Big Pharma wakes up to 1994, invents online commerce

Pfizer discovers the phenomenon known as point-‘n’-click

Nineteen years after the birth of Amazon.com, the day was bound to arrive eventually when the pharmaceutical industry would rouse itself and discover this strange thing known as e-commerce.

So, it may seem a bit — let’s say — non-momentous, to hear that a major drug company just  decided it wants to sell its pills directly to the public, through the web.

(“Look here, Mr. McKinsey, I know we’ve gone over this thousands and thousands of times before, but explain to us one more time how this works. You mean to say people will pay us, with their credit cards? And then we mail them medicine? And we never once have to set eyes on the [expletive]s? Hey, now. That’s what I call patient-centric!”)

If you fancied a wager, you might have gotten decent odds from an online gambling site that,  when the day finally arrived, the first class of prescription drugs to be sold by its manufacturer straight to patients via the Internet would be oral contraceptives.

Based on data and history, OCs should be the obvious pick, right? The contraception category is positioned in that sweet spot where scientific validity and medical efficacy meets economic efficiency and intersects with contemporary Western cultural mores. Or, to put it in the form of a question: Since 66 years of clinical study suggests there are minimal associated risks, why would society continue to tie up the time and energy of hundreds of millions of young working women, not to mention squandering billions of dollars in unnecessary physicians’ and pharmacists’ fees, when customers are perfectly capable of ordering birth-control pills through their iPhones?

However, decisions concerning such matters are made not necessarily on the basis of patients’ preferences, or according to common sense or logic, but by the old, rich, happy white dudes who run things.

Therefore, Pfizer’s U.S. brain-trust determined the first therapy they intend to vend online (supplementing the usual channels, such as retail drugstores, and shifty-eyed bartenders) will be the erectile dysfunction drug sildenafil. Viagra.

Some with a suspicious cast of mind will respond to this news by grumbling that an outbreak of old-timey phallus-first sexism may have played a role in determining the choice of Viagra to clear the path toward e-commerce. There is more, and perhaps also less, to it than that.

Viagra is no ordinary brand. It is the poster-child for Direct-to-Consumer pharma advertising, a phenomenon of the 1990s, where mind-blowing sums invested in constant media promotion led to several  prescription drugs becoming as familiar to the U.S. marketplace as the names of the most popular pancake mixes and sport-utility vehicles.

That’s good, for Pfizer, because 15 years following its launch, the product remains a cash-cow, ringing up $2 billion in annual sales, with nearly nine million prescriptions filled each year in North America.  But that’s also bad, for Pfizer, because the overwhelming public interest they created in the product has spurred 24 million Internet searches each year, many of which result in patients ordering unknown quantities of counterfeit versions from shadowy, unscrupulous online vendors.

This places the manufacturer in a delicate position. Having established patient demand through lavish use of DTC, the company found itself incapable of controlling the resulting circumstances. Instructed via TV ads to “Ask your doctor about Viagra,” many patients replied, “Nah.” Consumers were defining their preference for ordering the therapy online, simply by undertaking that very action — even if the product they received was either a sham, or a scam, or a substitute of dubious provenance.

Essentially, the company had two choices: surrender their brand equity and continue to cede the online marketplace to fraudsters, or step up and devise a system for selling their wares directly to consumers via e-commerce.

That, of course, is no choice at all. Consequently, Pfizer selected the U.S. retail pharmacy CVS as a partner to fulfill Viagra scrips digitally through the manufacturer’s website.

Back to the future for Big Pharma?

This is a choice that was no doubt made with great reluctance from the largest organization in an industry that always favors the status quo. Nonetheless, it is a highly disruptive move on the part of the company, and it is no overstatement to say that the consequences of this action will lead Big Pharma, yes, kicking and screaming, into the digital age.

Other drugmakers are bound to soon follow, and other Rx categories will be offered as quickly as regulators are able to adjust. (Oral contraceptive marketers, please take note.) Many dominoes will fall, as the national retail pharmacy chains, the medical associations, insurers and legislators begin to consider the implications of manufacturers selling therapies straight to patients, streamlining the traditional pathways.

In some respects, this development may signal a return of the pharma industry to its 19th Century roots, as itinerant pill-producers, pitching cures to the public from the back of caravan parked just outside the city limits. Be that as it may, there remains one pressing question, in this age of business-at-the-speed-of-thought. And that is: Why did this take so long to happen?

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