The above image from here: Yellow bulbs!
There
is never a dull day in the pharma marketer’s life! Respected Mr. N Modi, PM of India, has sent
shivers down the spine of pharma marketers - on 17.4.17 at Surat during a
hospital inauguration: Mr. Modi announced in his speech there that the central
govt. will bring in a law to ensure doctors prescribe generic drugs (Ref.: The
Times of India, page no. 1 headline, Ahmedabad edition). The reference was that doctors should write
unbranded generic drug names on prescriptions ie., for example, doctor will not prescribe Dolo 650,
he has to prescribe paracetamol 650 mg!
Now let us remember, almost entire of
Indian pharma market is the branded generics market, which is promoted to
doctors. Pharma companies have built
their fortunes and gained huge shareholder value on the basis of pen habit of
doctors to prescribe branded medicines (me-too products) and earned profits. This has helped pharma companies to recruit
field personnel to expand operations, ensured market penetration of quality products to the nook and corner of Indian pharma market; this has helped pharma companies build
manufacturing set-ups, and export products to almost every country of the world. And pharma companies have also started R and
D endeavours.
Overnight, with the PM's announcement, this pharma business model is
under threat by the envisaged law. No
more will a doctor prescribe Taxim, he will write cefixime 500 mg, it is upto
the patient and pharmacist to ensure the consumption of this drug, either
unbranded generic or any one of the branded options available with the
pharmacist.
Now,
if the law that is to come, allows the doctor to prescribe both paracetamol 650
mg and his recommended brand in brackets eg., (Dolo 650), then there is some
steam left in the branded generics pharma market space promoted to doctors.
Background
During 1950s, the medical representative (MR) visit was a most welcome entry for the doctor.
Probably he would get one medical representative visit every day in
urban areas, and in semi-rural and rural visits, if at all a MR would visit,
the doctor would get a MR visit may be once a week. Hence, the MR with his product updates and
samples was a welcome presence to the doctor.
From 1970s, with product patent regime
being abandoned (thanks to the Indian Patents Act, 1970), (the product patent was re-introduced in 2005), me-too product
manufacturers and marketers burgeoned.
More medical representatives started entering the doctor’s clinics,
bonus offers earlier unheard off…became a rage, pharmacies also started pushing
brands that offered better margins or free goods (sales promotional
offers). As the number of medical
representatives started increasing, the leverage was with the doctor, and he
started gratefully accepting various quid-pro-quo gifts from pharma
marketers. Those who were aggressive in
gifting grew rapidly…this story continued into 1980s. However, there were also some pharma
marketers who were not gifting or providing sponsorships adventurously.
The late 1980s, and 1990s saw the
earlier conservative companies, shed their shyness, throw their ethics out of
the window, since they saw their counterpart companies who provided gifts and
bonus offers growing humongous, and got into the gifting and sponsoring of
doctors gameplan. Various wannabe biggie
companies also started playing with penetration pricing to garner market
share. CRM (customer relationship
management) was the core of pharma marketing.
PCD (propaganda cum distribution) companies started taking root and
gained traction in the first decade of 21st century. The party has become bigger and bigger.
Doctors are splurged; several
unconfirmed legendary CRM activities make rounds during marketing “gupshup”:
a) After
the formal cocktail dinner launch of a breakthrough brand of antiulcerant,
important doctors were given keys to a luxury car… and prescribers who were
gifted their four wheels left broadly smiling
b)
Another
leading doctor working for psycho-somatic health of patients, was given enough
cars by various companies – one car for each day of the week! And the day the doctor takes out a certain
car, on that day the pharma brands belonging to the car gift-giver would roll
out of the pen of the doctor
c) Sponsored
foreign tours for families and other indulgences in the foreign tours engrossed
doctor fraternity and brands paraded in their minds
d)
Sponsorship
of get-togethers, cocktail dinners and various other meetings masqueraded under
the garb of CMEs (Continuing Medical Education)
And it goes on and on and on…each pharma
marketer vying with each other to give and take…for mutual gains with the
medical fraternity.
WHY DO PHARMA MARKETERS ‘GIVE’ TO THE
DOCTOR?
