How can we improve pharma marketing? By learning from CPG marketing.

Just last week, one of our clients volunteered over lunch that pharmaceutical marketing is looking a lot like consumer-packaged-goods (CPG) marketing. We couldn’t agree more, especially since we handle Rx, OTC, financial services, and food products––and routinely recommend and implement similar activities for all of them.

Factors for this trend, at a high level, include narrowing profit margins, increased pressure from payers, digital transformation, and a proliferation of OTC switches over the last 20 years. (The Glue team had the privilege of working on the Pepcid OTC switch, which was one of the earliest brands to convert.) To keep up, pharma has had to change.

With that as a backdrop to an intriguing phenomenon, let’s consider the specifics of what’s driving this trend and the potential upside: understanding and implementing even more CPG lessons will make pharma marketing efforts that much more successful.

  1. Cost and value have become central to decision-making. There was a time when price was never mentioned by consumers or prescribers as a factor, and manufacturers could raise the wholesale acquisition cost (WAC) of their brands every year with impunity. Today, as consumers are underwriting a larger share of the drugs they are prescribed, they and their physicians not only consider whether a treatment option is affordable, but whether its value is truly reflected in its cost.

To ensure that consumers believe there is value, pharma marketers need to clearly articulate what their products do in compelling sound bites––just as their CPG counterparts do. One way to achieve this objective is to design clinical studies so that they yield outcomes that can be communicated in easy-to-understand, lay language that consumers will embrace.

  1. Marketing dollars have been radically redeployed. With increasing pressure on margins, pharma companies have had to rethink their marketing spend. The traditional mainstay of brand promotion––the sales force––has been profoundly edited. A 1996 study calculated that the volume of sales reps had surpassed the capacity of all physicians who could possibly see them. As we know, much has changed in the last 20 years!

In the age of ever-expanding digital channels, many pharma brands are now completely and cost-effectively supported by a suite of on-line tactics that may include complementary, unbranded social media. Taking a page from CPG marketing, the opportunity here is to look at this non-personal promotion from the target audience’s point of view and ensure that the end-user experience is as customized, consistent, and cohesive as possible—across all touch-points.  

  1. In certain disease categories, Rxs are competing against OTCs. As an agency that is currently active in the allergy market, with a team that was also involved in the launch of Linzess, we have had to consider how to drive preference for an Rx when there are a myriad of options on the retail shelf. While a copay program that results in an equal or lower out-of-pocket cost to the consumer provides part of the answer, it’s even more important to make the case for superiority. (If the consumer believes an OTC is good enough, messages about the cost of an Rx alternative will be irrelevant to them.)

To do this well, CPG principles dictate that we take an insight-based approach to defining the unmet need, pervasively elevate awareness of this need, and then position the Rx as meeting this need better than an OTC option. In cases where the unmet need is not broadly recognized, but still held by a segment large enough, and loyal enough, to sustain the brand, precision targeting should be added to the mix.

The way to beat OTCs is to join them. Pharma needs to employ the same techniques that have proven so successful in the CPG marketers’ practice. Pharma just needs to execute them more effectively.  

For more examples of big-agency thinking, without the big agency, visit glueadvertising.com/#work

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