Healthy Skepticism Library item: 15797

Warning: This library includes all items relevant to health product marketing that we are aware of regardless of quality. Often we do not agree with all or part of the contents.

Publication type: news

Gandy G.
Demonstrating value to boost product uptake
Pharmafocus 2009 May 29
http://www.pharmafocus.com/cda/focusH/1,2109,22-0-0-0-focus_feature_detail-0-492802,00.html

Abstract:

Gavin Gandy argues that pharma marketers have to work harder to demonstrate the value of their product.

Full text:

I am sure that every marketer reading Pharmafocus is convinced of the value of their brand. Why then do so many of us find it hard to demonstrate value to other people and, in particular, those who have the power to influence whether our brand is used or not and to what extent? Surely this should be relatively straightforward? Well, not unless you take the time to consider what value is and what it really means.

Value and why we need to demonstrate it

Defining value can be difficult when individual people derive different levels of value from the same product or service. Our sense of value can also be influenced by other people and, in particular, people whose opinions we trust. So what do we mean by value?

Value is derived when the perception of the benefits of a product or a service are in line with the cost. Simple enough, but perhaps in our industry we do not consider this in sufficient detail. And too often we concentrate only on the value that comes from the functional benefits of our products, i.e. efficacy and safety, without thinking about the equally important emotional aspects of the value our brand brings. Potentially, this shows a lack of real insight into what drives the decision-making processes of our customers and without that insight, we have a limited chance of boosting the uptake of our products.

We all know that most healthcare systems are creaking at the seams, trying to manage the ever-increasing costs of healthcare delivery. Coupled with this, research and development costs are soaring as pipelines continue to fail to bring radically new and innovative therapies to market, and at the other end patents are being successfully challenged by generic manufacturers. Companies are therefore looking to maximise their profits on any new products that make it to market, conflicting with the healthcare systems need to control costs.

Pharmaceuticals are a soft target for healthcare systems looking for savings. Why? I would argue because we have not established their value with key stakeholders, be that on the macro or micro level.

At the macro level, politicians and payers focus on cost and can introduce various cost-cutting schemes because the voting public allow them to do so. Why? Because, in the main, the voters are not focusing on our industry and therefore do not care; we have not done enough to demonstrate the value that we as an industry bring to overall healthcare. I say in the main, because when the voting public can be made to care, they can have an impact, as demonstrated in areas such as cancer. Perhaps we should learn from this our industry can and needs to do more to demonstrate that spending money on medicines represents good value.

But that is an issue for industry-wide representation to tackle. More pertinent for most individual companies and their brand managers is demonstrating value at the micro level that is to payers and prescribers (although lets not forget that payers are to some extent pawns of the government, and in some respects, therefore, it is not in their interests to open their eyes to value, because their job is to follow political will, which in turn means to control costs).

Generally, though, uptake of a particular product will be dependent on stakeholders within each countrys healthcare system believing that it adds value, by whatever measure they use to assess that value and, as we shall see, those measures are not all cost-based.

So, now more than ever, pharmaceutical brands need to demonstrate their value if they are to be successful.

How value needs to be demonstrated

At a national level, we often think about value in relation to new products and securing reimbursement and funding. In this situation, we easily slip into jargon use and bandy around terms such as the value proposition and target value profile, sometimes without fully appreciating what these terms should mean. But these words are not just meaningless jargon we really do need to start valuing the value proposition.

Often it is the responsibility of the market access or professional communications team to develop and communicate this to the payer or budget-holding customers, and may even be developed independent of the marketing team to the point where the market access aspiration differs from the marketing position.

This can happen because getting a foot in the door, i.e. a profitable price and reimbursement, is most likely to be the market access position at launch. Marketing, on the other hand, is trying to maximise speed of uptake and sales. If the two are developed in isolation, they can look completely different and lead to intra-company confusion. You might laugh, but we have seen this done.

The development of the value proposition is not a stand-alone process, but should be part of an integrated and collaborative effort with other marketing principles, and must be an integral part of brand development. Therefore, the brand positioning and value proposition should not be developed in isolation, but rather they should support and shape each other.

The power of cross-functional working having all your key internal stakeholders aligned with what you are trying to achieve, and making sure they are clear about what role they play in terms of delivery has to be the way forward for success, otherwise you end up with left hands and right hands not knowing what is going on. Working cross-functionally to fully understand payers needs, where the common ground is and, more importantly, what they will value, is going to give you the best chance of success.

Shaping phase III studies may well form a key part of this, and all corporations, big and small, need to have a horizon that extends beyond their home market when considering which comparators should be built into the programme and how these can drive health economic outcomes. Local marketers have a duty to inform global teams as to what may be required, and a detailed understanding of payer needs and motivations are immensely powerful when it comes to these discussions with your global colleagues.

An element of flexibility is also helpful, especially if through good segmentation you can demonstrate even more value in patient sub-populations. It may prove a more effective strategy to gain reimbursement at a good price in these patients and then look to develop your patient pool overtime, linked to the clinical development an argument that could hold true for your internal as well as your external stakeholders.

But what about existing products products that have already gained reimbursement and have a place in treatment pathways is there a need to demonstrate value further in this situation?

