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May 2009
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  What Is One to Do?I received a phone call a few days ago from a senior marketing research professional at a major pharmaceutical company. This gentleman is probably in his late 40s or early 50s and theoretically has the most productive years of his career ahead of him. But he faces the nontrivial problem that his company is about to be acquired and his position eliminated. What, he asked plaintively, should he do? In the good old days, such a call would have led to an extended conversation about the advantages and disadvantages of continuing to work on the client side versus switching to the agency side of the table, the strengths, weaknesses and organizational climates of the various organizations on both sides of the table, and my offering to serve as a reference for a person of his caliber. On this occasion, however, no such discourse seemed appropriate. Pharmaceutical companies and marketing research agencies alike, as we both knew, are not only fully staffed but letting people go, imposing salary freezes and, if they have not already been acquired, making him a sitting duck to repeat his upcoming experience through another acquisition. This statement was largely true across the board in pharma, and thus nuances by company did not seem worthy of much discussion. Rather, I gave him several ideas that varied significantly from my usual counsel. First, I told him that, as I have previously written and spoken about, health care, health care manufacturers and agencies providing services to the health care area are wasting about one-third of the money they spend, and that they will be looking for “disruptive” ways to improve their effectiveness and efficiency. They will need consultants who understand not only the health care marketplace but also such process change systems as Six Sigma to reinvent themselves, and since he already had the first half of this equation well taken care of, he should become schooled in the latter. Helping organizations in this way, I pointed out, was likely to become an increasingly lucrative technique for making money by saving money. Read this month's Orange Pages module for more details about applying Six Sigma to health care marketing and marketing research. We also discussed some specific ideas with more of an entrepreneurial bent. The pharmaceutical industry has finally figured out that patient compliance, despite millions of dollars spent on efforts by pharmaceutical companies to get doctors to assist in this direction, goes nowhere because there is nothing in it for the doctor and too much of his or her time is required. Thus, companies are starting to spring up that specialize in patient compliance programs – and in charging pharmaceutical companies serious money for assistance in this critical area. I suggested he might pursue working with, or even establishing, a company with such a focus. Other possibilities emerged in our conversation. MinuteClinics, staffed by nurse practitioners and housed in chain pharmacies, are beginning to take off. A significant movement in the direction of cost-effective medicine for minor ailments, other such activities might well be carved out to improve both the effectiveness and the efficiency of medical care. Speaking of which, much discussion is beginning to be heard about moving medicine more in the direction of “focused factories,” i.e., medical teams in special facilities that treat only an extremely limited variety of conditions. Lasik facilities in the United States are a classic example, where highly and specifically trained ophthalmologists do nothing but refractive surgery on the eye. Another classic example, though far less well known, is Shouldice Hospital in Canada, which does nothing but repair simple abdominal hernias. All the hospital’s surgeons use a standard approach to the procedure, and the hospital’s charge for performing the operation and its incidence of side effects are significantly below those at other hospitals. In brief, in clear distinction to the line of reasoning behind managed care, in which the primary care physician and the general hospital were to serve as the most efficient gatekeepers for health care funding and the providers of most of the treatment needed for a wide variety of conditions, it is now being realized that more specialization, if appropriately targeted, yields greater “effectiveness” (i.e., better outcomes) and greater “efficiency” (i.e., lower costs). As an aside on this latter point, by the way, we will need to decide whether we are trying to achieve the best care possible for a fixed low cost or to set the standard for care and try to figure out how to provide it most cheaply. While both are approaches to efficiency, a little thought reveals that these two end points cannot be pursued at the same time. Decide which you are looking to do and march forward. But where, one might ask, is the greatest opportunity for experienced health care marketing researchers in this marketplace? Simple! Somebody needs to establish the kinds of focused factories that would be the most productive and profitable and set standards for the best ways in which to open and operate them. Our discussion then led to recent comments from the chief executive of Johnson & Johnson. While put in the unfortunate position of having to explain the first drop in his corporation’s revenue in 75 years, he went on to say that all the news wasn’t bad. The economy had provided him with an excellent opportunity to make great acquisitions at low prices. Rather than follow his colleagues at other companies and purchase other pharmaceutical companies, he identified two areas of special interest to him: companies involved with consumer wellness and medical applications of information technology. These two areas, having been identified by many as key roads to the reduction of waste in the practice of medicine, will require vast amounts of research, both primary and secondary, thus providing yet another area of opportunity for the retreaded pharmaceutical marketing researcher. Similarly, we are now starting to realize that we have paid far too much attention to producing various therapeutics that can be “tried” on patients, and far too little attention to developing diagnostics that will help us determine, a priori, which therapy will work best with which patients. Individualized medicine, including the development and implementation thereof, will constitute a huge opportunity for the skilled health care researcher. In summary, I’ll reverse an old joke: “For you I’ve got bad news and good news.” The bad news is that much of health care marketing research over recent decades has focused on helping develop and evaluate promotional materials. As we increasingly shift from “intuitive” medicine, in which a doctor’s choice of therapy is subject to whim and chance, and toward “precision” medicine, in which physicians follow a standardized template that has been shown to work best, promotion and marketing research will have far less relevance. The good news is that precision medicine and health care reform bring with them a plethora of issues that will keep health care marketing researchers busy for decades to come. 
Richard B. Vanderveer, Ph.D. CEO, GfK Healthcare 
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