Vol. 1, No. 5 * May 2002
Published by VirSci Corporation * www.virsci.com


The Demise of Everything “E”?
John Mack
Pharma Marketing News Editor

The dot-coms have come and gone. Pharma companies seem to be “de- commissioning” their e-business divisions. Managers are losing their “e” prefixes in their titles. The vast unemployed victims of downsizing are eliminating the “e” words from their resumes. Is this the end of everything “e” and the Internet?

Obviously, something is going on and savvy people are being quoted as in

“I wouldn’t say the Internet’s a dirty word. But companies know enough not to add ‘dot-com’ to the ends of their names these days.” — Jay Hare, a partner in the technology industry group in PricewaterhouseCoopers’ Minneapolis office, quoted in the May 13 E-Commerce Times

Ha! That ploy is old news, so 20th century thinking! What’s the thinking and real strategy that we need today? This month’s guest article by Filip Troicki provides some pointers.

I always thought that Pharma, being a latecomer to the Internet, would have learned a lesson from the dot-coms and avoided all the “irrational exuberance.” Articles like “The Truth About E-Health” in this month’s Pharmaceutical Executive Magazine suggest that the industry has not been fully inoculated against the “epidemic of weak ROI.” But just like the investor who was not fully exposed to stocks during the boom and also not fully exposed during the bust, now may be a good time for pharma marketers to “buy in” to the Internet, according to Troicki.

Yet there is still a fly in the ointment according to Edward Fotsch MD, author of the PE article mentioned above and CEO of Medem. According to Fotsch, e-health ROI for pharma has been a disaster because physicians have not embraced the Internet and payors refuse to help by making it profitable for physicians to do so. This, of course, is a physician-centric view of ROI. I am willing to concede that 85% of all healthcare dollars are controlled by physicians’ pens, but the healthcare consumer is where the Internet action is. And the way things are going, consumers will soon be deciding where more and more of that money will be spent (e.g., defined contribution health insurance plans). It is also well-known that consumers can influence doctors’ decisions, especially after visiting a product website ( a recent survey by Vividence found that after visiting a product web site 72% of consumers would likely request the drug from their physicians compared to 38% before visiting the site). This increasing patient awareness and empowerment, which the Internet enhances, is the premise on which DTC advertising and promotion is based.

Consumer empowerment facilitated by the Internet has the capability of changing how huge companies — like the music industry — do business. But the music industry wants to resist the change and has called upon the Feds to help them. Pharma, being a heavily regulated industry, knows all too well the danger of bringing in the Feds — sooner or later it’s going to be payback time! Better to have a strategy to meet the challenge on your own terms. And this is precisely the opportunity before pharma with regard to the patient-physician “battle” over empowerment in which the Internet is playing a huge role.

Consumers demand information, convenience, and transparency that the Internet is designed to offer. IMHO, many doctors can’t be bothered with the whole thing and wish it would just go away. But it won’t.

So, you (pharma marketers) can spend all your big bucks earmarked for the Internet trying to reach physicians until you are blue in the face and you will never get the kind of ROI you are used to with traditional methods of physician-focused promotion. I think you should have learned this lesson a long time ago before the Internet was so ubiquitous — all the pre-Internet technological schemes to reach physicians by computer (and even TV) were failures also. I predict that wireless/PDA applications and promotional gimmicks and e-detailing aimed at physicians will also cost the industry big bucks and fail the ROI test as well.

Now, I’m not saying that pharma marketers should choose sides and pick consumers over doctors. OK, maybe I am — but only on the Internet or when using any kind of technology. That’s my viewpoint and I’m sticking to it!


Pharma NetTRUST Federal Privacy Watch

Pharma NetTRUST Federal Privacy Watch (FPW) is a periodic, subscription-based e-newsletter with up-to-date news about privacy laws, regulations, and actions by Congress and federal agencies of interest to pharmaceutical companies. FPW reports include:

  • summaries and status of proposed and enacted legislation
  • Federal Trade Commission (FTC) and other federal agency actions
  • healthcare and pharma industry response to legislation, press releases, position statements, etc.
  • privacy advocate organization opinions, press reports and views on legislation
  • European Union (EU) privacy laws affecting US pharma companies, safe harbor news, and effects on US legislation and policy

Read a complimentary issue and learn about the latest proposed privacy legislation and FTC comments. For subscription information, call John Mack at 215-504-4164 or e-mail johnmack@virsci.com.

Guest Article

E-marketing must follow e-strategy
Filip Troicki, VP, Research & Analysis, Vessel Media LLC

The beginning of 2002 brought about some positive signs of activity in the e-health marketing arena. One of the reasons for the positive outlook has to do with the fact that the online businesses that got through the industry’s toughest times are stronger and have created more to offer their audiences and their advertisers. The survivors are the Web properties that have solid content, innovative services, sticky audiences, and an ability to quickly adapt to change. As the Internet is emerging from the fog, the healthcare industry is also slowly warming up to the idea of revisiting the medium for marketing initiatives. The activity of pharmaceutical companies has been largely limited to small tests on well-known portals, followed by close analysis of the ROI for each campaign. At a time when some pharmaceutical marketers see themselves as giving the Internet a “second chance,” most Web portals are hoping that the “second chance” will not be their last. It would be in everyone’s best interest if these online tests produce good results and online advertising campaigns develop into marketing programs that rival those of traditional media.


