The pharma industry in India is going through an important and interesting transition. Positioned fourth in terms of volume and 13th in terms of value globally, this industry is growing at a healthy rate of 14 per cent — far better than its Asian counterparts — and is expected to touch $75 billion by 2020.
Despite this, many factors make the task of marketing in this sector very challenging.
Marketing challenges
~ Regulatory framework : The first challenge is that of strategic regulatory framework. It disallows many forms of overt advertising, and influences the timing of product launch and its pricing.
Companies need to take this into account while planning their promotional budgets to ensure viability and break-evens. The commercialisation timing of a drug has a bearing on the window of opportunity, and the pricing strategy needs to account for this, if the development costs are to be recovered.
~ New product development : The days of blockbuster drugs (that is, radical innovations for critical illnesses) are over. Today, most innovations are those of incremental drugs.
This puts a lot of pressure on the organisation to up their marketing promotions and woo the consumers, instead of depending on the product performance alone.
~ Pharma supply chain : The third aspect is that of the changing relationship in the entire pharma supply chain. Earlier, it was a simple model where a medical representative would take the doctor out for a lunch or dinner and gift his family a holiday. The doctor, in turn, would prescribe the representative’s drug to the patients (after being convinced of its efficacy, of course).
But this is not the case any more. While doctors are important in the value chain, there are other influencers — such as pharmacists and hospital staff — who play a significant part in decision making. The marketing programme should include these as well.
~ Patient awareness : Prior to the internet era, the main source of information about medicines and their effectiveness, was the doctor community. But today, patients obtain a lot of knowledge from the web on various drugs, treatment options, their sources, what have you.
And all this means that the marketing department should deliver a product that is not only competitively advantageous but also addresses consumers’ concerns. In effect, the research and development team is also involved in the communication processes in this industry.
~ Increase in number of players or competitors : The market is highly fragmented. To give an example, a top company in the Asian region is Pfizer, and even that has only a 4.9 per cent market share. Which means that there are numerous other smaller players, who create regional pockets with niche brands. This means that marketing strategies cannot claim economies of scale while doing their advertising programmes — they must customise it more.
~ Digitisation and technology : Right from emailing for pre-sales information, databases for more accurate targeting, special websites to gain more knowledge to e-prescribing from remote locations and video conferencing with select physicians, this industry is witnessing it all.
And marketers have to gear up for this level of sophistication. The internet has also substantially modified the shopping behaviour of consumers, and the pharmaceutical industry has not been spared either. Transparency of prices and product information has forced pricing strategies to be more aggressive.
Overall, the pharma industry is undergoing a rapid transformation in its approach to marketing strategies. The era of uniqueness of the products alone providing the competitive edge, is slowly giving way to aggressive marketing campaigns, in addition to creating the much needed USP.