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JOURNAL OF CLINICAL AND DIAGNOSTIC RESEARCH How to cite this article: MASOOD I, IBRAHIM MIM, HASSALI MA, AHMED M. EVOLUTION OF MARKETING TECHNIQUES, ADOPTION IN PHARMACEUTICAL INDUSTRY AND RELATED ISSUES:
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JOURNAL OF CLINICAL AND DIAGNOSTIC RESEARCH How to cite this article: MASOOD I, IBRAHIM MIM, HASSALI MA, AHMED M. EVOLUTION OF MARKETING TECHNIQUES, ADOPTION IN PHARMACEUTICAL INDUSTRY AND RELATED ISSUES: A REVIEW. Journal of Clinical and Diagnostic Research [serial online] 2009 December [cited: 2009 December 7]; 3: Available from December &volume=3&issue=6&page= &id=522 ORIGINAL ARTICLE Evolution Of Marketing Techniques, Adoption In Pharmaceutical Industry And Related Issues: A Review MASOOD I *, IBRAHIM MIM**, HASSALI MA***, AHMED M**** ABSTRACT The availability of life saving pharmaceutical products by their very nature plays a prominent role in the well being of a society. Within this context, the pharmaceutical industry plays a prominent role especially in the process of discovery and development of new pharmaceutical products, rapid and safe development of these products and finally the production and distribution of safe and efficient products. Over the years with the advancement in global marketing strategy and technologies, similar to other profit driven industry, pharmaceutical industry also had join the band wagon in the process of maximizing profits in the current era of challenging global market. The primary objective of this paper is to discuss the evolution of marketing techniques employed by pharmaceutical industries in order to remain competitive in this highly regulated commodity. Key Words: Pharmaceutical, Pharmaceutical marketing, Pharmaceutical promotion, Pharmaceutical industry, Marketing strategies **Pharm, PhD,Prof., ***B.Pharm, M.Pharm (Clin. Pharm), PhD Discipline of Social and Administrative Pharmacy, School of Pharmaceutical Sciences,Universiti Sains Malaysia, Minden, Penang, Malaysia ****B.Pharm., M.Sc., (Pharmacology), Ph.D Professor and Dean, Faculty of Pharmacy and Alternative Medicine, The Islamia University of Bahawalpur, Bahawalpur, Pakistan Corresponding Author: Imran Masood B.Pharm, MBA, CQRM Doctoral Scholar, Discipline of Social and Administrative Pharmacy, School of Pharmaceutical Sciences, Universiti Sains Malaysia, Minden, Penang, Malaysia Phone: , Mobile Background And Introduction Marketing is the most commonly used tool to increase market share. Our aim to write this article is to highlight marketing from the industry perspective regarding pharmaceutical marketing, issues related to promotional practices and their impact on prescribing behavior of the physicians from the published and presented literature and research findings. Before starting discussion about pharmaceutical marketing and related issues, it is much important to understand what the concept of marketing is? How its evolution took place passing through the process of development. Marketing And Its Evolution The question what is marketing could be answered as, it is a process by which one identifies the needs and wants of the people, creates a product/service to meet the needs and wants, develops a way of taking the product/service to the market place, determines the way of communicating the product to the market place, determines the value for the product, targets the people (segmentation), who have needs/ wants and then creating a transaction for exchanging the product for a value and thus creating a satisfaction to the buyer's needs/wants [1]. Evolution of marketing didn t take place overnight, international situations and scenarios made the business people to develop this way of retaining and increasing their business [2]. The evolution process can be in three eras; production, sales and marketing. The production concept prevailed from the time of the industrial revolution until the early 1920's. It was early industrialization when output was limited, no competition and high demand. Companies had no interest in consumer preferences or demands [2]. They were only focused on 2 questions, can we produce the product? And can we produce it in enough quantity? Production concept worked fairly well because the goods that were produced were largely those of basic necessity and there was a relatively high level of unfulfilled demand. Virtually everything that could be produced was sold easily at the price determined by the producer. Production concept prevailed into the late 1920's [3].By the early 1930's however, mass production had become commonplace, competition had increased, and their demand was decreasing. Now the firms began to practice the sales concept (or selling concept), which was focused to convince customers to buy their products through advertising and personal selling. Now the key questions were can we sell the product? And can we charge enough for it? The sales concept paid little attention to whether the product actually was needed; the goal simply was to beat the competition