2014 Healthcare Marketing Report

May 2, 2014
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Healthcare as we know it is in the midst of unprecedented change. This change is being driven by structural challenges facing life sciences companies, the advent of the Affordable Care Act, the evolution of personalized medicine, and advances in health IT, digital, social and mobile technologies. What does it all mean for healthcare marketers?

Healthcare as we know it is in the midst of unprecedented change. This change is being driven by structural challenges facing life sciences companies, the advent of the Affordable Care Act, the evolution of personalized medicine, and advances in health IT, digital, social and mobile technologies. What does it all mean for healthcare marketers?

Healthcare marketing reportThose of us in healthcare marketing are witnessing a period of change that we believe is unprecedented in US history. These changes are both fundamental and structural. They impact how drugs, devices and diagnostics are developed, how healthcare is delivered, and how it will be priced and paid for. In 2014, the healthcare industry finds itself in the midst of the perfect storm, where a number of key factors are coming together to drive these changes. The Affordable Care Act is changing the structure and administration of our healthcare system. Consolidation in the biopharmaceutical sector continues to impact the life sciences job market. As personalized medicine becomes more of a reality, drug development, reimbursement, clinical decision-making and even patient education will all need to evolve. These changes are compounded by the amazing growth of Big Data, healthcare IT and mobile health technologies, which seem to change by the month as new platforms and services enter the market.

We believe these changes will ultimately be positive and result in greater efficiencies, reduced costs, and most importantly, better health outcomes for patients. But for healthcare marketers, navigating these changes can seem like skateboarding through a tornado.

This report examines three key sectors of the healthcare industry:

1)     Pharmaceuticals and biotechnology;

2)     Diagnostics and personalized medicine; and

3)     Healthcare IT and analytics.

Our goal is to provide a snapshot of each sector as it appears in 2014, and then to offer our perspective on what we believe are the main challenges facing healthcare marketers who are working in these areas.

Biopharmaceuticals: The Wild Ride Continues

Between 2000 and 2014, an estimated 350,000 jobs have been lost in the US pharmaceutical industry. According to Matt Herper, science and medicine reporter at Forbes, a major reason for these job cuts is the spate of mega-mergers in the industry throughout that time frame.

In a 2012 survey of senior executives from the top 20 global pharmaceutical companies conducted by Roland Berger Strategy Consultants, 73% of respondents said that they believe the pharmaceutical industry is experiencing a strategic crisis, one that requires companies to fundamentally change their business models in order to adapt and survive.

Hybrid marketing skills—the ability to work across traditional, digital, social, owned, earned, paid and shared media—is the “new normal” for healthcare marketing professionals.

Despite the major challenges facing the pharmaceutical and biotechnology industries in 2014, there are also major opportunities in key areas where innovative companies will continue to thrive. In the US, the demographics of an aging population—compounded by the ongoing obesity epidemic—suggest that cancer, diabetes, cardiovascular disease and age-related neurological diseases (e.g. Parkinson’s disease, Alzheimer’s disease, other forms of dementia) will continue to be areas of significant unmet medical need. Perhaps one of the biggest opportunities for biopharmaceutical companies today is in the development of targeted therapies and personalized medicine, which we discuss in greater detail below.

Life science marketers are under intense pressure to demonstrate clear ROI for their activities to senior management. Adding to this pressure is the fact that the pharmaceutical industry continues to be criticized in the court of public opinion. Engaging with the public and putting a human face on the company is therefore mission critical. 

The days when a pharma marketing director could focus on just a few core marketing disciplines, and rely on the agency or his team to understand and manage the vast array of other disciplines, are over. Even compared to two years ago, the communication channels and tools available to marketers in 2014 are vastly more sophisticated. In fact, in a report published by Adobe in September 2013 entitled Digital Distress: What Keeps Marketers Up at Night?, 76 percent of the 1,000 marketing executives interviewed expressed the opinion that marketing has changed more in the last two years than in the past 50. The proliferation and ongoing evolution of new digital and social media channels, analytics, content strategy and inbound marketing, combined with the widespread utilization of technology platforms such as Hubspot, Marketo, Salesforce and Oracle’s WebCenter Content systems, have contributed to most of those changes.

Healthcare marketing professionals at pharmaceutical and biotechnology companies need to stay current with the evolution that is taking place in content marketing, inbound marketing and social media. Despite regulatory constraints, smart life sciences companies continue to find ways to engage with their publics through most of these channels. And we’re willing to bet that these changes won’t slow down anytime soon. In a relentlessly uncertain industry, embracing new tools and the powerful analytics they offer, learning new skills, and demonstrating their value to corporate leadership will make savvy healthcare marketers stand out from their peers.

Diagnostics and Personalized Medicine Continue to Expand

Although personalized medicine is still in its infancy in 2014, few can take issue with the potential of diagnostics and personalized medicine technologies to reduce waste and improve patient outcomes. The Institute of Medicine (IOM) estimates that the US healthcare system wastes approximately $765 billion per year. Of that number, according to the IOM, approximately $210 billion a year is wasted on unnecessary services. 

Diagnostics and personalized medicine technologies can help improve clinical decision-making and decrease the amount of unnecessary or ineffective treatments and services that are charged to Medicare, Medicaid, government and private healthcare plans, thereby improving efficiencies, reducing waste and ultimately lowering the cost of healthcare. Personalized medicine is here to stay, and it will continue to grow in importance as a critical part of healthcare delivery.

