A recent report by Cegedim Strategic Data (CSD), a leading provider of healthcare market research, examined 2013 pharmaceutical marketing investment. While industry investment in pharmaceutical sales force and various marketing channels remained flat from 2012—at just under $85 billion—emerging markets saw increased expenditures, while the US and Europe cut their spending.
According to the report, the leading 10 multinationals ranked by promotional expenditure, all reduced investment during the 12 months to December 2013. “Reduced marketing investment, however, was not universal,” Cegedim notes. Major emerging countries saw increased expenditure including China (+9%), Brazil (+11%), Mexico (+9%), South Korea (+4%) and Russia (+16%). These increases were offset by cuts in the USA (-4%) and generally across Europe with spending in the UK down nearly 13%.
This study follows an April 2014 report from Cegedim that announced a slight downturn in pharmaceutical industry sales force levels from 2012 to 2013. Cegedim found a 1.2 percent decline—equivalent to about 424,000 full time reps. Much like this report, however, the results were varied on a global level.
The decreases were most notable in North America where total full time reps “stood at 66,000 as of Q4 2013 representing a drop of 7.4% over the previous 12 month period.” A similar trend is developing in Europe, where France, Germany, Italy, UK, and Spain showed a decline of 7% to 72,000 reps. “These regional trends reveal a continuation of cuts, although at a slower rate since 2012,” Cegedim notes.
Emerging markets and especially China saw the opposite trend. Rep levels there jumped over +9% with some 95,000 reps measured as of Q4, 2013. Brazil also saw an increase with over 24,000 reps through 2013, up +4.4% over the previous year.
“A combination of factors has led to a general consolidation in marketing activity,” commented Christopher Wooden, VP for CSD Global Promotion Audits. “The impact of the so called patent cliff is still being felt as the industry seeks to maintain margins. Meanwhile, regulatory scrutiny and clearer compliance guidelines are putting pressure on the use of traditional, personal promotional channels. Finally, broad coverage primary care sales forces are being transformed to promote highly specialized portfolios. Consequently, fewer reps are needed.”
Online Marketing Channels
“Globally, the use of “digital” channels such as e-detailing, e-mailing and e-meetings continued to expand with these three channels up over 14% over 2012 at $1.9 billion constant US dollars,” states the report. In the last 6 months of 2013, all digital channels tracked by Cegedim including pharma company websites, social media, web banner advertising in professional online journals and mobile apps came to nearly $2.5 billion USD – approximately 6% of audited marketing expenditure.
This graph shows the breakdown of digital promotion globally:
“In absolute terms, digital marketing investment is still a relatively small portion of the mix,” states Wooden. “However, we expect the use of these channels will only continue to advance as marketers seek to maintain reach through ease of access while delivering a high level of information quality to HCPs.”