The Indian pharmaceutical industry (including exports) is ranked third in the world in terms of volume and tenth in the world in terms of value according to a report on the Indian pharmaceutical industry (The Indian Pharmaceutical Industry: Changing Dynamics & The Road Ahead) published by ASSOCHAM and Yes Bank in 2015. The All India Organisation of Chemists and Druggists (AIOCD) estimates that the size of the domestic Indian pharmaceutical industry was Rs 1.16 trillion in 2017. Rising income levels, an increase in the elderly population and a rise in the incidence and treatment of chronic diseases are key triggers for the continued growth of the pharmaceutical market in India. However, the pharmaceutical market in India is characterized by intense competition and hence, low price levels. Drug price control orders promulgated by the Government of India also keep prices in check for drugs under its purview. The intensity of competition in the Indian pharmaceutical market can be gauged from the fact that the market leader has less than 10% market share and the top 5 players have less than 30% market share according to QuintilesIMS MAT data for May 2017. Also, since India recognizes process patents and not product patents in pharmaceuticals, there is no difference between brands of the same drug molecule produced by different pharmaceutical companies. Hence, the Indian pharmaceutical market is dominated by branded generics.
Promotion of pharmaceuticals assumes significance given the intensity of competition in the Indian pharmaceutical market and little/no product differentiation within the market for a drug molecule. In almost all industries, promotion is directed at the buyers or users of the products made by the industry. However, patients as buyers and users of pharmaceuticals have limited or no influence on the choice of the prescribed pharmaceutical brand. Also, direct to consumer (patient) advertising of prescription drugs is not permitted in most countries (with the notable exception of the United States). Hence, promotion in the pharmaceutical industry is directed at physicians as physicians play the role of decision-makers in the prescription decision and direct-to-consumer advertising of prescription drugs is not allowed.
Pharmaceutical companies use multiple promotion techniques including personal detailing to physicians (detailing refers to the activity of pharmaceutical sales representatives when they make calls to physicians and provide them with “details” — approved scientific information, benefits, side effects, or adverse events — related to a drug), sampling (dispensing of free samples by medical representatives), advertising in medical journals, sponsorship of educational events including continuing medical education (CME) events and conferences, gifting (both low-value and high-value gifts) and influencing of key opinion leaders (key opinion leaders (KOLs) are physicians who influence their peers’ medical practice, including but not limited to prescribing behaviour).
Of these promotional techniques, detailing offers the only marketing communication channel for pharmaceutical companies that incorporates personal selling and persuasion to physicians to prescribe their brands of drugs. The largest chunk of promotional expenditure in the pharmaceutical industry both in India and in the global context has therefore been directed towards detailing with other promotional tools such as sampling (which is often used along with detailing with the pharmaceutical sales representatives (PSRs) providing samples as requested by the physician during a face-to-face interaction), advertising in journals and sponsorship of educational events serving as supporting marketing communication instruments serving to support detailing. Thus, the pharmaceutical industry has traditionally relied the most on personal detailing to physicians to persuade physicians to prescribe their products.
Multiple studies have shown that physician attitudes towards pharmaceutical sales representatives and detailing range from negative to neutral. Physicians view detailing as a convenient way to obtain information regarding prescription drugs. Studies on the impact of detailing on prescription behaviour of physicians show that detailing has a significant impact on the prescription behaviour of physicians. However, excessive detailing has been shown to be counterproductive.
Detailing is a key part of the promotional mix for pharmaceutical companies. However, the productivity of detailing has been on the decline both in India and across the globe primarily due to the increased competition for time with physicians. PSRs are getting crowded out of the doctors’ chambers especially in India’s large cities according to a Mckinsey & Company report on India Pharma 2020. An article in the Bloomberg BusinessWeek dated September 2011 titled, “Welcome to India, the Land of the Drug Reps”, says that busy doctors are besieged by the estimated 1 lakh PSRs in India and that doctors tend to restrict the time that they provide to PSRs with doctors providing as little as 20 seconds to a minute for a detailing session. Other issues that pharmaceutical companies face with detailing are the significant investment needed to maintain a large sales force of PSRs and inefficient sales efforts (with few high prescribing physicians receiving multiple sales calls from different pharmaceutical companies and other physicians receiving less than the optimal number of sales calls).
Given the negative to neutral attitudes of physicians towards medical representatives, the utility of detailing as a source of information for physicians, the positive effect of detailing on physicians’ prescription behaviour and the counterproductive nature of excessive detailing, it becomes imperative to optimize personal selling to physicians. E-detailing which entails the use of digital technologies such as the internet, video conferencing and interactive voice response in detailing is emerging as one of the critical ways through which personal selling to physicians can be optimized. For the purpose of this study, virtual live e-detailing (in which the physician listen to a presentation about the promoted product through videoconferencing) and scripted e-detailing (in which physicians launch a sponsored learning application with information about the promoted product) will be included in the definition of e-detailing.
Falling productivity and rising costs of maintaining a sales force and busy doctors with little time to see medical representatives are key factors behind the rise of e-detailing. E-detailing provides physicians with a convenient means of obtaining the information that they need at a time and place of their choosing while providing the pharmaceutical industry with the means to target physicians in a cost-effective and optimal manner. Thus, the adoption of e-detailing is advantageous for both physicians and the pharmaceutical industry.
1) Mckinsey & Company Report (2010) on India Pharma 2020 Propelling access and acceptance, realising true potential
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