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Biotechnology Update
;; ~
BIOTECHNOLOGY U P D ATE
Marketing and Promoting Biotech Services by Ronica Roth and Lynne M. Constantine
As biotechnology moves into the mainstream of pharmaceutical practice, community pharmacists have an unprecedented opportunity to build their business and professional expertise. As use of biotechnology pharmaceuticals moves from inpatient to outpatient settings, community pharmacists are well placed to create market niches in biotechnology products and services. The maturing of biotechnology in the '90s has coincided with third party payers' growing insistence that health care services be delivered in the least-intensive setting possible. Drugs once administered only in hospitals are now routinely delivered in physicians' offices and patients' homes. To turn this trend to your pharmacy's advantage, however, you must have a well-thought-out marketing plan. Before you stock a single biotechnology product, conduct a top-to-bottom assessment of your pharmacy and your market. The information you gather will help you understand where your pharmacy fits into the overall market and how to plan a sales and promotional strategy that will spell success. Vol. NS35, No. 10
October 1995
Analyze Strengths The assessment phase begins internally with an honest look at what your pharmacy can invest in time, capital, and personnel. Through this assessment, you can determine the initial package of products and services to be offered. For example, the assessment would consider: • Sufficient storage space. Preparing and dispensing biotechnology products does not require special equipment, but refrigerated storage space is essential. If your pharmacy has a minimal amount of storage space, you may want to begin by stocking only one or two products until you are in a position to expand. • Adequate cash flow. An inventory of biotechnology products is expensive to maintain, and reimbursement often is slow. If you have consistent cash-flow worries, you would be wise to wait until you have built up some fmancial reserves before marketing your pharmacy as a source of infrequently prescribed dnlgs. • Personnel. Biotechnology pharmacy is service oriented. Can your current staff provide the necessary patient education? If not,
can you afford to hire more pharmacists or other professionals? Can your administrative staff handle both the necessary telephone support of customers and expanded billing responsibilities? • Delivery service. Determine the cost-benefit ratios of offering delivery service by hiring drivers and renting cars or by using a courier service. When you have assessed your pharmacy's needs and strengths, you will be in a better position to know precisely which biotechnology services to offer, how to prepare for their launch, and what resources will be required for future growth. Caremark, Inc. , of Northbrook, Ill. , undertook such an internal assessment of its organization 10 years ago and determined that it was ready to enter the biotechnology services field. This home infusion therapy company was already delivering leading-edge drugs and other therapies. When colony-stimulating factors such as filgrastim (Neupogen-Amgen) and later aldesleukin (proleukin-Chiron) became available for cancer patients being treated as outpatients. Caremark moved into stocking and providing these pharmaceuticals. In some cases, it stocked the drugs while they were still investigational. "We already delivered innovative home-based care," says Jim Tiller, Caremark's pharmacy and research development manager in oncology management services. "We decided it would help our custonlers
if we expanded to deliver biotech products to people's homes, too."
Define the Market Assessing the needs of potential customers is the next important step in successfully marketing biotechnology services. Begin by asking potential customers whether they would be interested in such products and services. Next, determine who your competitors are and how they are marketing their biotechnology services. A market assessment helped the pharmacists at Murray Pharmacy of Pittsburgh, now part of Health Management Inc. (lIM!), decide to enter the biotechnology market when the company that had dominated the market left the Pittsburgh area. According to Lloyd Myers, HMI's sales and marketing vice preSident, Baxter Healthcare Corporation, Glendale, Calif. , stopped shipping biotechnology chemotherapy agents to Pittsburgh oncologists in 1987. Murray, at that time a well-established community pharmacy, stepped in to provide filgrastim and interferon alfa (Roferon-A- HoffmannLaRoche; Intron A-Schering; Alferon N - Purdue Frederick). Murray made the move to biotechnology because it could offer sameday delivery and intensive customer service, which market research indicated that physicians wanted. In conducting a market AMERICA PHARMACY
