06 Jan Drugs vs. Medical Devices Marketing:
Different Sides of the Same Coin
Whether it is simply a desire to diversify or to come up with a drug delivery system, many pharmaceutical companies are dipping their toes into the world of medical devices. On the surface it may seem that marketing a medical device may just require a few tweaks to your drug marketing strategy, the truth is it requires a very different mindset to reach financial potential.
Marketing pharmaceutical drugs is a rather tried-and-true and homogeneous process. Doctors control the process by writing scripts and patients go to pharmacies to get the drugs filled. The major marketing strategy most pharmaceutical companies utilize are advocates and hordes of sales reps trying to convince physicians that its product is superior in terms of efficacy, safety, or convenience. Cost is generally not a big issue between competing brands, however, tier position with insurance companies can be vitally important in selling efforts. However, reimbursement process is fairly uniform and straight-forward.
On the other hand, medical devices are a different animal. There are some similarities to drugs, e.g., FDA approval is required, many devices are prescribed for patients’ use (e.g., orthopedic implants, hearing aids, contact lenses etc.) and doctors still are very important influencers but the differences are enormous.
First of all, in addition to doctors, there are several other parties who can be equally, if not more, influential in making purchasing decisions. It depends on the type of equipment being sold. Selling an MRI machine is quite different from selling surgical instruments or hearing aids. So the target audience might be doctors, nurses, hospital administrators, purchasing departments, and/or consumers. It is imperative to determine how purchasing decisions are made and develop marketing materials for each accordingly based on what criteria (effectiveness, convenience, cost etc.) are likely to be more important to the various audiences.
DTC or Direct response television (DRTV), in which a company asks consumers to respond directly through a phone call or by visiting a web site, can be done for consumer products like hearing aids and contact lenses but consumer marketing plays a diminished role compared to its importance in drug marketing. DTC drug ads generally focus on new drugs for chronic diseases and diseases with recognizable symptoms for general public (e.g., depression, obesity, allergies, osteoporosis, arthritis, asthma, and diabetes). Just like complex, highly specialized drugs are generally not advertised on TV, a device manufacturer is not going to try to convince consumers that their ultrasound scanner is superior to the competition.
Training takes a vitally important role with medical devices. This provides incredible opportunities to spend time with doctors and nurses, build relationships, and sell. And sales reps may even feel welcomed because staff at medical facilities needs to learn the nuances of operating a complex device properly. The device company may institute levels of certification for advanced training opportunities to further maximize time at the facility. The drug reps would be envious.
Having a device with perceived technological superiority can offer competitive advantage. You would never choose one medical facility over another because only they can prescribe a particular drug while the other can’t, but a facility can really boost their customer base if they have access to certain equipment, e.g., a screening machine or a surgical system that its competitors don’t. So it behooves a device company to discuss how their state-of-the-art technology can bring prestige and deliver a positive impact on the bottom line over time even if the acquisition cost appears prohibitive.
Moreover, devices reimbursement is an indirect process. It can be thought of as more of an investment which would bring future returns through collecting fees as procedures are performed using that device and diagnosis-related group (DRG) reimbursement. Reimbursement can be complicated with many cost codes. There are CPT codes, ICD-10 codes, and HCPCS codes which hospital staffs need to be made comfortable and navigating through the red tape when utilizing your device.
Drugs are very treatment-focused and patient-centric basically driven by the physician-patient relationship. Medical devices have looser control. There are more cooks in the kitchen and device companies have to cast a wider net to attract wider set of audiences. But with a proper marketing strategy, rewards can be enormous for both the device manufacturer and the medical facility. A manufacturer can build strong relationships with the medical community and a clinic can achieve greater profits and prestige.