Reimbursement is increasingly being linked to the utilization of diagnostics in an effort to improve treatment outcomes and efficiencies. At the same time, advances in digital and social media technologies are leading to increased patient demand for diagnostic tests. As noted in a McKinsey & Company report on personalized medicine, “while there are many factors that will spur the growth of personalized diagnostics in therapy selection, the most significant are payors mandating Dx to ensure proper use of therapeutics, advances in our understanding of the heterogeneity of disease and safety signals, improvements in the underlying technology and quality of Dx testing, and physicians’ need for more information. Additionally, the increasingly informed and active consumer and the advances in digital and information technology will drive growth.”

Healthcare IT and Big Data: Clouds and Lots of Sunshine in the Forecast

The cloud has changed healthcare forever. Healthcare IT is now one of the fastest growing industries in the United States. The Affordable Care Act has contributed to this growth by mandating that electronic medical records (EMR) systems be in place in all medical practices by 2014, with penalties for those who have not adopted an EMR system starting in 2015. 

Driven largely by the explosive growth in cloud and mobile health technologies, healthcare IT is projected to grow at a rate of almost 10% CAGR annually between now and 2018. The expansion of the cloud has ushered in the era of Big Data, which is exerting an enormous impact on the healthcare industry. Big Data is driving clinical decision-making and best practices in population health sciences, public policy, health outcomes research, drug development and personalized medicine. In an annual survey of mobile health technology trends, the Healthcare Information and Management Systems Society (HIMMS) reports that the number of organizations offering mobile apps to patients and consumers increased by 13% in the past year alone. The same survey found that 88% of those working within the healthcare industry were employed by organizations that either had a mobile technology plan in place or were in the process of developing one.

Having a proliferation of Big Data is one thing. Interpreting it, analyzing it and turning it into actionable information is another. Healthcare analytics providers are an essential part of what’s driving the growth in healthcare IT. As concerns over the high costs and inefficiencies of healthcare persist, providers of healthcare analytics software, services and related technologies will find attentive audiences, especially if they can be said to offer a solution.

For marketers at these organizations, the key challenge is establishing thought leadership. In 2014, healthcare IT is an increasingly crowded market, with major insurance providers, EMR companies, healthcare analytics consultancies, mobile health providers and others all vying for share of voice. Those that can demonstrate leadership, innovation and the ability to address some of the very real challenges facing the US healthcare system will be those that differentiate themselves from the rest.

Conclusion

While the issues and trends discussed in this report have been developing for the past few years, what is really interesting about 2014 and beyond is the degree of convergence taking place between the biopharmaceutical industry, diagnostics, and the burgeoning fields of personalized medicine and healthcare IT.

Pharmaceutical and biotechnology companies are embracing targeted therapies and companion diagnostics. Purveyors of personalized medicine and diagnostics are making major advances as Big Data becomes more pervasive, and the benefits of Big Data can be translated into product development, clinical decision-making and disease management. Digital, cloud and mobile health technologies are helping to revolutionize product research and development, while facilitating integration within and between healthcare systems and physicians practices, a development that may enable improved patient outcomes, more efficient care delivery and reduced waste due to unnecessary treatments and procedures. 

In sum, healthcare marketers in 2014 are witnessing a time of transformational change, both within the industry and in the broader marketing profession. Healthcare marketing professionals, and the strategic business partners they work with, must be able to adapt to new industry models, understand the transformative impact of new technologies, pivot when required, and learn the new skills necessary to do their jobs effectively. Those who can will find both new opportunities and success.

Sources:

  1. ChemJobber Blog: 11/7/13. 2013 not shaping up to be a great year for pharma. Challenger reports 19,507 jobs lost. http://chemjobber.blogspot.com/2013/11/2013-not-shaping-up-to-be-great-year.html. Last accessed 3/25/14.
  2. Forbes: 4/13/11. A decade in drug industry layoffs. http://www.forbes.com/sites/matthewherper/2011/04/13/a-decade-in-drug-industry-layoffs/. Last accessed 3/25/14.
  3. Roland Berger Strategy Consultants: 12/2012. Pharma’s fight for profitability. http://www.rolandberger.ru/media/pdf/Roland_Berger_Pharmaceutical_Industry_20130113.pdf. Last accessed 3/25/14.
  4.  Adobe: 9/2013. Digital distress: What keeps marketers up at night? http://wwwimages.adobe.com/www.adobe.com/content/dam/Adobe/en/solutions/digital-marketing/pdfs/adobe-digital-distress-survey.pdf. Last accessed 3/25/14.
  5. Institute of Medicine: 2/24/11. US healthcare costs – where is the money going? http://resources.iom.edu/widgets/vsrt/healthcare-waste.html. Last accessed 3/25/14.
  6. McKinsey & Company: 2013. Personalized Medicine: the path forward. http://www.mckinsey.com/~/media/McKinsey/dotcom/client_service/Pharma%20and%20Medical%20Products/PMP%20NEW/PDFs/McKinsey%20on%20Personalized%20Medicine%20March%202013.ashx. Last accessed 3/25/14.
  7. Forerun Systems: 3/14/13. Guide to the 2015 electronic medical records mandate. http://www.forerunsystems.com/news/bid/271083/Guide-to-the-2015-Electronic-Medical-Records-Mandate. Last accessed 3/25/14.
  8. FierceHealthIT: 2/18/14. Cloud technology to propel growth in healthcare IT market. http://www.fiercehealthit.com/story/cloud-technology-propel-growth-healthcare-it-market/2014-02-18. Last accessed 3/25/14.
  9. HiMSS Analytics: 2/24/14. 3rd annual HiMSS Analytics mobile survey. http://apps.himss.org/content/files/FINALThirdAnnualMobileTechnologySurvey.pdf. Last accessed 3/25/14.

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