The next time you find yourself in a doctor’s office, remind yourself that you’re playing a pro-active role in the Web 2.0 revolution that is transforming health care.
A great deal has been written about “e-health” following a number of ambitious initiatives aimed at improving both the delivery and efficiency of health care. The buzzword employed to describe the e-health revolution is “patient-centred”. Sounds like a self-evident truth, but it’s taken a long time for health professionals to realize, and say out loud, that it’s all about the patients.
One of the driving motivators behind the e-health movement is the enormous cost, and scandalous inefficiency, of so many national heath-care systems — particularly in countries like Britain. There is a growing consensus that it’s time to bring radically innovative solutions to health care. Many of these bold initiatives, not surprisingly, are Web-based.
I will focus here on how Web 2.0 social networks are e-rupting the traditional market dynamics in the patient-doctor-pharma triangle. But before I move onto that issue let’s scope out, in big bullets, some other areas where Web 2.0 tools are transforming health care:
- the explosion of websites (like WebMD) and virtual worlds (Second Life) which provide health information, thus empowering consumers with knowledge thanks to easy access to facts about diseases and treatments;
- the emergence of online networks (like DailyStrength) that socially link patients who are sharing information and providing mutual support;
- the foray of giants like Google and Microsoft into the personal health data business, offering patients more control and portability of their personal heath records;
- the decentralization of health-care delivery thanks to Web tools used for tele-medecine and distant diagnosis.
Each of these trends represents a revolution of its own, and there has been wide-ranging debate and discussion (and controversies too) about impacts and outcomes in all these areas. An even more powerful Web 2.0 e-ruption is revolutionizing the power and market dynamics between consumers, doctors, and the pharmaceutical industry.
Let’s first look at the patient-doctor relationship. Needless to say, as consumers are increasingly empowered by information and knowledge thanks to reliable health information on the Web, it’s affecting the status dynamics between doctors and patients. In the United States, for example, more than half of the adult population consults the Web for health information. People are no longer arriving at the doctor’s office in a state of nervous ignorance about their health. Thanks to the Web, the power of information is no longer asymmetrical. Frequently, patients show up with a precise idea of their possible ailment and, what’s more, with suggestions about treatment options.
In Throwing Sheep in the Boardroom, we devote an entire section of the book to Web 2.0 revolution’s impact on social status. The Web 2.0 status e-ruption has radically transformed traditional value perceptions based on title, rank, and social prestige. As status become increasingly democratized, established professionals are not only suffering from diminished status, but are increasingly finding themselves subject to ratings assessments of their clients.
In the academic world that I inhabit, websites like RateMyProfessors have turned the tables on teachers and professors as their own students rate, rank and review them transparently for the whole world to see. More than a million teachers have been, whether they like it or not, rated on this site. This bottom-up ratings system has now spread to the medical profession with sites like RateMDs.com. Even nurses are rating physicians on NursesRateDoctors.com. It is a safe bet that doctors, like professors, don’t particularly enjoy being rated by their subordinates and customers. In fact, the name of the NursesRateDoctors site was so contentious that its owner, Careseek Inc., hastily rebaptized it with a more neutral name: NursesRecommendDoctors.com. Still, it’s easy to see how these Web 2.0 e-ruptions are impacting traditional notions of professional status. There is even evidence suggesting that patients trust online e-groups as much, if not more, than advice from doctors.
Now let’s look at the relationship between doctors and pharma companies. It’s no secret that Big Pharma companies suffer from a negative reputation due to their marketing methods to promote drug products to the medical profession. And by implication doctors, it is often claimed, are frequently too susceptible to the blandishments of Big Pharma marketing reps whose “doctor detailing” strategies include abundant supplies of free drug samples, free meals, free holidays, and assorted other freebies as tacit inducements that help build relationships. There has been a longstanding debate about the ethical probity of doctor detailing, but it’s not the focus of our concern here.
What is pertinent here is Big Pharma’s market model to get their products into the hands of consumers. Let’s start by quantifying the industry. Big Pharma is big business: the top 10 global pharma giants have annual revenues well in excess of $300 billion. Industry leader Pfizer’s revenues exceed $50 billion.
Big Pharma spends massively on marketing its products. Some indeed claim that their marketing budgets are actually bigger than their much-vaunted R&D spending. In the United States, Big Pharma spend billions (estimates put the figure at roughly $5 billion) on so-called direct-to-consumer advertising, most of it on television commercials for “blockbuster” drugs. Direct-to-consumer drug advertising is highly controversial (and banned in Europe). Its critics claim, among other things, that Big Pharma advertising incites consumers to demand medication, thus increasing costs burdens on the entire health system.
