Pharmaceutical Marketing Congress 2005 Review
by R.J. Lewis
4th annual Pharmaceutical Marketing Congress organized by IIR was well attended, and reflected the changing state of our industry. The conference resonated with messages that the landscape of pharmaceutical marketing, and the industry at large, has and continues to undergo profound change - not all of it good. The Pharmaceutical industry, according to the 2004 Harris Poll, has moved from ranking among the best-perceived industries by consumer perception in 1997 to among the worst publicly perceived industries today.
Keynote addresses included talks by David Pernock of GlaxoSmithKline, Roy Vagelos, MD, retired CEO of Merck, and Lou Gerstner former CEO of IBM.
David Pernock provided an excellent, and much needed, industry perspective countering the rising criticisms of the pharmaceutical industry as insensitive profit hungry price gougers. He effectively communicated several messages that the industry needs to repeat loudly, clearly and frequently in a coordinated public relations effort.
David Pernock's underlying messages added to the normal pharma line that capitalism and profitability are good and that profit motive spurns innovation and new drug development. The defense of the pharmaceutical industry was elaborated upon by including a brief history of the miraculous developments we've made in the area of vaccines. Over a reasonably short period of time, the industry has managed to eradicate smallpox, eliminate polio from the western hemisphere, control measles in America, and dramatically reduce tetanus, diphtheria, rubella, and meningitis caused by Hib.
To counter the critics argument that the industry spends too much on advertising at the expense of R&D, Mr. Pernock presented compelling data illustrating both advertising expenditures and R&D expenditures across various industries.
He drew industry comparisons showing that pharmaceutical advertising expenditures are not at all out of line, at ~4.7% of sales, when these figures are comparatively measured against other industries such as sporting and athletic goods (7.5%), food (11.1%), Motion Pictures/Videos (12.5%) and distilled and blended liquor (15.8%).
Research and development costs are also not just even with other industries, but well above the norm, with the pharmaceutical industry a clear leader in R&D spending 17.7% of sales on R&D - higher than other industries such as computer software (15.4%), aircraft (10.4%), and industries such as automotive and telecommunications (less than 4%).
Pharmaceutical Company patient assistance programs such as Together Rx have helped also helped over 6.2 million people in 2003 and provided more than $3.4 billion in medicines to financially disadvantaged patients.
Despite all of these positive aspects of our industry, perception is reality.
According to the latest Harris Poll, when consumers were asked the question, "Do you think each of the following [industries] generally do a good or bad job of serving their consumers?" Pharmaceutical companies are perceived among the worst industries, above only Managed Care, Insurance, Tobacco and Oil. Today, industries such as the cellular phone industry, technology, airlines, ISPs and Internet Search Engines all rank higher than pharma in perception of doing a good job for their consumers.
Speaking of the tobacco industry, one of the final thoughts Mr. Pernock left us with to consider, a thought I challenge everyone to consider before setting an angry eye on the industry, is that Americans spend more on alcohol and tobacco than they do on Medicine.