to the sale with little regard to customer satisfaction. Marketing was a function that was performed after the product was developed and produced, and many people came to associate marketing with hard selling. Even today, many people use the word marketing when they really mean sales [2],[3]. After II World War, the variety of products increased and hard selling no longer could be relied upon to generate sales. With increased discretionary income, customers could afford to be selective and buy only those products that precisely met their changing needs, and these needs were not immediately obvious. The key questions became; what do customers want, can we develop it while they still want it and how can we keep our customers satisfied? In response to these discerning customers, firms began to adopt the marketing concept, which involves; focusing on customer needs before developing the product, aligning all functions of the company to focus on those needs and realizing a profit by successfully satisfying customer needs over the long-term A diagrammatic representation of marketing evolution is represented in [Table/Fig 1]. It was some background about marketing and its evolution but it is just about marketing of the products other then the controlled products and pharmaceuticals, which is not only largest but also the most profitable industry of the world. Pharmaceutical Marketing Pharmaceutical industries adopted marketing toll with some controlled practices initially. But with passage of time, pharmaceutical marketing became like fast moving consumer goods (FMCG) and all the concerns regarding patient safety and health were neglected. The definition of pharmaceutical marketing is activities focused on making physicians as well as the general public aware of new and existing pharmaceutical brands, pharmaceutical marketing can include giveaway samples, detailed product literature, disease management programs, and support material for patients, internet initiatives, and events/meetings for physicians [4]. Pharmaceutical marketing can also be defined as a management process that serves to identify and meet patients needs in a profitable way [5]. Pharmaceutical business mainly adopts sales and promotion, the branches of marketing [6]. World Health Organization (WHO) defines promotion as all informational and persuasive activities by manufacturers and distributors, the effect of which is to induce prescription, supply, purchase and/or use of medicinal drugs [7]. International Federation of Pharmaceutical Manufacturers Association (IFPMA) defines promotion as any activity undertaken, organized or sponsored by a member company (pharmaceutical company member of IFPMA) which is directed at healthcare professionals to promote the prescription, recommendation, supply, administration or consumption of its pharmaceutical product(s) through all media, including the internet [8]. Industry uses various techniques for the promotion of their drugs. Techniques And Tools For Pharmaceutical Marketing And Promotion For ease of understanding, it can be divided in two sections: 1. Traditional pharmaceutical marketing and promotion: techniques and tools 2. Pharmaceutical marketing in 21st century: latest techniques and tools in global village. 1.Traditional Pharmaceutical Marketing And Promotion: Techniques And Tools a.advertisement Advertisement of drugs is done mainly by 2 ways. Directed to consumers Advertisement (DTCA) Advertisement in mass media (legally allowed only in two countries USA and New Zealand ) Directed to prescribers Advertisement Through advertisement in professional publications, books, journals, conferences electronic media and cyber space. Continuous Medical Education (CME). These days this tool of pharmaceutical promotion is very popular by which pharmaceutical companies use educational events for their marketing purpose by investing on physicians or opinion leaders paid as speakers, education events, lectures excursions i.e. national excursions for participation in conference/seminars and symposia, foreign excursions for participation in conference/seminars and symposia. Industry gets double benefit from CME programs. At one end they oblige their customers (prescribers) and as return get increased prescription. On the other end they promote their image as a responsible organization of the society to use corporate social responsibility (CSR) concept. b.sponsorships Companies also try to make direct payments to the doctors by various indirect ways i.e. for clinical trails (entering patients in clinical trials against payment), national and international conferences and symposia sponsorships, free medical camps, and opinion leaders (to deliver lectures) for health care professionals [9]. c.personal Selling Personal selling is most important way of drug promotion. It adopts detailing in combination with many other tools. Detailing is most commonly used technique world wide and by definition detailing is the personal sampling and other promotional work among doctors, dentists, and other professional persons done for pharmaceutical concerns; in order to secure goodwill and possible distribution or prescription of the product. Sales representatives are the focal resource for applying most of the techniques of pharmaceutical marketing means relationship between prescribers and medical representatives is supported by various gifts and materials [10]. The adopted tools of promotion for this technique are drug information brochures, literatures, drug samples, giveaways, personalized gifts, sweepstakes in conferences and workshops and many other tools [9],[10]. 