Executive Summary

This report captures the perspectives, insights and discussion presented by industry leaders at a recent conference organized by the Center for Business Intelligence on “Marketing and Supporting Pharmaceuticals over the Internet? (January 27-28, 2000). 15:00 2000/10/1315:00 2000/10/13Each chapter is an edited transcript with additional commentary and analysis included.

Chapter 3 starts out this report by describing the Internet as a medium that commands perhaps a disproportionate amount of trust from its readership. About half of web users (49-55%) view the Internet as a reliable source of health information, versus only 25-30% for newspapers and 13-28% for television. The reality is that the Internet is largely a self-regulated medium, and as such the information it contains is often misleading. The author, John Mack, suggests that the pharmaceutical industry must take the high road to help consumers find credible and balanced health information, thereby adding more value and credibility to their own marketing initiatives, and preventing tighter government regulation of the pharmaceutical Internet presence. To do this, one must build trust with the consumer by adhering to principles if quality of information, ethics and privacy. Mack describes efforts by several organizations charged with setting the standards for quality, ethics and privacy, including The Internet Healthcare Coalition, the Hi-Ethics Alliance, The Alliance for Online Privacy, as well as government guidelines from the FTC and the Department of Health and Human Services

In Chapter 4, Marc Scheineson examines the appropriate use of the Internet by drug and biologics manufacturers, and the FDA's enforcement posture. Pharmaceutical companies have been given the go ahead for Direct-to-Consumer advertising, breaking down traditional consumer protection provided by learned intermediaries. According to the FDA, consumer protection can be assured if all media, including the Internet, abide by the rules of accuracy and fair balance. Any positive claims must be accompanied by negative information such as side effects and contraindications. This is a simple principle, yet the interactive qualities of the Internet raise some ambiguity as to how fair balance is interpreted. Scheineson warns the reader that it is their competitors that hold the regulatory leash. Most warning letters have been generated not by FDA surveillance, but by competitor complaints.

While the FDA has stepped back from redefining its regulatory role over manufacturers using the Internet for promotion, the agency is seeking greater regulatory power over on-line pharmacies. Scheineson discusses the inclination of the FDA toward regulating non-manufacturers on content, and the legal (constitutional) implications of such a move. The author describes other government organizations that are seeking to exert their influence or control over the medium, especially with regard to maintaining consumer privacy, and the likely impact that will have.

The discussion extends to international issues and how differences in laws and market approvals add several more layers of complexity. The Internet is an international medium, accessible by anyone, yet what is allowed for promotion in one country may be prohibited in another. Scheineson describes stopgap measures for staying within the margins of appropriate use for multiple countries. The author describes numerous intentional harmonization conferences directed at making the rules consistent for a medium that knows no boundaries.

Another perspective on the regulatory issue is offered by Peter Reichertz in Chapter 5 Reichertz describes the implications of the Washington Legal Foundation vs. Henney case and its First Amendment considerations. Whereas the FDA sought to extend greater control over what physicians and consumers can receive and communicate in terms of unapproved indications for a drug, the Internet is a medium that is nearly impossible to control. Some would argue that the Internet should have a greater degree of First Amendment protection because, like a library, it is a repository of information that is actively sought by the user. Reichertz describes the current status of other national and international government agencies that are trying to define their jurisdictional reach, including the FTC and the European Commission. To give the reader a comprehensive picture of the FDA position on marketing over the Internet, the author discusses recent civil actions, classified as Warning Letters or Notices of Violation for:

• Promoting unapproved uses

• Lack of fair balance

• Comparative claims

• Promotion of drugs and devices approved in foreign countries, but not in the US

• Referring to public information or links to web sites discussing unapproved indications

• False and misleading information

Creating a new web presence from nothing and entering into an increasingly crowded dotcom environment can be a high-risk business strategy. In Chapter 6, David Heck and Dan MacDonald present the rationale for an alternative strategy: partner with established Internet players who have already put in the investment and have built a substantial customer base. Strategic alliances can be arranged with publishers, medical societies, patient advocacy groups and healthcare portals to allow pharmaceutical companies to gain access to an existing pool of interested consumers. The enormous amount of traffic going through healthcare portals presents many opportunities for direct-to-consumer promotion, patient education and patient recruitment for clinical trials. Some companies, such as the authors? CenterWatch, help pharmaceutical companies expand connections with these portals and other key web locations, to redirect Internet users for a particular purpose. A CenterWatch deal creates a winning situation for both sides. The consumers gain easy access to research news and clinical trial opportunities relevant to their own medical conditions and the pharmaceutical companies gain access to truly interested and self-driven consumers. Use of the Internet can significantly cut costs in patient recruitment, as described in this chapter, as well as in advertising and sales detailing, as described in other chapters of this report.