Pharmaceutical e-marketing teams have not had an easy task navigating the online waters in recent years. After the major pharmaceutical brands limited their overall marketing budgets during the past 18 months, online healthcare advertising came to a virtual standstill. In what seemed to be a never ending and self-fulfilling cycle, most marketers began to decrease online spending after they saw the poor results of their initial online advertising campaigns. The evaporation of advertising revenues to Web sites caused major changes that greatly affected the topography of the e- health space. The changes that included the disappearance of giants like DrKoop.com, the acquisition of Medscape by WebMD, and the downsizing of many other health portals, has caused many pharmaceutical marketers to be skeptical about the stability of the Internet. As more portals closed their doors, got acquired, or were downsized, marketers again tightened their advertising budgets and the cycle began again. While the scenario is not as simple as I have just described it, it does point out a set of events that healthcare e-marketers were forced to deal with, until recently. The demise of Internet properties with poor business models has cleared the air for those properties with strong foundations to flourish. As a result, those left standing are more determined than ever to create programs that fulfill advertiser’s marketing objectives.


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Imagine putting a plan together where the Internet marketing budget gets allocated more money than print or TV. If this sounds far fetched, it shouldn’t. The Internet allows for direct interaction with precise target audiences, making it a much more powerful medium for advertising than print or TV. The marketers who are able to appreciate the power of the Internet will want to take advantage of this medium at a time when everyone else is being skeptical.

This is the time to be online. The turmoil of the past three years has caused many Web sites to drop their ad rates considerably, accepting campaigns that are sometimes 90% below the 1999 rate card. Most Web sites have also come up with more innovative marketing solutions and have upgraded their ad serving software with the capability of targeting specific audiences. Armed with wisdom of past experience, and presented with opportunities that are both innovative and affordable, it is surprising that not everyone is taking advantage of the Internet. What is even more surprising is that those marketers who decided to return to the Internet continue to rely on the same tactics that drove them away from the Web in the first place.

Pharmaceutical marketers continue to place banner buys on the most popular Web sites without putting much emphasis on strategy. They fail to realize that online marketing is not just banners and buttons but an opportunity to interact with, educate, and influence their target physicians and consumers through multiple media channels. At the end of the day what matters most is how many prescriptions are written and not whether a physician or patient clicks on a banner. It is crucial to look at the results of an online advertising campaign in the light of the strategy that was developed when planning the campaign. At the risk of sounding too obvious, I need to point out that the consequences of a poor strategy are poor results. Pharmaceutical marketers need to put more effort into looking at the opportunities available on the Internet and see how these opportunities fit in with their marketing goals. When used correctly, the Internet can be used as a powerful tool that delivers excellent results.

Because your customers are already there.

According to the September 2001 Boston Consulting Group study, 89% of physicians are already online, and an effective e-marketing strategy has a significant influence on the prescribing behavior of 73% of physicians. In a September 2001 study done by International Communications Research for the Kaiser Family Foundation, 75% of consumers are online using the Web to research drug and disease state information. A recent study by Vividence Corporation also reveals that 72% of those consumers request medications from their physicians after learning about the drug on the Internet. These studies show the power of the Internet is such that even the smallest pharmaceutical companies with the least known drugs can outperform and outsell the giants. If this is the case, why are so few pharmaceutical companies taking advantage of the Internet? The problem mainly lies in the fact that the power of the Internet has been fogged up by the sheer quantity of healthcare Web sites and opportunities available for promoting products online. With all the other opportunities that pharmaceutical marketers have come to know and trust offline, not many have the time to learn about the opportunities of this new medium. As with any other medium, in order to come up with a successful online advertising campaign, the pharmaceutical managers will need to do their homework and learn about the opportunities available online.

As the Internet clutter begins to clear, innovative online marketing tools are being introduced and online advertising rates have dropped. Advertisers who can quickly dominate the field will be the first to reap the benefits of brand loyalty and new customer acquisitions. The challenge for pharmaceutical marketers is not only to learn about the opportunities available on the Web, but also to take advantage of those opportunities to dominate this space before competitors swallow up the limited inventory. Pharmaceutical companies that can quickly and effectively integrate e-strategies into their offline marketing initiatives will be able to influence vast audiences that are looking for guidance and information on the Internet. We have seen many pharmaceutical marketers refuse to incorporate their offline promotions with online advertising campaigns, only to come back and point out that their competitors have saturated the online space. As the Internet space again fills with the same old banner ads and buttons, it will be those companies that can come up with innovative strategies to target their consumers that will ultimately succeed online. As I previously mentioned, what matters is not impressions and clicks, but interaction with exact target audiences to the point of product recommendation, evaluation, and finally treatment — all with the pharmaceutical brand in mind. To illustrate the importance of a winning online marketing strategy, allow me to give an example.