2.Pharmaceutical Marketing In 21st Century: Latest Techniques And Tools In Global Village. Pharmaceutical marketing have also adopted modern techniques according to developments in technology. Few of them are adopted independently and some are being used in combination or to support traditional techniques. a.internet Based Drug Promotion: Using Corporate Blogs, Social Network Webs And Many Other Online Methods Pharmaceutical industry is focusing on the advantages of the internet and the development of new media forms to promote their products. Electronic detailing, interactive websites, prompts and viral marketing campaigns using social networking sites such as YouTube, MySpace and Facebook are among the tools being used [11]. B.Electronic Detailing With the technological development, many existing methods and practices has been either replaced or modified in combination with technologically developed methods. Electronic detailing (e-detailing) is one of the methods of drug promotion introduced few years back as technologically develop tool. In pharmaceutical industry it has been introduced as a new communication channel for the promotion of drugs among the physicians. For e-detailing digital technologies like internet, video conferencing, and interactive voice response are adopted to interact with physicians [12]. c.direct To Consumer Advertisement Of Prescription Drugs The pharmaceutical industry is one of the most advertising-intensive industries. Promotional expenditures often amount to percent of sales, sometimes well exceeding expenditures on research and development (R&D) [13]. Direct-to-consumer advertising of prescription drugs (DTCA) is legal in 2 industrialized countries, the United States and New Zealand. No new legislation was introduced to allow this form of advertising; both countries laws were silent with respect to the target audience for prescription drug advertising. However, since the early 1990s when the US pharmaceutical industry spent less than $100 million per year advertising prescription drugs to the public, DTCA has grown enormously, with spending reaching $3.2 billion in 2003 and the proportion of advertising revenues devoted to DTCA growing from 9% in 1996 to 13% in 2003 [14]. Under the Federal Food, Drug, and Cosmetic Act, the Food and Drug Administration is responsible for ensuring that the labeling and advertising of prescription drugs is truthful and not misleading. Section 502 (n) of the act (21 U.S.C. 352 (n)) prohibits the advertising of drugs that is false or misleading or that fails to provide required information about product s risks. Although in beginning, advertising of prescription drugs was primarily addressed to health professionals, but over the period of time, consumers have became a primary target audience. After the change target audience of advertisement, direct-to-consumer advertising (DTCA) has become the favorite channel of the pharmaceutical companies for marketing their products. Spending on DTCA for prescription drugs reached $3.27 billion in 2003, almost 5 times the $695 million level seen in 1996, and over 25 times the $130 million level seen in Part of this growth resulted from the Food and Drug Administration s August 1997 Draft Guidance for Broadcast Advertising of Prescription Medicines, which effectively opened the door for pharmaceutical companies to advertise prescription drug products on television and radio [15]. Regulations And Codes Of Conduct To Control Pharmaceutical Promotion The issue in pharmaceutical marketing is not only the misuse or abuse of the drug promotional techniques, but the absence and weak enforcement of the regulations and self regulatory codes could also be responsible for uncontrolled drug marketing. Malaysia has a comprehensive (Malaysian Laws on Poison and Sales of Drugs) law to control pharmaceutical promotion and a well defined self regulatory code developed by the Pharmaceutical Association of Malaysia (PhAMA) which is an extension of IFPMA (International Federation of Pharmaceutical Manufacturers Association) Code but The effectiveness of the Pharmaceutical Association of Malaysia s (PhAMA) code of conducts for prescription (ethical) products in controlling pharmaceutical promotion is questionable as no research has been done to examine if it is implemented in practice [16]. Many developing countries have no appropriate law to control the pharmaceutical promotion. In Pakistan the drug act 1976 governs the Pharma industry, but no appropriate control