Tuesday, March 16, 2010

Spoiling the party!

Kunnath Pharmaceuticals is a very interesting company boldly treading gray areas of pharma product promotion (particularly with reference to their brand Musli Power, seen above) and spoiling the 'party' of conventional pharma marketers. But this interesting company has belled the DTC (Direct to consumer) advertising 'cat' for pharma products, and may be, it is showing the way forward for pharma marketers! Kunnath Pharmaceuticals keeps making headlines every now and then for their DTC dalliances and trysts with law enforcers!! But this company, mind you, will unwittingly, pioneer a new era of pharma marketing communication.

The Medical Council of India (MCI) has decided to become the party pooper! Pharma marketing has always been a grand party for doctors: wining, dining, gifting, sampling, sponsoring, freebies, package tours, cruises, conference in-stall activity that pampers doctors ... it has been real fun doing it all! The MCI has now donned the garb of a moral police and decided to penalize doctors accepting gifts more than Rs. 5000/-, only gifts up to Rs. 1000/- are ok. So I guess, what this means is you give a gift up to worth Rs. 1000/-, every time you gift. What is the frequency of gifting? There are no clear guidelines on that from MCI.

Unenviable position

MCI is in an unenviable position - they are doing the right thing by trying to discipline pharma and doctor give and take. However, where does one draw the Lakshman Rekha?! What is rightful gifting? Isn't the doctor justified by taking some 'justifiable freebies'! The MCI has made the right moves to give out the correct message to the pharma and doctor community that pharma marketing give-and-take needs to be disciplined. After all, ultimately it is the hapless patient who bears the brunt.

Hey, what about the freebies to chemists?!

Another interesting pharma market phenomenon are the freebies to dispensing doctors and chemists (medical shops or pharmacies). There are pharma products that give 1 + 3 offer! That means if the chemist or dispensing doctor purchases 1 strip he gets 3 strips free!! The patient does not get any benefit of the free goods parted by the pharma manufacturer to medical shop. The traders get the benefit. Will somebody spoil this party, enjoyed by the medical trading community, next?!

Fierce competition, spoiling the party!

Spoiling the party of pharma marketers, is the no-holds barred competition at the market level, in today's times! It is not only the PCD (propaganda cum distributors) operators who are intensely marketing their pharma wares, chemist and druggist associations too are in the marketing fray!

BCDA (Bihar Chemists and Druggists Association) has launched its company: BCDA Ltd that markets its brands of pharma drugs. They have given "targets" to chemist members on the minimum amount of their brands that need to be sold!!

UTKAL, the body representing the chemists and druggists of Odissa state (formerly Orissa state) plan to launch their company UTKAL Ltd., shortly!

So Alice in pharma wonderland is shrieking "Curiouser, curiouser!"

We have traders becoming brand marketers, trader associations becoming brand marketers, dispensing doctors patronizing select PCD and profit sharing brands, doctors are in to buying quantities of select custom brands and ensuring their consumption at chemist outlets in their hospitals, doctors are starting companies or becoming directors of pharma companies, hospital chains like Apollo have their own brands, MNCs are in to launching branded generics, PCD companies and marketers are making inroads in to the pharma market ... the pharma market mosaic is truly colorful and very intense!

In the above context, it is no wonder that prescribers are plied with everything from the MR bag! Competition is intense for the attention of the prescriber and the share of prescribing power. So can MCI really discipline medical practice in this melee!!
MCI's intentions are good, but are they sufficient measures to bring solace to the patient?

The answer is the bitter pill of DTC advertising

DTC (direct to consumer) advertising of Rx brands is currently disallowed by the Drugs and Magic Remedies Objectionable Advertisements Act, 1954. Kunnath Pharmaceuticals is always in news for contravening this act!!

Everyone dislikes DTC advertising (because it can be a major party pooper!):

  1. It will increase self medication (as if it doesn't happen now!)
  2. Doctors' will lose control and their vice-like grip over influencing consumption of pharma products (doctors will lose prescription secrecy)
  3. It will empower patients who will start asking uncomfortable questions to doctors, chemists, and pharma marketers (patients may start demanding value-for-money generic generics)
  4. Pharma marketers will have to spend more on marketing communication activities
  5. Pharma marketing will become more complex: now it is easy - just control prescribers and you are ensured of sales, with DTC advertising coming in to the game, marketing spend planning will be a new game altogether
  6. Patients will demand value: price to benefit value, patient information, counseling on side effects and other aspects of drug therapy etc.
So DTC advertising of Rx and nonRx pharma products will be the greatest party pooper and disruptive force of all times in the pharma cum healthcare market, if allowed (the Drugs and Magic Remedies Objectionable Advertisements Act needs to be modified for that to happen). MCI's moves as spoiling the party for doctors will pale to insignificance, if DTC advertising of Rx and nonRx pharma products gains scale! Doctors cannot be just plied with gifts, freebies and other packages to generate sales. Pharma marketing processes will be more intense and complex than that. In fact, if DTC advertising of Rx and nonRx products is allowed it will be a colossal paradigm shift in pharma and healthcare marketing.

The way media or the fourth estate is becoming all powerful in our democracy, the age of DTC advertising for pharma goods (both Rx and nonRx products) is not far off. The pharma marketing game will get very much complex after that.

Finally economics will rule! And DTC advertising of Rx pharma products will be allowed!!

Topline (sales) and bottomline (profits) is sacrosanct in business! Today, pharma companies are at their wit's end to increase sales. They are doing everything possible: free gifts to doctors, chemist offers (in fact, the buzz is that two big pharma companies in India have given away so much of free goods to chemists that it created 5% growth for the pharma industry, in Dec 2009!), detailing, sampling, freebies, incentives to field personnel, in-conference promotion through trade stalls, CME activities etc.

Doing the above is in fact passe!! Everyone from the top pharma companies to the regional and subregional/PCD companies are doing that. So next what!?? Where is the game changer?!

The PCD and other regional/subregional companies are making life tough for national pharma companies to grow! And to add to their woes, MCI guidelines!! So what next??

ENTER DTC ADVERTISING (of pharma Rx products), it is inevitable!!

In fact, the pharma biggies (like Piramal, Cipla, Mankind etc) will be forced to prefer DTC advertising of pharma Rx products - it will help them tame the PCD and small pharma company "beast" that is preventing them from growing further.After all, DTC advertising will not be possible for the small players.

DTC advertising of Rx products will also help them beat the MCI guidelines on gifting.

It will also help pharma marketers beat the ever increasing 'avaricious' demands of chemists and doctors. How much will you give - how much will satisfy them?

In the end, the topline and bottomline truths are the realities of pharma business. My hunch, come Nov 2011, DTC ads of pharma products (Rx and nonRx) will start!

Why?! This financial year will be a very tough year for pharma companies. MCI guidelines, intense pharma competition - PCD companies, regional and subregional companies, Piramal Healthcare and Mankind will taste some success in their OTC businesses, Rx businesses will have more competition, ever increasing free goods to chemists - so tough calls will have to be made by pharma companies seeing the challenges particularly when Dec 2010 and March 2o11 sales and profit reviews are made. Along with this media will continue to grow in Indian society.

And, then finally, big pharma companies will bell the DTC cat!! Let us watch and see my prophesies fall flat on the face or may be (if I am lucky) they will come true!! Thanks for reading this blogpost, you can kindly scroll down, click on older posts when required, and please do read all blogposts. Kindly refer my blog to your acquaintances.

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