Clearly the answer is yes, and this may be where market access and marketing fail to mesh effectively. After all, if you believe that one product is better value compared to the next then you will buy it more frequently, or in our case use it more. Quite often, this need is translated by marketers into the Value Added Programme, which invariably is an educational package aimed at either the prescriber or the patient. Not that there is anything wrong with this approach, other than that it is perhaps getting a little tired, can be treated with an element of scepticism if aimed at prescribers, and in some cases does not truly link to the intrinsic value in the brand itself.

The key question is: do these initiatives go far enough to add real value? A great example of what I mean here is Fresenius Health Care, which agrees reimbursement models to deliver dialysis to patients suffering from chronic kidney failure. They have a model called the Comprehensive Price Payment, which is an integrated and quality-driven approach that bundles a variety of dialysis-related services and products that in turn require the implementation and functioning of an integrated disease management model to achieve health benefits, quality improvements and system rationalisation.

This is possible because they offer products and services for the entire dialysis value chain; put plainly, they get paid for servicing a healthcare systems dialysis needs. OK thats great, but what if you do not have the infrastructure to be a total solution? Well, the principle is still sound how can we help you to meet your healthcare needs in a way that is both acceptable and profitable?

Time to get emotional

So, what is missing from our communication? If we go back to our definition of value, we can represent it as: perceived value = perceived benefits price.

Traditional pharmaceutical marketing is all about converting features of our product to benefits, isnt it? We have all been taught to use the which means that phrase surely that does the job? Well, no. All too often our communications focus purely on the functional benefits of efficacy and safety. Why is that not enough? Because we have not split benefit down into its component parts.

Ask any FMCG marketer and they will tell you that we derive both functional benefits and emotional benefits from the products that we buy. Just think about a man buying a car or a woman buying shoes and youll understand immediately what I am talking about. These are not buying decisions that are based purely on functional attributes they contain higher levels of emotional benefit.

Can this be done in pharma? With the right communication, I would argue that it can. Let me give you an example. Shire in the UK had a product for Alzheimers disease, Reminyl, launched after Aricept (Eisai/Pfizer), and was challenging for market share. Their initial communication was based on the functional claim that Reminyl slowed cognitive decline in Alzheimers patients for up to four years. The benefit over Aricept was minimal as far as prescribers were concerned. Treating this disease is not about MME scores; GPs were not just concerned about cognitive function, they cared about the patient, and even more so if the patient had a partner. Hence, with insight, this communication was changed to a couple holding hands and the plea: Help us to hold on for as long as we can. This was far more emotive and communicated greater benefit to a would-be prescriber. And the result? A much faster uptake of the product.

The trouble is that we often ignore or forget about the emotional benefit when it comes to marketing pharmaceuticals; after all, doctors are educated and rational people who make decisions based on hard facts and clinical data, arent they? But the fact remains that doctors are people too, and therefore the principle holds true for them, even more so in some cases given that they enter into medicine in order to help people. The which means that phrase may get us some of the way, but to tap fully into the higher emotive needs and benefits, we need to generate a deeper insight into what really matters to our prescribers.

Without understanding this other side to benefit, we are only able to satisfy functional needs. Not that we should be dismissive of this, as it must be a minimum requirement, but it does not help to differentiate our brand from others that can claim similar things. So how do you uncover this level of insight?

Well constructed market research, using well thought-out discussion guides and a range of different techniques, can go past top-line functional needs and start to get at a deeper level of understanding that can lead to true insight. Yes it takes time and yes it takes investment, but it is a modest investment for the potential return that it can yield.

You need to understand how certain beliefs drive behaviour and then try to think about what is underpinning those beliefs. What is your key business objective, and what change in behaviour do you need to bring about in any particular customer or group of customers?

Often this requires constantly asking the question Why? in research, drilling down beyond the top-line responses to really understand what drives behaviour. And dont forget, these drivers will be different for each segment of your market; generally managers and budget holders are looking at populations, whereas prescribers tend to look at individuals.

Demonstrating value

At whatever level, in a continent which is increasingly taking a more global view of health economics, we as an industry have to be demonstrating the value of what we bring to the table, and in a way that goes way beyond the givens of price, efficacy and safety. In fact, the drive towards viewing health economics not just in individual budgetary silos, but in a more holistic way, should help us spending from the drug budget can be justified by demonstrating to stakeholders the value in achieving the wider health outcomes.

But this is not happening at an even pace across Europe. The UK has had NICE for years, and therefore the industry has had to get better at health technology assessment submissions, which in turn has generated useful debate about treatment approaches and the value of new medicines within the context of overall healthcare outcomes. In some European countries this is not the case; affiliates seem less ready to challenge current approaches to disease management.

Whatever the national environment, right across the continent there is an increasing need for pharma companies to work harder at convincing all stakeholders about the positive value that their products bring to the overall healthcare picture. The trade-off for us may be that we have to be more realistic with our ambitions and focus on selected patient groups where real value can be demonstrated, rather than on everyone with the disease. The benefit, though, is that if we can be seen as true partners working alongside the healthcare system to bring true value to patients, then we will be knocking at an open door.