on promotion. In the chapter 4 of Drugs (Licensing, Registering And Advertising) Rules, Drug Act 1976 rule number 31 to 35 address the advertisement not promotion and even not enough to control advertisement [17]. Chapter III of Drug act prohibitions rule number 24 and 25 addressing prohibition of advertisement of drugs direct to consumers and control on sampling in very ambiguous way. It states that no person shall distribute or cause to be distributed any drug as a sample except in accordance with such conditions as may be prescribed [18] and no details of may be prescribed are available. Schedule G is added by an SRO (Solicitor s Remuneration Order) 1362(1)/96, dated , specifically to control pharmaceutical promotion [19] but is in the same ambiguous statements form and actually is only addition of few more papers in the Drug Act. These legal provisions are much ambiguous and can easily be deceived/ violated. Abuse Of Marketing Techniques In Pharmaceuticals The pharmaceutical industry has contributed more to the well being of humanity than any other. Arguably among other achievements, it has helped to remove tuberculosis, gastroenteritis, and diphtheria from among the 10 leading causes of death in the western world and also achieved a mile stone by playing basic role in removal of small pox, plague and polio, the main causes of death and disability especially in the developing countries few decades back. But despite these achievements, yet the avoidable suffering caused by the pharmaceutical industry, particularly to the poor of the world, seems at times beyond comprehension [20]. Alliances between medical profession and pharmaceutical industry have become increasingly widespread in recent years. While there are clearly benefits for doctors and their patients derived from the medical profession working with the industry, concerns has been arisen that commercial imperative of industry may conflict with physicians independence and professional integrity [6]. It is fact that marketing and promotional activities may influence the physicians decision regarding prescribing medication. Little information is available about means of the promotion of pharmaceuticals in all over the world especially in the developing countries there is no documentation of the promotional practices, means and tools influencing doctors prescribing behaviors. Even globally we can find few studies that addressed the issue but on in a very narrow and specific area of the scene. Promotional Spending Gifts given by the pharmaceutical industry to physicians are common and controversial [21]. Their expenditure on marketing is increasing day by day. Only in USA, pharmaceutical industry spends nearly twice as much on marketing as on R&D [22]. In 1998 pharmaceutical industry spent US$12724 million in United States only on promoting its products. In 1998 expenditure were dominated by free drug samples provided to physicians (equivalent retail cost of US$ 6602 million) and office promotion (US$ 3537 million), followed by (DTCA) Direct to consumers advertisement (US$ 1337 million) hospital promotion (US$ 705 million) and advertising in medical journals (US$ 540 million) [23]. It has been estimated that on average, more then US$8000 is spent per physician annually [21] and this budget is increasing every year. According to IMS (International Medical Statistics) and CAM, spending for the promotion of prescription drugs in US during the year of 2004 was more then 57.5 Billion out of which 15.9 (27.7%) was spent on free samples, 20.4 (35.5%) on detailing 4 (7%) on Direct to Consumers Advertisement (DTCA), 2 (3.5%) on meetings, 0.3 (0.5%) on e- promotion, mailing etc, 0.5(0.9%) on journal advertisement and 14.4 (25%) were the unmonitored promotional expenditures (estimate) [24]. IMS have not included the spending on phase IV seeding trials, trials which are specifically designed for the promotion the prescription of new drugs and have no interest in generation of scientific data. In 2004, 13.2% (US$4.9 billion) of R&D expenditures by American pharmaceutical firms was spent on phase IV trials [24]. Out of these marketing budgets; focus of the companies shows increasing trend on the budget allocation for detailing mode and direct to consumer advertisement. In 1996 budget spent on detailing mode of promotion was 3 billion which reached 4.8 billion in 2000 (only in 5 years). Similarly spending on direct to consumer advertisement was 0.8 billion which in the 5 years reached 2.5 billion USD in United States [25]. Pharmaceutical industry has been the most profitable industry in the country for a decade. According to an analysis of 2001 data, it was five times as profitable as the average Fortune 500 companies. The industry deserves great credit for supplying miracle drugs, but no responsible industry would engage in the price gouging and advertising abuses that taint its reputation today [26]. The Game Of Patent And Branding Since the early 1990s, the most drugs approved by FDA were me too
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