Healthy Skepticism Library item: 16622

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Publication type: news

Shankar P
Pharma companies play loyalty card to boost sales
NJBiz 2009 Oct 12
http://www.allbusiness.com/marketing-advertising/marketing-techniques/13364577-1.html

Abstract:

Prescription discount programs entice customers to stay current

Full text:

Does the idea of funding your Lipitor make your heart race? Can’t keep up with the costs of Viagra? Cash-strapped devotees of such products may find a willing partner in Pfizer, their maker, which will chip in some of the payment; that could mean free supplies or discounted prices on drugs. Pfizer offers these benefits for more than 70 products across eight programs.
Called loyalty, adherence or compliance programs, marketing efforts aimed at keeping patients on prescription drug regimens are becoming an increasingly popular tool for pharmaceutical companies looking to retain customer loyalty and increase sales, said Mark Calabrese, general manager and vice president of marketing solutions at Cegedim Dendrite, a Bedminster-based firm specializing in pharmaceutical customer relationship management.

“About 25 percent of new prescriptions written never get filled,” and more than 50 percent of patients don’t fill scripts after the sixth month, Calabrese said. The cost of noncompliance on the patient and the health care system could be formidable, he said: “A $50 inhaler turns into a $25,000 hospital experience.”

Loyalty cards help offset co-payments for patients who can’t afford them, and also provide them with educational material, Calabrese said. They also get periodic reminders to fill their prescriptions through e-mail, text messages or phone calls.

Cegedim Dendrite has a product called IntelliScript, a loyalty program that helps not just patients with co-payment benefits, but also pharmaceutical companies to better segment and target their patient populations, and develop relationships with them and their physicians, Calabrese said. Cegedim Dendrite offers about 40 such programs to six of the top 10 pharmaceutical companies, he said.

“Adherence programs can help manufacturers capture sales lost to current customers not sticking to their treatment regimen, and some companies are beginning to leverage the Internet and emerging technologies to enhance these programs,” said Monique Levy, senior director of research at Manhattan Research, a New York-based market research and advisory firm for pharmaceutical and health care companies.

“There is more and more interest from brand managers on how they can increase loyalty and adherence,” said Greg Caressi, senior vice president of health care at Frost & Sullivan, in Mountain View, Calif. His consulting assignments have included those with Johnson & Johnson, Pfizer and Schering-Plough, he said. Frost & Sullivan organizes an annual event on patient adherence in Philadelphia around April, he said.

In addition to boosting sales of prescription drugs, pharmaceutical companies find loyalty programs are a useful option in engaging with physicians, Caressi said. “Their relationship with the physician is changing – they are no longer able to provide gifts, so they need to interact with them in a different way,” he said.

Loyalty programs can sometimes work to prevent a would-be competitor from grabbing market share. Healthcare Dialog Inc., the marketing division of Fairfield consulting firm Redi-Direct, helped a client on the West Coast – a dermatology products manufacturer with $10 million in sales – achieve that this year.

The company expanded an existing loyalty program to “blunt the impact” when a competitor launched a new product earlier this year, said Cindy Lanzendoen, Healthcare Dialog president of global marketing for Redi-Direct. The program offered rebates, with people in certain neighborhoods getting higher discounts based on product usage and demographic profile.

“A new product entry will make a lot of noise, and people may switch,” Lanzendoen said. She said her division’s expanded loyalty program helped its dermatology client achieve a 21 percent increase in patient participation during a three-month offer period, compared to a 17 percent decline in that industry niche during the same period.

Caressi said no one-size-fits-all model exists for patient loyalty programs, which must consider side effects, affordability and other reasons why some patients don’t follow their prescription regimen, he said.

Not all loyalty programs bring such impressive results, and oftentimes the problems lie in companies unsure of what they want to achieve, Lanzendoen said.

“If you have programs that are not clearly defined, the results will be difficult to measure,” she said. “You are also putting budgets against customers that don’t grow in the long term.”