- 1 Introduction
- 2 The Complexity of Sales in Big Pharma
- 3 Ethical Unalignments Causing Public Outrage
- 4 Conclusion
Drugs, medicines and medical products have always been a very specialised product to sell, requiring specific procedures and regulations to ensure their appropriate use, sale and safety. It’s not surprising then that ethical issues have been raised by the press and littered mainstream media with allegations of corruption, unlawful selling technics and a less than ideal reputation of big pharmaceutical companies. But how are these ethics defined? In such a sensitive field, the dilemma to balance the selling a drug that could potentially save a person’s life with the objective to also drive sales for the company, is a hard line to trace.
Ethics defines itself as the moral principles that governs an entities behaviour and actions. (Oxford, 2018) In other words, ethics represent the moral code of conduct a person should choose to achieve an end that will not taint or damage one’s reputation or credibility. Over recent years, pharmaceutical companies have been at the epicentre of ethical scandals and corrupt business transactions that has resulted in a social stigma attached to their name. From bribery to false promises, the sales of pharmaceutical products have come under heavy fire from the FDA in the United States and the EMA in Europe to counteract unethical practices by applying heavy sanctions and regulations to these companies. (Carome, 2017)
The following paper will elaborate why ethical mishaps occur in such an important industry as well as elaborate on the complexity of pharmaceutical sales structures to finally discuss the limitations of sales technics and the repercussions they may hold.
The Complexity of Sales in Big Pharma
As mentioned, sales in the pharmaceutical industry is not a simple sale. The product being sold is ultimately destined to a patient rather than a customer. Therefore, sales structures need to consider multiple channels and decision-making units to ensure a continuous flow of demand.
Target Audiences and Decision-making Units
The consumer target audience and decision-making units can be divided into 5 main groups requiring different levels of information, pricing and sales approaches.
For the purposes and relevance of this paper, the three closest to ethics will be touched upon: patients, pharmacists and doctors.
The patient is the last in line to receive the medication, they are at the end of the pipeline and are an audience that has the least knowledge on a topical subject in the medical field. However, with the shift of technological advances, notably the world web services, patients are developing competencies and better understanding the treatments available to them by a simple click of a button. Patient care and self-treatments are threatening medical practices as they are known today, with doctors losing their expert power over the patient’s decision-making process to wellness. (ProSellus, 2018) Therefore, the use of technology and its application by big pharma, destined to patients is changing the way companies do business. The importance of selling a product directly or indirectly to a patient, through promotional advertisements, social proofing as well as being a referent of expert knowledge is key to driving sales. By providing the knowledge to help patients understand their illnesses and the best treatments available increases the patient’s likelihood to buy from these companies. Furthermore, companies are now pushing their patients to regularly take their medications by heavily investing in smart-pill programs specifically designed to send alerts to doctors indicating the medication has not been ingested at the specific time it was intended. Thus, ethical issues can be raised on whether the intentions of the big pharma companies are genuine or if they are ensuring that the patient refills his or her pillbox. (Robbins, 2016)
The sales approach to this specific nascent potential must be tailored to customer needs all the while remaining genuine and within the realms of the ever-tightening regulations that are imposed. This being said, up until now, pharmaceutical companies are not permitted to directly sell medication to patients. Intermediaries with expert knowledge and advice are still required to prescribe and dispense potentially dangerous medications. Only the United-States and New Zealand are permitted to directly market prescription drugs to its consumers. (HavardHealth, 2017) This direct marketing gives indoctrinates the patient with branding that ultimately influences treatment choices.
Pharmacists are the healthcare professionals that interact with both patients and doctors. Their role is to cross check prescriptions and ensure the safety of interactions as well as dispense the medication directly to a patient. Essentially, pharmaceutical companies need to mediate with pharmacists to deliver the drug to the end user. As valuable influencers to the decision-making process of what products to use when ill, (notably in OTC medication) they play a vital role in the journey to wellness cycle. (MedBroadcast, 2018) This pivotal role gives them a considerable amount of power when it comes to price negotiations with big pharma. Without their backing, the likelihood of a product being sold is drastically reduced. Therefore, pharmaceutical sales delegates develop close relationships with their clients as do their clients with them. The reason for this mutuality demonstrates the complementarity of one another, a pharmacist may not operate without the backing of their industry. In other words, without inventory, a pharmacist cannot dispense a medication. This is not the case of other healthcare professions such as doctors as will further explain this report. This tightly knit relationship between key accounts and sales delegates allows for bulk trading which consequently drops the price. In France, the rise of pharmacy cooperatives and groups such as Pharmactive and Pharmavie are ways for pharmacist to gain buying power and avoid heavy price competition from singular major key accounts. (Pharmaciens, 2016) However, the commercialisation of their healthcare profession begs the question of the credibility an authenticity of their craft. Moreover, commercial push of sales and reward systems that sales delegates offer to pharmacists question the ethical conduct of these healthcare professionals that need to sell “x” amount of product to reach target objectives.