Truly integrated off-line and on-line marketing campaigns for pharmaceutical brands are actually quite rare. However, most companies recognize that integrated campaigns have distinctly higher response rates. In Chapter 7, Drew Neisser explains the rationale for integration, ways to measure the results, common reasons for failure, and outlines a strategic approach to integration using examples from successful integrated marketing campaigns. Integration does not mean developing a print ad and putting it on-line. That is re-purposing in the bad sense of the word, dooming integration to a creative afterthought. Too often, marketers are be simply looking at different media as separate ways of delivering a message and end up trying to maximize the effectiveness of each medium separately. Neisser presents creative ways in which on-line, print, and broadcast media can be closely linked and mutually supportive, while maintaining consistency in the message.

AstraZeneca has taken the innovative step of creating the position of Electronic Promotion Manager assigned to specific therapeutic areas. The EPM combines expertise in information technology and marketing and operates as part of a cross-functional team. Michael Cord, EPM for the gastrointestinal team, describes in Chapter 8 how a pharmaceutical company can use the Internet to increase brand awareness and credibility and provides many insights into big pharma integrated marketing strategy. This is illustrated with several examples from AstraZeneca's promotional campaign for Prilosec.

Although many may argue as to the current impact of on-line advertising, there is one established fact that strongly supports the use of the new medium: merging the disciplines of interactive marketing with direct marketing and traditional advertising makes a company's marketing communications investment work harder, improves accountability and enhances brand value. Studies conducted by the US Department of Commerce indicated that direct marketing is twice as effective if combined with Internet marketing. In Chapter 9, Philip Odoom provides us with a contrast between the “old? style integrated marketing and the new synchronized marketing on the Internet. Specifically, he describes the technology and logistics behind direct response marketing, a method tailored for the Internet and used to track and adapt promotional campaign progress in real-time. Unlike traditional advertising, response-oriented advertising does not try to understand why people behave in a certain way. It simply measures their actual behavior, and changes the advertising mix to maximize the response. According to Odoom, this new era of marketing will require a cross-discipline management approach, not dominated by any one medium.

A wealth of information has made it increasingly difficult, if not impossible, for physicians to stay current on medical developments and pharmaceutical product information. At the same time, it is becoming increasingly difficult for pharmaceutical sales reps to gain access to physicians, and to provide them with the information that they need. Heavy patient loads and limitations set by managed care have left only a few minutes for the message to be delivered. In Chapter 10, Don Paullin introduces us to a solution ? e-detailing. This new method involves the development of web-based interactive presentations that provide the physician with the required information, and the opportunity to set an appointment with a sales rep if so desired. Presentations are brief, and available 24 hours a day, 7 days a week. With e-detailing, physicians can now access detailed product information at their convenience. Advantages include a higher response rate than traditional detailing, access to physicians who otherwise would never set aside time for a sales rep and the ability to extend the reach of smaller sales forces.

In Chapter 11, Steve Schack and Tom Grondalski explain how pharmaceutical companies can build or gain access to electronic communities of patients, healthcare providers, payers and drug purchasing groups. The terms B2B (business-to-business) and B2C (business-to-consumer) take on specific meanings from the pharmaceutical industry. The authors describe how an increasing emphasis on direct-to-consumer advertising (a B2C endeavor) and greater access to healthcare information on the Internet is empowering the patient. Remarkably, the authors note, this trend will erode the physician's and the provider organization's role as privileged gatekeeper to the patient's healthcare. This will result in providers becoming more consumer-focused, a welcome change for many who are frustrated with today's bottom line approach to treatment. The expected exponential growth in B2C e-commerce will include disease therapeutic sites designed by providers to help patients manage their condition, as well as online drugstores and healthcare product vendors that cater directly to the empowered patient. E-commerce will work for the pharmaceutical companies on the B2B side by streamlining the supply chain, increasing the reach of the sales organization with e-detailing, and even providing direct contact with regulatory agencies such as the FDA. Schack and Grondalski outline the various applications of the Internet that extend along the entire product life cycle, and how they are designed to suit the needs of the various stakeholders in a pharmaceutical company's business network.

The old adage says that if you build a better mousetrap, the world will beat a path to your door, but in the Internet world of millions of “better mousetraps? it is extremely difficult to get noticed and even harder to pull in a significant amount of traffic. In Chapter 12, Ian Cross explains the steps required to gain access to a large volume of web site visitors, and provides a breakdown of the various tools of the trade such as banners, direct e-mail, e-mail newsletters and rich media. Once the customer is re-directed to the company's web site or partner portal, customer retention costs become significantly lower than for traditional media. If one can obtain customers by, for instance, developing a wellness program, it is relatively easy and cheap to keep in touch through monthly newsletters, or other means over the Internet.

In Chapter 13, Michael Sklanowsky explains how to get near the top of the list when consumers conduct search engine queries related to your company's products or services. This may be a deceptively trivial issue, but it is not. The vast majority of Internet users use the Search Engines to identify web sites related to their interests. A company may have research or products that are perfectly relevant to those interests, but never show up in a query because the result is too far down the list to be noticed. Judicious use of keywords and registration of web sites will guarantee improved visibility, and capture of a larger portion of the 70 million healthcare information seekers on the Internet.

