Six Questions For McKinsey's Fox On Pharma's Digital Struggle

McKinsey has an assessment tool called the Digital Quotient that we have now run with hundreds of companies across industries over the past few years. It measures the digital maturity of a company across 18 management practices in four categories: strategy, culture, organization and capabilities. As an industry, pharma is second to last in average digital maturity, beating out the public sector, but being far outpaced by industries like travel and hospitality, retail, telecom, and insurance. Importantly, not only are these other industries ahead, but the gap is increasing. As people’s expectations are shifted by the ease of experiences in some of these leading industries, the comparable experiences in pharma seem increasingly lacking. To catch up, pharma companies will need to make a fundamental shift in their orientation towards their patients and physicians. Pharma needs to move from a model of push promotion to one of pervasive engagement through value-added experiences.

Pharma 3D, our new book on the topic, is about marketing in the digital age - much of which will be digital, but certainly not all; [the book] is not about digital marketing. Our premise is that patients and physicians are fundamentally changing their behaviors – how they access information and make decisions, as well as how they connect and interact with one another. Regardless of whether a company has decided to make a deeper commitment to digital channels, tools and technologies, every company should be investing in understanding their patients and physicians. Deep understanding of the motivations of these stakeholders (referred to as 'discovery', and the first of the 3 Ds) will lead a company to better decisions on how they allocate resources and execute across their commercial model. So, it’s not a matter of whether a company should be an early or late mover. Every company needs to understand its stakeholders and regularly update its commercial approach as a result of its latest patient and physician insights.

It’s imperative for companies to think in 3D. 3D thinking is about discovering what motivates a company’s patients and physicians, designing experiences based on those insights and delivering those experiences with consistent excellence and constant learning - so the experiences can be improved over time. Commercial approaches of the past don’t work as well as they once did because the people those commercial strategies were aimed at behave differently today than they once did. Taking a 3D approach to one’s commercial strategy uncovers those differences and identifies ways to capitalize on them with innovative marketing and sales approaches.

We’re really lucky in pharma that other industries – the ones that are ahead of us on the digital maturity curve – have spurred the growth of all sorts of specialized technologies for real-time data collection, advanced analytics, rapid deployment of new digital assets (e.g., online presence, apps), accelerated A/B testing, and many other capabilities. The impact of all these tools is that one can conceive of, test, improve and deploy campaigns much more rapidly, with higher quality and better targeting than was possible even a few years ago. When used right, that means higher impact for the same budget or similar impact for a reduced budget. Either way, marketers today are far more empowered than they were in the past.

I think this will vary dramatically by market. That said most payors these days are very interested in data that illustrate the value and efficacy of a therapy. They are also intrigued by things that pharma companies are doing to enhance the value of their therapies through so-called, 'beyond the pill' services. The degree to which these factors affect payor decision-making will vary a lot based on the drug class in question, the intrinsic cost-benefit ratio for the therapy, the actions of other competitors in the class and the individual priorities of the payor.

We did CareFlow analysis recently in the depression category and found multiple instances when people’s behaviors were getting in the way of effectively treating their conditions. (Ed: McKinsey's CareFlow essentially maps a patient’s journey from initial awareness of a problem to treatment, examining the factors guiding their decisions at each stage.) For example, we found that almost two in five people who were ultimately diagnosed with depression waited over six months between initially recognizing the symptoms and seeing their doctors. This happened despite over two thirds of people reporting a history of depression in their families. The clear implication for pharma companies in the category was to dig into why people would wait to see the doctor and provide encouragement and resources to support them. Similarly, later in the CareFlow, we looked at why people might not be adherent to their medications. Close to one fifth of people discontinued treatment in less than a month because they felt the treatment wasn’t working. Clinical trials have shown clearly that therapies must be taken continuously for 4-6 weeks before they have effect. These patients had the wrong expectations, leading to a call to action to physicians to better educate their patients on the importance of sticking with the medication for at least six weeks.