Consumption of medicines is decided by
the doctor, in the current situation, it is by prescribing the branded generic. If a doctor prescribes brand X, the patient
buys it. The patient has implicit trust
on the doctor (the medical professional earlier definitely had a demi-God
status in Indian society) and obediently goes with the doctor’s brand
recommendation. The result is pharma
marketers who take care of doctor’s needs enjoy better sales outcomes and
profits.
In this business, the patient does not
make any choice between brands with the same generic drug. It is the doctor’s business to choose the
pharma brand for the patient. But the
payer is the patient!
Ignorance of brand options with same
generic drug, lack of will by patient to exercise brand options, and
non-encouragement by the environment to choose alternative brands or unbranded generics
are the main reasons why patients go along obediently with the doctor’s brand
recommendation.
This pussy footing by the patient provides
an opportunity for the doctor to use his influence with patients and encourage
consumption of his favoured brands. And
this gives an opportunity for the doctor to strike quid-pro-quo relationships
with pharma brand marketers! And both
the pharma company and doctor enjoy the benefits of pharma brand sales, thanks
to a very co-operative attitude of the patient.
WHY DO PHARMA MARKETERS PROMOTE PRODUCTS
TO DOCTORS?
Pharma brands are built by the doctors
prescriptions, if a doctor gets 1000 to 2500 patient visits per month (average
of 40 to 100 patient visits per day; 25 working days per month), and prescribes
an average of four assorted pharma brands per patient, then, 4000 to 10000
pharma brand purchases have happened (it will not be 4000 to 10000 different
brands, there will certainly be a number of repeated overlapping brands) - a
doctor after all, may be able to remember maximum 100 to 200 different pharma
brands?
So the idea for the pharma marketer, is
to be among the 100 to 200 brands or so, which a
doctor remembers (certainly some brands are etched permanently in the doctor's
mind ‘non-volatile ROM brands’ and
others are ‘volatile RAM brands’,
the latter are the brands that float in and out of the doctor’s mind, depending
on the regularity of product promotional activity).
It is then vital to gain patronage of
the doctor, and ensure the promoted pharma brands sell. Thus, prescribing the pharma brand name is
key to commercial success of a pharma company.
GENERIC PRESCRIPTIONS: death-knell for
the pharma brand business
The ruling BJP party and Mr. N Modiji are focused on winning elections, the next big one is the Lok Sabha elections of
2019. To gather votes, they need to say a
story of doing good to their voters, mainly the middle class and poor sections
of society. Capping the prices of stents
has endeared the govt. to the masses.
Now ensuring purchase of unbranded generic medicines, which are
available at rock bottom rates will further make the government voter friendly. There is a good talking point here for the
ruling party.
a) Branded
generics promoted to doctors (these carry maximum premium (high MRP) and are
hugely prescribed by doctors)
b)
Branded
generics not promoted to doctors, sold by pharmacies to patients, and also
purchased by dispensing doctors who sell them to patients
c) Unbranded
generics not promoted to doctors sold by pharmacies to patients, and also
purchased by doctors who sell them to patients.
In developed countries, the patient is
not ignoramus. The doctor has to justify
his recommendation to patients.
Normally, prescriptions are for unbranded generics in developed
countries. Many of these unbranded
generic medicines sold in developed countries are manufactured in India and
marketed abroad.
However,
in India, it is a time-honoured practice to manufacture and market, branded
generics and the prescriber chooses to patronize certain brands of his choice
based on the doctor’s experience with the technology and quality of the brand,
and marketing inputs provided by the pharma marketer. The Indian patient is ignorant of his ability
to make a choice between branded and unbranded generics.
ARE PHARMA BRANDS EQUIVALENT?
The answer is yes and no! Brands of the same category are chemically
equivalent (contain the same quantity of the active ingredient). However, there can be important
differences. This is with the excipients
and the manufacturing process parameters of the brand. For example, if you compare the dissolution profile
of albendazole tablets, you may be surprised; Zentel from GSK is said to have the best
profile. Similarly, Advanced Crocin has certain
excipients to improve dissolution and consequent absorption of paracetamol into
the bloodstream, when ingested.
