Merck Sharp & Dohme

CASE MEMO - MERCK SHARP & DOHME

-Arnab Chakraborty & Ankush Gupta, 9/8/2016

Discussion Questions: -

1. How are strategic priorities shifting at MSD BeLux and in the industry?
2. How can MSD BeLux respond to these changes through digital innovation in its process?
3. What are some key considerations that limit/ influence MSD’s digital strategy?

An Outlook:

Owing to a mix of key developments in the pharmaceutical industry, Merck Sharp & Dohme(MSD) Belgium and Luxembourg (BeLux)- the EU unit of MSD, a global, research driven pharmaceutical company is looking to develop the digital strategy for the marketing and sales of its human health products.

A snapshot of MSD’s Operations:

MSD’s operations are product driven where the products are classified under 1) Pharmaceuticals, and 2) Vaccines and Infectious Diseases. Prescription pharmaceutical products were sold to drug wholesalers and pharmacies, hospitals, government agencies and managed healthcare providers such as health maintenance organizations. The infectious disease products were sold to drug wholesalers and retailers, hospitals, and government agencies. Vaccines were sold to physicians, wholesalers, physician distributors and government entities. Sales representatives were responsible to communicate the effectiveness, safety, and value of its pharmaceutical products to healthcare professionals (HCPs). On the other hand, marketing was the responsibility of the brand customer managers(BCM) where each BCM managed a specific branded product, in close coordination with sales, marketing communications and operations. Apart from conducting market research studies on patients and HCPs, BCM also organized scholarly conferences and symposia to keep posted about the latest data in their field of expertise.

Key developments in the pharmaceutical industry- what is forcing MSD to look at change in strategy?

1. Mergers between companies sharing strong innovation, deep product lines, and robust R&D.
2. Direct-to-customer advertising for prescription drugs was banned in the EU.
3. Increased pressure by the government on physicians to prescribe generic drugs rather than branded products in order to lower costs.
4. Physicians increasingly started to see sales reps by appointment, thereby limiting detailed frequency.
5. Direct communication with patients prohibited. Companies can communicate only in the consumer market, but can’t refer to any prescription drugs and branded products.
6. Detailing over phone is prohibited. Although the sales rep can call the HCPs to discuss the disease area, but they can’t mention the product.

MSD’s strategic priorities:

The traditional sales model was detailing driven and relied on intellectual property (patency) and product features. However, with the key developments as mentioned above, it has been increasingly important to engage with all the key stakeholders for a product – from physician to patient. Besides, it is also important to understand their customers and their priorities better through better customer engagement programs, while leveraging the use of technology and analyzing data. It is also important to find ways to lower costs as the market is inclining towards generic products as well as mergers also are a way to lower costs through operational efficiency.

MSD’s digital strategy:

First, MSD currently has three different platforms- Docvadis, Univadis besides the corporate website. It would be efficient to integrate it all to one platform. This will help reduce the costs associated with maintaining three different platforms. Also, it would be better to direct patients to a common platform where they can interact with the different physicians and also have access to requisite database. Next, it is prohibited to talk about the product and it is only possible to communicate with the consumer base in the consumer market. MSD did not use social media to avoid user comments on adverse events. Now, since there is no harm to any product, social media is a way to improve customer interaction about a disease area or concern. The risk associated with a negative comment in such arena is minimum because it is just a tool to spread awareness. MSD can make a proper use of blogs, facebook and twitter to get close to the customer and involve them in a participative discussion. E-mail campaigns are usually sent to trash while social media platforms give the company scope to connect with the right customer. Even if there is a heated debate regarding a disease or issue, people want the solution. MSD can figure out the best solution by analyzing the discussion and can be ahead in the race.