Biotechnology & Pharmaceuticals: Drug Companies Get Customer-Focused

In recent years, drugmakers have taken their messages to the people, not just to the doctors who prescribe their wares. This expansion in customer focus, driven by increasing pressures to squeeze every last bit of revenue from the select few drugs that survive the long, arduous journey from chemical-compound discovery to Food and Drug Administration approval, has put customer-relationship management and related technologies more in demand than ever in the biotechnology and pharmaceuticals industries.

"Branding is more important to drug companies nowadays," says Roy Dunbar, CIO and VP of IT at Eli Lilly & Co., which had $11.1 billion in sales last year. "Patients used to call their doctors; now, a patient on one of our drugs can pick up the phone and call us."

For the past few years, the manufacturer of medications such as the antidepressant Prozac has been implementing sales-force automation, call-center, and other apps from CRM vendor Siebel Systems Inc. to support its branding efforts with concrete data. These advances in CRM have led Eli Lilly to initiate the Lilly Answer Center, which uses the Web and call-center technology to stay in close contact with customers.

The center brings in functions that had previously been outsourced to an offshore service provider. Within the past year, Lilly has also integrated its shipping, billing, and sales data from a variety of SAP apps into a centralized database that gives salespeople around the world access to inventory and supply information about their physicians and hospital clients.

Express Scripts Inc. has a slightly different position in the pharmaceutical and biotechnology markets, but one that's no less dependent upon IT. The company, which had $12.6 billion in 2002 sales, manages the prescription drug programs for insurance companies, trying to control skyrocketing spending on prescription medication while providing improved service. Express Scripts has been working to do this through RxHub LLC, a joint venture with competitors AdvancePCS and Medco Health Solutions Inc.

The goal of RxHub, a nonprofit company spun off in 2001 from the three competitors, is to increase adoption of electronic prescriptions, which promote efficiency and provide access to services that can ensure that patients receive the most effective medications, says Dale Chamberlain, the company's chief technology officer and VP.

"There's a tremendous amount of data about the number and types of prescriptions," he says. "Crunching that data helps Express Scripts determine trends."

INDUSTRY LEADERS Rank Company Revenue in millions Income (loss)
in millions IT
employees 22 Wyeth $14,584 $4,447 1,827 106 Eli Lilly & Co. $11,078 $2,708 2,642 479 Watson Pharmaceuticals $1,223 $176 80 Financial data is from public sources and company supplied.
Revenue is for latest fiscal year.
Employee data is from InformationWeek 500 qualifying survey.

SNAPSHOT INSIDE COMPANIES Average portion of revenue spent on IT 3% Average percentage of industry applications and business processes that have Web-based front ends 29% Companies with real-time business processes in place 100% HOW COMPANIES DIVIDE THEIR IT BUDGETS Hardware purchases 18% Services or outsourcing 16% Research and development 6% Salaries and benefits 33% Applications 7% Everything else 20% INDUSTRY FINANCIALS Average year-over-year revenue change 0% Average year-over-year net-income change 41% DATA: INFORMATIONWEEK RESEARCH
See year-over-year shifts in business-technology practices for this industry. Compare and contrast this year's data with last year's.

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