Danny Zane on Big Pharma Marketing

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In this episode of Lehigh University’s College of Business ilLUminate podcast, we are talking with Danny Zane about his research on how pharmaceutical marketers might overcome the negative perceptions most Americans have of “Big Pharma” and how they can better share information across varied stakeholders and begin moving past the industry's stale promotional model.

Zane is an assistant professor of marketing who specializes in consumer psychology. He recently co-authored a study with Carter Morgan, an assistant professor of marketing in the Muma College of Business at the University of South Florida, that was published in the Journal of Public Policy and Marketing. The study is titled Practitioner Perspectives on Key Challenges in Pharmaceutical Marketing and Future Research Opportunities.

Zane spoke with Jack Croft, host of the ilLUminate podcast. Listen to the podcast here and subscribe and download Lehigh Business on Apple Podcasts or wherever you get your podcasts.

Below is an edited excerpt from that conversation. Read the complete podcast transcript [PDF].

Jack Croft: What was the process you used to conduct the study?

Danny Zane: We wanted to do something a little different by viewing things through the pharmaceutical practitioner's perspective. Instead of looking from the outside in, as I think we tend to do as academics sometimes, what we decided to do here was actually interview multiple practitioners who deal with pharmaceuticals and the marketing of them every single day.

To do that, we interviewed eight of these practitioners. And they included marketers at biotechnology companies, health care companies, pharmaceutical companies. They ranged from directors to top C-suite execs. We also included two practicing MDs, doctors, to hear about their outlook on pharmaceutical marketing from their unique perspective.

We posed a general set of questions to each of them in this interview format. And some of these questions, we included asking about their take on the biggest current challenges and opportunities in pharmaceutical marketing. We asked them what they believe the role of pharma is in the marketplace and in society. And we threw in a fun magic wand question, so something like what would they change if they had a magic wand to wave and could do anything really they wanted in that space.

After collecting all of those responses, Carter and I analyzed them to come away with some major themes that emerged. And it was sort of surprising to see how much convergence there was.

Croft: Based on those interviews, you had come up with three main topics that … you say are top of mind in the pharmaceutical marketing field: "the skeptical way in which patients perceive Big Pharma," "the challenges facing marketers as key distributors of information to other stakeholders," and, "pharmaceutical marketers' adherence to a stale promotional model."

So let's … [start] with what seems to be the predominantly negative perceptions most Americans have of Big Pharma. In fact, one of the practitioners you interviewed told you that consumers view pharmaceutical companies as, quote, "being Machiavelli sitting in an evil lair, plotting global domination." What seemed to be the main drivers for that negative view of pharmaceutical companies?

Zane: The main drivers of this skepticism or this prevailing negative sentiment about the pharmaceutical industry as a whole, what we found from the perspective of these marketers and MDs in the industry, are, first, consumers' perceptions of pricing trends around pharmaceuticals. And then the next was their patients' actual experience with the clinical effects of pharmaceuticals themselves, so their experience as they take prescription medication, and finally, also consumer perceptions stemming from the direct-to-consumer pharmaceutical advertising model that exists, the fact that we see these advertisements for prescription drugs on our TVs and elsewhere.

Croft: Are the issues surrounding pricing as simple as pharmaceutical companies, as it is often proposed, having a rapacious devotion to higher profits? Or is there something more complex going on here?

Zane: When thinking about why prices drive this skepticism, consumer skepticism of the industry, the issue is really, I think, that it's the opaqueness of the industry's pricing structure. And that leads consumers to easily default into believing that these pharmaceutical companies set high prices foremost to increase their profits. So whether that's objectively true or not, it's the fact that consumers are so easily able to default to that belief. So we see these rising prices of pharmaceuticals--which, by the way, they've commonly increased at rates higher than inflation over the last several years. But that's coupled with no good explanation for why this is. It's given this really shrouded secrecy that seems to encapsulate pricing in this industry.

Croft: The second thing you had mentioned was the personal experiences of patients with medications that either don't work as the patients feel they should or have those unpleasant or even harmful side effects that are listed in small print at the bottom of every direct-to-consumer TV ad. What are the questions marketers should be seeking to get answers to in this area?

Zane: What gets tricky is that consumers' beliefs about how effective drugs are are actually extremely delicate and malleable. So there's some fascinating stuff that goes on here. For example, patients go so far as to infer that drugs with good taste or drugs that have weaker side effects are actually less effective at doing the core function they're supposed to do. So we walk around with this-- you can think of it as a no pain, no gain belief. So if there's no pain in the form of this thing tasting bad or having these really noticeable side effects, well, "Ah, there must be no gain. It must not be really doing its job in terms of curing that focal ailment I want it to."

And then we also have a big problem in this country with non-adherence, where consumers don't stick to their medication regimen. They sort of trail off. I think to tackle this issue, we first need to better understand consumers' psychological tendencies as it comes to medication.

So just as one question here, do they ever unfairly attribute those inflated expectations of a drug's effectiveness maybe stemming from its taste or its side effects, for example? Or do they ever misattribute their own failure to use medication as prescribed to them? Do they ever blame the pharmaceutical manufacturers unfairly for some of their own potential wrongdoings? And if so, does that further fuel this skepticism about the industry and the effectiveness of these drugs when maybe it shouldn't? I think that's a nice starting point, is to really think about how deeply some of these psychological underpinnings and phenomenon might permeate through some of this stuff.

Croft: The direct-to-consumer advertising or DTCA is, as you mentioned, virtually ubiquitous on TV these days. … But if patients can't get medications without a doctor's prescription, what is the rationale for targeting advertising directly to consumers?

Zane: So interestingly, these direct-to-consumer advertisements for pharmaceuticals, they're only ubiquitous on TV in the U.S. and New Zealand. Those are the only two countries in the world that allow direct-to-consumer pharmaceutical advertising. So I think that that's telling in and of itself. And the reason that you described that most countries probably don't allow this is because there are these doctors that are gatekeepers of sorts.

So why is it allowed in the U.S.? Well, the main arguments for targeting consumers directly with this advertising, there's a few. But some proponents claim, "Well, it will educate them about conditions and treatments they might have been unaware of otherwise." Some argue it could improve overall population health by encouraging the use of appropriate medications and perhaps maybe even de-stigmatizing certain conditions. If you see a commercial about a certain condition, it brings it more into perhaps the popular rhetoric. Or it makes it seem a bit more normative. It maybe encourages people to go to doctors by seeing these, sort of as a reminder of, "Hey, there is intervention that can help you. Next time you have an ailment, perhaps you should seek medical advice." And there are some others as well.

But it now seems that this is built into the entire industry structure. So our interviewed practitioners, they actually stated that the onus is really now on them to promote their medications. And they see it as this necessary part of the system that's been created. … They recognized sort of the necessity. But they also realized many shortcomings.

These direct-to-consumer advertisements present an overly rosy picture of medication and its successes, right? You sort of get this nice music. People look very, very happy and smiling in these advertisements that you see, and so perhaps, again, adding to those inflated expectations.

But in addition to that, they also tend to leave huge gaps in consumer knowledge about underlying conditions, side effects. They don't mention multi-pronged treatment approaches, if any, so should this be coupled with anything else. And going back to that consumer skepticism of the industry overall, actually half of American adults believe that because there's so much of this direct-to-consumer advertising, the resources needed to create and share those ads, consumers believe, is a big contributor of rising drug costs. Although studies have actually shown that that's not the case.

And so again, you're getting these misconceptions based on how easy it is for consumers to draw some of these default inferences about where money is going within this industry.