Pharmaceutical Makers Turn To CRMPharmaceutical Makers Turn To CRM
Many drugmakers are turning to the software to generate more revenue from existing products and prime the market for upcoming offerings.
October 29, 2003
After years of blockbuster medications that literally change the way their customers live, drugmakers are facing a period of uncertainty as the cost of developing the next big thing grows and the discovery pipeline shrinks. Many pharmaceutical companies are turning to customer-relationship-management technology as a means to squeeze revenue from existing products and prime the market for what's to come.
It may not be obvious to everyone why an industry that makes as much money as the pharmaceutical industry does should worry about CRM, Brian Weed said Tuesday at the Center for Business Intelligence's CRM for the Pharmaceutical Industry forum in New York. "But doctor's offices are closing their doors to pharmaceuticals sales representatives and citing HIPAA and privacy concerns as reasons," said Weed, global marketing and sales IT director for Eli Lilly & Co. The Health Insurance Portability and Accountability Act was created to promote the digitization of patient records and ensure the privacy of this information. The dynamics of the pharmaceutical market are heavily affected by what's happening in the health-care industry, said William Dwyer, divisional VP of strategic marketing for Abbott Laboratories. Increasingly, drugs are replacing surgery, as surgery becomes less invasive, and people generally live healthier lifestyles. Consumers have changed the way they look at health care and medicine. "People want information, and they can find it," Dwyer said. The ultimate goal of a CRM implementation in a pharmaceutical company is to drive sales and improve the bottom line, said Michael Lengel, a partner with Peppers and Rogers Group, a CRM consulting firm. As research and development becomes more expensive--it takes about $900 million and several years to get a prospective drug from discovery to delivery--pharmaceutical companies are pushed to fill their pipelines with blockbusters while having plenty of proven products to generate for a steady revenue base. While this research and development of new blockbusters takes years, with little guarantee of success, pharmaceutical companies can do a better job of leveraging their existing product lines through a deeper understanding of the doctors and patients they sell and market to, Lengel said. CRM helps pharmaceutical companies identify which physicians are most receptive to their salespeople, create a database of those physicians, calculate potential revenue from physician relationships, select high-priority physician accounts, and customize physician interaction, Lengel said. "A lot of leads fall through the cracks without strong account management." Privacy is also a growing concern for pharmaceutical companies as their physician clients are being pressed to meet HIPAA guidelines, said Debra Bromson, senior counsel and chief privacy officer at AstraZeneca Pharmaceuticals LP. "Companies are realizing that the data they store is invaluable," she said, "but they have to balance this with the public's fear of companies knowing too much about them." Drug companies can run into problems, for example, if they start sending their diabetes patients marketing materials for drugs that treat heartburn or depression without their consent, she said. In May, Kos Pharmaceuticals Inc. began rolling out its CRM implementation to its 500 sales reps. "Our sales staff is growing, and we needed to make sure they communicate with each other, especially if they're calling on the same doctors," said Lisa Barry, senior manager of sales systems at Kos, which develops drugs to treat chronic cardiovascular and respiratory diseases. The company completed the rollout in June and is still assessing the project's success. "The sales force seems happier, and the physicians like that different sales reps can tell a continuous story." Biogen Inc.'s decision two years ago to launch a comprehensive CRM project was driven by the imminent release of new drugs and the company's lack of a sales-force automation tool in Europe. "Time was the greatest barrier," said John Vaeth, director of CRM capability development of Biogen. The CRM system includes Siebel software, a data warehouse, global sales-force automation software, and PDAs for the sales force. Another challenge for Biogen was calculating any return on investment before the software had ever been used. The company circumvented that problem by considering the size of the market for its products, its market share, and the opportunity for increasing that market share with improved technology. But CRM isn't just for sales. Customer service and call-center workers also benefit from access to real-time data. Vaeth said Biogen's commitment to call-center service is second to none. A number of patients who take Avonex, the company's multiple sclerosis drug, suffer from a phobia of needles, Vaeth said. With this in mind, as many as 70 of Biogen's call-center staff agreed to inject themselves with a placebo solution just to understand what their customers are coping with.
About the Author(s)
You May Also Like