Douglas McCormick discusses the problem of user verification in Chapter 14, an issue of critical importance to enabling advanced services and marketing over the Internet. Once a web page or service is placed on the Internet, it immediately becomes accessible to a global audience. Any promotion becomes a direct-to-consumer promotion. Any claim for an approved indication becomes a claim for an unapproved indication in a different country. Information meant for the discerning eye of the physician becomes fodder for the public, the press and the investor market. McCormick outlines five main approaches to qualifying audiences on-line, including the pros, cons and costs, an demonstrates how audience verification can help a company:

• Ensure (to varying degrees of security) that the right information gets to the right reader

• Protect itself from liability due to inadvertent legal and regulatory transgressions

• Maintain more accurate profiles on key user segments

According to Bob Greene, the key to evaluating return on investment (ROI) on web advertising is to first determine your objective. He describes in Chapter 15, how the campaign is plotted out in stages, with benchmarks established against which one measures success. The benchmarks can be impressions, hits, registrations, requests for samples, or requests for prescriptions. Many of the Internet-specific measurements, such as click throughs and impressions, provide hard numbers, but are not always clearly linked to revenue. To obtain objective comparisons of a campaign's success, return on investment has to be tied to these measurable goals. As the interactivity components of advertising on the Internet grow, clearer measures of their revenue-generating potential will become available. The industry is trying to reach a consensus on a standard measurement. Organizations, such as FAST (Future of Advertising Stakeholders) and the Internet Advertising Bureau are attempting to have the industry voluntarily come together and agree on what is important, what should be measured, and how it is reported.

A second perspective on ROI is offered by Anthony Schneider in Chapter 16. The author discusses advertising tools that permit measurements of success. These include banners with point-of-purchase capability, games, video, rich media or e-commerce banners that, without building a back-end e-commerce web site, are able to advertise, engage, and offer e-commerce functionality. The advertising investment landscape is changing on the Internet, the author explains. Cost Per Thousand (CPM), a measurement that determines the cost of interactive advertising, is going down. At the same time the number of sites that accept banner ads is at least doubling every year. A new model, payment-by-response, is growing in prevalence, representing a model of payment that cannot be rivaled by any other media. Schneider discusses the utility of other advertising vehicles including e-mail, permission marketing, coupons, web partnerships, affiliate programs, advertorials, interstitials and sub-sites, providing the reader with a panoramic view of the marketing tools that cut the cost of reaching new customers. But reaching customers is only half the equation for ROI. The author goes on to describe the advantages of extranets and B2B e-commerce for disintermediating and increasing supply chain efficiencies. In the final analysis, however, Schneider emphasizes that return on investment has more to do with seizing opportunity than directly linking to an increase in revenue

Whereas an Internet presence comes with many of the same regulatory concerns as developing any other promotional material, this unique medium has many capabilities to which conventional models of regulation may not map. The Internet model of a world in which patients, healthcare professionals and pharmaceutical manufacturers converge has many layers of regulatory considerations. Michael Pozsgai peels back the layers in Chapter 17 to reveal each issue that bears upon e-commerce content, design and strategy. The first layer is to determine for whom the promotional vehicle is intended. Is it for patients, journalists, investors, or even for prospective employees? Another layer: is the information specific to a particular country, and will it abide by the laws and regulations of that country? Are there appropriate disclaimers or disclosures for other countries that may be able to access it? Another layer: is it a promotional piece? Direct to consumer promotion is illegal almost everywhere except the US. Another layer: is the content discussing efficacy claims for products that are approved in one country, but not in another. And the list goes on. Poszgai tells us that the more successful web sites tend to be distinctive by providing a higher level of service to the customer. In this context, a company may insulate itself from some of the regulatory pitfalls by providing non-promotional on-line resources such as continuing medical education, international scientific symposia, peer-to-peer physician communication and possibly adverse event reporting.

The web's global reach and explosive growth present both opportunity and challenge. Non-English access is the fastest growing segment of the Internet, and a global industry must implement a strategy to improve consistency between print and on-line communications across languages, adhere to international differences in regulatory law, and maintain cultural sensitivity. Simply translating from one language to another, without considering these differences, exposes a company to significant risk. In Chapter 18, Philip Onigman details a language strategy that follows these criteria while saving costs in advertising design and development. Interestingly, a language strategy is not only used to extend marketing internationally, but it is also used to gain greater access to domestic language markets. The important language will be the one in which the client understands the content of your message. The author also outlines a technological approach using a central repository database of language and image content to ensure consistency and alignment worldwide.

Where are the most promising international markets? Chris Davis provides us with some answers in Chapter 17, along with statistics that suggest enormous opportunities are in the offing for companies that are prepared to let go of their English-centric strategy. Currently, US-based content and e-health services dominate the landscape, yet international healthcare markets present a vast, untapped online marketing potential for pharmaceutical companies.

Davis informs us of statistics that show on-line access rates for countries such as Germany and China are set to explode. In Germany, expansion will be propelled by a concerted government effort to provide 40% of the population with Internet access by 2005. In China, Internet usage tripled in 1999 to about 7 million people. Data from European Community and Asian markets testify to the same phenomenon. We are only now seeing the beginning of a supernova? of Internet growth in worldwide markets.

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