assessment, look for ways to capitalize on distinctive features of the area's health care market. For example, in a market dominated by ftxed reimbursement contracts, physicians are looking for ways to streamline their practices and save on costs. In such a market, you can boost referrals from physicians by stressing the patient education you provide for biotechnology products. Similarly, in a market in which local hospitals do not offer extensive outpatient or home health services, drug delivery services would be a competitive advantage in seeking referrals from physicians and hospitals. To fmd out what services are needed in the local market, send questionnaires to physician practices in specialty areas that use biotechnology products, such as oncology and infectious diseases. Talk to insurers and representatives of health maintenance organizations to learn which pharmacybased biotechnology services and products are reimbursed and how the reimbursement process is structured. With this information, you can calculate expected payments from these sources and prepare to offer patients, physicians, and other customers insurance billing services. A critical step in market research is to identify and study your competition. To learn lTIOre about competitors in your market, contact manufacturers' sales representatives. They are familiar AMERICANPHARMACY
with all providers of their products and are eager and ready to help. For example, Amgen Inc. of Thousand Oaks, Calif. , offers a kit, based on materials developed by the American Pharmaceutical Association, that helps pharmacists enter the biotechnology market. Ortho Biotech, Inc., of Raritan, N.J., also has materials to help pharmacists market their biotechnology services. In researching the needs of potential customers and referral sources, do not neglect the cognitive services side. Market research and subsequent experience proved to Murray Phannacy the paramount importance of offering extensive cognitive services to support biotechnology. "Biotech marketing is a matter of providing the ultimate service in your market, " Myers says. "My pills may be the same as the next guy's, but I can help your patients."
Develop a Marketing Strategy The next step is to develop a marketing strategy by taking the information collected during the assessment phase and making some decisions-about the initial scope of services, the pharmacy's pricing policy, and the ways you will differentiate your pharmacy's services from the competition's. The initial scope of your pharmacy's services will be dictated by the organizational assessment of what is possible; by the market assessment
of what is needed, and by a professional assessment of the company's interests. Murray Phannacy decided to start small, offering just the oncology services abandoned by another company. As the company grew, the pharmacy added one service line at a time, with great fmancial success. Capitalize on your organization's strengt~s. For example, if your company's pharmacists have a particular interest in cancer chemotherapy and your local market includes oncology practices, it makes sense to follow that track, at least at fIrSt. If yours is a traditional community phannacy that caters to home-bound patients and already considers extensive personal service its hallmark, as you move into biotechnology services, you may wish to hire social workers, drivers, and support staff immediately.
Design a Multifaceted Program The next step is to develop a sales and promotional strategy for your biotechnology products and services. Print promotion, educational seminars, public relations events, and direct sales all improve name recognition and let customers know what you offer them. A good promotional strategy includes creative ways to get the message out to potential patients and referral sources. In the biotechnology market, you must do more than just run newspa-
per advertisements and mail glossy brochures. The pharmacy can pronl0te its specialized services directly to patients in innovative and customer-focused ways that do not compromise its professional integrity. For example, the nationwide specialty drug delivery service of Pittsburgh-based Stadtlanders Pharmacy emphasizes education and support for its 19,000 patients, most of whom have received organ or tissue transplants or have cancer, acquired immunodeftciency syndrome (AIDS), or other chronic conditions. To educate and support its patients, Stadtlanders publishes two magazines and many pamphlets. Its social workers and pharmacists offer educational programs to professional organizations and to support groups in the community. The company sponsors events important to its patients, such as AIDS research fundraisers and the "Transplant Olympics. " Although these activities are part of the extended service Stadtlanders offers, they also Biotechnology Update is developed by the American Pharmaceutical Association, edited by Peggy Piascik, PhD, University of Kentucky College of Pharmacy, and supported by an educational grant from Amgen Inc. The views expressed are not necessarily those ofAmgen.