A pharmaceutical company planning a Phase III clinical trial decided to use the Internet as one of the tools to recruit patients. The first attempt at recruiting a sizable group was through banner advertising on major health portals. The campaign lasted over 2 months cost the pharmaceutical company more than anyone wanted to admit. The second attempt was an email strategy that relied on rentals of cheap email inventory and blasting out mass emails to unknown audiences. The results of the email campaign also turned out to be poor, and we were called in to evaluate the problems and come up with a solution. The problem we saw with the banner campaigns is that they were ignored by most of the audiences. Banner advertising is usually a better tool for branding than it is for clinical trial recruitment. Non-targeted emails did not serve their purpose especially since the audience was not pre-qualified in any way before the emails were sent. At the time when we were called in, the budget was already largely spent, and the time allocated for the recruitment was quickly coming to an end. After evaluating results of the previous campaigns, and keeping in mind the goals set by the pharmaceutical company, we were able to come up with an effective and efficient solution. As usual, the inclusion/exclusion list was lengthy but the time allocated for the recruitment was not. On a limited budget, our strategy was a cost per lead email campaign that targeted the inclusion group, and listed the perimeters of the exclusion list. In order for the lead to be considered valid, each individual had to check off the correct information that listed the exclusions. The leads that came back were re-evaluated and the prospective patients were sent for screenings at nearby medical centers. We were able to get a sufficient number of leads in a single week, and since we only paid for the recruited patients, the cost was about 50% lower than the budget.

What is interesting about this campaign is that it proved to be so successful after two previous failed attempts by the pharmaceutical company to recruit patients via other channels on the Internet. The pharmaceutical company described above is not necessarily a typical scenario, since most companies would have given up after the first unsuccessful online campaign, but it does illustrate how a well-planned Internet strategy can provide great results. The wisdom behind a successful online strategy is seeking out and targeting the right audience, and developing tools that ensure that the audience is both interested and receptive.

An online marketing strategy should include a number of essential steps to insure the campaign’s success. We have seen that companies that follow these steps are usually on the right track to successful online marketing campaigns:

  1. Education about the overall opportunities on the Internet.
  2. Research about healthcare industry and how it pertains to your product
  3. Planning of targeted, results driven online marketing strategies
  4. Implementation of test campaigns
  5. Optimization of campaigns
  6. Analysis of results through detailed reports

Even though the online world might seem overwhelming and unstable, and many pharmaceutical companies try hard to avoid it, it will be the early adapters and the risk takers that profit from being online. Not only does the Internet provide a way to reach virtually any audience, it also allows for pharmaceutical companies to interact with their target audiences and influence their behavior. With 89% of physicians and 75% of consumers currently online, it’s time for the pharmaceutical industry to start planning effective online strategies that grab the attention of their customers, and increase their marketing ROI.


HIPAA Compliance for Pharmaceutical Manufacturers, PBMs and Pharmacies

Jean-Paul Hepp, Director Global Privacy, Pharmacia
John Mack, President, VirSci Corporation

3:00 PM * June 21, 2002 * ETHIC 2002 * Hilton Washington & Towers * Washington, DC

For more information about this presentation and conference (including registration), call 800-640-2218 or visit www.ethic2002.com.

* * * *

Preparing Your Pharmaceutical Company for HIPAA: Compliance and Beyond

John Mack, President, VirSci Corporation
Lois C. Ambash, Principal, e-Health Partners
Jon Bogen, CEO, HealthCIO

8:30 AM * August 5, 2002 * HIPAA for Pharmaceuticals * Hilton Washington & Towers * Washington, DC

This workshop is designed to provide practical guidance for Pharmaceutical, Biotech and Medical Device Companies who are in the planning or very early stages of HIPAA compliance. It’s premise is that the process of HIPAA compliance can be leveraged to help solve larger organizational and business challenges.

For more information about this presentation and conference (including registration), call 888-670-8200 or visit www.iirusa/hipaapharma.

ABOUT Pharma Marketing News

Pharma Marketing News is a monthly publication sponsored by VirSci Corporation (www.virsci.com) and distributed FREE to subscribers of the PHARMA-MKTING e-mail discussion group. PHARMA-MKTING is an exclusive email network for pharmaceutical marketing professionals interested in the latest interactive technologies available for marketing. The network facilitates communication between members and recognized experts and leaders in interactive pharmaceutical marketing. See www.pharma-mkting.com for more information about becoming a member of the group.

ABOUT VirSci Corporation

VirSci (pronounced VER – sigh) is dedicated to developing and applying best practices in privacy, usability, and quality to online pharmaceutical and health marketing. It’s our passion to help our clients do business via the Internet more effectively, with greater return on investment, and with enhanced consumer trust. VirSci provides global pharmaceutical and healthcare industry clients with competitive market intelligence, interactive marketing services, and HIPAA/privacy/security consulting and educational services