In short, their profession is changing. Becoming ever more competitive where sales drives the profession over the patient’s wellbeing. (John, 2018) Modern and disruptive technologies are threatening the practice as patients are becoming more connected to their illnesses through a device. Making the pharmacist’s advice a redundant characteristic of their profession.
The medical profession of a doctor is a multidisciplinary craft with an increasing specialisation of expertise. From generalist doctors to eye surgeons, medical doctors range from a diverse number of fields making them invaluable to society as we know it. (James E. Dalen, n.d) Pharmaceutical companies have always tendered to winning the doctors favour in regards to their products as they have until now, been the key holder to sales. However, this specific subgroup of healthcare professionals has been at the centre of ethical scandals and back deals with big pharma. So much so that new regulations have been implemented sanctioning any form of bribery, misguiding selling tactics and unlawful conduct.
Sales tactics are particularly challenging to execute with doctors as they offer very little time and often reject any form of medical advice in their own profession from a non-medical professional. Therefore, doctors have an upper hand over pharmaceutical companies when it comes to fulfilling a need or answering a problematic as they have no direct need for pushing sales. This one of the key reasons why bribery occurs, buying a doctor’s time by offering high end meals or gifts are a way for the sales force to be able to pitch a product. The issue in reality is doctors know this, and take advantage of it. (Groningen, 2017)
The approaches in selling technics and strategies vary from one target audience to another. So, Pharmaceutical companies adapt selling strategies accordingly based on information needed, interests that need to be met and selling tactics that ensure efficiency. The next segment will focus on key points and selling tactics companies use to drive sales using healthcare professionals and to attract the attention of customers.
Selling tactics have always played a crucial role in the success of a sale or transaction. Without strategy, structure or the right people, conversion rates would plummet. (Keenan, 2014) Over the years, pharmaceutical companies have tailored to the needs of patients, pharmacists, insurances and doctors to best liaise their products to the interest of the end user. In other words, they have developed a specialised sales force capable of tending to all five audiences.
As pharmaceutical companies are forbidden to sell directly to patients, they apply indirect sales methods through strategic marketing campaigns to increase brand recognition and exposure all the while persuading medical professionals to endorse their products. In the pharmaceutical industry, when targeting patients, brand recognition is key, online presence is a technique that hopes to build on product solutions to suspected illnesses that a patient may be querying online. By covering this first line of suspected illness in the patient’s journey, they cover the first steps of the customer life cycle: Awareness, research and shortlist. The following steps will include the healthcare professionals, in other words, the points of contact.
MSL’s otherwise known as medical science liaisons are a sales division specifically constructed to sell to doctors. As their activity requires a high level of expertise in scientific knowledge, they are specifically trained to pitch and answer any scientific questions related to their products. Companies often recruit medical professionals for this role as they bring legitimacy to their arguments because of their trained background in healthcare. Furthermore, the use of Key opinion leaders (KOL) is a tactic that is heavily applied in the medical field, as doctors follow technics and strategies of reputable physicians, leveraging KOLs to promote their brand or products often leads to more sales. Promotion for doctors is therefore made by other doctors and influencers. (Moynihan, 2008)
Sales delegates are the sales force instructed to target pharmacies, distributors and hospitals. Their role is to push sales in their respective sectors by applying bulk deals and incentives for the pharmacists to stock more of their product. The objective of stocking a pharmacy’s inventory is to limit the risk of substitution, which is one of the main losses of potential revenues with the rise of generics for pharmaceutical companies. (Schweitzer, 1982) They apply combining product deals as well as selling to multiple pharmacy cooperatives to increase volumes of sales and to maximise margins for pharmacists. Moreover, to maximise sales in pharmacies, merchandising teams are sometimes offered to larger accounts for OTC and cosmetic products in order to enhance sales and exposure of their products in the OTC aisles.
The synergy of bringing awareness to the customer, doctors favouring their treatment and applying sales tactics with pharmacists to maximise sales and profit margins, make the pharmaceutical industry a complex yet profitable industry to be in. However, the rise in competition with generics and limited patent restrictions make for a fast pace industry with a small window to generate a return on investment. For this reason, sales can sometimes cross the ethical line and shine a dark light on a sensitive industry.
Ethical Unalignments Causing Public Outrage
Two main ethical mishaps will be highlighted in this paper using real examples demonstrating the misguiding conduct of sales in the pharmaceutical industry.
