Decreased earnings and increased job cuts may force pharma to take another look at eHealth.
Merck’s [MRK] looming financial problems may be more pressing in the short-term than those of many of its competitors, but they are far from unique within the industry. Generic drugs are eating into the revenues of many companies and parched product pipelines, coupled with growing pressures to reduce drug costs, are universally eroding profits. In the near future, job cuts and budget slashes will be necessary parts of most companies’ cost-cutting plans.
It is common for research and development goals to take a back seat to sales and marketing objectives. Many companies find that, at least in the short-term, maintaining the brand equity and maximizing market competitiveness of their current products takes precedence over developing the next blockbuster.
Moreover, there is an opportunity for pharmaceutical companies to offset a portion of the costs associated with reaching their sales and marketing goals through the use of eHealth technologies. The term eHealth usually refers to the use of the Internet to streamline drug delivery and development, as well as to supplement and support sales and marketing initiatives to physicians and consumers.
eHealth applications, such as eDetails, which uses the Internet as the medium of communication for the pharmaceutical sales detailing of physicians, can be integrated into traditional sales and marketing programs. Use of these applications can produce significant cost and timesavings in both the short and long-term. In the case of eDetailing, pharmaceutical brand teams can reduce the number of sales representatives that they send out to call on busy physicians without compromising the information that each physician receives on their product.
Moving into the future, pharmaceutical companies could use the Internet to build interactive relationships with and provide information to physicians and consumers. eHealth applications, while valuable, will not be able to universally address all of the budget problems that the pharmaceutical industry currently faces. However, when applied appropriately such technologies may be able to ease a little of the financial strain, thereby possibly allowing for greater investment in product development and innovation.
