PharmExec Blog

Pharma's Promotional Spend: What's the Right Target?

Global consultancy Cegedim has released its latest survey on how and where big Pharma puts its promotional dollar. Pharmaceutical Promotional Spend: Global Trends reports that spending in emerging markets significantly increased last year, while Europe and US declined slightly.  Although overall promotion spending remained flat worldwide at $90 billion, the US still accounts for the majority of billing at 32%.  Beyond the numbers, the survey offers new insights on how budgets are being allocated among various channels:   the emerging markets’ are depending less on the human touch through sales reps, with an array of more sophisticated approaches to the consumer, while worldwide there is a strong transition underway to digital initiatives.

In the 12 month period to June 2012, Russia’s promotional spend increased 42% in comparison with the year before, followed by China with a 30% increase and Brazil with 22%. Commenting on the rising tide, Christopher Wooden, VP of Global Sales at Cegedim says, “In the last 18 months or so, these markets have leapfrogged some of the more conservative markets in Europe such as Spain and France in their use of digital.” This quick embrace of internet, mobile phones and even social media by physicians,  Wooden reports, is the result of laxer regulatory environments in emerging markets; by comparison, slower adopters in Europe are often simply suspicious of these platforms.

Nevertheless, markets across the board will see rises in digital spend, as digital channels are less costly in times where budgets are tight.  As Wooden points out, “the next generation of doctors just starting to practice are much more open to digital channels, because they’ve been exposed to it early on.” This trend, however, depends on how well drug companies adopt these technologies and integrate them into existing functions and organizational structures.  It remains a challenge to design and implement the tools in a seamless way.

The survey also points out that while digital spend is seeing an increase; companies are not necessarily scaling back on the more traditional methods of drug promotion. Sales representatives have a well-established share of the budget because physicians, who in a sense act as savvy consumers, want face-to-face interaction when weighing the decision to prescribe a new medicine. Spending has been diverted from more traditional channels not because they are less effective, but as a result of emergent technologies. So, in essence, pharma is still figuring out the perfect mix of channels, new and old, best suited to getting that brand noticed, in front of physicians.

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