The Bextra® Scandal by Pfizer
In 2009, one of the leading pharmaceutical companies, Pfizer settled for 2,3 billion dollars in fines for illegally marketing a since removed product from the market, Bextra®. (Gardiner, 2009) This case was the biggest health care fraud settlement in history and severely damaged the reputation of the company as it did of the industry as a whole. The drug was initially approved by the FDA in the United States in 2001 for forms of arthritis and menstrual pains. However, sales representatives and MSLs were specifically instructed to pitch to doctors its pain killer properties for acute pains after surgery with higher a potency than ibuprofen at higher doses. This sales tactic successfully managed to generate additional sales but at the patients cost. A number of documented reports uncovered kidney, skin and heart problems related to the consumption of higher doses of this drug. Since their release, Bextra® was withdrawn from the market in 2005 and a number of testimonies revealed that the aggressive sales tactic was consciously chosen by Pfizer’s sales force. Such a scandal reframed the question of healthcare safety and sales in the pharmaceutical industry. Drugs are not any type of product, exaggerating their benefits all the while underplaying their side effects can severely damage a patient’s health. Moreover, regulatory institutions such as the FDA a specifically designed to verify the effectiveness of a drug and approve it for specific indications. Falling out of those guidelines is unknown territory that can lead to life threatening situations for the end user. This case exemplifies the harm of misguided communication and unethical practices has when applying sales techniques in healthcare sensitive scenarios.
Gsk Bribery Allegations
Bribery scandals have become a common occurrence in the pharmaceutical industry. Regulators are clamping down on doctor compensations for prescribing specific drugs with brand names. The most recent in times to be picked up by the press relates to GSK being found guilty of bribery in China with doctors and hospitals payed to actively promote their products. (Webb, 2016) Despite these anti-corruption efforts, the company was found again besieged with allegations in 2015 for paying off other pharmaceutical companies to prevent the issuing of generic competitors in the UK market. (Webb, 2016) This public outcry of companies trying to unethically maintain dominance in their respective fields by forms of bribery, demonstrate and underline the unequivocal objectives of big pharma to meet sales objectives. Furthermore, Novartis in South Korea has also been accused recently of illicit rebates with doctors. This trend of securing prescriptions through briberies shines a bad light both doctors and the pharma industry as a whole.
Both these cases highlight two underlining issues in sales for big pharma, bribery and misguided selling. Both forms of unethical conducts harm the industry’s reputation and trust in regards to all of its audiences. But are they the only ones at fault? Or do healthcare institutions indirectly encourage forms of bribery for personal gain?
Limitations of Sales Through Government Policy
Prescriptions are becoming paid advertisements that the doctor as a decision maker, still has power over. Investments on prescription drug advertising has been rising in the United States. Their primary objective is to generate sales rather than help the patient. This being said, they also make the patient have a more influential role in the decision-making process of treatment choices. (HavardHealth, 2017) The knowledge acquired from these advertisements spur conversation with doctors on potential concerns or symptoms they can relate to from an ad. Often, the patient will relate to a brand name over an INN . Governmental policies in certain countries have begun to avert this issue through the academia of young healthcare professionals and also giving the right of substitution to pharmacists unless indicated otherwise. (EurekaSanté, 2012) Other monetary-disincentives include insurance companies refusing to reimburse non-substituted drugs without a specific reason. In France, the right to substitute with a lower cost generic product, saves excess expenditures for the healthcare system all the while giving the right to the patient to pay outright the brand they desire. (ServicePublic.fr, 2018) After all, brand choices should come secondary to the wellbeing of a patient.
Furthermore, other governmental policies limiting sales expenditures and gifts towards doctors have been adopted in certain countries. In France, medical visits are run under a strict guideline aimed towards transparency and fair competition in the relationship between doctors and companies. They are limited on the frequency of visits and “offerings” they may give to a medical professional. For instance, instruments such as measuring tapes, agendas and medical pens may be offered. However, anything that can be related to personal use, such as an iPad, computer or vehicle for instance is strictly forbidden. (Santé-Gouv, 2016) The objective of these regulations is not to eliminate the reward system already in place, but rather to keep this system professional without jeopardising the integrity of a profession.
In brief, governments are beginning to crack down on unethical practices being applied in the pharmaceutical industry. By limiting the power of branding through disincentives and attempting to upkeep transparency of sales practices, they hope to preserve the medical professions integrity and authority when it comes to treating patients.
Sales tactics and strategies are a sensitive matter in the pharmaceutical industry. Without them, a sales distribution channel and the exposure on illnesses they generate, the healthcare system would struggle to operate. In spite of their image and rocky reputation, companies continue to try and find ways to manipulate the system to maximise profit margins at the cost of the patient. Through briberies to overplayed words describing the benefits of the drug, sales force divisions still treat a drug as a regular product and not as a treatment capable of saving lives. This being said, the healthcare systems around the world are also at fault. Governmental policies and implementations try to limit the corruption the system is plagued with, but healthcare professionals approach to continuous learning in their fields should be emphasized to deliver the best treatments to patients. Although the basis of any business is to generate money and sales, there will always be a need for healthcare, medication and innovation in this field. Building transparency with reliable products will ultimately benefit big pharma companies and create the solid foundation between healthcare professionals and patients.