AMBEN® October 1995
Vol. NS35, No. 10
serve to associate the Stadtlanders name with a caring, full-service phannacy dedicated to disease management for specific populations. In the early stages of offering biotechnology services, direct promotion is important. Personalized letters to referral sources are a good introduction to the pharmacy or its new services. In a business that thrives on personal contact and ongoing relationships, sales visits to key referral sources are a good strategy. In addition, they give you an opportunity to discuss complex issues of service and reimbursement. The fmal stage is to put all the infonnation and deci-
sions into a fonnal marketing plan. Think of the marketing plan as a living docun1ent, a place to record actions taken and their results, a compendium of vital information on what works and what does not. The plan also spells out for every employee the parameters and goals of the phannacy's biotechno logy service so that everyone can move together and in the same direction. This plan should include a specific section on implementation, including a time line. Every preparatory detail should be addressed, including necessary training, contracting with providers, purchaSing supplies, hiring staff,
and developing promotional materials. Planning for the future must also be part of the marketing plan. Build in plenty of flexibility that will allow your phannacy to change direction within the evolving health care market. But be sure to spell out a process for measuring success or failure and to set up some guidelines for deciding when to expand or cut back services and how to select the services to add. "Biotechnology is here to stay, and the number of products available will increase," says Caremark's Tiller. "We constantly must be innovative in the way we
provide our cutting-edge services, taking an increasingly greater role in supporting and monitoring the effects of each new dnlg regimen we offer. " At Murray Pharmacy, preparation for growth has been constant as well. "New products present new problems, " Myers says. "Our challenge was and is to figure out how to solve those problems and make life easier for our physician clients. " Ronica Roth and Lynne M. Constantine are health and behavioral science writers with Community Scribes, a health communications firm in Arlington, Va.
"MACK'S SAVED MY MARRIAGE! •••
Thank you Mr. Pharmacist for suggesting Mack's." Beth A.N., Flight AttendantSnoring Sufferer, San Rafael, Cal.
"I've used them personally, and prescribe
"I can swim again! Don't stop making them ... "
Ray Benner Detroit Symphony Circa 1978
OTITIS Patient April D. Salt Lake City, UT
CK'S®
Chairman of the Board McKeon Products
Vol. NS35, No. 10
October 1995
Creator of the original silicone earplugs in 1962, musician Ray Benner has marketed Mack's Earplugs world wide. Used for OTITIS prevention, post-surgery, as well as noise, they are available over nite to ALL PHARMACIES! If not already familiar with MACK'S, for a FREE (pharmacists only) sample contact:
III
~EARPLUGS Pillow Soft"
McKeon Products, Inc.
P.O. Box 69009 Dept. E
Pleasant Ridge, MI 48069-0009 (810) 548-7560
AMERICA~ PHAR~IACY
BIOTECHNOLOGY U P D ATE
Marketing and Promoting Biotech Services by Ronica Roth and Lynne M. Constantine
As biotechnology moves into the mainstream of pharmaceutical practice, community pharmacists have an unprecedented opportunity to build their business and professional expertise. As use of biotechnology pharmaceuticals moves from inpatient to outpatient settings, community pharmacists are well placed to create market niches in biotechnology products and services. The maturing of biotechnology in the '90s has coincided with third party payers' growing insistence that health care services be delivered in the least-intensive setting possible. Drugs once administered only in hospitals are now routinely delivered in physicians' offices and patients' homes. To turn this trend to your pharmacy's advantage, however, you must have a well-thought-out marketing plan. Before you stock a single biotechnology product, conduct a top-to-bottom assessment of your pharmacy and your market. The information you gather will help you understand where your pharmacy fits into the overall market and how to plan a sales and promotional strategy that will spell success. Vol. NS35, No. 10
October 1995
Analyze Strengths The assessment phase begins internally with an honest look at what your pharmacy can invest in time, capital, and personnel. Through this assessment, you can determine the initial package of products and services to be offered. For example, the assessment would consider: • Sufficient storage space. Preparing and dispensing biotechnology products does not require special equipment, but refrigerated storage space is essential. If your pharmacy has a minimal amount of storage space, you may want to begin by stocking only one or two products until you are in a position to expand. • Adequate cash flow. An inventory of biotechnology products is expensive to maintain, and reimbursement often is slow. If you have consistent cash-flow worries, you would be wise to wait until you have built up some fmancial reserves before marketing your pharmacy as a source of infrequently prescribed dnlgs. • Personnel. Biotechnology pharmacy is service oriented. Can your current staff provide the necessary patient education? If not,
can you afford to hire more pharmacists or other professionals? Can your administrative staff handle both the necessary telephone support of customers and expanded billing responsibilities? • Delivery service. Determine the cost-benefit ratios of offering delivery service by hiring drivers and renting cars or by using a courier service. When you have assessed your pharmacy's needs and strengths, you will be in a better position to know precisely which biotechnology services to offer, how to prepare for their launch, and what resources will be required for future growth. Caremark, Inc. , of Northbrook, Ill. , undertook such an internal assessment of its organization 10 years ago and determined that it was ready to enter the biotechnology services field. This home infusion therapy company was already delivering leading-edge drugs and other therapies. When colony-stimulating factors such as filgrastim (Neupogen-Amgen) and later aldesleukin (proleukin-Chiron) became available for cancer patients being treated as outpatients. Caremark moved into stocking and providing these pharmaceuticals. In some cases, it stocked the drugs while they were still investigational. "We already delivered innovative home-based care," says Jim Tiller, Caremark's pharmacy and research development manager in oncology management services. "We decided it would help our custonlers
if we expanded to deliver biotech products to people's homes, too."
