Why pharmaceutical companies need Big Data to make big decisions
Sumit Prasad of Mu Sigma highlights the importance of Big Data in the pharmaceutical industry.
Big Data, according to the McKinsey Global Institute, is moving the world onto “the cusp of a tremendous wave of innovation, productivity and growth as well as new modes of competition and value capture”. The dawning of this new era has by no means been lost on the pharma industry, which is already well on the way to harnessing the enormous possibilities Big Data presents for new drug discovery, clinical trials and portfolio management. But like all aspects of the commercial world, there is always room for improvement and in data analytics it lies in utilising Big Data to maximise business efficiencies in sales and marketing strategies.
The fact that the pharmaceutical industry is somewhat late to the Big Data revolution is understandable. As a part of what has been, until fairly recently, an immensely profitable industry, pharmaceutical leaders have not been hard pushed to find new ways of fine-tuning their business efficiencies. This is no longer the case. Big earning blockbuster drugs are coming out of patent protection, the cost of new drug development is excessively expensive and the risk of getting beaten to the post by competitors has never been greater. Today’s changing marketplace, and increasingly competitive landscape, means that pharma companies are now competing in a whole new ball game.
This is where Big Data comes in. Insights that can be gained from data analytics can be invaluable in cultivating sales and marketing strategies, and ensuring solid return on investment. To ensure a highly profit-driven strategy, pharma companies need not only to be implementing Big Data from the very beginning of the planning process, but also using it to evaluate the success of their campaigns.
Make decisions that count
Essentially, the most significant contribution that Big Data can make for pharmaceutical companies is to improve decision-making. By managing vast amounts of accumulated data from a multitude of sources, Big Data helps them understand market dynamics at a more comprehensive level and consequently make more informed, and more strategic, decisions.
Pharmaceutical market dynamics are changing significantly, and 26.5% of IT leaders in the pharmaceutical industry now see the greatest opportunity for Big Data as ‘understanding the market’ [Thomson Reuters]. Nowhere is this more important than in determining product budgets. To date, more often than not, this has come down to instinct. Historical performance and annual sales targets play an important role, but without the information to make properly informed decisions, budget allocation ends up relying on ‘gut feeling.’
Thanks to Big Data, aspects like the patent expiry of a product, competitor product launches or promotions, market regulatory changes and the commercial potential of the brand, amongst others, can all be used to guide budget decisions.
Gain a competitive advantage
The next stage of the planning process is typically deciding how best to spend your budget – that is, where to place your sales reps to ensure maximum ROI. This is where the need for real-time information is more important than ever. In the constantly progressing and ever-changing world that is healthcare, using Big Data to understand where the most valuable ‘hot spots’ are gives companies a key competitive advantage.
Big Data will allow you to manage a plethora of information, from flagging doctors with great future prescription potential, to gaining an understanding of the rapport between sales reps and physicians. To start with, these insights are crucial for making long-term decisions. They are then even more critical in terms of responding to short-term changes in the market environment, be it by identifying a sudden decline in prescriptions or by recognising a prescriber in danger of ‘churning’.
It is not simply a case of understanding the market, however. ‘Understanding the patient’ was rated as the next greatest opportunity for using Big Data [Thomson Reuters]. As patients become more aware of their medical options and are able to take greater control of their own treatments, their brand and product preferences become increasingly valuable information.
Big Data can provide an analysis of both unstructured data, from social media sources where patients frequently share their experiences and views on medicines, and structured data from prescriptions. These insights can be invaluable when it comes to identifying patient preferences and informing subsequent sales and marketing tactics.
Once you have a good understanding of the market environment, segmentation is vital for identifying first and second tier prescribers, and establishing how frequently sales reps should visit them. In the past, sales volumes have given a good indication of which tier a doctor should fall into. The evolution of Big Data means that it is now possible, and much more beneficial, to look at influencer networks. Whether they are individual consultants, or a regional NHS trust with multiple hospitals, focusing on these networks ensures a far more effective way of reaching the target audience and deploying your budget.
Rather than individually focusing on all members of the network, the data you can gain nowadays about who is part of an influencer network, and how strong the network is, enables you to spread your message more quickly and effectively.
An ounce of prevention is worth a pound of cure
Big Data enables sales and marketing teams to create accurate profiles of their top targets, work out the most appropriate channels and the best ways to reach them, and ensure the timing is spot on.
Yet, as the old saying goes, prevention is better than cure. It is not just a case of learning from our mistakes. It is learning how to prevent them in the first place. Or, at the very least, how to minimise the damage they cause.
Big Data gives pharma companies the ability to respond rapidly, almost in real-time, to new developments, enabling them to take preventative actions before serious damage takes place. The ability to analyse data on an on-going basis means pharma companies no longer have an excuse for not staying ahead of their competitors.
To compete in a fast-paced industry like pharmaceuticals, companies need to move quickly to keep up, and to do this they need to be able to make better decisions faster. Big Data enables pharma companies to make these data-driven decisions throughout the planning, implementation and evaluation process of operations across the organisation, empowering them to compete at the top of their game.
About the author:
Sumit graduated in Statistics from Delhi University in 2007 and joined IT giants TCS for 2.5 years, working in the Pharma domain. He then went on to pursue a Masters in International Management from IE Business School. Thereafter, he has been a part of Mu Sigma, one of the world’s largest pure-play providers of decision sciences and analytics solutions. He currently leads multiple teams in the Pharma domain, providing analytical solutions to clients to help them develop their sales force strategy across their therapeutic areas and products. He was recently bestowed with a quarterly “Impact Award” for developing the Placement and Call Planning.
Closing thought: What are the benefits of Big Data to pharma?