Pharma brands are also presented in
unique differentiating ways that improves patient acceptance and brand salience. The shape at the mouth of bottle in oral
pharma formulations may aid pourability, use of certain permitted colours and
flavouring agents also enhances patient acceptance, use of Alu-alu pack by
certain pharma brands (may not be used by plain vanilla unbranded generic medicines)
enhances patient compliance and patient acceptance. Pharma brand marketers work on
differentiating their products through value added excipients to improve
organoleptic qualities (improved patient acceptance through mouth-feel,
flavour, texture, odour, colour and taste); these are not a consideration in
plain vanilla unbranded pharma products.
Though brands may be chemically
equivalent, or even proven to be bio-equivalent, yet brand performance may not
be same; and brand acceptance at patient level will not be same. Furthermore, doctor’s confidence will not be
same on each brand. It depends on the
doctor’s experience with the brand, technology used in the brand, and patient feedback
to the doctor on the brand.
IS IT RIGHT TO DO ‘DEBRANDIZATION’ (brand-bandi in doctor's prescriptions) OF INDIAN
PHARMA MARKET?
Patient
health, recovery and well-being are paramount for medicine marketers and
doctors. Quid-pro-quo relationships are
at one level, but patient recovery & well-being (public health) is the non-negotiable
foundation where pharma marketers, doctors and other stakeholders such as
regulatory agencies agree to be on one page.
So the fundamental question to ask is,
whether promotion of unbranded generic medicines - will improve public health?
The merits of ‘debrandization’ in pharma
market:
a)
People
will come to know of availability of unbranded generic and branded generic
medicines (which are not promoted to doctors), so this option will gain
traction; and patients can exercise this option if they wish
b)
Doctor-pharma
marketer relationship will become “cleaner”
c) PCD
(propaganda cum distribution) companies who are known to offer robust services
to doctors in exchange for their prescription or purchase support, will end
d)
Accessibility
will improve
e)
Cost
of therapy will come down.
The demerits of ‘debrandization’ in
Indian pharma market:
a)
The
current pharma marketing business model will collapse
b) Shares
of big pharma listed companies whose business depends on pharma brands will
fall steeply
c)
Industry
turnover will fall
d)
If
the doctor stops prescribing branded medicines, medical representatives will
not meet them, many medical representative jobs will be lost
e)
Companies
will reduce jobs in marketing (particularly field jobs)
f) Field
personnel will focus on chemist retailers than doctors, offer incentives and
freebies to retailers to stock and push their products (as per the Times of India, 19.4.17, page no. 19, Mumbai edition, retail margin on drugs may be as high as 1000%, this will stress pharma marketers, as they have to offer competitive margins and offers, this will erode financial strength of pharma companies)
g) Innovation
and technology improvements will not occur, all pharma companies will go for
manufacturing the plain vanilla formulations (without any improvements), it
will become a commodity game
h)
Quality
will become a question issue. For
instance drugs (APIs) and excipients are available at various crystalline
purities, and the manufacturer will go in for lowest acceptable crystal purity
(only economy will weigh on the mind of manufacturer)
i)
Packaging
will be passé and will not offer any improved benefits to patients
j) With
profit margin squeeze, companies will not have adequate surplus monies to
invest on geographic expansion, export ventures, product development, R and D,
new molecule research, social marketing etc
k) Companies
will reduce emphasis on launch and marketing of modern medicines, they will
prefer to invest on nutraceuticals and Ayurvedic formulations. These will not be affected by the proposed
law (in fact, Himalaya Drug Company and other such companies will go laughing
all the way to the bank, while rest of pharma will be stressed). Besides Ayurvedic formulations and
nutraceuticals can be advertised. We
will lose our standing, competence, global edge and knowledge of manufacturing
and marketing of modern medicines
l) In
case of branded formulations containing multiple ingredients such as Becosules
Z, it will be virtually impossible for the doctor to write names of generic
drugs or vitamins/minerals included in the formulation on his prescription
m) Monitoring
the implementation of this ‘generic name
only law’ for prescribers is nearly impossible…let us say there are about
10 lakh active prescribers (across India), and let us assume, every working day
these 10 lakh active prescribers write about 50 prescriptions each. This means 5 crore prescriptions per
day! And for 25 working days, it is 125
crore prescriptions per month!! Are you
going to monitor this?!!
