efficiency being driven by bean-counter Thoughtware to the point …….
Are Pharma demands for efficiency being driven by bean-counter Thoughtware to the point of communication absurdity?
Have Pharma demands for capping total agency costs and rate cards resulted in excellence in marketing and communications strategy being abandoned?
Has effective communications to an appropriate target audience become a casualty of the times?
Even the giant marketing agencies would appear to be being forced into producing nonsense.
Are they really pretending the game hasn't changed?
For example, Pharma spending considerable sums of money to have brands approved across the EU only to have reimbursement blocked for lack of a compelling value proposition.
This has been the case both for Bristol Myers Squib in the oncology area and for Pfizer with Exubera.
Are the Pharma agencies really the victims of these circumstances or actually the culprits?
Communications Value
Marketing strategy should start not end with a Value Proposition.
Payers and regulators, not physicians, are the ‘explicit’ buyers in today’s markets.
Physicians may be ‘influencers,’ or at best decision makers at the margin, but it is the client who holds the dollars who really makes the decisions.
Pharma agencies also need to provide their clients with value for their communications dollar. If not, who could blame Pharma for its parsimony?
Who hasn’t realised that these are the new rules of the game – Pharma or its Agencies?
Who is responsible for interpreting a Value Proposition as a Positioning Statement?
Brand attributes are all important but if the Cost-Effectiveness is not there where is the value?
In the rarefied heights of big Pharma marketing it is perhaps easy to forget that value is a perception in the mind of the buyer.
Communications Efficiency
“To economists, efficiency is a relationship between ends and means. When we call a situation inefficient, we are claiming that we could achieve the desired ends with less means, or that the means employed could produce more of the ends desired.
“Less” and “more” in this context necessarily refer to less and more value. Thus, economic efficiency is measured not by the relationship between the physical quantities of ends and means, but by the relationship between the value of the ends and the value of the means.”
As economists measure ends and means in monetary terms is there a danger that the broader ‘social’ or ‘external’ benefits could be missed?
In an era where many Pharma clients are finding their pharmaceutical bill a pain and flexible, pay-for-results, pricing is becoming the norm rather than the exception, externalities are a luxury few can afford.
Consequentially Pharma is feeling the pinch. For example IMS Health reports that price cuts on marked products reduced total growth in the top five European markets by 2%.
(See: IMS Intelligence.360 2007, 2008.)
Do Pharma agencies expect to be exempt from these pressures?
When was the last time a large Pharma agency worked on a success fee basis?
Communications Effectiveness
Arguably effectiveness lies at the heart of the issue.
Evidence based medicine, the efficacy of treatment regimes are de-rigour in Pharma’s markets, but are they as relevant to the Pharma Agency marketplace?
Are the same exacting proofs of product outcomes criteria that apply to Pharma equally applicable to their communications suppliers?
It wasn’t that long ago when Pharma followed the agency client pack and didn’t expect to pay for creative.
Now brand strategy is being forced to take a back seat with clearly disastrous results for both Pharma and its Agencies.
Are we heading towards Agencies paying Pharma for the privilege?
Is There an Answer?
Perhaps?
In this time when the rest of the commercial universe is being forced to take a long look at its operating paradigm, if it expects to thrive rather than survive, Pharma and its communication agencies might consider some radical, self-evaluative, rethinking?
(Tomorrow’s Blog: The Evolution of Pharma Communication Orgware)
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