The Pharmaceutical Industry is Facing Big Promotional Change

Promotional Issues in the Pharma IndustrySometimes a marketing story comes along that one needs to read closely to make sure it is actually saying what is in the headline.  One example is when the headline suggests a company or industry is changing a business practice that has become so widely adopted that any alteration from how things are done just does not seem right.  For anyone familiar with pharmaceutical marketing, this story fits that category.

According the New York Times, two of the most common methods used to promote pharmaceutical products are being dropped by one of the world’s leading drug makers, GlaxoSmithKline.  One promotional method being discontinued is the practice of paying doctors to promote products.  The usual example of this is when companies compensate doctors for talking about their products at company-sponsored conferences, which are attended by other doctors.  The second change is the announcement that compensation to Glaxo’s sales force will no longer be tied to how many prescriptions doctors write.  Many companies use prescription totals as an important measure in the effectiveness of each member of the sale force.  These changes, which to some degree Glaxo already put into effect in the U.S. a few years ago, will now apply to all markets they serve around the world.

Both promotional methods have been used for decades and represent practices that are generally not well-known to consumers.  Instead, these fit under business-to-business promotional approaches, where most drug industry promotion is directed to businesses in the health care sector including health care providers, such as doctors and nurses, and health care facilities, such as hospitals and treatment centers.  

While in recent years there has been an increasing shift in promotional spending to the business-to-consumer market, where drug companies can direct their message right to the consumers, as discussed in the story the real motivation for the change may have more to do with potential legal issues facing this industry.

Image by Ian Wilson