n)
If
a doctor writes some brand names, and in India where there is a situation of less
number of doctors, and more patients, what punishment are you going to administer? Prevent
them from practising?
o) If
medical representatives and field personnel lose jobs, in a country where
under/unemployment is high, is this initiative worth it? Please remember marketing creates more jobs
than manufacturing or R and D (in pharma field)
p) Doctors
may give oral recommendations for brands, or unsigned slips containing brand
names, or pharmacies will push certain brands on oral recommendation of doctors
… there are ways to beat this law…
q) There
could be legal challenges to this ‘debrandization’ as it takes away the freedom
to promote branded products and recommend them
r) Patients
may be unhappy with the generic name prescriptions since the doctor is not
prescribing “quality brands” (it is a matter of freedom of choice and many
patients want quality brands…brands are the covenants of trust)
s) Patients
and patient attenders may be upset with the tongue twister and complex generic
names of medicines, in comparison to cute, easy to recall, easy to pronounce
and easy to remember brand names of medicinal products.
HOW MAY PHARMA COMPANIES MANAGE THE NEW
CHALLENGES?
PESTEL standing for political, economic,
social, technological, environmental and legal environment is always in a
state of flux, depending on the various happenings on the PESTEL front, pharma
organisations will respond in various ways:
a) Some
will adopt the wait and watch, others will lead a counter response through
various forums like IDMA and KDPMA; few others will use their good offices with
various authorities and present their viewpoints. Some others will present their take on social
media and talk to the media
b) Companies
will start investing on new marketing technology to strengthen their
patient-centric communication, and strengthen CORPORATE EQUITY and PRODUCT
EQUITY at patient-level.
c)
There
will be a rise in OTX (over-the-counter and prescription) route of marketing
(including communication/advertising/digital messaging to patients) to
strengthen sales outcomes; also OTX products will be launched in a rush: ayurvedic,
dental, nutritional powders, nutritional supplements, health soaps, and other
nutraceutical products (including in unique packaging like Tetra Pak based products
or products with unique concepts like virgin coconut oil)
d) A
chemist-focused and dispensing-doctor focused working will be emphasised to
ensure product availability
e) Companies
will go in for umbrella branding, umbrella brand colour concept, and uniform packaging
for creating market identity for their products; so that chemist/pharmacy
retail-push/pull will start; pharma marketers will also go in for launch
and pushing unbranded generics and branded generics (low cost, that are not
promoted to doctors)
f) Companies
will increase no. of medical representative calls to pharmacies (eg., 15 per
day) and reduce doctor calls (to say 5 per day)
g)
Companies
will probably rationalize field personnel count and coverage, and consolidation
of divisions/SBUs etc., to reduce costs
h) Companies
will invest more on chemist coverage, example: paying chemists/pharmacies to book shelf
space for their products, offer freebies to chemists, & having field personnel to
cover more chemists/pharmacies and dispensing doctors
i) Some
companies with deep pockets may start their chain of pharmacies (for eg., Cipla
pharmacy), and will also emphasize online pharmacy marketing toos
j) Companies will invest more to make patented medicines, products with novel drug delivery systems or products that do not have many me-too products...
j) Companies will invest more to make patented medicines, products with novel drug delivery systems or products that do not have many me-too products...
What
may the Govt. do?
a)
Govt.,
may tighten doctor-pharma marketer relationships with new laws
b)
Govt.,
may ask doctors to write generic names only on prescriptions
c) Govt., may ask doctors to write the generic names
and the brand name alternative (in brackets), so that the patient will have an
option to buy the generic name product if he wants or go ahead with the doctor’s
choice of a branded product or the patient may choose another branded product, a company of his choice.
It would be prudent to go the option C,
since it meets governmental requirements, patient psychology, doctor’s
confidence and liberty, and Indian pharma industry traditions.
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