McKinsey research

Making sense of e-detailing in Japan’s pharmaceutical sector

By Brian Salsberg and Hiroto Furuhashi

For decades, pharmaceutical companies had a simple business model. They hired thousands of sales reps who would hustle from door-to-door, desperate to win a few minutes time from physicians to attempt to convince them why Product A had superior efficacy and/or fewer side effects than Product B. The practice, which has changed little over the years, is unwieldy and inefficient. Is there a better way?

The branded pharmaceutical industry is performing at a level of productivity that is lower than what modern technology would allow it. The current, labor intensive approach to selling (and largely qualitative approach to physician segmentation) is not the result of technical limits. Physicians have been quick to use PCs, tablets and the Internet; pharmaceutical companies have plenty of data at their disposal. Instead, the industry is making a conscious choice—based on inertia and  fear of ceding some market position and dropping out of the “MR (Medical Representative) arms race.”

Now, however, after much trial and error, the industry might be on the cusp of something much more promising—and Japan is leading the way. The practice is known as “e-detailing” or electronic detailing. The term refers to interacting with physicians virtually rather than physically. It often takes place through a company’s own website or through a physician portal coupled with email-driven promotions and attached explanatory videos offering up-to-date pharmaceutical product information.

E-detailing in Japan has existed in some form for nearly a decade. However, the fact that we have not witnessed a specific winning e-detailing model, and that a number of pharmaceutical companies continue to watch from the sidelines, means that that the best way to utilize the medium is still the subject of debate.

The case for e-detailing

Today, the majority of all physician e-details taking place globally are happening in Japan. Part of this is because Japan is the world’s second-largest pharmaceutical market in terms of sales; the country also has an advanced digital infrastructure. The number of smart phones and tablets both owned and used by physicians—and not just the younger ones—has also grown markedly in recent years. Moreover, external pressures such as stricter rules (i.e., a ban on excessive entertainment from sales reps and restrictions on hospital visits) and changing customer dynamics have prompted pharma companies to experiment with new approaches. Specifically, they are using a combination of their own Internet websites and emerging physician portals, such as MedPeer, Carenet or m3.com.

We see four benefits of e-detailing over traditional sales rep detailing alone.

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