This guest blog is by Alex De Carvalho as part of our themed content hosted the first week of each month, with October focusing on healthcare.
Compared to other industries, healthcare and pharmaceutical companies have historically been slow to market online, partly because of strict advertising regulations (FDA) and patient-privacy (HIPAA) laws. However, as new market realities push pharma companies online, these firms will find that social media supports the more agile business model some will pursue.
By 2016, the world’s pharma firms will lose over $140 billion in annual sales from major drugs as key patents expire and cheaper generic versions hit the shelves. This upcoming “patent cliff” is a legacy of the blockbuster drug manufacturing and marketing model, where massive R&D led to billion-dollar drugs. The current crop of expiring patents include well-known brands such as Pfizer’s Lipitor, GlaxoSmithKline’s Advair, AstraZeneca’s Seroquel, and Sanofi-Aventis and Bristol-Myer’s Plavix.
This wouldn’t be much of a problem for drugmakers if new monster products could take up the slack. However, the discovery rate of new drugs have declined even while regulatory hurdles for new drug approvals have increased over the past decade, making it impossible for big pharma to sustain historically high, double-digit growth rates.
In addition to acquiring new molecules, partnering with academic groups, and diversifying their core business, drug companies are responding to these new realities by cutting headcount, increasing DTC marketing, and launching digital and social media initiatives. Budgets are moving to the web, with increased activity in online recruiting, marketing, market research, social media monitoring, community management, app development, and more. As they move online, pharma firms will find that social media will positively contribute to their products’ lifecycles in at least three ways:
Market Research: As of March 2011, the Internet counts over 2 billion users. These include key opinion leaders, patient opinion leaders, healthcare providers, and individuals across hundreds of therapeutic areas who have joined branded and unbranded communities to discuss symptoms and treatments. These platforms are changing pharmaceutical firms’ approach to market research, since they can now track and monitor these discussions to draw new conclusions. These platforms facilitate new qualitative and quantitative market research techniques, including asynchronous, private, and anonymous forums between physicians and/or patients, sentiment analysis, adverse event monitoring, and more.
Big data: Patient information is being shared and aggregated online through blogs, social networks, patient, physician, and association communities, health-tracking devices and applications, and electronic medical and health records. This is akin to large unstructured clinical trials, where people worldwide are recording and discussing the results of millions of trial and error experiments associated with the management of their health and medical conditions. With the use of data-mining technology, such data will uncover vast opportunities to improve tratment protocols and patient outcomes.
Comunications: The embedded slide presentation below compares the legacy blockbuster model with a more agile specialty model, highlighting how social media market research, communication, and community management complements the product lifecycle. The specialty model includes product extensions and new delivery methods which can be more quickly tested and brought to market. Such extensions require continuous adjustments of strategy and marketing, which are more easily facilitated by social media. Through community engagement and relationship building, social media can effectively complement quick adjustments and changes to brand strategies.
Pursuing these strategies will require a new mindset and a more agile mentality. These types of activities are probably better pursued by creating “incubators” within pharma companies, where dedicated resources can experiment with new online technologies and platforms before rolling them into operations. For those that take the leap, the future is social.