For decades, pharmaceutical companies had a simple business model. They hired thousands of sales reps who would hustle from door-to-door, desperate to win a few minutes time from physicians to attempt to convince them why Product A had superior efficacy and\/or fewer side effects than Product B. The practice, which has changed little over the years, is unwieldy and inefficient. Is there a better way?<\/span><\/p>\n The branded pharmaceutical industry<\/strong> is performing at a level of productivity that is lower than what modern technology would allow it. The current, labour-intensive approach to selling (and largely qualitative approach to physician segmentation) is not the result of technical limits. Physicians have been quick to use PCs, tablets and the Internet; pharmaceutical companies have plenty of data at their disposal. Instead, the industry is making a conscious choice – based on inertia and fear of ceding some market position and dropping out of the \u201cMR (Medical Representative) arms race.\u201d<\/p>\n Now, however, after much trial and error, the industry might be on the cusp of something much more promising-and Japan is leading the way. The practice is known as \u201ce-detailing\u201d<\/strong> or electronic detailing. The term refers to interacting with physicians virtually rather than physically. It often takes place through a company\u2019s own website or through a physical portal coupled with email-driven promotions and attached explanatory videos offering up-to-date pharmaceutical product information.<\/p>\n E-detailing in Japan has existed in some form for nearly a decade. However, the fact that we have not witnessed a specific winning e-detailing model, and that a number of pharmaceutical companies continue to watch from the sidelines, means that the best way to utilize the medium is still the subject of debate.<\/p>\n Today, the majority of all physician e-details taking place globally are happening in Japan. Part of this is because Japan is the world\u2019s second-largest pharmaceutical market in terms of sales; the country also has an advanced digital infrastructure. The number of smartphones and tablets both owned and used by physicians-and not just the younger ones-has also grown markedly in recent years. Moreover, external pressures such as stricter rules (i.e., a ban on excessive entertainment from sales reps and restrictions on hospital visits) and changing customer dynamics have prompted pharma companies to experiment with new approaches. Specifically, they are using the combination of their own Internet websites and emerging physician portals, such as MedPeer, Carenet or m3.<\/p>\n First<\/strong>, based on the cost per detail, e-detailing is significantly more cost effective and efficient in maintaining interactions with physicians. While accurate, apples-to-apples data is hard to come by, we estimate each e-detail costs between 500 and 750 yen, depending on the scope of audience and the sophistication of content. An MR costs 7,000 yen to 12,000 yen, depending on sector, region, and hospital vs clinic. The ROI (return on investment) for MR details in the range up to ~2x, versus ~4-6x for e-detail. In other words, the cost structure allows for sustained ROI for e-detailing-even when extending reach beyond the top prescribing quintiles of physicians.<\/p>\n<\/li>\n Second<\/strong>, e-detailing significantly improves the accuracy of the product marketing message because it leaves less room for the human error\/interpretation and execution risk than an army of sales reps. The details are by definition more carefully scripted (except in peer-to-peer e-detailing interactions)<\/p>\n<\/li>\n Third<\/strong>, e-detailing can provide pharmaceutical companies a much more accurate set of data around physician behavior – in much the same way that e-commerce players sit on a much richer consumer data set than traditional players.<\/p>\n<\/li>\n Finally<\/strong>, done right, the ability to provide \u201cdouble-coverage\u201d (MR detail plus e-detail) can have a multiplier effect towards prescription impact far beyond that of either technique alone.<\/p>\n<\/li>\n<\/ul>\n As Japan-based pharmaceutical companies have begun to better understand the above, they have gradually increased their attention to e-detailing; the number of e-detailing efforts almost quadrupled in Japan between 2000 and 2010. At the same time, the number of time physicians are spending online and the number of these messages being read has also been increasing. For example, one pharmaceutical company told us that the share of time spent on-line by physicians (related to all pharmaceutical touchpoints) has increased from about 5% in 201, to more than 15% in 2012. The main driver for this has been the increased use of longer P2P (peer-to-peer) contents in e-detailing. Interesting to note is that this does not seem to have cannibalized on time spent with MRs, which further supports the arguments and need\/value of double-cover for physicians.<\/p>\n While the relative effectiveness of e-detailing versus in-person detailing will fluctuate by market and product, our work and background interviews suggest the following: Compared to MR detailings, an e-detail is 60-80% as effective, and the gap narrows along the \u201cadoption curve.\u201d<\/strong> Is e-detailing less effective when physicians are in the early stages (awareness, consideration, trial, loyalty) of adoption? The question is tough to answer. Certainly, as physicians become (loyal) users, e-detailing works nearly as well as MR visits. But e-detailing may also be a good way to \u201ccreate noise\u201d with non-prescribers – that is, to build awareness and generate early leads. In fact, more than half the physicians in Japan say they learn about the existence of new treatment via the Internet or other e-channels.<\/p>\n The rise of e-detailing does not mean the end of human element by any means. Japanese medical professionals value face-to-face interactions<\/strong>; in 2008, the country had 29 sales reps per 100 physicians, twice as many as anywhere else in the world. And a survey by Cegedim Strategic Data in late 2011 found that while only \u201c17 percent of Japanese docs say (sales) reps are very useful, perhaps due to e-detailing,\u201d three-quarters say that they \u201care somewhat useful.\u201d The point is to find the optimal mixture of traditional and new channels to build relationships.<\/p>\n These conclusions pose intriguing operational challenges when it comes to deciding how to use the e-channel and sales representatives. They are also an opportunity for the industry and individual companies to create more awareness around the channel and to convert physicians to e-channel and\/or MR based on their channel preferences and a proper behavioural segmentation.<\/p>\n Despite Japan\u2019s physicians being at the forefront in terms of e-detailing reception, there is still a long way to go. \u201cI use (my) smartphone to see websites of societies and check examination steps for differential diagnosis,\u201d said one internist, \u201cbut it is not user-friendly.\u201d The tablet has the potential to become a useful tool for Japanese physicians, but it is early days yet. For example, fewer than a quarter of those surveyed who own tablets use them to check or review medical charts and only 9% used them to communicate with patients or physicians. Most don\u2019t even use it to search for medical information.<\/span><\/p>\nThe case for e-detailing<\/h3>\n
We see four benefits of e-detailing over traditional sales rep detailing alone.<\/h3>\n
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