Point-of-Care Pharma Marketing: When Is It Appropriate?

In the world of smartphone apps for physicians, Epocrates plays a leading role. The Epocrates iPhone app is free (with a $99 PREMIUM upgrade option) to physicians -- and anyone else -- who can use the app to find information on drug dosing, interactions and insurance coverage while seeing a patient. According to a New York Times article (see here), 70% of Epocrates' revenue comes from pharma point-of-care advertising; ie, messages from pharma advertisers that pop up as "DocAlerts" when the app is used to look up drugs, etc.

Some docs complain about the messaging, claiming they don't have time for that "nonsense." A few reviews on the iPhone app store suggest this is a common complaint:

"why must I be badgered with your alerts?"

"Paid for 'premium' subscription, getting nagging pharma clinical alerts that are rarely useful. Alerts don't go away unless you tap through them. If this is the case, should be free app."

According to the NYT article, "Epocrates is betting that the 320,000 physicians who use its apps, much like those who use Google and other advertising-supported data services, will tolerate some marketing to get the information they want at no charge." However, unlike Google, ads delivered directly to doctors while delivering care can have a much greater influence over their prescribing. If you are of the opinion that advertised drugs are usually more expensive and sometimes less safe than generics, then pharma paid DocAlerts (ads) are not in the best interests of patients and payors.

For pharmaceutical manufacturers, Drug information apps such as offered by ePocrates and ePrescribing may offer a new channel to influence physician prescribing at the point of care. “The beauty of the work we do with Epocrates is that we literally put ourselves in the palm of their hand,” said Dr. Freda Lewis Hall, chief medical officer at Pfizer.

Being in the doc's palm is one thing, but interrupting his/her workflow is another. When is it appropriate to "interrupt" physicians with commercial messages at the point of care? There are several more or less disruptive ways to provide messages in apps at the point of care, including:

• Ads appear via a splash screen when doc turns on PDA, smartphone, or iPad. The message not related to any prescribing transaction.
• Specific targeted messages are "triggered" by doc's drug lookup choice, demographic, and/or prescribing history and designed to influence doc's prescribing decision.
• Non-targeted messages delivered before, during, or after the prescribing process.

Which do you think is most appropriate and why? Please take a few minutes to respond to my "Point-of-Care Pharma Marketing" survey (click here). After finishing the survey, you will be able to see a summary review of the results to date. No open-ended results that may contain personal information of respondents will be shown. Also, at the end of the survey, you will find links to these FREE Pharma Marketing News articles:

1. ePrescribing: What Role Should Pharma Play?
2. Ready or Not: Gearing Up for the Expansion of ePrescribing

Thanks!

[This post originally appeared in Pharma Marketing Blog. 

Make sure you are reading the source to get the latest comments.]

How Much Does Pharma Spend on ePromtion? The Mystery Continues - UPDATE

Depending upon what publication reports the data, the TOP 12 pharma companies either spent $287.60 or $168.12 million on "ePromotion" in 2008. The two publications I am talking about are Medical Marketing & Media (MM&M; see "Pharma Report: When Generics Attack") and AdAge (see "Marketing Mix of Leading Pharma Advertisers in 2008"). The "measured media" DTC data reproduced in these publications come from the same source: TNS, which is now part of Kantar Health.

I focus on the 2008 data because I don't have 2009 data from AdAge, but I DO have 2009 data from the May 2010 issue of MM&M, which reported promotional spending in several categories: DTC, detailing, ePromotion, meetings, and journal advertising. Some of the data -- it's not clear which data -- come from SDI's Promotional Audit. 

The 2009 data reported in MM&M covers the TOP 20 pharma companies in terms of "Total Promo Spend" (see chart below, which shows the Detailing, DTC, and ePromotion spend for the 20 companies; not included are the data for meetings and journal advertising; click on the chart for an enlarged view):

What's immediately evident is how LITTLE each company spends on "ePromotion," which -- I assume -- includes only display ads placed on 3rd-party Web sites and specifically not search advertising. This is part of what's called "measured" media spending, which many experts say overstates the actual amount that companies spend on advertising -- because of discounting. Let's not worry about that because discounts probably apply to both types of media.