Define the Market Assessing the needs of potential customers is the next important step in successfully marketing biotechnology services. Begin by asking potential customers whether they would be interested in such products and services. Next, determine who your competitors are and how they are marketing their biotechnology services. A market assessment helped the pharmacists at Murray Pharmacy of Pittsburgh, now part of Health Management Inc. (lIM!), decide to enter the biotechnology market when the company that had dominated the market left the Pittsburgh area. According to Lloyd Myers, HMI's sales and marketing vice preSident, Baxter Healthcare Corporation, Glendale, Calif. , stopped shipping biotechnology chemotherapy agents to Pittsburgh oncologists in 1987. Murray, at that time a well-established community pharmacy, stepped in to provide filgrastim and interferon alfa (Roferon-A- HoffmannLaRoche; Intron A-Schering; Alferon N - Purdue Frederick). Murray made the move to biotechnology because it could offer sameday delivery and intensive customer service, which market research indicated that physicians wanted. In conducting a market AMERICA PHARMACY
assessment, look for ways to capitalize on distinctive features of the area's health care market. For example, in a market dominated by ftxed reimbursement contracts, physicians are looking for ways to streamline their practices and save on costs. In such a market, you can boost referrals from physicians by stressing the patient education you provide for biotechnology products. Similarly, in a market in which local hospitals do not offer extensive outpatient or home health services, drug delivery services would be a competitive advantage in seeking referrals from physicians and hospitals. To fmd out what services are needed in the local market, send questionnaires to physician practices in specialty areas that use biotechnology products, such as oncology and infectious diseases. Talk to insurers and representatives of health maintenance organizations to learn which pharmacybased biotechnology services and products are reimbursed and how the reimbursement process is structured. With this information, you can calculate expected payments from these sources and prepare to offer patients, physicians, and other customers insurance billing services. A critical step in market research is to identify and study your competition. To learn lTIOre about competitors in your market, contact manufacturers' sales representatives. They are familiar AMERICANPHARMACY
with all providers of their products and are eager and ready to help. For example, Amgen Inc. of Thousand Oaks, Calif. , offers a kit, based on materials developed by the American Pharmaceutical Association, that helps pharmacists enter the biotechnology market. Ortho Biotech, Inc., of Raritan, N.J., also has materials to help pharmacists market their biotechnology services. In researching the needs of potential customers and referral sources, do not neglect the cognitive services side. Market research and subsequent experience proved to Murray Phannacy the paramount importance of offering extensive cognitive services to support biotechnology. "Biotech marketing is a matter of providing the ultimate service in your market, " Myers says. "My pills may be the same as the next guy's, but I can help your patients."
Develop a Marketing Strategy The next step is to develop a marketing strategy by taking the information collected during the assessment phase and making some decisions-about the initial scope of services, the pharmacy's pricing policy, and the ways you will differentiate your pharmacy's services from the competition's. The initial scope of your pharmacy's services will be dictated by the organizational assessment of what is possible; by the market assessment
of what is needed, and by a professional assessment of the company's interests. Murray Phannacy decided to start small, offering just the oncology services abandoned by another company. As the company grew, the pharmacy added one service line at a time, with great fmancial success. Capitalize on your organization's strengt~s. For example, if your company's pharmacists have a particular interest in cancer chemotherapy and your local market includes oncology practices, it makes sense to follow that track, at least at fIrSt. If yours is a traditional community phannacy that caters to home-bound patients and already considers extensive personal service its hallmark, as you move into biotechnology services, you may wish to hire social workers, drivers, and support staff immediately.
