Pharma’s Innovation Gap, But Not The One You Think

There is an innovation gap in the pharmaceutical industry, but it’s not the one you are thinking about. Biopharma is undoubtedly a leader in scientific innovation, bringing life-changing and life-saving therapies to market. However, when it comes to how consumers experience biopharma as an industry, it feels remarkably 20th century. There are so many mass market television and print ads from the pharmaceutical industry that it has become cliched, tiring, and sometimes annoying. And expensive. Just turn on the TV and see for yourself.

The innovation gap comes down to how pharma engages with its customers. In the rest of their lives, consumers experience engagement and deep connection with brands and products. But in arguably their most intimate brand engagement — with a therapy that will potentially save their lives — that same level of engagement and connection is not there. This is the gap.

As precision medicine advances and both physicians and consumers increasingly demand tailored experiences, the imperative to adapt marketing strategies is clear. It's no longer enough to shift ads from TV or print to digital channels. Instead, it’s necessary to leverage a suite of tools to create personalization at scale. Doing so is essential to remain relevant, improve outcomes, and achieve business results. Other industries have shifted priorities to create more authentic, personalized, and engaging marketing campaigns. Why can’t pharma?

The current state of pharma advertising

Pharmaceutical marketing is a multibillion-dollar global industry. Estimates from various marketing research firms peg outlays at roughly $50 billion annually. And drugmakers cling to traditional media buys like TV commercials. Combined, pharmaceutical and healthcare companies spend nearly 30% of their media budgets on traditional ads, more than any other economic sector.

As the exhibit below shows, these companies have the second highest rate of TV and streaming ad impressions, trailing entertainment. Why stick with that format? It’s familiar territory and easy to replicate across product portfolios. It’s expensive, but it works.

Obviously, there is an elephant in the room that we can’t ignore: pharmaceutical marketing is highly regulated. Legal and compliance requirements are both important and very real. Plus, an interesting new twist is the stated goal of Health and Human Services Secretary Robert F. Kennedy Jr., to further limit direct-to-consumer advertising.

Why change is necessary

So, what are the alternatives? How can we create deeper connections while remaining compliant? We think it comes down to getting four things right:

1. Content: deliver content that is authentic

2. Channel and format: meet customers where they are and in a format that is bite sized and digestible

3. Technology: leverage technology to create a frictionless and integrated experience

4. Operating model: build a capability to consistently and compliantly deliver an elevated customer experience. This is the most critical step and probably the hardest. More on that later.

Critically, companies need to be intentional about their actions and understand that this is a system where all four aspects of the strategy are connected.

Content: Authenticity

Consumers — that includes patients — care about authenticity. Studies have shown that they are willing to spend more money on brands that they view as authentic. That means being honest and transparent. Across industries, marketing has been moving away from scripted ads and towards real people telling real stories; particularly stories that create an emotional response. There’s no reason why life sciences companies can’t follow suit. Patient stories that illustrate the impact of treatment, whether that’s curing cancer, improving a skin condition, or relieving pain can be powerful messages to patients, caregivers and healthcare providers.

The patient testimonial is not a new tactic. The challenge is creating a chorus of these testimonials that span the breadth of patient types and situations and delivering them in a way that feels authentic. Obviously, there is risk, but how can we challenge ourselves to take calculated risks that build connection with our patients and ultimately improve experience and outcomes?

Channel and format: meet consumers where they with digestible content

Just as important as authenticity is the need for concise and easily digestible content. Short-form video dominates social media and provides strong returns, according to the marketing platform HubSpot. In healthcare, the concept has primarily been adopted by apps and other digital-first platforms that use Instagram-style stories or notifications aimed at a patient’s condition or interests.

While big ad campaigns reach millions of people at once, bite-sized media can be used to connect with audiences craving authentic, digestible storytelling. Austin Chiang, MD, is an example of someone using his status as an influencer to counter misinformation and provide consumers and clinicians with accessible and evidence-based content. The so-called TikTok Doc boasts nearly 1 million followers across his social media platforms and uses short, entertaining bursts to engage audiences. Chiang, who serves as Chief Medical Officer of Endoscopy at Medtronic, and Chief Medical Social Media Officer at Jefferson Health, detailed how healthcare organizations can mirror this approach during a speech at the 2023 Oliver Wyman Health Innovation Summit. X threads — formerly known as tweetorials — are another avenue being used to quickly arm patients and clinicians with actionable information.

Delivering authenticity at scale via channels consumers are already deeply engaged with and in a format that is bite sized and easily digestible is a proven winning combination. How can we internalize this in pharma?

Technology: a frictionless experience

Technologies like generative artificial intelligence (AI) fit in here by enabling companies to do personalization at scale. On one end of the spectrum, generative AI can help companies craft personalized messaging about drugs for both patients and their clinicians. That’s something Pfizer is doing at scale, as Lidia Fonseca, Chief Digital and Technology Officer, Executive Vice President, detailed at last year’s Health Innovation Summit.

While AI-powered virtual “try-on” technologies first emerged in consumer sectors like cosmetics and eyewear, similar AI technologies are now also being deployed on the clinical front. Specialties like dermatology and obesity have been early adopters, allowing consumers to get routine assessments and advice for interacting with a clinician. More advanced uses are emerging like using digital twins. Here, simulations are done in real time using patient information and evidence-based data to create personalized treatment and outcome scenarios.

Pushing down this road, especially for complex conditions, will go a long way toward improving the feedback loop between clinicians and patients. The more a patient knows what to expect, the more motivated they’ll be to follow a treatment regimen, giving clinicians more transparency into their medication adherence.

Operating model: building a repeatable capability

The hardest and most important work is building the right operating model. Companies need an infrastructure that links marketing to organizational goals, allows them to be agile, and to scale best practices. Becoming authentic storytellers and utilizing different delivery channels are the result. This is not an either-or situation. Traditional broad-reach advertising may still be effective for certain products. But the batch-and-blast approach is increasingly misaligned with the principles of precision medicine and personalized marketing. More personalized marketing tactics can enhance efforts by making real connections with consumers.

It's important to reinforce that pharmaceutical companies face unique challenges to efficiently manage their media content supply chain, particularly with regulatory and legal compliance. By establishing a centralized digital platform for content creation and approval, companies can facilitate real-time communication among marketing, legal, and regulatory teams which allows for quicker feedback loops, ensuring that content meets compliance standards before it is disseminated.

To unlock this potential, executives must be willing to invest in marketing talent development and integrating expertise in analytics, data science, and marketing technology. For those willing to adapt, the potential for significant business impact and enhanced marketing effectiveness is immense, paving the way for future growth and success.