In the United States, Big Pharma actually spends more on doctor detailing – roughly $7 billion in 2005 according to official U.S. government figures — than on consumer advertising. This reveals that, even where direct commercial advertising is allowed by law, Big Pharma still devotes more money to direct-to-doctor marketing. Doctors, in short, are Big Pharma’s main marketing conduit. In the United States, Big Pharma employs an army of some 82,000 marketing reps (at a cost of roughly $170,000 per rep in salary and expenses) to market drugs directly to doctors.
Do the math and you’ll grasp pretty quickly that Big Pharma doctor-detailing marketing is a hugely costly operation. Those numbers must seem even more staggering at present, when Big Pharma is swallowing a bitter pill of deep crisis triggered by patent expirations, slow top-line growth, and the drug industry’s negative image. Surely there must be a more efficient, and less controversial, way of marketing drugs.
Indeed there is. Thanks to the Web 2.0 revolution, Big Pharma can now dialogue directly with doctors — not on a one-on-one basis according to the old doctor detailing model, but through networked information-sharing on websites like Sermo.
Sermo is a social networking site for American physicians. The site, whose motto is ”know more, know earlier”, is a networked forum where doctors join professional discussions with medical colleagues on a wide range of issues. Launched in 2006, Sermo has received a good deal of mainstream media coverage, much of it posted right on the site.
One potentially contentious issue is Sermo’s business model. The site solicits no advertising, which at first blush seems commendably principled. On closer inspection, though, one learns that Sermo monetizes its doctor discussions and comments to “third-party” clients. Who are these clients? Some, it is true, are government agencies and private medical researchers interested in obtaining insights into issues and trends in the medical profession. But Big Pharma is also paying Sermo big bucks for privileged fly-on-the-wall insights into what doctors are saying to one another. When a group of doctors are discussing online their preferred treatments for a specific disease, Sermo sells that discussion to Big Pharma clients. The world’s biggest drug maker, Pfizer, has even partnered with Sermo.
“Pfizer takes a leaf out of Facebook”, reported the Financial Times. Others are more troubled, accusing Sermo of “letting the enemy in” by selling doctor conversations to Big Pharma. Sermo, for its part, has argued that its monetization model is merely a way to “reinvigorate the productive dialogue between physicians and industry that improves the medicines we use and ultimately the patient care we deliver.”
Has Sermo sold out to Big Pharma? Maybe. What is more certain, however, are big changes coming to Big Pharma’s business model. If Big Pharma companies can use Web 2.0 tools like Sermo to market their products to doctors, albeit indirectly, it won’t be long before they’ll be taking a hard look at their doctor-detailing budgets.
Against this backdrop, the implications for the pharma-consumer relationship are clear. The shift in the United States towards direct-to-consumer advertising has already put Big Pharma in direct contact with consumers. Now Web 2.0 social networking sites give the industry more creative ways to connect with both doctors and consumers. Big Pharma can also use Web 2.0 collaborative tools to crowdsource R&D initiatives with scientists and experts beyond their own bureaucratic silos. This in fact is already happening.
Concerns about possible Big Pharma manipulation of Web 2.0 tools to co-opt doctors and hard-sell consumers, while they shouldn’t be dismissed entirely, can be alleviated by the knowledge that, even though sites like Sermo are closed, information in cyberspace is transparent, horizontal, and instantaneous. There are already well-informed blogs, like In the Pipeline, that provide detailed information about the goings-on inside Big Pharma and the medical profession. Another American blog is called Health Care Blog.
So is the Web 2.0 revolution a timely e-ruption that Big Pharma can seize upon to transform its business model in order to steer through a crisis? Not so fast. Industry observers have noted that, while Web 2.0 is staring them in the face, Big Pharma companies are slow-moving, conservative, and deeply entrenched in a bureaucratic culture instilled by an obsession with government guideline compliance. The industry has hardly been energized by Web 2.0 into a “breakout mentality”. One report says that Big Pharma is still “stuck in Web 1.5″. The industry, instead of embracing Web 2.0, has been focusing branding efforts mainly on online info centres and thus failing to engage consumers in an authentic conversation about health care.
Big Pharma companies will get their act together soon enough, especially when their revenues start heading south. In the meantime, get ready for a major Web 2.0 e-ruption throughout the entire health care industry. Consulting your doctor will never be the same.
