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Markets generally started recovering from July. August is the first month where we have seen greater return to normalcy. What is happening and where to go from here?
As expected, all (or almost all) stakeholders in all businesses are looking forward to returning to old routines. Pharma market is no exception. Doctors and Pharma companies are quickly trying to go back to old normal. Some indicators of what happened during COVID may be seen as follows.
Patient/Doctor Interaction – Many doctors stopped seeing patients at all. And kept it so for about four months. Some started online consultation. Specialties like Eye, ENT and Dentistry where patients are seen from a close distance, were virtually closed. Patients were also reluctant to go to clinics and hospitals for fear of catching disease. This is about consultants. We must remember that the largest bulk of patients goes to General Practitioners, GPs or Street Clinics. GPs could not go online because their clientage came from such social strata who could not access online consultation. More importantly, a GP does not charge consultation fee separately; he includes it in the medicines which are dispensed. Online consultation would apply where consultation was already in practice. In my view, the biggest loss came from the GP sector; for doctors, for patients and for Pharma companies. GPs were the first to start returning to practice, partially or fully. Now they are back in to practice fully and are seeing large number of patients.
Acute Care vs Chronic Care – Acute Care is the term for short term therapies such as antibiotics, pain killers, cough and cold medicines, and others which are used for short span of time. These drugs are dependent on new prescriptions which were not being issued due to non-availability of doctors. Chronic Care is the term for long term therapies such as heart drugs, diabetes drugs, psychiatry drugs and the like which are used for a lifetime or at least many years. The patients cannot stop such drugs and therefore sales of these drugs were likely less affected.
Market Dynamics – The overall growth of Pharma Industry as reported by IQVIA (the company that collects and reports on Pharma business) is negative in the second quarter 2020 (Apr-Jun) in value and units. McKinsey reported in one of the articles that Cardiology visits dropped by -31%, Dermatology visits by -43% while oncology visits dropped by -14% only. McKinsey stats are based on US patients. Pakistan may have slightly different picture but not much different. IQVIA in its second quarter report has shown a very strong growth in the sales of anti-cancer drugs; it is over 60% plus on MAT basis. It is extremely significant.
Doctor – Pharma Interaction – This has been the worst-hit area. Pharma selling has always been personal, face-to-face selling. Technology such as digital presentations on tablet are also made in person. Long term interaction inevitably leads to personal relations which create an atmosphere of trust and ease of communication. Relationships also go a long way and are instrumental in the success of new ventures. It is common knowledge that when marketing/salespeople move from one organization to another, they count on the support from their relations with doctors. Doctors also honor these relations and reciprocate. This interaction has remained absent for about four months, which is a long time. It is yet to be seen how much the loss in relations has been. The salespeople tried to remain in touch through messages but is definitely a poor substitute.
Supplies to Market – supplies and deliveries had been largely undisturbed. Production was least affected because Pharma companies and distributors had exemption from lockdown. Material supplies were interrupted for some time but most companies in Pakistan do not practice Just-in-Time system. We are a nation of hoarders and we like to keep high inventories of all materials. We feel insecure with JIT system. That behavior did show benefit at this time.
Where to go from here? We see a rush of new launches which is a questionable idea. We should employ deeper thinking.
Rebuild Customer Relations – In my view, this should be the first priority. All that should be done to revive, revitalize and rebuild customer relations must be applied strategically and urgently. Saving money in this head may cause short term and long-term losses.
Protect Mega Brands – Every big company has more than one mega brand. Mega brand may be defined as a brand having a market value of 500 million or more. According to IQVIA Q2, 2020 report, 73 brands have crossed one billion mark. 500 million or more may be double than this or even more. These brands are protected and guarded fiercely in all situations, but these are special circumstances. ‘All guns blazing’ type efforts must be done to protect mega brands.
Reactivate Sales Teams – Sales teams have been lying low for about four months. Some companies engaged their sales teams in training activity, but it cannot be done over prolonged periods. Long time back, I happened to read a research which said that after two weeks of vacations, the IQ dropped by a few points. Whatever might have been done to keep teams engaged, they would not be in the same shape as they were before lockdown.
Do Innovative Marketing – While most companies would be rushing to do more of the same that they did previously, the intelligent organizations must bring innovative marketing strategies to stand out and get heard and get noticed. The opportunities for innovation are much more now and must be exploited.
As of now, we should divide many things into Pre-COVID and Post-COVID periods (like BC and AD) and treat these on their merit.