Historically, the pharmaceutical industry is economically sturdy, but three things are not: patients’ household budgets, marketing department budgets, and small-company budgets. Let’s talk about the current economic uncertainty and what it means for pharma marketers.
What’s the current situation?
Recession, inflation, labor shortage, supply-chain issues, sanctions, volatility, uncertainty – from pundits to next-door neighbors, everyone’s trying to describe and predict the economy. And if the words seem to conflict, that’s because the events have been – well, no one wants to hear the word “unprecedented” ever again, but yes, that. As economist Mark Zandi of Moody’s recently told CNBC, “I’ve never seen anything like it.”
But there is agreement on one thing: our economic situation warrants caution. We heard it from pharmaceutical executives, who see inflation as their top concern in 2023; from economists we interviewed; and most importantly, from patients, in a recent survey of 200 American patients that EVERSANA INTOUCH conducted.
- Biopharma valuations are down, especially for public and earlier-stage companies.
- Talent shortages continue, particularly in executive and specialized R&D roles, while simultaneously layoffs, especially in biotech, are on the rise.
- Clinical trial shutdowns in Russia and Ukraine have driven a slowdown and will affect the diversity and expense of clinical trials for years to come.
- Healthcare delivery was unable to recover after the peak of the pandemic, and is still limping.
“2023 is seeing contracted budgets and an emphasis on value,” says Jacquie Morgan, SVP, Enterprise Transformation, EVERSANA INTOUCH B2D. “Clients will be scaling back on initiatives and looking with a discerning eye on return on investment and the ability to deliver scale, value, and efficiency to their business.”
“It’s getting harder to commercialize products that have a marginal benefit, such as slightly more convenient dosing,” said Jeff Greene, SVP Strategic Planning, EVERSANA INTOUCH. “Marketers really need to quantify the value these products bring and be prepared to price and discount accordingly — especially for Medicare populations, whose nest eggs might look quite scrambled right now.”
Expect this caution to show up everywhere in life sciences: from organizations changing investments, to patients changing behavior.
A recent Harvard Business Review article notes that 80% of American workers are worried about job security. Stress can affect patients’ health directly, and may make them more distracted or less adherent to the behaviors that help them best manage their health.
Our survey respondents reflected this: The majority (53%) were extremely or very worried about their ability to afford treatment for their health conditions in 2023. They told us, “I’m worried about 2023,” “I’m worried I won’t be able to afford healthcare,” and “I currently have no help affording my medications, and it isn’t easy.”
Implications of economic volatility abound:
- Patients: Market access gaps. Struggle to afford out-of-pocket costs. Deferring preventative, less essential, specialty care.
- HCPs: Increased price sensitivity. Increased pressure for efficiency. Practice ownership financial challenges. Reduction in support staff.
- Payers: Elevated cost-cutting. Formulary changes. Commercial payers adjust to new public policy. Shifts in government healthcare policy and funding.
- Industry: Fiscal conservatism. Reduced innovation investment. Reduced VC funding. Focus on profit over growth. Inflation Reduction Act implications.
- Pharmaceutical marketing: Increased utilization of financial support services. Increased impact of social determinants of health. Risks to forecasts. Shifting competitor activity. Changes to media inventory and cost.
What does this mean for pharma marketers?
As Janet Balis, EY Americas marketing practice leader, recently wrote in Harvard Business Review, “marketers know from experience that when the economy turns, their budget is an easy target.”
This awareness, however, may result in behavior that’s counterproductive – cutting corners rather than working smarter. Beware of misplaced thrift.
“Financial pressures are driving a flight toward more core marketing needs with nearer-term bottom-line payoffs, at the expense of more transformative investments in marketing infrastructure and capability-building with longer-term returns,” said Sean Rapson, Managing Director, EVERSANA MANAGEMENT CONSULTING.
Marketing teams everywhere should expect heightened budget pressure and scrutiny.
So… what now?
We recommend a dual-prong approach: creatively address patient concerns, and focus on data-driven efficiency.
Creatively address patient concerns.
Economic uncertainty makes life even harder for patients and caregivers, many of whom are already facing financial difficulties due to the conditions they’re fighting.
“Addressing treatment affordability at the public health, payer, provider system, and patient levels is becoming increasingly important,” said Ellen Cappellino, SVP, Market & Patient Access, EVERSANA COMPLETE Commercialization.
A 2021 Accenture survey of 12,000 patients in six countries found that only 16% were aware of a patient service offered to them by a brand. This mirrored what we saw in our survey. Patients named copay cards as the main tool that they’d be interested in seeing from pharma if it became difficult for them to afford their medicine. This was followed by tips for working with insurers, a list of nonprofit organizations that could provide assistance, and a patient coordinator to help navigate insurance benefits.
More than ever, patients and caregivers need trustworthy, easy-to-understand information about how to manage their condition and their prescription. The time is now to improve patient services, and communications about those services.
Consider changing up creative messaging to better reflect this focus. DTC ads and patient creative may need to elevate a brand’s financial offerings. Agile brands are recutting existing TV spots to include information about copay cards or financial assistance. Additionally, we’ve found that search and display ads that mention savings and value-added offerings tend to outperform more general messaging. Concurrently, marketers are working with field teams and patient services to elevate patient-service messaging and keep HCPs informed on how to help their patients afford medications.
Focus on data-driven efficiency.
Avoiding being “penny wise and pound foolish” means knowing what the right expenses are.
“The current trend in the life-sciences landscape is one of reimagination of existing structures across both clinical development and commercialization,” Kelly Baker, CFO, EVERSANA, recently told Pharm Exec. “[There] is a lot of work underway right now to transform the way patients, physicians, and other stakeholders connect with a brand or product. Life-sciences companies need to embrace this and continue to drive digital engagement.”
To make your budget go further, you need a strong omnichannel foundation. Work with experts who can help you realistically assess the most effective next steps based on your current state. Become clear with your objectives: what’s the biggest barrier your brand faces? Which stakeholders will offer you greatest leverage? Focus there. Then, with an omnichannel foundation and clear objectives, you can adeptly measure what’s working, and cut what isn’t. For instance: one ROI study that EVERSANA INTOUCH conducted found that physician NPP was twice as productive as traditional speaker programs for that brand. That enabling the brand to be more deliberate about the latter and redirect the savings into higher-ROI digital.
Prioritize cost-effective tactics that will give you the most bang for your buck. Sometimes, less cutting-edge ideas get overlooked when you’re looking to make a difference – think SEO, partnership with EHR platforms, or even email campaigns – but focusing on the ones that fit your brand and audience is always right. (And, of course, how do you know which ones are right for you? It always comes back to data. )
Patients, marketing teams, and smaller organizations are feeling the pinch of economic uncertainty, despite pharma’s historic economic sturdiness.
Pharma marketers need to keep both the short-term and the long-term future in mind, and prioritize data-driven, patient-centric tactics that will help in a difficult year – and set them up for long-term success.
To find out how EVERSANA INTOUCH is helping clients do just that – or, to get details on our patient survey – contact us!
Contributors: Kelly Baker, Ellen Cappellino, Julie Glover, Jeff Greene, Sarah Kant, Boris Kushkuley, Jacquie Morgan, Sarah Morgan, Sean Rapson, Elizabeth Stauffer
Photo by Towfiqu barbhuiya on Unsplash