The dawn of AN ERA OF PHARMA TECHNOLOGY IN INDIA
Today, Indian pharma industry is highly commoditized. It is an era where CRM power is the muscle power of a company. The marketing orientation is towards intense CRM activities. The marketing and sales cycle is simple: contact the doctor-detail-sample-gift-negotiate and provide specific gifts and sponsorships (including celebrations of birthdays and anniversaries) in return for prescriptions or POBs (personal order booking) related sales. The moot point is how long can this go on and to what extent? Pharma companies today provide prescribing doctors with groceries, provisions, movie tickets at multiplexes, white goods (like DVD players, washing machines and refridgerators), sponsored vacations under the garb of seminars and symposia, clinical oriented gifts, pens, payment of electricity bills, cash, samples, schemes (ie., free goods with sales stocks) and what not... Earlier it was a minority of pharma companies that indulged in no-holds barred CRM and it was a minority set of doctors who indulged in taking any and every thing that a pharma company provided. Today, the situation is converse. Almost all pharma companies do intense CRM and majority of doctors demand the kind of items (gifts and freebies) they want to be serviced with. Doctors themselves lament that today the situation is not what it was say in the 1970s ... SO WHAT IS THE NET RESULT FOR PHARMA COMPANIES? Events like the sale of Ranbaxy to Daiichi Sankyo ... C'MON, THAT IS FAR FETCHED!! HOW CAN CRM RELATED SALES AND MARKETING ACTIVITIES MAKE A COMPANY WEAK ENOUGH TO BE TAKEN OVER BY ANOTHER COMPANY? THE ANSWER IS HERE...
When any pharma company gives CRM the highest in the priority in terms of revenue generating business activities, the focus of the entire company (right from the top management to MR level) goes towards CRM. Everything else becomes secondary. The casualty of a hyperfocus on CRM is profits. When marketing value is perceived in terms of freebies and gifts given to the prescribers the product per-se takes the back seat. And with that there is an erosion of profitability.
The medical profession too feels the pain today... doctors have seen the erosion of trust between the doctor and patient. When trust and profitability get eroded, it means business processes are becoming less effective and efficient.
Peter Drucker says that profits are a measure of effectiveness and efficiency. So what will the pharma entrepreneur do to improve profitability? Cut down on CRM budgets overnight! NO!! THAT WILL BE SUICIDAL!!!
THE ERA OF PHARMA TECHNOLOGY IN INDIA WILL BEGIN NOW (as a force of circumstance)...
The sagacious pharma entrepreneur will start putting the focus on technology - either packaging technology (for instance Juggat Pharma's ingenious application of tetra pak technology to create the product category of ELECTROLYTE ENERGY DRINKS for Rx support, for more details: firstname.lastname@example.org) , or new drug development programs or new dosage delivery systems.... Pharma companies will exploit science further - to apply scientific precepts, concepts, and tools to improve the pharma product's safety, utility, and application. This in turn will create unique features in brands. This certainly will provide USPs (unique selling points) for the brand. This will ensure new and attractive talking points while detailing the brand to the target audience. And when a product is presented as different and better, the focus on gift based or freebie based CRM will decrease. This will ensure that profits will be better.
Without growth in real profits, a company's decline will begin. The pharma company will enter in to a vicious cycle of a freebie based CRM trap, from which it will not be able to get out fast. Today, let us say a doctor gets satisfied with a TV for his clinic and he gives a bonanza of prescriptions for a brand. However, the opium of the freebie will fade away fast, the doctor's need will rise further - he will want a LCD TV or plasma TV next. If a doctor is offered a 5 star room for his sponsored stay during a symposia, he will want the next time a seven star room facility.
Hence, the sagacious pharma company will start producing pharma goods that will create brand differentiation through technology. For instance, Zydus Cadila has collaborated for a little known technology to differentiate their erythropoietin offering - they are offering erythropoeitin which is pegylated. It is an interesting technology of combining erythropoietin with polyethylene glycol. It is described as a low hanging fruit on the technology tree. Not a very complex technology, but nevertheless a technology that can give brands some more power and real marketing value.
Another little step in this direction is the resin based system in Becosules Z (from Pfizer) to enhance the absorption and bioavailability of B complex vitamins. This differentiates the brand further from other B complex products. NOW IMAGINE, IF PFIZER LAUNCHES A BECOSULES NANO, WHERE IN THEY PROVIDE A MULTIVITAMIN USING NANO SPHERES (VITAMINS ARE PRESENT IN THE NANOSPHERES) AND THAT THIS ENHANCES ABSORPTION ... THE RESULT IS HIGHER PERCEIVED VALUE FOR BECOSULES Z AND MORE PRESCRIPTIONS. Imagine a nano based tech product for rifampicin or isoniazid that enhances absorption and bioavailability - thus, lesser drug can be used for the patient and the side effect (particularly liver toxicity) can be reduced. Value delivery through technology in pharma is better marketing sense than an overemphasis on freebie based CRM.
Application of technology in pharma will increase with the interdisciplinary approach in pharma.
It is well known that technology provides companies with more financial might than freebies based CRM. Imagine for a moment - if Ranbaxy had provided as much focus on technology as it has provided for freebie based CRM, in its marketing operations right from the beginning, today probably Ranbaxy would not have got sold out to Daiichi Sankyo.
RECOLLECT THE ASIAD DAYS IN INDIA (1982), WE HAD TV BRANDS IN INDIA LIKE DYANORA, TEXLA, CROWN, EC TV, KELTRON, KEONICS, ETC. TODAY, AFTER ECONOMIC LIBERALIZATION, WHERE ARE THOSE TV BRANDS? THEY HAVE BEEN GOBBLED UP BY THE TECH GIANTS - MAINLY THE JAPANESE. TECH COMPANIES HAVE FAR MORE FINANCIAL MUSCLE. THE SAME THING HAS STARTED HAPPENING IN INDIA, DAICHII SANKYO HAS BOUGHT OUT RANBAXY ( I ESTIMATE THAT IN 3 TO 4 YEARS, IE. BETWEEN 2011 AND 2015, THE INTEGRATION BETWEEN RANBAXY AND DAIICHI WILL BE COMPLETE, AND MOST LIKELY, THE NAME RANBAXY WILL VANISH IN TO OBLIVION OR WILL BE THERE ONLY FOR NAMESAKE). AS THE INDIAN PATENTS ACT, 1970 HAS BEEN AMENDED, PRODUCT PATENTS ARE NOW VALID IN INDIA. HENCE, TECH COMPANIES WILL HAVE THE UPPER HAND SLOWLY BUT SURELY. SO THE SAGACIOUS ACT WILL BE TO PUT THE FOCUS ON TECH ASPECTS IN PHARMA COMPANIES - IT SHOULD HAVE AS MUCH PRIORITY AS MUCH AS 'FREEBIE BASED CRM' HAS IN INDIAN PHARMA COMPANIES. This is more important in current times when world over the focus is on BRIC countries. Right now, America is in a recession and Brandweek says that even the drug industry in America is in a recession, another net poll (at John Mack's blog) too says this. So where will these tech rich companies of USA focus? Yes ... of course India and China for growth. So expect more buy outs and shakeouts. Already there are reports that Takeda the #1 Jap pharma company is tryin' to buy out Torrent.
Thnks for reading this blogpost, please scroll down and read all others too, please click on OLDER POSTS wherever required, to access all posts.