What % of total measured media spending is devoted to ePromotion? To calculate that I added the spending on DTC, ePromotion, and Journal Ads to get the total measured media spend, which was $4.208 Bn in 2009 according to data reported in MM&M. The total ePromotion spend was $0.3037 Bn, which is 7.2% of the total.

The 7.2% figure is suspect. Measured media data reported in AdAge ("Marketing Mix of Leading Pharma Advertisers in 2008") indicate that Internet display ad spending was 2.4% of total measured media spending in 2008 and 3.1% in 2007. Unless I am missing some data from the MM&M source or made an error in math, I don't see how you can go from 2.4% to 7.4% in one year.

Meanwhile, Melissa Leonhauser, director at SDI, was quoted in MM&M as saying that 2009 pharma ePromotion spending increased 6.6% compared to 2008. Total industry promotional spending increased 2% according to Leonhauser

The other thing I notice from the data reported in MM&M (see chart) is that some companies spend nearly as much or more on DTC as they do on detailing to physicians (eg, Pfizer, BMS, Amgen, BI, and Daiichi-Sankyo). If true, that's pretty amazing. Amazing, because I've seen estimates of physician detail spending of $12 billion industrywide, whereas overall DTC spending is more in the range of $4-5 billion. That yields a Detailing/DTC spending ratio of about 3 to 1. For the biggest spender -- ie, Pfizer -- to have a Detailing/DTC ratio of 1.12 to 1 (based on data reported by MM&M; ie, $1.223 Bn/$1.089 Bn) seems very suspect to me.

I have more suspicions about the data reported in MM&M. In the case of Daiichi-Sankyo, for example, when you add up the columns (ie, different types of promotion) you get $554.50 million, whereas the table has $300.75 million in the Total column.

Let's get back to comparing 2008 ePromotion pharma spending reported in AdAge vs the spending calculated from data reported in MM&M. These numbers are very different for most of the companies on the two lists. Again, I am comparing data for 2008. To do that, I used the % change reported in MM&M to calculate the ePromotion spend for 2008 from the 2009 data. This calculation for Merck, for example, yields $95.5 million whereas AdAge reported that Merck spent only $8.60 on ePromotion (Internet display ads) in 2008 -- a difference of $86.9 million! Anyway, here are the numbers (note:for the AdAge data I merged SP data into Merck and Wyeth data into Pfizer to account for mergers after 2008 and to make a fair comparison to what MM&M reported; 2008 data from MM&M were calculated from % change information published in MM&M):

What can account for the huge differences seen for many companies on this list? There must be a mistake somewhere -- as I said, I may have made a mistake in my math or assumptions. But I know for sure that there is at least one error in the MM&M table -- the data for Daiichi-Sankyo just doesn't add up to the total reported.

UPDATE (6/12/2010):

Bob Harrell commented on my Facebook page: "Are you sure the definition of "ePromotion" in either or both cases is *really just* online display advertising (basically banner ads)? That seems like a very odd and narrow definition to use for ePromotion in pharma - putting aside the question of what can easily be tracked/indexed - and thus a questionable assumption for your comments above."

It's not clear from MM&M Table 4 ("Total Promo Spend, DTC SPend, ePromotional Spend") whether or not the ePromotion numbers refer only to display ads. It is also not clear if the numbers refer to direct-to-consumer ePromotion or ePromotion to physicians, which can include eDetailing, etc, or to BOTH consumers and physicians. Since MM&M put ePromotion and DTC in the same table and had another table (Table 5) devoted to physician promotion, I assumed that the ePromotion numbers in Table 4 referred to consumer ad spending.

The source of the ePromotion numbers reported in MM&M (Table 4) is "SDI's ePromtion Audit," which I now have learned "tracks online promotional activities for physicians" (see "SDI Reports: Pharmaceutical Promotional Spending Indicates Trend Toward Electronic and Online..."). This would explain the inconsistencies I calculated in the table above. It would not explain, however, what the the level of ePromotion to consumers is.

SDI noted an increase of more than 32% in industry spending on ePromotion (to physicians). Kelly Sborlini, Vice President of Market Research Audits at SDI said "we're also seeing a similar shift in pharmaceutical direct-to-consumer advertising. The largest growth area in DTC advertising is on the Internet, whereas spending on consumer magazine print ads is decreasing." I cannot find the numbers that SDI used to support this statement.