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Weekly UpdatesIn Douglas Adams' book, The Hitchhiker's Guide to the Galaxy, galactic researchers from a hyperintelligent, pandimensional race of beings built the second greatest computer in all of time and space, called Deep Thought, to calculate the ultimate answer to life, the universe, and everything. After 7.5 million years of performing calculations on the question, Deep Thought provides the answer: "42." The reaction of the researchers was:
"Forty-two!" yelled Loonquawl. "Is that all you've got to show for seven and a half million years' work?"
"I checked it very thoroughly," said the computer, "and that quite definitely is the answer. I think the problem, to be quite honest with you, is that you've never actually known what the question is."
I have often used this reference when addressing the questions of marketers--the questions that are often asked are based on presumptions and beliefs that do not reflect the real world, and, more often, marketers are looking for the answer rather than understanding the situation. This means the questions that are usually asked are too "small," focusing on a perceived solution rather than on getting to the root of a problem. Typically, the questions are similar to these:
* What must a marketer do to get the reimbursement needed to maximize sales?
* How can more physicians be convinced to prefer this product for this indication?
* What must be done to get physicians who "spread their prescriptions" to write more for this product?
* What is the optimum price for this product?
Although these may appear to be perfectly sound questions, they are each based on assumptions that may not be accurate. More importantly, each seeks to solve a specific problem based on those assumptions. The drawback is that the "problem" an individual might think he or she sees could be very different from his or her perception. Therefore, solving it will accomplish nothing.
Reimbursement to Maximize Sales
The question of securing the reimbursement that will maximize sales is one that is commonly asked and seldom correctly answered. The answer is rarely found because, for the most part, reimbursement does not drive sales--although lack of reimbursement can hinder them. However, many products with poor formulary status and disadvantageous reimbursement get plenty of use--the cyclooxygenase-2 inhibitors and atypical antipsychotics have been among the most prior-authorized classes in history, without impeding their sales. If physicians want to prescribe a specific medicine, they usually will. One thing I have consistently found over the years is that when a physician is not convinced that a product offers value, the first response when asked why he or she does not use it is that the price is too high or that it is not covered by insurance. This is much easier than taking the time to engage in a conversation to learn about a product in which the physician has no interest--or has already decided has no place in his or her practice. Simply stating that the product "is not reimbursed for my patients" is a great way to cut off the unwanted discussion.
Instead of solving the reimbursement problem, the focus of inquiry should be on understanding where the clinician sees a product fitting into their practice. If it does not solve a problem for them, it probably will not get much use regardless of reimbursement status. If targeted physicians prescribe treatments that have reimbursement problems (such as prior authorization, high copays, or even lack of payment), yet they prescribe them nonetheless--one should find out why. If the physician does go through the hassle of prior authorization or other limits for some products but not a product from a marketer's company, he or she should find out why. The problem may not be reimbursement at all.
Prefer This Product
Although primary care physicians (PCPs) are responsible for the vast majority of prescriptions in most classes, they are not necessarily the responsible party. For many disorders, such as Parkinson's disease, schizophrenia, and heart failure, specialists diagnose and initiate treatment, and PCPs maintain the patient on the regimen that is initiated by the specialist. Although some PCPs do initiate therapy in one or more of these areas, most simply "go with the flow" regarding more complex disease processes. To attempt to get a PCP to prefer one product for Parkinson's disease or bipolar disease may be futile, because many do not initiate treatment in these disorders.
Rather than attempting to secure use of one's product by practitioners who do not initiate treatment, it is wiser to first learn who initiates treatment. This is not always easy, because many PCPs will initiate some treatments in most disease areas, but refer most patients. Determining which physicians always diagnose and initiate and which refer is the first step toward the most useful segmentation study that can be done.
Marketers often fall into the trap of assuming most physicians treat most diseases, because the research methods used often force that impression. Choice-based models actually force a respondent to choose a treatment, but seldom offer referral as an option. For a more realistic approach to understanding the market, marketers should try using one of the patient-simulation methods that are available--but only those that offer open-ended options.
Use This Product
Many firms use market segmentation schemes that classify physicians by share of product use. The "product A" segment will include physicians for whom product A constitutes 60% of their use of products in the class. A product B segment, will include physicians for whom that product constitutes the majority of their use. Invariably, a large segment called "splitters" or "spreaders," use a little bit of everything. Many marketing plans have been built around encouraging these physicians to make a specific product their product of choice.
Often, however, these "splitters" are the best clinicians in the business, and they select the specific product to meet a patient's specific needs. Those whose prescriptions in a category are heavily weighted toward one product are often choosing to simplify their practice of medicine, whereas the "spreaders" are attempting to optimize the treatment for the individual patient. In such cases, it would be easier to identify those who seek simplicity, rather than specificity, and help them to understand why one's product is the most logical choice. Product loyalty is a means for a customer to reduce risk, not a reward for great marketing. If a clinician is predisposed to treat most patients with a single agent, helping them to prefer a product is far simpler, and more responsible, than attempting to get those who are predisposed to customize therapy to change the way they practice medicine.
The Optimal Price
I have written several times on this topic, but it seems to be a perennial favorite in the industry. (1) The best price for a product depends on a number of factors, very few of which can be discovered by a price sensitivity study. Understanding the goals for the product, its overall strategy, whether the first year of sales or the fifth year is most important, and the role that price may play in decisions to prescribe the product are among the many questions that must be addressed. The question of optimizing should be set aside in favor of these others.
Conclusion
Before embarking on a search for answers that may be pointless, even if it does not take a full 7.5 million years to get them, a marketer should frame the situation properly to get to the root of the problems. If a marketer does not understand the question, the answer he or she will receive is likely to be as useful as "42."
REFERENCE
(1.) Kolassa EM: The impossibility of price optimization. Product Management Today 2001;12(11):15-16,21.
E.M. (Mick) Kolassa, PhD
Managing Partner
Medical Marketing Economics, LLC
400 South Lamar Boulevard
Oxford, Mississippi 38655
Phone: (662) 281-0502
E-mail: mick@m2econ.com
www.m2econ.com
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