“How much does it cost?”
Often one of the first questions that come to mind for pharma customers (right behind, “Does it work?”), and a good indicator of the pharma market’s struggle with price sensitivity.
In fact, 82 percent of consumers rate drug prices as “very” or “extremely” important in shaping their perception of the pharma industry.
More and more we are seeing value-based medicine becoming the model for cost-effective medical care that has made drug pricing transparency a critical issue impacting any marketer.
However, these costs can become muddled by today’s complex networks of suppliers, intermediaries, and payment structures that can cloud the perception of the true health value of a given pharmaceutical for patients and even for some health care providers. Consequently, our current price sensitive environment can make any marketing effort somewhat tricky.Rather than taking a back seat when it comes to these critical decisions, communicators should step forward to help shape the principles they’ll eventually take to the market. A lasting success is best achieved by transparency, particularly when it comes to pricing, because transparency builds trust.Click To Tweet
A key driver for success is to put patients and their health care providers first to ensure trust in your Rx product. Though many things can ultimately impact price sensitivity, three factors stand out:
- Whether the disease is acute or chronic
- Where the disease is treated (hospital or retail)
- Whether or not the disease is symptomatic
But no matter the reason for price sensitivity, these factors can make pharma brands vulnerable, particularly to generics after loss of exclusivity (LOE).
That’s where strategic marketing comes in.
Both before and after LOE, pharma marketers can fortify their brands against generic entries.
Focus on Brand Building
The unknown is always a little scary, and some health care providers will avoid switching patients to generics to avoid the risk of destabilization, especially if the condition is chronic. For marketers, capitalizing on this initial brand loyalty and reputation through brand building is key.
User stories, brand narrative marketing, consumer and provider education – they should all be crafted through a corporate reputation lens. These tactics can help establish trust in not just the drug, but also the company, creating brand loyalty throughout the product life cycle and through LOE.
Show Value with Data
A study of physicians found that 85% of respondents stated scientific literature about a particular drug was their first priority in prescribing, and 46% mentioned published clinical trial results were their primary source of information.
Physicians clearly crave evidence-based data when choosing drugs, and it’s your job to make it accessible. Proactively reach out to media with your research, develop white papers, unveil new findings at conferences – put data at the forefront of your marketing. This credibility will come in handy when buyers are debating between a pharma brand with ample research readily available and the newest generic on the market.
The pharma industry is complicated, and companies have often shielded customers from the convoluted inner workings of manufacturing, pricing, regulations, etc.
However, as price sensitivity continues to grow, more customers want to better understand a brand’s pricing principles. In fact, 73 percent said their opinion of pharma companies would improve if companies were more transparent about what goes into the cost of medicines.
Consumers’ opinions about pharma companies over the last two decades are being shaped by social media platforms. If we have learned anything about social media platforms, it’s their unparalleled ability to drive misperception and help a lie outrun the truth.
Consumers’ and health care providers’ abilities to separate fact from “alternative facts” have diminished from past generations, making social media an essential aspect of any marketing effort that needs to have pricing transparency in its DNA.
When customers are able to see exactly what factors into pricing, their suspicions and resulting price sensitivity may significantly drop while the reputation of the brand grows. A win-win.
The Evolving Role of Communicators
While pharma marketers can use these approaches to better navigate price sensitivity for their brands and products, they can also have an impact on the pricing decisions of the company. Marketers have access to incredible audience data, enabling them to derive insights that can guide overarching pricing strategies.
Rather than taking a back seat when it comes to these critical decisions, communicators should step forward to help shape the principles they’ll eventually take to the market. A lasting success is best achieved by transparency.
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