Design a Multifaceted Program The next step is to develop a sales and promotional strategy for your biotechnology products and services. Print promotion, educational seminars, public relations events, and direct sales all improve name recognition and let customers know what you offer them. A good promotional strategy includes creative ways to get the message out to potential patients and referral sources. In the biotechnology market, you must do more than just run newspa-
per advertisements and mail glossy brochures. The pharmacy can pronl0te its specialized services directly to patients in innovative and customer-focused ways that do not compromise its professional integrity. For example, the nationwide specialty drug delivery service of Pittsburgh-based Stadtlanders Pharmacy emphasizes education and support for its 19,000 patients, most of whom have received organ or tissue transplants or have cancer, acquired immunodeftciency syndrome (AIDS), or other chronic conditions. To educate and support its patients, Stadtlanders publishes two magazines and many pamphlets. Its social workers and pharmacists offer educational programs to professional organizations and to support groups in the community. The company sponsors events important to its patients, such as AIDS research fundraisers and the "Transplant Olympics. " Although these activities are part of the extended service Stadtlanders offers, they also Biotechnology Update is developed by the American Pharmaceutical Association, edited by Peggy Piascik, PhD, University of Kentucky College of Pharmacy, and supported by an educational grant from Amgen Inc. The views expressed are not necessarily those ofAmgen.
AMBEN® October 1995
Vol. NS35, No. 10
serve to associate the Stadtlanders name with a caring, full-service phannacy dedicated to disease management for specific populations. In the early stages of offering biotechnology services, direct promotion is important. Personalized letters to referral sources are a good introduction to the pharmacy or its new services. In a business that thrives on personal contact and ongoing relationships, sales visits to key referral sources are a good strategy. In addition, they give you an opportunity to discuss complex issues of service and reimbursement. The fmal stage is to put all the infonnation and deci-
sions into a fonnal marketing plan. Think of the marketing plan as a living docun1ent, a place to record actions taken and their results, a compendium of vital information on what works and what does not. The plan also spells out for every employee the parameters and goals of the phannacy's biotechno logy service so that everyone can move together and in the same direction. This plan should include a specific section on implementation, including a time line. Every preparatory detail should be addressed, including necessary training, contracting with providers, purchaSing supplies, hiring staff,
and developing promotional materials. Planning for the future must also be part of the marketing plan. Build in plenty of flexibility that will allow your phannacy to change direction within the evolving health care market. But be sure to spell out a process for measuring success or failure and to set up some guidelines for deciding when to expand or cut back services and how to select the services to add. "Biotechnology is here to stay, and the number of products available will increase," says Caremark's Tiller. "We constantly must be innovative in the way we
provide our cutting-edge services, taking an increasingly greater role in supporting and monitoring the effects of each new dnlg regimen we offer. " At Murray Pharmacy, preparation for growth has been constant as well. "New products present new problems, " Myers says. "Our challenge was and is to figure out how to solve those problems and make life easier for our physician clients. " Ronica Roth and Lynne M. Constantine are health and behavioral science writers with Community Scribes, a health communications firm in Arlington, Va.
"MACK'S SAVED MY MARRIAGE! •••
Thank you Mr. Pharmacist for suggesting Mack's." Beth A.N., Flight AttendantSnoring Sufferer, San Rafael, Cal.
"I've used them personally, and prescribe
"I can swim again! Don't stop making them ... "
Ray Benner Detroit Symphony Circa 1978
OTITIS Patient April D. Salt Lake City, UT
CK'S®
Chairman of the Board McKeon Products
Vol. NS35, No. 10
October 1995
Creator of the original silicone earplugs in 1962, musician Ray Benner has marketed Mack's Earplugs world wide. Used for OTITIS prevention, post-surgery, as well as noise, they are available over nite to ALL PHARMACIES! If not already familiar with MACK'S, for a FREE (pharmacists only) sample contact:
III
~EARPLUGS Pillow Soft"
McKeon Products, Inc.
P.O. Box 69009 Dept. E
Pleasant Ridge, MI 48069-0009 (810) 548-7560
AMERICA~ PHAR~IACY