Pharma replacing reps with Web

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Pharmaceutical companies are looking for ways to replace the endangered species known as the sales representative, and they may have found it on the Internet.

The World Wide Web is becoming the place to be for big pharma to peddle its wares to healthcare professionals across the country. In an emerging trend, the drug companies are marketing their brands to doctors through e-mail and Web conferencing, capitalizing on the high efficiency and low cost of the Internet.

"I don't think it will ever replace a time-honored way of doing business, which is getting out there face-to-face," said a VP-marketing at one of the top 10 pharmaceutical companies. "But right now, I think the industry is dipping its toe in the pool and testing the waters. You need to keep all options open."

under fire

Currently, pharmaceutical companies employ an estimated 87,000 sales reps to reach roughly 600,000 practicing physicians in the U.S. And more and more, those reps are coming under fire. The University of Pennsylvania Hospital System and Duke University hospitals, for instance, have severely curtailed visits by sales reps, who usually come armed with the latest details about drugs-and also come armed with gifts, some as small as pens and notepads but others as large as lavish lunches for entire medical staffs and trips for physicians.

A decrease in budgets as well as a decrease in numbers-Merck, for instance, recently cut 700 more jobs-are also factors in how pharmaceutical companies are restructuring their marketing.

"There's a larger audience of doctors out there using the Internet for drug information than are relying on reps," Mark Bard, president of Manhattan Research, said at a conference last year. Manhattan Research, a pharmaceutical marketing and services firm based in New York, estimated that last year more than 200,000 physicians participated in `e-detailing'-the process of receiving drug marketing information via the Internet. The company estimated it was a 400% jump from 2001.

A similar firm, Jupiter Research, found that direct-to-physician online marketing budgets increased slightly in 2004 and will continue to rise this year. Although online spending accounted for only 9% of pharmaceutical companies' physician-directed marketing budgets in 2004-39%, the most, still went to sales representatives while 15% were for samples-Jupiter found that online detailing, product Web sites and e-mail marketing will receive increased spending in 2005.

Eric Bolesh, a senior analyst at Raleigh, North Carolina-based Cutting Edge Information, said he isn't surprised. "The pharmaceutical industry's current competitive landscape makes choosing how to allocate sales force funds all the more difficult," Mr. Bolesh said.

That's where companies like The Maxwell Group come in. The Maxwell Group, based in Blue Bell, Pa., provides a service called MedConference, a direct-to-doctor Web conference that allows physicians using a standard PC with Internet access to see and hear live medical presentations. The doctors can also submit questions by voice or online chats. The three-year old company has already managed more than 5,000 presentations.

"Doctors need immense amounts of medical information, but their patient loads limit their ability to see pharma sales reps or attend outside conferences," said Bob Maiden, president of The Maxwell Group. "MedConference brings the experts directly to them whether in the office or at home using their own PCs."

And physicians aren't the only ones finding drug information on the Web.

Doctors are now writing "webscriptions" directing their patients to the Internet to research more information. Nearly 80% of the doctors who responded to a recent survey reported that they refer patients to credible online information at least some of the time. Fourteen percent said they refer patients to medical Web sites "all of the time" and 68% said they did it from "time to time, depending on the situation."

Approximately 800 specialists, ranging from pediatrics to cardiology, responded to the survey, which was conducted by the publishers of MD Net Guide, a series of medical journals designed to help physicians navigate the Internet.

"More and more patients rely on the Internet for medical information," said Todd Kunkler, MD Net Guide's associate editorial director, "and that makes it incumbent upon the responsible physician to check out what's available and recommend the most informative sites."

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